A Philosophical Question for Republicans

[DjTj]

Let's make one thing clear. Money to welfare moms CANNOT stimulate the economy. It can only damage the economy because it removes money from the wealth generation cycle for a period of time. For example, that money could have been used to drill oil and create wealth.

As Dan T. pointed out, money to welfare moms can obviously create wealth. The money can of course be abused, but the same thing can happen with money used to drill for oil if, for example, they don't find any oil where they're drilling.

Now you might be able to find a way to use the money that damages the economy even more, but it would take a pretty bad scenario for a corporation to not be better than the best case scenario for a welfare mom.

I don't think this is true at all. The best case scenario for a corporation is much better than the best case scenario for a welfare mom, but the worst case scenario is also much worse. For example, any tax break given to Countrywide or Bear Stearns in the past few years has actually destroyed billions of dollars in wealth.

Let's say the corporation goes bankrupt. The money goes from the corporation to the bank/stockholders to another corporation. That's not particularly worse, if at all, than the money going from the corporation to the government to the welfare mom to another corporation, which is the best case scenario for a welfare mom.

I don't think you understand what bankruptcy is. Bankruptcy is when you can't afford to pay your debts, which means that all the assets the company has does not add up to the amount of money they owe to their creditors. When bankruptcy occurs, the shareholders get nothing. The banks and creditors get only a fraction of they are owed. Wealth that existed on paper before the bankruptcy disappears.

The reason that money given to corporations has the potential to create great amounts of wealth is because it is leveraged. That leverage also creates a greater risk for loss. A dollar to a corporation could become $10, but it could also become nothing, and since that dollar will likely encourage $10 of investment from other sources, if the corporation fails, it could lose $10. A dollar to a welfare recipient, in the worst case, is a loss of a dollar if it is simply stuffed in their mattress, but it will almost always be spent somewhere ... it's like the difference between investing in stocks and putting your money in a savings account.

No, it is not ALWAYS better, but as general rule, to maximize the economy, you want as much money as possible in the hands of corporations generating wealth.

I would argue that government does not need to play a great role in this.

I have no problem with universal corporate tax breaks instead of targeted tax breaks.

Good corporations will be able to collect money and create wealth regardless of government intervention. They will pass through any taxes as costs to their customers.

If you gave a universal tax break to corporations, where would you make up the revenue? Increased individual income taxes? Those are also paid by the corporations because they will have to increase salaries to give their employees the same take-home pay. It will also take money out of the hands of individuals who may otherwise buy the company's products or invest in the corporation's stock. Would you increase capital gains? That would hit the corporation's shareholders. Every kind of tax really hits corporations, and every kind of tax really hits individuals. The only reason we collect corporate income tax is because it is easy to do - it doesn't cost the IRS much to check the annual reports of corporations and compare them with the tax bill. It is a low-overhead way to collect taxes, in the same way that income tax is a lot easier to collect than a consumption tax.

If it were up to me, they'd all get the same "tax breaks", i.e. no corporate income tax. They keep all their money. That's pure free market with no favoritism.

I think chom's original argument in this thread was for exactly that. Why is favoritism towards individual companies (tax breaks for domestic oil exploration) tolerated by conservatives while favoritism towards particular classes of individuals (welfare recipients) vilified?

Both are corrruptions of the "free market," and both should be anathema to pure capitalist libertarians.

You're the one who wants to take their money and pick and choose who gets it. Not me.

Do you think Barack Obama is not going to give out subsidies and tax breaks to certain companies and eliminate tax breaks to others?

That's what government does, so if you want wealth redistribution, don't complain when the distribution is corrupt.

I think part of government's role is definitely to redistribute money in ways that can benefit the entire country. We must fund the military, build roads, encourage domestic industry, and maintain a happy and capable labor force.

Some forms of wealth distribution are more prone to corruption than others, and targeted corporate tax breaks are probably one of the worst. Of course, welfare has its own problems with fraud and abuse, and every other government expenditure has its own issues. But just because there is waste in military contracts, does that mean we shouldn't have a military? Because lobbyists steer tax breaks to particular corporations, does that mean we should stop trying to encourage domestic industry? Because some individuals defraud the welfare system, should we stop helping the poor?

There is a level of fraud and corruption that can't be avoided. This is as true in the corporate world as it is for the government. Because some people don't pay their credit card bills, does Visa stop issuing credit cards? Because 7-11 stores are sometimes robbed, does 7-11 stop opening stores? In an ideal world, there would be no fraud and corruption, but in reality, we have to deal with these things. We can minimize them as best we can, and we have made tremendous progress in welfare since the 90's, especially with the transition to TANF and increases in EITC rather than 60's-style welfare. The "welfare mom" argument is one that Newt Gingrich used in the 90's before the Republicans reformed welfare ... it is a lot better today and a lot more efficient, and it can help the economy as much as many tax breaks for corporations.

[Mister Happy]

__

First of all, you're thinking in terms of dollar bills. I'm thinking in terms of wealth. I consider that topic irrelevant to the discussion, so I might not respond to some of your comments.

As Dan T. pointed out, money to welfare moms can obviously create wealth. The money can of course be abused, but the same thing can happen with money used to drill for oil if, for example, they don't find any oil where they're drilling.

I don't think this is true at all. The best case scenario for a corporation is much better than the best case scenario for a welfare mom, but the worst case scenario is also much worse. For example, any tax break given to Countrywide or Bear Stearns in the past few years has actually destroyed billions of dollars in wealth.

I agree there are cases where the welfare mom outperforms the corporation. Those are the exceptions, not the rule.

As a general rule, we need to keep money flowing to our corporations to generate wealth and taking money out that cycle will prevent the economy from growing like it should.

Do you agree?

I would argue that government does not need to play a great role in this.

Good corporations will be able to collect money and create wealth regardless of government intervention. They will pass through any taxes as costs to their customers.

If you gave a universal tax break to corporations, where would you make up the revenue?

Elimination of the corporate income tax is not the government playing a role. Quite the opposite.

The government made $314.9 billion in corporate tax revenues in 2008. Ignoring any increase in corporate profits, complete elimination of the corporate income tax could be achieved simply by reducing spending from 2009 ($3.1T) levels to 2007 ($2.77T) levels.

The day before 9/11, Rumsfeld estimated that The Pentagon could not track $2.3 trillion. There are plenty of ways to cut $300 billion of spending if you try.

I think chom's original argument in this thread was for exactly that. Why is favoritism towards individual companies (tax breaks for domestic oil exploration) tolerated by conservatives while favoritism towards particular classes of individuals (welfare recipients) vilified?

I guess I can't answer that because I'm also opposed to targeted tax breaks.

Then again, I'm also anti-"free market" in the sense that I think unchecked corporations can be as tyrannical as any government.

However, I think you just answered your own question when you said "part of government's role is ...to encourage domestic industry." That's why they gave manufacturing companies, including oil companies, some of their tax break in the first place.

I think part of government's role is definitely to redistribute money in ways that can benefit the entire country. We must fund the military, build roads, encourage domestic industry, and maintain a happy and capable labor force.

Some forms of wealth distribution are more prone to corruption than others, and targeted corporate tax breaks are probably one of the worst.

One of the key principles this government was founded on is to minimize corruption and abuse. We can't just accept corruption as par for the course. If we know it is exists, we need to take steps to eliminate it. Either add more checks and balances and accountability or put that power in the hands of the state and local government if that's possible.

[DjTj]

First of all, you're thinking in terms of dollar bills. I'm thinking in terms of wealth. I consider that topic irrelevant to the discussion, so I might not respond to some of your comments.

Wealth is measured in dollar bills, so I'm not sure how you've just conveniently ignored all of my arguments. :whoknows:

I agree there are cases where the welfare mom outperforms the corporation. Those are the exceptions, not the rule.

I would argue that rate of return is not the only consideration we should make. In your personal finances, stocks will always outperform your savings account in the long run, but that doesn't mean you should never put money in your savings account. There is value in low-risk investments as well as high yield investments. Welfare and other direct domestic expenditures are the former; tax breaks to corporations are the latter.

As a general rule, we need to keep money flowing to our corporations to generate wealth and taking money out that cycle will prevent the economy from growing like it should.

Do you agree?

Yes, but there is no real danger that money will stop flowing to our corporations. That's the magic of capitalism. Good corporations will find ways to make the money flow to them. The market determines where the money should go; not the government.

Elimination of the corporate income tax is not the government playing a role. Quite the opposite.

The government made $314.9 billion in corporate tax revenues in 2008. Ignoring any increase in corporate profits, complete elimination of the corporate income tax could be achieved simply by reducing spending from 2009 ($3.1T) levels to 2007 ($2.77T) levels.

The day before 9/11, Rumsfeld estimated that The Pentagon could not track $2.3 trillion. There are plenty of ways to cut $300 billion of spending if you try.

And reducing that spending would also pay for all federal welfare programs. What's your point? There are a million places we can find more money in the budget. The question is whether it would be better to use that money to provide targeted tax breaks to corporations or to make welfare payments (or, as you suggest, to eliminate all corporate income taxes).

One of the key principles this government was founded on is to minimize corruption and abuse. We can't just accept corruption as par for the course. If we know it is exists, we need to take steps to eliminate it. Either add more checks and balances and accountability or put that power in the hands of the state and local government if that's possible.

Of course we need to try to reduce corruption, and that was my whole point: targeted corporate tax breaks are MORE prone to corruption than welfare payments or many other government expenditures, so we should be more wary of them.

[Mister Happy]

Wealth is measured in dollar bills, so I'm not sure how you've just conveniently ignored all of my arguments. :whoknows:

Let's just say that creating wealth is more complicated than simply printing dollar bills and leave it at that. (And, yes, I did say some stupid things that aren't worth clarifying.)

I would argue that rate of return is not the only consideration we should make. In your personal finances, stocks will always outperform your savings account in the long run, but that doesn't mean you should never put money in your savings account. There is value in low-risk investments as well as high yield investments. Welfare and other direct domestic expenditures are the former; tax breaks to corporations are the latter.

I suppose I can agree with that.

Yes, but there is no real danger that money will stop flowing to our corporations. That's the magic of capitalism. Good corporations will find ways to make the money flow to them. The market determines where the money should go; not the government.

And that's why I oppose corporate income tax (and targeted tax breaks.) Those are the government deciding where the money goes.

And reducing that spending would also pay for all federal welfare programs. What's your point? There are a million places we can find more money in the budget. The question is whether it would be better to use that money to provide targeted tax breaks to corporations or to make welfare payments (or, as you suggest, to eliminate all corporate income taxes).

The point is that it doesn't have to be a choice between corporate income tax and welfare. It could be a choice between being fiscally responsible and welfare, or earmarks and welfare.

If you want to make it a question about which is better welfare or no corporate income tax, for that we would have to measure how much our economy would grow/shrink if we eliminated the corporate income tax. I don't really know how to do that.

[Mister Happy]

If you gave a universal tax break to corporations, where would you make up the revenue?

According to the Department of Treasury:

"The revenue forgone from the existence of corporate tax preferences comes at a significant cost to economic efficiency. If the revenue from tax preferences were used to lower the corporate tax rate, the rate could be lowered from 35 percent to 27 percent while producing approximately the same revenue."

It also says:

Lowering corporate tax rate to 31% and eliminating special business tax provisions (as described above) would increase our economic output by 0.5 percent (or $100 billion per year).

Therefore, elimination of targeted corporate tax breaks in favor of a 27 percent corporate tax rate would produce the same revenue and increase our economic output by AT LEAST $100 billion per year.

That's the solution. The corporations get their universal tax break. The welfare mom still gets her check. The economy gets a boost. Less corruption. Everybody wins.

P.S. I got the $100 billion number from McCain, so take it with a grain of salt (or some Pepto Bismol and warm milk).

[chomerics]

What you just stated here I wouldn't consider a mooch. And Yes I would consider an oil exec not a mooch since he employs millions of people where as a welfare mom doesn't. No disrepect just simple facts. WHo would I rather give me money too....the one who keeps the economy going is the oil company. My money going to a welfar mom has no return on it. Where as my money to a oil company gives me jobs, gas and transportation.

What service does the oil company provide the taxpayer? What if they are polluting the environment, and spending all their money on overseas investments?

All you have said is the oil company employees people, so they should get the break. . .well, are you advocating people get the break for being an employer yet the person working for them should not? When you advocate carte blanch statements and say that your money going to one adds value, but not the other, you are not looking at the situation clearly.

Put it this way, giving the mom on welfare government assistance has a far FAR greater effect on a community and an area then a business does. It could be for childcare to keep the kids out of trouble, it could be for food which is spent at a local grocery store which pumps up the local economy, it could be for her own education to increase her role in society, it could be for any number of things. To simply state giving a government dollar to someone who is poor has no value is not only wrong and baseless, it is entirely acute in examining the issue of the role of government.

This is where most people are wrong IMO. Why should the RICH be punished for being rich. Based on our current tax system, the RICH pay the lions share of the taxes that this country runs on. Meaning, the middleclass and poor pay far less in taxes than a rich person does. That isn't my opinion or myth but solid fact(which I have backed up before in other threads).

How is the rich person being "punished"??? You do understand that a rich person pays less in %terms in taxes than a poor person right? Where do you determine the equality? If we were not to tax on a graduated scale, we would very quickly become an oligarchy, and the entire free market ways would be non-existent. Heck, we have the makings of an oligarchy all ready, just look at who the politicians are, and what families they are from. You will find that at least 50% of all politicians are from the same group of people from the previous generation that led the country. Heck, it is how we get people like Dubya as president!!!!

So with that being fact, why should we lower non-rich people taxes and raise Rich people taxes?? The system we have now is fair, it just needs to be run that way.

You just said the system is not fair for rich people, you can't argue both sides of the equation. . . in fact I think it is skewed towards the upper class in a very big way. There are many MANY more tax incentives wealthy people have that a poor person is not allowed to have. SSI is the biggest example of a poor mans tax there is. Why have the cap on income? That is Dooh Nibor economics at its worst. A tax on the poor person a rich person does not have to pay. Why is capital gains tax 15% yea a person who can't have a capital gains tax because they don't make enough money to purchase stock and reap the benefits have to pay upwards of 30% in taxes? Where is the "fairness" in that? In fact the vast MAJORITY of people in the top 1% pay far FAR less of a % in taxes to the person making 50K a year. That is not a fair and equitable system at all.

I'm not really getting why people think rich people need to get soaked in taxes?? I hear all the time liberals and dems say, "these Bush tax cuts are for the RIch". Uh yeah, they are for everyone. It's a numbers game.

Nope they are for the rich. If they were for everyone, the tax system would not have become flatter after the cuts. Do you understand what I am talking about here? It is a shift in the tax burden of this country from the upperclass to the lower classes. In effect it makes the rich pay less in overall %s and the poor pay more in overall %s. That is not a fair tax cut, and it is why you always hear people saying it is a rich persons tax cut. . .because the facts prove that it is.

Rich people make more than middleclass and poor so their tax break is obviously going to be greater than them. That doesn't mean that a taxcut is only for rich people.

Then explain, if you can, how the tax system becomes flatter after the tax cut and favors the upper class? If what you are saying is correct, and it favored everyone the same, there would be no change in the tax revenue streams, when there was a decided change post tax cut. In other words, the facts don't back up what you claim. The tax cuts transferred the tax burden from rich to poor, that is what the data says, and how it played out.

When I hear that from libs and dems I hear, Soak the rich and don't allow them any of the taxcuts. Last time I checked, didn't they work for their money just like joe blow in middle america?? Or am I wrong and it magically appeared in their bank account from some fairy!

Actually, not they did not "work" for their money at all. A very large % of their tax in capital gains, which is taxed at 15%. This is money that is gained by not working, but instead selling stocks and investments. That is not the same thing as working for a living. Why, in your value system, do you not put the same emphasis on hard work, and actually doing something to contribute to the local, state and federal economies in the same light as signing a piece of paper? Why should a person who is simply wealthy because of their parents and lineage pay less in taxes than someone who works for their money? Why does Paris Hilton only pay 15% of her capital gains income in taxes, yet Joe Blow pay over 30% of his? How is this fair? Because she was a lucky sperm?

Look, to think that Republicans are the only party who deals in giving freebies to rich companies is ignorant. The dems do it too, they are just better at pointing the finger and making repubs look bad for it.

Not true at all. The republicans are and have always been pro business, and for giving welfare to big business. They have made entire careers on it. Just look at the senior health care plan for the perfect example of a horrible bill that is nothing more than corporate welfare which removed negotiating power and free market practices. It IS corporate welfare anyway you look at it.

The real problem isn't that we support big biz, it's that we are so stupid in government to not drill, refine and produce our own oil which is right here in our own back yard!! The notion that we will have some alternative fuel soon, is foolish. It's so far off, we need to think of the right now, and right now OIL is our fuel, it pleantiful and abundant. Yet, becuase there are those who are KOOK fringe wackos who think that our earth is dying and we need something other than oil, that's why we don't.

You had congress, the senate and the presidency for 6 years to do what you claim they could have done, and it wasn't done. . .why is that? Maybe because there is not the abundance of oil you think is there, the cost to do it is exorbitant, and it was nothing more than a wedge issue used to promote an extreme viewpoint. BTW, global warming does exist, and it is a problem.

research the alternative, but in the meantime, drill and refine our own oil NOW. Support the Big Biz oil companies to do so and see what kind of drop in oil prices at the pump you see.

If you think this, you really have been drinking the cool ade! We have been giving big oil billions of government money, and we continue to do so. We will continue to do so and it will continue to hurt the dollar value.

For those in favor of a free market approach, why are you so decidedly against it when it comes to big oil?

[HOF44]

There are many MANY more tax incentives wealthy people have that a poor person is not allowed to have. SSI is the biggest example of a poor mans tax there is. Why have the cap on income? That is Dooh Nibor economics at its worst. A tax on the poor person a rich person does not have to pay.

I agree with this. The limit on SSI is bunk. Wonder what it would to to the solvency issue on SS if there was not limit on that.

[GibbsFactor]

I agree with this. The limit on SSI is bunk. Wonder what it would to to the solvency issue on SS if there was not limit on that.

So you let them pay in but not take out?

[HOF44]

So you let them pay in but not take out?

They would get what is allowed by the rules of the program.

[chomerics]

So you let them pay in but not take out?

Not at all, you eliminate the cap on the poor mans tax. The maximum taxable income for SSi is like $102K or something like that, after you make that much money, you don't pay anymore into the system.

So in essence, it is a reverse graduated tax. If you make 0-100K you pay 6% of your earnings into SSI. If you make 200K you pay 3%earnings into it. If you make 500K you pay 1.2%. If you make 7 figures, you pay less than 0.6% of your pay into SSI. It is a Dooh Nibor tax on poor people and rich people don't have to pay anything as their salary increases.

[81artmonk]

This post makes me even sadder

Sometimes on this board I can't believe the type of company I keep.

The only thing I have in common with some of the ignorant people on here is a football team. Reminds me to never talk politics or religion at a sports bar.

I'm really curious what the poster said, that I commented on, that was so terrible, that you had to post something so demeaing as what you said??

[81artmonk]

You gave the absolute best eamples to support you position, I'll give you that. Hard to disagree with you.

But what about someone that comes down with a dibilatating injury, or chronic illness that prevents them from providing for themselves. Do they just get put on the street? Left to die?

Also not all companies live up to lofty ideals you have prescribed to Exxon. Remember Hooker Chemical, PG&E??

The topic is not nearly as simple and clear cut as some make it out to be.

I know I wasn't part of your talking points but, what alot of people are missing is that those people have a legit claim to help(welfare). We are strickly talking about those who mooch off the system and don't use it as a help to getting back up.

[81artmonk]

What service does the oil company provide the taxpayer? What if they are polluting the environment, and spending all their money on overseas investments?

All you have said is the oil company employees people, so they should get the break. . .well, are you advocating people get the break for being an employer yet the person working for them should not? When you advocate carte blanch statements and say that your money going to one adds value, but not the other, you are not looking at the situation clearly.

Put it this way, giving the mom on welfare government assistance has a far FAR greater effect on a community and an area then a business does. It could be for childcare to keep the kids out of trouble, it could be for food which is spent at a local grocery store which pumps up the local economy, it could be for her own education to increase her role in society, it could be for any number of things. To simply state giving a government dollar to someone who is poor has no value is not only wrong and baseless, it is entirely acute in examining the issue of the role of government.

If the welfare mom succeeds from the help and becomes a productive member of society than it is a good thing. However, IMO that isn't the case a majority of the time.

How is the rich person being "punished"??? You do understand that a rich person pays less in %terms in taxes than a poor person right?

A rich person pays almost somewhere in 80%(86.0% Of all federal income taxes are paid by the top 25% of income earners.) range. the top 50% pay 97% of all income taxes. Fact, not opinion.(http://online.wsj.com/article/SB119786208643933077.html)

You just said the system is not fair for rich people, you can't argue both sides of the equation. . . in fact I think it is skewed towards the upper class in a very big way. There are many MANY more tax incentives wealthy people have that a poor person is not allowed to have. SSI is the biggest example of a poor mans tax there is. Why have the cap on income? That is Dooh Nibor economics at its worst. A tax on the poor person a rich person does not have to pay. Why is capital gains tax 15% yea a person who can't have a capital gains tax because they don't make enough money to purchase stock and reap the benefits have to pay upwards of 30% in taxes? Where is the "fairness" in that? In fact the vast MAJORITY of people in the top 1% pay far FAR less of a % in taxes to the person making 50K a year. That is not a fair and equitable system at all.

Nope they are for the rich. If they were for everyone, the tax system would not have become flatter after the cuts. Do you understand what I am talking about here? It is a shift in the tax burden of this country from the upperclass to the lower classes. In effect it makes the rich pay less in overall %s and the poor pay more in overall %s. That is not a fair tax cut, and it is why you always hear people saying it is a rich persons tax cut. . .because the facts prove that it is.

You're wrong again. The tax records prove this. The Rich pay entirely more in % than the poor or middleclass. Again this isn't opinion but fact.

Actually, not they did not "work" for their money at all. A very large % of their tax in capital gains, which is taxed at 15%. This is money that is gained by not working, but instead selling stocks and investments. That is not the same thing as working for a living. Why, in your value system, do you not put the same emphasis on hard work, and actually doing something to contribute to the local, state and federal economies in the same light as signing a piece of paper? Why should a person who is simply wealthy because of their parents and lineage pay less in taxes than someone who works for their money? Why does Paris Hilton only pay 15% of her capital gains income in taxes, yet Joe Blow pay over 30% of his? How is this fair? Because she was a lucky sperm?

See, now your true colors are coming out. You my friend are so completely wrong it's funny. The average wealthy person did not inherit his wealth. Which is what most LIberal think.

So let's say I started my own biz. After 10 years I become really successful and make millions, which I invest and make millions more, in your world, you would call me a lazy rich person. Those with money make more money. just a simple fact of life, doesn't make them evil or undeserving.

Your example, is flawed anyway, the more money you make the advatages you have to taxbreaks. I never said the system was perfect. I'm sure we both could name flaws, that however doesn't mean it favors one over the other.

Not true at all. The republicans are and have always been pro business, and for giving welfare to big business. They have made entire careers on it. Just look at the senior health care plan for the perfect example of a horrible bill that is nothing more than corporate welfare which removed negotiating power and free market practices. It IS corporate welfare anyway you look at it.

Oh I agree, republicans are for keeping jobs while Democrats are for punishing the rich corporate and making them pay for their evil rich ways. The senior health plan you can blame on the AARP lobbying group. One of the most powerful lobbying groups anywhere.

You had congress, the senate and the presidency for 6 years to do what you claim they could have done, and it wasn't done. . .why is that? Maybe because there is not the abundance of oil you think is there, the cost to do it is exorbitant, and it was nothing more than a wedge issue used to promote an extreme viewpoint. BTW, global warming does exist, and it is a problem.

That is becuase the democrats have stood in the way of drilling alongside of the enviro wackos! Every new refinery, drilling bill has been shot down by the dems. Just becuase we have the power, does not allow us as you put it, carte blanche.

If you think this, you really have been drinking the cool ade! We have been giving big oil billions of government money, and we continue to do so. We will continue to do so and it will continue to hurt the dollar value.

Of course, we do. OIL is life!! Without it, our world, economy and everything we know would stop! So yes we support the oil industry.

[Special K]

Let me let you in on a little secret.....MONEY, chomerics...who has it, who doesn't , how it should be dibursed, if it even SHOULd be dispsersed, and so on. BOTH sides of the debate are focused on money.