I actually thought that WaPo had fired George Will because of his recent total weirdness, especially because of his vehement defense of rapists, but that turns out not to be the fact. My bad. Now he prancing around showing off his mathematical illiteracy, complete lack of understanding of fundamental economics, and (not really surprising to anyone who has ever read his columns) a complete lack of understanding of what it means to be middle class, much less (gasp) being poor, and complete lack of empathy with people who are suffering.
In this diary, I am going to invoke fair use rules. I am going to quote Mr. Will’s column to the extent that I need to present his views, and to present my objections. I do not wish to quote Mr. Will out of context in any way, so that will require somewhat exyensive quotes to set the context, because Mr. Will is very talented in obfuscating bull flop. So I’m going to parse his “argument,” such as it is, and I’ll try to keep the journeys through the math and economics that Mr. Will seems to willfully hide from us because he portrays arguments for progressive taxation that don’t really exist. (You would think that the WaPo wouldn’t post someone who was ignorant of math and economics, but then again, they publish Samuelson.)
I originally wanted to parse Will’s essay from beginning to end, to go point by point, sentence by sentence, and just take it apart. But I came to realize that Will was arguing that the poorest amonst us should pay the most by a flat tax. It would be a lot easier if we were both sitting down together and analysizing the text. But since neither one of us is in that congenial position right now, I think it will be best to drop right into the fourth paragraph:
Although the argument for progressive taxation usually begins with a moral judgment about social conditions, it usually becomes a moral assertion of equitable sacrifices. It asserts that money has declining marginal utility — that $1,000 subtracted from a wealthy person’s income diminishes that person’s happiness, or society’s sum of happiness, less than would $1,000 subtracted from the income of a person with a modest income.
I think to most of us this is a no-brainer when it comes to utility. But Will deflects the subject by converting it to happiness: if he had any idea of what it means to be on the lower end of the social spectrum he would understand that among the working poor we don’t think about relative happiness; we think about paying the rent, buying the groceries, and putting gas in the car. We don’t think about whether or not a rich guy is going to miss a grand on a frivolous purchase, we think about the ten bucks we need to put gas in the car to get to work.
So it’s kinda clear from the get-go that Mr. Will has no clue as to the price of “stuff.” And he has no clue that poor people have less than his hypothetical $1,000 a month to put a roof over their heads, feed a family, maintain a car. His ideology has no room for peons. His ideology has no idea of the cost of living.
But he deflects to basic fact that we have to have money to pay for the basics just to survive,and he couches it in terms that a wealthy well-off person would understand: happiness. He doesn’t understand getting kicked out on the street.
And of course, when you get into the subject of taxation and the public use of monies for the public good, you run into all kinds of arguments. It is especially true on the local level: someone wants to spend money on the local parks and recreation facilities, another wants the monies to go to the local library. Both parties argue it’s best for the kids. You have established arguments about the redistribution of tax monies within the community.
Arguments for it [progressive taxation] are invariably [I so much want to put a (sic) here] arguments for increased equality of social outcomes. Because individuals have different vocational desires and different aptitudes for adding value to the economy, inequality is inevitable.
And anytime you have questions about taxation and the rich and the fairness of the process, you will almost always be guaranteed to run into someone ranting about redistribution, how it’s Communist, or fascist, or socialism, or it’s a give-away to racially undesirable, freeloader minorities on welfare. Even though the majority of people on welfare in this country are white, and the majority of welfare freeloaders are white, and the re-allocation of funds goes to white people, this is still a political no-no to help our brethern in need.
The political problem is the redistribution of wealth.
The first is that the rich fear the Robin Hood phenomena would leave them poor. You know what I mean, living on an upper middle class economic level may not seem disasterous to most of us, but there would be a drastic collapse in class for someone in the 1%. Redistributive fears are not so much about money as they are about losing, or “redistributing” class status. You constantly hear about the evils of redistribution and economic equality from the Right. And, of course, that is how they got rich. But, because the new economic regime is destroying the middle class, any talk of “class distinction,” albeit rampant in America, will be forbidden on all Fox Channels.
All economic transactions are redistributive.
Think about it for a hot minute: economics describes, and sometimes explains, how we exhange things. And as human beings, we constantly exchange things on multiple levels, whether it be food for ourselves or food for others.
Economics is the art of using resources to the best of our social advantage. Unfortunately NOT. But it's an idealistic nudge. And leave it to good ole George to give it a sadistic twist. This is paragraph three (I’m backtracking one, because we’re getting ready to delve into the core of his fallacies.
Society should prevent extreme privation, no matter how far the top earners are from those near the bottom.
I had to stop there. Can’t you just feel the tablecloth about to be whisked away?
But who is to decide, and how are they to decide, the ideal spread between the top and the bottom of income distribution? The argument for progressive taxation must demonstrate this: Such taxation does not do more harm by slowing economic growth than faster economic growth would do good by its distributive effects.
What does the “ideal spread” between the top and the bottom of income distribution have to do with anything? What, is George still on the play ground in elementary school arguing over imaginary slights?
Now if Mr George knew how to look things up, he would see that when taxation on the wealthier class in America was higher we have seen nothing but economic growth, and mainly because it funded and maintained our infrastructure, which is essential to maintaining our economic bases in the non-service sectors.
Progressive taxation has never harmed economic growth. All the empirical evidence is in favor keeping some sort of economic balance. If workers don’t have money to spend on things other than rent, transportation, and food, the economy whithers and dries up.
But Will ignores the critical aspect of income inequality, and it doesn’t involve taxes.
He pretends that a “flat tax” would be fair to all.
Just because being $1,000 short this month means that you get evicted, and for George it means he doesn’t get to buy a new chair for the living room, there is no way you could think that this is the same thing (unless you’re Mister George).
We (meaning the corporations and consumers of America) don’t pay most of our workers in the lower 50% of our economic system a decent living wage.
Now pardon me if I object to Mr George’s first sentence to it’s maximum effect: You don’t have to calclate the ratio of top to bottom to create a fair wage. All you have to do is look down.
When you see the floor, that’s the minimum wage that everyone should receive.
And we don’t need the legislate this. A living wage should be paid by any and all employers. And, if you find out you are doing business with a company that is not paying a living wage, stop dealing with them.
And, of course, he asserts the basic Libertarian creed. “I got mine.” “It isn’t possible to pay people more than what their job is worth.” “It would raise prices.” “If your rent is too high, live somewhere else.” I could go on, but reciting Libertarian cant makes my head want to explode.
Capitalism, whether it be democratic or communist, skims as much “rent” (to use the misleading term of economists’ parlance) as possible off the back of the working man. Yet Will thinks that those who make the most profit doing the least amount of work should pay taxes without regards to their rent taking. So if you hump forty hours a week hauling away garbage for the city, or sit on your ass and collect one hundred times as much money living off of dear ole Daddy’s trust fund, it’s an “aesthetic” judgment, not a mathematical one, that a flat tax hurts a poorer worker more. It never seems to occur to Will that goods and services cost the same for the poor and rich alike. It seems that the impact of taxes isn’t about a person’s spending power: it’s that the non-wealthy should suck it up and value money more.
But this ostensibly scientific, meaning empirical, generalization about how people value money often conceals moral judgments about how people ought to value money, or — again, an essentially aesthetic judgment — about the “social value” of expenditures by the wealthy and the non-wealthy. When these moral judgments are codified in tax policy, they conflict with this idea: “It is one of the virtues of a free society that, within the widest limits, men are free to maximize their satisfactions according to their own hierarchy of preferences.”
So if you still agree with Mr George at this point, you might as well quit reading. Because it was at this point, with his disingenuous quote (“don’t blame me, it’s from a ‘famous essay’ ploy”), that I got real tired of his “rich boys play, poor boys pay” so fast that I wanted to dare him to attempt to live on merely twice my income for a year. (I’m letting him have double because it’s quite obvious he doesn’t go to the grocery store very often, if at all.)
Proportionate taxation always is what progressive taxation never is: simple. What justifies progressive taxation, and characterizes progressivism, is confidence that at any moment in society’s endless evolution, what is equitable can be known and society can be fine-tuned to achieve it. Which is how we got our baroque tax code.
I’m not even sure where I can dive into this stinking pile of cow flop and disentangle all the misleads, but let’s try the last sentence.
It would not matter if we had a flat tax or a progressive tax: our tax code would still be baroque because businessmen have long been able to buy off the legislatures on both the local and national scale, lessening taxes on businesses, creating loop-holes, and allowing off-shore banking to launder and/or hide profits.
But diving a little deeper into this pile of flop, there is the Willian “pot calls kettle black” moment. I’m going to quote him out of context here to make my point, and I will explain my rationale.
Will’s entire point is to replace the progressive tax system with a flat tax system, because he has every “confidence that at any moment in society’s endless evolution, what is equitable can be known and society can be fined-tuned to achieve it.” Well hush my mouth. Mr George is both an Evolutionist and a Progressive! Who would have thought it?
But of course I must admit the the brief fantasy isn’t true. Will instead espouses the philosophy of Caligula in which “men are free to maximize their satisfactions according to their own hierarchy of preferences.” Now I know it sounds like frat boys at a kegger, but it’s far more pernicious than that. And I didn’t dig that quote out of any of Will’s columns on rape.
But the false core of Mr. George’s contention is that taxing rich people suppresses growth. If the wealthy class were indeed re-investing in America this might be true. They would be raising wages, strengthening our infrastructure, and even expanding health care so that people would have more freedom to live without day-to-day nagging worries. But Mr George is more concerned about the wealthy “minority” class.
It is, however, the nature of reality [I’m doing it this time, (sic)] that burdens imposed on the wealthy minority can injure the majority by impairing economic incentives, thereby suppressing growth. Progressive taxation reduces the rewards of investments and the real rate of return on savings, thereby encouraging consumption over saving and hence over capital formation. [This may have been true a century ago, not now.] When progressive taxation slows economic growth [tell us when this ever actually happened Mr George, please, please, please], it makes inequalities of wealth more durable by retarding the accumulation of new fortunes. [Obviously it is more important to add more to the 1% than it is to maintain the middle class for Mr George.] And by encouraging constant tinkering with the tax code to perfect equity, progressive taxation gives a patina of altruism to rent-seeking by economic factions, whereby government enriches those sophisticated at manipulating it.
The constant tinkering with the tax code is, and pretty much always has been, to do something that was to the advantage of business. When someone as wealthy as Warren Buffett laments that his secretary pays a higher rate in income taxes than he does, anyone with a head on their shoulders can see that the supposedly progressive tax system can sometimes be regressive in nature. Likewise, many localities can attest that giving a business tax breaks will not necessarily entail reinvestment in the community, as investors short term greed necessitates returning profits to the shareholders and the ownership, and not the workers. And as soon as their tax relief plan runs out they are running to anothr locality, another tax break, and creating more unemployment through tax incentives.
And businesses that locate in urban areas are starting to realize that lower tax rates are the kiss of death. They are also starting to realize that anything less than a living wage creates a transient work force. The friendly face that has been behind the counter for years, knows your name and your needs, isn’t being replaced by someone who will carry on the tradition. But the businesses that insist on a lower tax base to relocate (or stay) cause a lowering of local monies devoted to infrastructure, policing, and importantly schools; and their dimishing pay rates don’t contribute to local economic growth if all the employees are paycheck-to-paycheck. Battered local economies increase the crime rate because of lack of jobs, battered personal paychecks that have nothing left over for discretionary spending strangles the ability of the people that live in the community to even support the businesses that surround them.
On the other hand, the community that has much higher taxes also has potholes filled, streets plowed, a lower crime rate because people can find employment, and most importantly better schools, which will attract younger people to the community and keep the community vibrant.
But the mere thought that somewhat higher taxes would be advantageous to the community is anathema to Libertarians like Mr George. And of course he needs to quote an unknown, but “famous” in his own mind, essay from 1952 shows he’s reaching. And we all know that those who can manipulate the tax system profit.
And it would seem that his second to last paragraph negates his entire argument (if you can call it that) so far. But that arguments against a flat tax, that it is regressive and makes the poor suffer greater privation from rent than the rich, are robust.