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Redistribution

By Big Tent Democrat, Section Other Politics
Posted on Wed Nov 25, 2009 at 01:09:04 PM EST
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Matt Yglesias writes:

The House bill, financed overwhelmingly by income taxes on high earners, will represent a large aggregate shift of national resources from the wealthy to the poor and near-poor. It will also represent a large shift of resources from things that are not health care services to things that are health care services. The Senate bill is not like that at all. It is much more mildly redistributive, but its redistribution is overwhelmingly contained within the health care system via taxes on “cadillac” health plans, medical devices, plastic surgery, etc.

Hmm. Define "mildly redistributive." The main financing device provided by the Senate bill is the increase in the Medicare tax on persons earning more than $200,000 per year. This is is a redistributive tax, though not as redistributive as the House tax proposal. Yglesias' description of the excise tax also does not square with the selling of it by other Village wonks - to wit, that it will move money out of health costs to increased wages. Now that claim strikes me as ludicrous, but it is interesting that Yglesias forgets it. Maybe he realizes it is not true. And that in fact, the excise tax is designed to be quite regressive.

Speaking for me only

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    Redistribution | 13 comments (13 topical)

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    Republicans are Right (5.00 / 1) (#1)
    by pluege on Wed Nov 25, 2009 at 02:02:10 PM EST
    the government has enough money - there should be no new taxes.

    the problem is what the government spends its revenues on, i.e., the spending choices Congress makes.

    The government has plenty of money for universal healthcare: take $100 billion per year from the criminally obscenely bloated unnecessary "defense" budget and over 10 years presto: your $1 trillion for healthcare for all.

    Take another $50 billion per year from the defense budget for infrastructure and in 10 years your bridges, schools, and sewers are repaired, you have true high speed rail (greater than 150 MPH), you have mass transit reviving cities and reducing sprawl, the electric grid is modernized, and stable, and you have widespread alternative energy REDUCING every year America's dependence on oil.

    Take $10 billion per year from the defense budget and make sure every American has the opportunity for a college degree.

    Take just $160 billion per year from the defense budget and you restore the American dream in 10 years, and at $520 billion per year you still spend more on "defense" than the rest of the world combined.

    The government has plenty of money for everything Americans need. The problem is what Americans allow Congress to spend their money on.

    Right on pleuge! (none / 0) (#2)
    by kdog on Wed Nov 25, 2009 at 02:19:42 PM EST
    Tax increases shouldn't even be on the radar until we have a long hard talk about the budget and the nonsensical sh*t we spend astronomical sums on.

    Parent
    Defense Budget (none / 0) (#13)
    by Politalkix on Thu Nov 26, 2009 at 02:15:31 PM EST
    I agree that the Defense Budget should be reduced (it is also a much lower % now than what we had during the times of LBJ and FDR). However, we also have to bear in mind that the largest part of the Defense Budget goes towards payment of salaries of our men and women in uniform.
    If we make huge cuts in the defense budget, what are we going to do with the laid off servicemen? Shall our country hire them as teachers and nurses and in projects to revamp the national infrastructure? Will the Democratic base agree with such a policy given that it will increase the level of competition for domestic jobs?

    Parent
    Sigh .. and now $200k income is rich??? (none / 0) (#3)
    by nyrias on Wed Nov 25, 2009 at 02:28:32 PM EST
    That is bogus in places like the Silicon Valley where they would barely fund a upper middle class life style, for a family of four, given the taxes are already so high.

    If it's so expensive in Silicon Valley... (none / 0) (#4)
    by NealB on Wed Nov 25, 2009 at 02:38:31 PM EST
    ...they should move to Missouri. This is America. Lots of choices for everyone here. Hell yes, $200,000 is plenty of money for a family of four. Anywhere in the country.

    Anywhere honest people that don't think they deserve special privileges want to set a reasonable budget and live by it. No exception for folks in overpriced locales like Silicon Valley. This is America. One country. A democracy. One set of rules applies for everyone.

    Parent

    Not when ... (none / 0) (#5)
    by nyrias on Wed Nov 25, 2009 at 02:45:02 PM EST
    a small house costs 3/4 of a $1M, and we have to pay CA 10% of our income, and a 8.25% sales tax.

    If you look at their life-style at $200k families, it is no where close to what you think the rich will do.

    And sure, it is one democracy and we will see if the voters will go for tax increase for the middle class.

    Parent

    In Palo Alto... (5.00 / 1) (#8)
    by NealB on Wed Nov 25, 2009 at 10:17:22 PM EST
    ...there's a "beautifully remodeled home boasts a Bright & open floor plan w/ Gleaming hardwood floors an elegant upgraded kitchen w/ Granite counters..." going for $258,888. If you've got your $62,000 down payment, your monthly mortgage payment at 5.5% would be $1,176.

    For a family with $200,000 annual pretax income, that's about 7% of income to pay for the house. Another way: Less that $15,000 of that $200,000 annual income to pay for the house. Another way: $185,000 for everything else, including paying a goodly share of it in taxes that make that $200,000 annual income possible.

    In short, even in Silicon Valley, there are livable homes that are affordable. And anyone that can't make it on what's left of their $200,000 after paying a measly $1200 a month mortgage doesn't deserve to be making that much money in the first place.

    Anyone in America making $200,000 and up should be paying more of it in taxes.

    Parent

    You Obviously (none / 0) (#10)
    by dissenter on Wed Nov 25, 2009 at 11:18:57 PM EST
    have never bought a house in that area. I'm sure a family of four could live in four hundred square feet of space but I doubt they would be sane.

    Just saying.

    Parent

    3br/2ba (5.00 / 1) (#11)
    by NealB on Thu Nov 26, 2009 at 01:17:50 AM EST
    I haven't bought a home there, but if living in Silicon Valley causes insanity there's no excuse to ask the rest of America to subsidize their taxes.

    Parent
    Hmm .. wrong view (none / 0) (#14)
    by nyrias on Thu Nov 26, 2009 at 08:30:34 PM EST
    People in Palo Alto are generally in HIGHER tax bracket and they are paying MORE (per capital or percentage-wise) TAX than the average American.

    The question is why they should be subsidize others' taxes.

    Parent

    The middle class pays more than its fair share (5.00 / 1) (#9)
    by NealB on Wed Nov 25, 2009 at 11:04:17 PM EST
    They pay a significant portion of their total income every year in taxes. E.G. 20% of $50,000 leaves only $40,000 a year to pay all the bills. For the sacrifice, the middle classes get little from the government in return for it.

    The upper classes, by comparison pay an insignificant portion of their total income every year in taxes. E.G. 40% taxes on $500,000 income leaves them with $300,000 disposable funds every year. For their relatively small contribution in taxes they get the benefits of a political system that fiercely defends their "right" to enjoy that $300,000 a year.

    The middle class must try to survive on $40,000 a year and are insulted if they complain. The upper class gets to live it up on $300,000 a year and are praised as the embodiment of the American dream.

    The middle and lower classes have been bled dry in this country so that the wealthy may enjoy their profits.

    Tell me about a hundred people from the top 10% of the wealthy that are willing to forgo their wealth for a year and survive on the $40,000 or less that most middle class folks do. Until 100 of the richest among us prove they can make it on $40,000 a year, don't suggest that the middle class needs to pay more in taxes than they do now.


    Parent

    And yet, house prices are crashing (none / 0) (#6)
    by Cream City on Wed Nov 25, 2009 at 04:14:32 PM EST
    in such overpriced places, so we also are told.

    Parent
    sure but ... (none / 0) (#7)
    by nyrias on Wed Nov 25, 2009 at 08:20:18 PM EST
    a) it does not crash enough, and
    b) it does nothing to help those already purchased one and are paying off their mortgages.

    Parent
    Redistribution | 13 comments (13 topical)

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