Wednesday, October 05, 2011

George Will on Elizabeth Warren's Collectivism

George Will below responds to Elizabeth Warren's recent claims that (modified slightly):

"There is nobody in this country who got rich on his own. Nobody. If Steve Jobs or Bill Gates created a new company like Apple or Microsoft out there — good for you guys.

But I want to be clear. You moved your iPods, iPhones, and Windows software products to market on the roads the rest of us paid for. You hired workers for Apple and Microsoft that the rest of us paid to educate. You were safe in your offices because of police forces and fire forces that the rest of us paid for. ... You built a computer business and it turned into something terrific or a great idea — God bless, keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along."

Here's George Will:

"Elizabeth Warren is a pyromaniac in a field of straw men: She refutes propositions no one asserts. Everyone knows that all striving occurs in a social context, so all attainments are conditioned by their context. This does not, however, entail a collectivist political agenda.

Such an agenda's premise is that individualism is a chimera, that any individual's achievements (like Steve Jobs) should be considered entirely derivative from society, so the achievements need not be treated as belonging to the individual. Society is entitled to socialize — i.e., conscript — whatever portion it considers its share. It may, as an optional act of political grace, allow the individual (like Steve Jobs) the remainder of what is misleadingly called the individual's possession.

The collectivist agenda is antithetical to America's premise, which is: Government — including such public goods as roads, schools and police — is instituted to facilitate individual striving, aka the pursuit of happiness.

Society — hundreds of millions of people making billions of decisions daily — is a marvel of spontaneous order among individuals in voluntary cooperation. Government facilitates this cooperation with roads, schools, police, etc. — and by getting out of its way. This is a sensible, dynamic, prosperous society's "underlying social contract."

41 Comments:

At 10/05/2011 10:48 PM, Blogger arbitrage789 said...

"God bless, keep a big hunk of it"

Nice to know that she doesn't want to take ALL of it.

 
At 10/06/2011 2:44 AM, Blogger PeakTrader said...

Government exists, because people pay for its services.

However, when the quality of the service becomes too low or the price becomes too high, it's almost impossible to cancel the service.

Government can maintain its poor quality or high price services by charging enough people too little, while charging other people too much.

In spite of the poor quality or high price of government services, some people find ways to succeed.

 
At 10/06/2011 2:50 AM, Blogger PeakTrader said...

Real value is when someone earns $1 million for creating $2 million of value for society, for example.

 
At 10/06/2011 3:25 AM, Blogger PeakTrader said...

When someone earns $1 million to create $2 million of value for society, he's already paid his "fair share."

It's government that's not paying its fair share by spending and squandering $2 million for $1 million of value.

 
At 10/06/2011 7:04 AM, Blogger Larry G said...

there are lots of countries with much more minimal govt and govt spending.... low taxes..no payroll taxes... very low if any corporate income taxes but entrepreneurs seldom flock to those countries.

the best countries appear to be the ones with the strongest but elected/representative govts but it's also clear than govts like China can and do get themselves involved in the "free market".

 
At 10/06/2011 7:57 AM, Blogger Zachriel said...

Speaking of straw men. Warren didn't claim that the rich owe everything to society, just something. And yes, some people say they shouldn't have to pay for any more than a minimalist government.

 
At 10/06/2011 8:00 AM, Blogger Michael Hoff said...

If you haven't read the whole article yet, you gotta read the part about the liberal intelligentsia believing that Americans are a "malleable, hence vulnerable, herd." A brilliant summation of the leadership of the left.

 
At 10/06/2011 8:07 AM, Blogger Jason said...

The audacity of Ms. Warren is staggering. As if the companies and examples she lists could not have even existed without publicly funded roads and education. Does it even enter her mind that the roads and educational institutions were funded by taxpayers who gained their livelihood through other companies and invertments before? Clearly not well thought out.

 
At 10/06/2011 8:15 AM, Blogger mike k said...

Speaking of straw men. Warren didn't claim that the rich owe everything to society, just something.-Zach

They owe exactly what everyone else owes and not a cent more.

 
At 10/06/2011 8:24 AM, Blogger Larry G said...

where did public schools and public roads come from?

who had the nerve to say that people who earn their own money should have to pay taxes for roads and schools?

is that where this country started to go wrong?

:-)

 
At 10/06/2011 10:16 AM, Blogger Seth said...

"They owe exactly what everyone else owes and not a cent more." -mike k

That's exactly right.

 
At 10/06/2011 10:34 AM, Blogger FactsAreFriendly said...

While agreeing with George Will, it seems to me he leaves out some important assumptions of Democrats, namely that government is honest, efficient, able to withstand the political forces promoting crony socialism, financial moderation and competence.

Government officials, particularly elected officials,often fail to meet all or most of these criteria and cause government forces to harm and stagnate the drive of individuals and thereby harm our quality of life.

Think Solyndra.

Dwight Oglesby

 
At 10/06/2011 11:00 AM, Blogger Che is dead said...

"... he leaves out some important assumptions of Democrats, namely that government is honest, efficient, able to withstand the political forces promoting crony socialism, financial moderation and competence." -- FAF

I think that you have far to charitable a view of the leadership of the Democrat Party. I believe that they know exactly what government is, at least to them. Democrats view government as an irresistible force with which to plunder one segment of the population in order to purchase the political support and loyalty of another. Vilifying those they wish to plunder while inculcating a sense of "victimhood" in those who would benefit from their scheme is simply a matter of political expediency. The left does not care about the poor or about "social justice". If they did they would have abandoned Marx long ago. They care about power.

 
At 10/06/2011 11:08 AM, Blogger Che is dead said...

"who had the nerve to say that people who earn their own money should have to pay taxes for roads and schools?" -- Larry

And what about the nearly fifty percent of us who pay no taxes? When do they start creating the wealth and economic growth that these collective achievements are supposedly responsible for? Are they simply leeches, selfishly using our collective infrastructure to no greater societal purpose? Why does the socialist left give them a free pass?

 
At 10/06/2011 11:10 AM, Blogger Zachriel said...

mike k: They owe exactly what everyone else owes and not a cent more.

Seth: That's exactly right.

Ah, a capitation tax. Bill Gates pays the same tax as his gardner. It is simpler, at least.

 
At 10/06/2011 11:16 AM, Blogger Zachriel said...

Che is dead: And what about the nearly fifty percent of us who pay no taxes?

Nearly all Americans pay net taxes, in particular, working people incur payroll taxes, not to mention local taxes.

Che is dead: Why does the socialist left give them a free pass?

Well, twenty percent of households have "leeches" collecting Social Security.

 
At 10/06/2011 11:33 AM, Blogger Che is dead said...

"Ah, a capitation tax. Bill Gates pays the same tax as his gardner. It is simpler, at least." -- Zach

Even if Bill Gates were to pay the same tax as his gardener their contribution to the overall wealth of society would be no where near the same. For example, how many jobs has his gardener created, what do they pay and how much do his employees pay in taxes? And what about the indirect impact of the economic activity created by Gates? The jobs, income, taxes?. Talk about simple.

 
At 10/06/2011 12:39 PM, Blogger Seth said...

"Bill Gates pays the same tax as his gardner." -Zachriel

There would also be a strong incentive among voters to vote for politicians that would keep government spending to a minimum.

My Homeowners Association fee is a flat amount per household. All homeowners are pretty well aligned on the limited functions of our HOA. I can well imagine that alignment might unravel if we went to a more 'progressive' system of fee assessement.

 
At 10/06/2011 1:01 PM, Blogger mike k said...

Ah, a capitation tax. Bill Gates pays the same tax as his gardner. It is simpler, at least.-Zach

That would be nice, but I'd settle for a flat tax, even one with a large standard deduction so those at the bottom paid only payroll, state and local taxes. As long as the deduction was applied evenly across the board. But, that is as progressive as I get.

 
At 10/06/2011 1:11 PM, Blogger Zachriel said...

Che is dead: Even if Bill Gates were to pay the same tax as his gardener their contribution to the overall wealth of society would be no where near the same.

Well, if you taxed $5000 per head, that would raise about $1.5 trillion. You would have to eliminate Social Security and Medicare, of course. (Let the old "leeches" pay for their own pill-popping.) Now, a family of four making $25000 a year, would pay $20000, leaving them $5000 to pay for lodging, food, electricity, etc. Bill Gates would have to pay $25000, leaving him, well, a bit more than $5000 to pay for his family's basic needs. Do you see a problem with this?

 
At 10/06/2011 1:31 PM, Blogger Paul said...

Zachriel,

"Well, if you taxed $5000 per head, that would raise about $1.5 trillion."

Regardless of the math, Che's point is valid. Besides, we should be talking about how to roll this corrupt, staggeringly wasteful federal govt back, not rewarding it with a pay raise.

 
At 10/06/2011 1:55 PM, Blogger Moniker said...

Paul-

Regardless of the math???

You must be joking? The math is a fact. You can't get blood from a stone. The tax system is progressive because it has to be.

Even if you pare down government to the bone, you don't get to a capitation tax figure that the average joe can pay.

If you implement a capitation tax, wages would have to rise dramatically, making US goods and services more expensive.

 
At 10/06/2011 2:02 PM, Blogger Paul said...

Moniker,

Reread Che's comment.

 
At 10/06/2011 2:08 PM, Blogger Paul said...

"The math is a fact.You can't get blood from a stone."

Yeah, but you can get it from the approx 50% of wage earners who aren't paying any net federal income tax. There's a math fact for you.

 
At 10/06/2011 2:18 PM, Blogger Zachriel said...

Paul: Regardless of the math, Che's point is valid.

You might reread your own statement. When it comes to money, the math does matter.

 
At 10/06/2011 2:19 PM, Blogger Zachriel said...

Paul: Yeah, but you can get it from the approx 50% of wage earners who aren't paying any net federal income tax.

Yes, but they're paying other taxes, including payroll taxes, which represent 40% of federal revenues. In fact, they pay a higher percentage of income in payroll taxes than higher income people. Overall, federal taxes are progressive, but only somewhat so.

 
At 10/06/2011 2:29 PM, Blogger Moniker said...

Paul -

The one about the "leeches"?

We're in a recession. Last time I checked, 1 out of 8 kids are going to bed hungry at night. 10% of the population is unemployed (and looking for work), not to mention the underemployed. 20% is living at or below the poverty line -- $22k for a family of 4 -- could you survive on that??? They're not all lazy parasites. As Z said above 20% of those taking "entitlements" and not paying taxes are old people on SS.

Or Che's comment about the contributions of Gates and his like to the advancement of society?

No doubt those guys provide jobs, tax revenues from their employees and an overall betterment of the entire society. BUT, not everyone who is rich is an entrepreneur with an operating business. Lots of rich people are Passive investors. Rich kids with trustfunds. Heirs to fortunes. Do they contribute to the betterment of society too? Maybe their investments create opportunities for others, but that's hardly comparable.

I'm in agreement with you that we should cut government spending (let's start with means testing entitlement programs and chopping the defense budget). I would also minimize or eliminate corporate and business taxes to support growth. But, as a practical matter, you can't abolish progressive taxation of individuals.

 
At 10/06/2011 2:38 PM, Blogger Paul said...

Zach,

"You might reread your own statement. When it comes to money, the math does matter."

Che's point was theoretical. Now pretend you don't understand again.


"Yes, but they're paying other taxes, including payroll taxes, which represent 40% of federal revenues"

Yeah, and so are the higher income job providers you want to turn upside down and shake. Why should one group be exempted completely from paying income taxes? Besides,those payroll taxes are supposed to be eventually returned to them in the form of entitlements, not building roads to the factories of the evil capitalists.

 
At 10/06/2011 2:41 PM, Blogger Moniker said...

Paul-

It's not 50% of "wage earners" who do not pay federal income tax, it's 50% of all households.

 
At 10/06/2011 2:45 PM, Blogger Paul said...

"We're in a recession. Last time I checked, 1 out of 8 kids are going to bed hungry at night. 10% of the population is unemployed (and looking for work), not to mention the underemployed.."

Yeah, Obama is a human wrecking ball, isn't he?

"Do they contribute to the betterment of society too?"

Hmmm, perhaps Obama can create a Council of Elders to determine who should be fleeced to pay for his next Solyndra style adventure. Who should be allowed to keep their money?

He could possibly model it after IPAB.

 
At 10/06/2011 2:51 PM, Blogger Paul said...

Moniker,

"It's not 50% of "wage earners" who do not pay federal income tax, it's 50% of all households."


Oh, sorry. I should have said the bottom 50% pay all of 2.7% of income taxes.

http://www.kiplinger.com/features/archives/how-your-income-stacks-up.html

 
At 10/06/2011 2:53 PM, Blogger Moniker said...

Paul -
We don't need a counsel of elders, we just need to eliminate taxes on corporations.

 
At 10/06/2011 3:37 PM, Blogger Zachriel said...

Paul: Yeah, Obama is a human wrecking ball, isn't he?

It's pretty clear that the current financial troubles stem from the financial meltdown in 2008.

Paul: Oh, sorry. I should have said the bottom 50% pay all of 2.7% of income taxes.

Again, if you don't include payroll and other taxes, then you aren't giving a fair portrait of the federal tax burden. In 2007, the burden by quintile was 4%, 11%, 14%, 17%, 25%.

 
At 10/06/2011 3:41 PM, Blogger Zachriel said...

moniker: we just need to eliminate taxes on corporations.

Corporate taxes as a share of GDP are at their lowest point since WWII, as are federal revenues generally.

 
At 10/06/2011 3:55 PM, Blogger Moniker said...

Paul -

You're missing the point. You're assuming that the bottom 50% is made up of middle class people. That's just not true anymore. Like I said above, that bottom 50% is made up mostly of the 10% unemployed, 20% living in poverty, and 20% elderly /retired.

I don't disagree that everyone with a job should contribute something to the tax pool, but it's simply not feasible to institute a capitation tax.

 
At 10/06/2011 4:05 PM, Blogger Moniker said...

Z
US corporate tax rates are too high, relative to rates in other industrialized countries. There is an exodus of corporations and intellectual property out of the country to avoid US rates. For example, Google and GE don't pay much (any) corporate income tax because they are able to plan around it by housing their IP in offshore subsidiaries. The corporate tax burden is therefore uneven, which means the playing field isn't level for the smaller players. Also, letting corporations keep their profits gives them the opportunity to expand their operations and create more jobs. Dividend distributions are taxed, so eliminating the corporate level tax doesn't mean the revenues totally escape taxation.

 
At 10/06/2011 6:02 PM, Blogger Zachriel said...

Moniker: US corporate tax rates are too high, relative to rates in other industrialized countries.

And yet the rates as a percentage of GDP are lower than at any time during the last 60 years. Even though the nominal rate is high, the effective corporate tax rate is actually a lower than average among its competitors.

Moniker: The corporate tax burden is therefore uneven, which means the playing field isn't level for the smaller players.

That part is true, and if there is a corporate income tax, most such loopholes should be closed.

Moniker: Also, letting corporations keep their profits gives them the opportunity to expand their operations and create more jobs.

Generally, income taxes are only on earnings after reinvestment, especially if it's money for hiring a new employee. Short of draconian taxes, businesses will expand if there is demand.

 
At 10/06/2011 9:05 PM, Blogger Hydra said...

Elizabeth Warren is right. Not even Steve jobs did it on his own.

 
At 10/06/2011 9:08 PM, Blogger Hydra said...

I don't disagree that everyone with a job should contribute something to the tax pool, but it's simply not feasible to institute a capitation tax.

++++++++++++++++

Well said.

 
At 10/06/2011 9:22 PM, Blogger Hydra said...

Jason correctly points out both the codependency and the intergenerational nature of the benefits of government. Benefits government can provide and enterprise cannot, because government operates on a different economy of scale, and a different time horizon.

Corporations expect to grow. They need immediate results for shareholders, and they need to get the most for least out of labor.

Govt is no different except for scale and time horizon. Govt want s to get bigger. It gets bigger by providing valuable returns for its citizens, which they take advantage of to earn money, on which they pay taxes, which govt uses to create the next level of infrastructure.

 
At 10/08/2011 12:19 PM, Blogger VangelV said...

The fact that anyone actually takes Warren seriously tells us just how far the US has fallen.

 

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