Carl Tyler's Blog

1 - No, its not. Trickle down is when the success of people allow other people to be successful.

Spreading the wealth is not bad, when it is done at the grass roots. When it is forced upon you by the government, yeah, that is when I object. I already give a healthy percent of my earnings to multiple charities - I want that ability to choose where it goes. Not to go to taxes

2 - Personally I don't think it is. I'm happy to pay my taxes and to pay more taxes if that's what's needed for the society I live in to succeed.

I realise I'm way in the minority here though

3 - According the the GOP, spreading the wealth is fine as long as the recipients are mega-corporations or millionaires. They then expect those people and companies to invest in things that create jobs. Real conservatives legitimately believe that's the best way to grow the economy. The theory was largely discredited IN THE PUBLIC EYE (I'm not saying it is literally false, but the perception is that it did not work) in the 80s and that is why the term "trickle-down economics" is never used any more.

The current trend is to instead label progressive taxation as "socialist." This leads to a massive irony overload as the rest of us watch the enormously expensive government bailouts of the auto, airline, and financial industries, which in some cases have involved nationalization of those companies (that, of course, being the true definition of socialism).

4 - #3 Rob, I consider myself a true fiscal conservative, and am sickened by the nationalization that has happened and is happening. I can't stand what the current administration has done. I know this idea is not popular, but I think we need to let companies fail. Just like the forest needs a fire to clear out the old and let the new thrive, we need that in business as well. I would let companies that mismanage themselves or are corrupt die and fail. Let new companies grow and thrive in the space they leave. And I also want to see us go after the people that created these problems .. the CEOs and Boards of AIG and all the other companies should be held responsibile. I know that is not a very Republican or GOP belief, but it is a fiscal conservative belief.

I also split my beliefs between fiscal and social issues in a major way. I am probably mega conservative on fiscal and fairly in the middle socially. I HATE that I have to pick from one of two options ... because neither match what I believe

5 - I think "spreading the wealth" as it is used in this context here is also a form of punishment for hard work.

I have pushed myself hard, educating myself off hours, taking risks, taking on financial burdens for my business, working 12+ hour days, etc.,. I would not want someone telling me that now I should give a portion of that hard earned money to someone else.

It would be different if you told me my taxes were going up to pay for a social program such as health care...I might not agree, but I get that.


John

6 - @4 Yeah, you're what I think of as a traditional conservative. I hope the election results lead the GOP back to its roots. The current GOP leaders seem to have taken the worst of both worlds, from my perspective - they've stopped caring about fiscal responsibility, and they've focused on intrusive promotion of a particular version of morality. Give me a real conservative to argue with any day of the week - I won't even mind (much) if I lose the arguments!!

@5 John M, the "sharing of the wealth" that Obama proposes IS going to social programs like health care. He's proposing the reduction of payroll taxes that are used to fund Medicare and Medicaid, and the money to make up that lost revenue will come from taxes on those of us who make more than $250k. For the record, I have no issue with paying that tax. I agree with Joe Biden - it's patriotic. I have a responsibility to my country,and that responsibility doesn't consist of an obligation to wear a flag pin or chant USA at sports events, it's an obligation to do my part when the country's in a hole. We weren't asked to take a financial hit to pay for the wars (though we should have been - first time in history we went to war and gave people tax cuts at the same time, a first grader can do the math on that one), so if we're asked to do so now, I consider it long overdue.

7 - One word (followed by many others): Entitlement.

Welfare (spreading of wealth evenly amongst the populace via executive or legislative fiat) transfers the earned revenue to those who did not earn it. Just as with the bail out, when you are given a hand out, there is no incentive to change your behavior. "Spreading the wealth around" will, as mentioned above, disincentive hard work on the part of those who work hard (why work harder to have more taken?) and fail to incentivize hard work on the part of those who presently do not (why work hard if all I need is provided for me without doing so?).

People, society in general, grow through adversity. The question is which way do they grow in? Growing into a socialist system increases the imbalance of workers to welfare recipients - increasing the burden on the working class (even the wealthy working class). We're already heading that way demographically with the aging baby boomers - we don't need to make it worse through more government sponsored socialism.

Nothing motivates like money because money provides a universal means to any end. When money is tagged for a particular purpose, it looses its persuasive power. Earmarking it for more government managed health care reduces the amount available to spend on private health care. Of these two systems, private health care innovates at a much higher rate than govt. sponsored health care. Why? Because there is a direct incentive: profit.

One could argue that the government would likewise profit from healthy citizens via increased future tax revenue but I don't believe your average bureaucrat thinks that far ahead... their thought process, like everyone else, usually ends with "what is the easiest way for me to get my pay check?". And that's the question you need to ask of everyone - then examine what they propose to do. The easiest way for Obama to earn his paycheck is to be elected president, ensuring a lifetime of security (financial) for himself and his friends in Congress.

In a world governed more strictly by free market capitalism, it is more difficult for socialists to earn their paycheck. Profit is the motive for all proposals. We ought to be looking at which president provides the most potential profit for all - not merely distribution of some money to all (which according to trickle down theory will in the long run be much much less actual wealth in a socialist system).

Another way to frame it is how hard to you want to work for your profit? Under socialism, you will be left with less than you receive now for the same effort, and may lose your job when it becomes cost prohibitive (too little profit) for your employer to continue to employ you. If you are fine with giving up your current standard of living and abdicating control of your future to someone who truly couldn't care less (the afore mentioned bureaucrat), vote Democrat. If on the other hand you value freedom of personal choice (distribution of your wealth under your direct control) and might like to retire somewhere other than government project housing, I suggest you vote some other way - and given our locked in two party system, that would leave only Republican.

8 - You asked.....
There are many ways to "spread the wealth" - many of which will ensure that there is eventually less wealth for all (unless perhaps you are the least wealthy to begin with).
We (in the US) already spread some wealth through income taxes - the rich pay much more than anyone else while the poor pay none. Most Americans simply do not support income redistribution - so we have not gone over the edge.
We all like to think that we can make more money through hard work, effort and ingenuity. We need to have this opportunity. As soon as the incentives are gone fewer will maintain these values and we will, as a country and perhaps the world, produce less and create less overall wealth.
As Karl Marx said, "From each according to his abilities, to each according to his needs". Taking from the rich to give to the poor did not work so well for the Soviets nor other communists and would not work well here.
Of course we need taxes and of course we need to help those that are in bad spots - no one should go hungry or unsheltered. That is why we pay taxes, have welfare, social security, etc. We do need these safety nets.

I have a better way to "spread the wealth" - or better yet "increase the wealth" - it's called COMMERCE. A high tide raises all ships - this saying fits a correctly-regulated economy perfectly.
You Carl, are like Joe the Plumber. You are very smart and work hard. You have studied and learned many things that help you provide great services and products for others. Would you work/study as hard if you knew your financial rewards would be the same as if you did not? Perhaps you would - but most would not. I want you to be better off financially than some others that don't work as hard and provide the services that you do. Keep up the good work and keep getting your rewards! Also share with charities and with those that have less. Keep paying those taxes too!

9 - I'll br brief:

Spreading the wealth is bad because:

1. It removes incentive for one to become successful (think about it - you bust your butt to become a success and financially successful, only your wealth taken from you and given to someone who does not have the drive that you had (OK, a "lasy arse"). This is wrong, by any moral, ethical, and sensible standard;

2. By discouraging success, the entire economic system of a country is in jeopardy of collapsing. Example: Government has $1.00 coming in from businesses/people to "distribute" - these entities no longer see a value in working so hard, so they cut back on their services/products (or, eliminate them all together). Since they are making less profits, they pay less (say, $0.90) of the "distribution" -- where does the government get the other 10%? They raise rates, cause more businesses to follow suit, resulting in an implosion of unimaginable proportions. History will show this as a fact.

3. American government is already filled with programs based on the "distribution of the wealth" philosophy - welfare and child support to name two. While I believe that 'helping out when one is down TEMPORARILY' and a definite believer in supporting one's children', I do not believe that the government should dictate the amounts that I do it in.

Also, these programs completely discourage anyone from going out and excelling in life, because, more times than not, the recipient of these programs do not have to excel - they can sit at home and collect a paycheck. And, if you take a close look @ how your State uses welfare and child support (among others), the State actually PROFITS from these programs in the form of block grants from the Federal Government. Also, many States abuse these programs to get as much profit as possible. This is fact - and I have the docs from the G.A.O. to back it up!

I'll stop here, but, distribution of wealth discourages people from succeeding and results in laziness(1), can cause issues of severe magnitude (2), and, are proven failures encompassing governmental greed.

My $0.02 - if you want it, go earn it! If I earn it, it is mine (unless you decide to give some to me in hard times) -- Who ever life is a free ride??

Cheers
Bob Baehr
The Unofficial Poster Child For Lotus Notes, Domino, and Lotus Foundations

10 - What trickle down really means is the folks at the top with all the money piss (hence the "trickle) on the rest of us.

11 - @Steven - would that be "piss on" as in "employ" (e.g. exchange money for labor) or "piss on" as in patronize (e.g. spend money at the place you work so you can have a job)?

Or are you imagining there should be some more voluminous level of transaction that inequitably benefits you for work you didn't do or service you didn't provide?

12 - I think one of the factors driving this issue is that people know that corporate executives have been getting steady huge increases in their salaries, while most serfs (like myself) have seen modest or no salary growth whatsoever for a long time.

While I don't know what goes into running a Fortune 500 company, I'm pretty sure I can't do it. However, that doesn't mean that the CEO deserves a $400 million golden parachute when they are forced out for their own incompetence.

Many publicly traded companies have had shareholder proposals to limit the size of a CEO salary to a certain # times the average employee salary. Many (if not all) have not been rejected by shareholder vote. While these proposals can be viewed as a disincentive, CEOs would still make a pretty good chunk of change. (I think I can live pretty comfortably on $10 million a year...)

13 - Well, I'm pretty much in favor of spreading the wealth, even though it will be my wealth they're spreading. Most government programs have far less overhead than similar private programs, notwithstanding the years of whining that the government is wildly inefficient. I'll admit I have a muddled sense of priorities, but there is far from a level playing field now, and I'd strongly favor higher taxes on people like me (and those making much more) to level out the playing field and provide a basic safety net of health and welfare amongst everybody in this country. Obviously, I don't want to go back to 95% tax brackets, but when Warren Buffet pays a lower tax rate than his secretary (which he freely admits), there is a problem with the system. I'll freely admit that I look at my tax returns each year and am astonished that I don't pay a higher percentage, and that is without taking any special tax breaks or shelters or anything.

14 - @13 - I'll be happy to help you deal with some of your shock... just send some of that should've-been-tax money my way.

I'm with Bob. If I earn it, I want to decide how I spend it. I don't want to HAVE to give it to corn subsidizing, bailing out a company, or helping out somebody who has 8 kids and makes $10,000 a year (and in many ways is incentivized to KEEP having children).

I want to be able to decide who I can give it to: my mom, the Red Cross, or the disadvantaged kid across town who is trying to go to a good private school.

Simply put: It's a freedom thing. It's not my right to tell you what to say, how to think, or how the result of your work -- or lack thereof -- should be spent.

And I don't want anybody else deciding those things for me either, whether they were to do it directly or by voting somebody in to office who will force those things upon me.

15 - The funny thing about this huge debate over "spreading the wealth" is that people act as if it's news. The income tax was created in 1913, and it has always been progressive, meaning rich people pay a larger percentage of their income than poor people do. There's a good article on the question from AP:

{ Link }

One interesting detail that income tax critics don't usually mention is the difference between income taxes and payroll taxes. Worth knowing (source, article linked above):

"For most Americans, the biggest tax burden is the payroll tax that funds Social Security and Medicare. The tax rates are the same for everyone, and the Social Security levy does not apply to incomes above $102,000, a boon to the wealthy.

Moreover, Social Security benefits go to rich and poor retirees alike. That means low-income workers' payroll taxes are partly shifted to wealthier people, a reverse of the income tax's topdown construct."

16 - @Rob - Exactly! That social security payroll tax is why Warren Buffet's secretary pays a higher percentage in tax than he does.

As you say, we have always had a progressive income tax (and I hope we continue to do so).

17 - @Rob - Interesting point. I'm shocked that neither candidate has pushed anything about reforming Social Security. Perhaps after Bush mentioned that in 2004 as a keystone of his re-election, and then failed to do anything about it, that is a topic to be avoided this time around?

I'd argue that it's good thing that Social Security stops at $102k. That leaves Mr. Buffet more money to dump back into businesses that create jobs and might actually return something higher than what SS does (~3% if I recall).

18 - @11: None of the above. They just like to piss on people lower then themselves. Get a grip. You're taking an obviously glib silly comment too seriously.

19 - @Ben: "Most government programs have far less overhead than similar private programs" ---

Are you kidding yourself? I have worked for both business and government and there is NOTHING efficient in the way governments at the local, state or national level works. Take procurement for example. In business, if I need a laptop and it is in the budget, it gets acquired. Two decisions, maybe two or three approvals depending on the size of the business. In government there are at least two, maybe three times the number of decisions and approvers.

I knew a guy who was a deputy assistant to a cabinet level secretary in charge of procurement for that agency (about 350K employees). He spent a year on a private sector exchange program (back in the 1980s) where he was involved in procurement at a large bank in New York. His assessment of the differences was that government HAD to be less efficient because they could not afford to make wrong decisions. In the end this meant that they also never made good or timely decisions. Private concerns can recover from wrong decisions either by jettisoning the portion of the enterprise that has failed or by sinking resources into the repair. Government cannot do either.

This means that a government run program will by its very nature be mediocre at best, despite the excellent intentions of the employees and leaders. When the marketplace is working well, business that are mediocre go away and are replaced by ones that do a better job.

Think for a moment please about the impact of what you suggest. If some well intentioned sophisticates from New York, Chicago or Washington can decide how to better spend your health care dollars, how far removed is that from them telling you what brand of car to buy and which e-mail client to use. After all, it would be far more "efficient" if there was only one type of car and one e-mail client. There would be no innovation like the Midas LSX, but it would be efficient... not.

Newbs

20 - @Newbs - Even aside from the disputed efficiencies of Medicare, I have dealt with private and government organizations with fairly large capital expenditures (hence my children going to nice colleges). I have to tell you, the government agencies may be a bit hidebound and slow, but they are generally far better at efficiently negotiating a reasonable price. Big corporations tend to be very stingy about pencils and laptops, and very extravagant about software, infrastructure, etc. Government agencies tend to be stingy about everything, but the most stingy about big expenditures, partly due to generations of "budget-squeezing".

And I am not in any way saying that "well intentioned sophisticates from New York, Chicago or Washington" (who I highly doubt are any more profligate than unsophisticates from Wasilla or Dropsy's Bend) should decide how to spend all my money. I do somewhat like the idea of sophisticated experts deciding how to solve numerous societal problems that I can't figure out sitting in my living room writing checks to charities. They may not be perfect, but the idea that all us normal schlumps are inherently better at figuring out individually how to solve those problems than experts who are hired to do so seems idiotic to me. Of course, then we need to have leaders who actually admire and hire experts instead of "good old boy" drinking buddies. Hence, Obama is more promising than Bush. Just my opinion, of course.

21 - @Newbs - One more thing. While my experience may be different than others, I have found government agencies tend to have very strict rules, but far fewer levels of approval than large corporations, and particularly than large health care companies, where you can jump through hoops for months trying to get a simple acquisition approved. Again, just my experience, but since people seem to think we should manage our own money to do as well for society as government can, my own experience is all I should ever have to go on, right?

22 - Ok... I'll jump in.

Trickle down does not work. The rising income gap during the years since the Reagan tax cuts are incontrovertible proof that that the gains of the wealthy are not re-invested in ways that necessarily benefit of the middle and working class. The gains of the wealthy are invested where they will gain the highest additional return for the wealthy. There's no surprise in that is there?

For the past 20 years, that has meant that the gains of the wealthy are invested in creating jobs in low-wage countries, or in businesses in the US in which executives are willing to be the most responsive to pressure for short-term gains from shareholders by controlling labor costs and under-investing in the future ongoing business operations -- because short-term investors don't care whether a firm will exist to employ its workers in ten years, or even three. Capital is mobile.

And as we see clearly now, the latest place where the wealthy sought the highest possible returns on their gains from the Bush economic policies has been in "financial innovation" which created nothing of lasting value for the economy, so that the primary thing that trickled down was indebtedness.

As for spreading the wealth, Barack Obama's tax plan adds 3% to the marginal rate paid by a working family that earns over $250,000. So if the income is $260,000, the family pays $300 more than they would under the current tax structure, or at $350,000 it's a whole extra $3,000. Whooopeee! That's just socialism running rampant, isn't it? Yeah, right.

The purpose of income redistribution through taxation is to counter the natural tendency of capitalism to concentrate wealth. The justification is that excessive concentration of wealth breeds instability that endangers everyone, and extreme inequality is offensive to the sensibilities of civilized society.

23 - @22 - You've got a good point there: The fact that we won't lower our minimum wage to the rest of the world's is likely doing more harm to our economy than any tax policies we're debating.

That bugs the snot out of me too. If the value of your labor is lower than minimum wage then you aren't allowed to work in this country.

24 - I'm Bob Baehr, and I approved this message.

I'll be brief again -

First, I am far from rich! Second, the current tax system is broken, no matter your 'viewpoint' - rich or poor, and is in need of a complete overhaul.

Now that I got that out of the way, distribution of the wealth via Government policy is a complete contradiction of what this Nation was built on, has thrived on, and, has excelled on. Why has America been called "The Greatest Nation In The World"? Because we have a history of opportunity (and, to benefit ourselves) from the fruits of our labor.

I am of the opinion that America has become the laziest nation of peoples on the planet. All we are looking for is a 'free ride', and, will give up whatever it takes to score that freebie. For example, look at the legal industry - while there are legitimate cases out there, for the most part, it's no longer about law and doing what is right, it's about making money!

What many people do not understand is that when you put your 'wealth' into the hands of the Government, they determine how much you get (*Strike 1*), subject to change at their discretion, beyond the control of the recipient (*Strike 2*).

And, Government can spend that money taken on anything they want - even through depletion with nothing being left for the citizens - Social Security anyone? (*Strike 3* - you're out!)

Today, they'll take your wealth! Tomorrow, they'll take what's left of your freedoms. This is not my opinion, but, historic fact (I am not a 'scholar', but, I have studied world history, esp European and Russian History)

Example: Pick up a historically accurate book on Russian history from the 1850's through 1917 - don't just read it - t*h*i*n*k about it! Then, look at Russia from 1917 to the mid-1950s. Compare that to current-day America and draw your own conclusion.

What I see being generated by all of this talk (not here, but in the media and among politicians) is class envy, which will lead to class warfare, among the citizens.

So much for being 'brief' - my apologies!

Bob Baehr
The Unofficial Poster Child For Lotus Notes, Domino, and Lotus Foundations.

25 - Bob,

It is hardly "historic fact". Marginal tax rates have been higher than they are now for most of the great expansions of the last 100 years. This country was built on the idea that Government was not "them", but "us".

Ben

26 - So I haven't said anything until now, so I should at least let people know where I stand.

So first I have some firm beliefs:

1. I believe that healthcare and healthcare services is a human right. I find the whole idea of someone through no fault of their own coming across insurance limits and such nonsense. No one, and I mean no one should have no health coverage. If that means I pay more tax so be it, I and the business currently pays quite enough to healthcare companies anyway.

2. I believe we spend too much on military, I would much rather money was spent on Education, healthcare and infrastructure, if private companies that currently make their money from military can't adapt to new customers, then let them fail, others will fill the spot.

3. I like the idea of a flat tax, a percentage is a percentage is a percentage, the size of the pie is proportional.

4. I believe Americans need to come to grips with the fact that markets and global economies have a leveling effect. Unfortunately for Americans and many western countries, as the develop countries standard of livings come up ours will go down.

5. I believe that for the last couple of decades, CEO pay scales have been completely screwed up. They've grown their salaries by something like 1500% whilst regular employees have seen very little in the way of increase. CEOs that get bonuses when they succeed and when they fail is Bullshit.

6. Being a Brit, I believe America was founded by terrorist anarchists who didn't want to pay any taxes

27 - @25 - I agree with you that Government is "us". I'll maintain accuracy in my post.