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The biggest threat to individual freedom

By maxwell edison ·
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In another thread I suggested that the biggest threat to individual freedom in the United States is the U.S. tax code and the myriad of U.S. social programs. After thinking about it for a few minutes, I sadly realized how true that really is. And what's really sad about it is twofold. One is that people, as a whole, don't realize it. And the second is that people are asking for (voting for) more of it.

The camel is indeed in bed with us. Or we are only but frogs in a pot of cold......make that warm water. (Ask and I'll explain - unless someone knows, and wants to reveal the meaning.)

More to come.......

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Great Depression - No

by maxwell edison In reply to "We are headed for a fina ...

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I think there are too many opportunities for growth to see another 1929. Moreover, many of the reasons for the crisis of the 1929 and the early 30s aren't a factor anymore. The "run on the banks", for example, that took place in the 30s couldn't happen today; and if there was an attempted massive sell-off of stocks, trading would be suspended until rational thinking was restored. Moreover, we're smarter right now, and people have the intelligence to ride out the down-turns in the market. Just after 9-11, for example, when our stock market went from a high of the 11,000 range (for the DOW) to the 7,500 range, the "smart money" just held a pat-hand and rode out the storm.

By a financial train wreck I mean that eventually, government will have to cut spending. There's absolutely no way around it. The "automatic increases" built into the system won't be sustainable. This includes social security, and the people who are counting on retiring at 65 might be faced with working another 5-10 years. I'm certainly not an economist, and I'm not a doom-and-gloom predictor, but we sure could have a major downturn in the economy, perhaps see an increase in the number of personal bankruptcies, and see the dollar lose even more ground to foreign currencies.

Historically, government spending has been held to about 10 percent of our GDP. Right now, it's pushing 20 percent, and something will have to give. I believe it's better to correct the problem now rather than be forced to deal with a more severe problem later.

And I think it's absolutely vital that the government stop making spending promises it can't keep, and let individuals keep more of the money they earn so they can take care of their own needs.

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I agree - sorta.

by Bucky Kaufman (MCSD) In reply to Great Depression - No

I agree that there's financial storm clouds on the horizon, but the NeoCon path is the wrong one for dealing with it.

The way we finally got out of the depression was to go on a massive government spending spree. Government loans financed Hoover Dam, WWII, the creation of the airline industry and the overhaul of the auto industriy. We built highways from coast to coast where before there were none, we created entirely new lakes.

These kinds of efforts don't come out of NeoConservative "no-government-is-good-government" cowardice.


re:
And I think it's absolutely vital that the government stop making spending promises it can't keep, and let individuals keep more of the money they earn so they can take care of their own needs.
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Personally, I'm OK with paying taxes so that I don't have to hire my own police, firefighters, water and sewage, etc. I think its cowardly not to trust the government with those functions - as long as its a Democratic government.

For some dumb reason, Republican governments don't believe in providing for the common defense of those blessings of liberty.

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Borrow and Spend

by Bucky Kaufman (MCSD) In reply to Can you please enlighten ...

You got it wrong, there.

Republicans don't tax and spend - they debt-and-spend. It's fiscally irresponsible - but it has great appeal appeal to the folks who don't want to pay their fair share.

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I don't have to be Adam Smith ....

by jardinier In reply to Can you please enlighten ...

or John Maynard Keynes, or Milton Friedman etc ...
to interpret what these figures indicate.

In 1992, George Bush Snr (alleged typical small-taxing, small-spending Republican) achieved an all-time record deficit of $290 billion.

By the end of his second term in office, Bill Clinton (alleged typical big-taxing, big-spending Democrat) had converted this into an all-time record surplus of $230 billion.

In the last year of his first term in office, George Bush Jnr (alleged typical small-taxing, small-spending Republican) turned this surplus into an all-time record deficit of $477 billion.

Hmmm ....

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90+% True, Max.....But

by olprof67 In reply to The biggest threat to ind ...

Let's not overlook the fact that several of the commonly-accepted rules in today's workplace are structured to stifle individuality for the good of the enterprise.

As one of the most flagrant, I'll cite health insurance. Employees who refrain from all tobacco use have fewer sick days and are far less likely to incur catastrophic health care bills.

But can you name me one major corporation or insurer who directly rewards employeees who don't smoke in the only compensation that matters --- hard (and preferably tax-fee) cash?

And while I definitely don't want centralized health insurance, I resent employers using their access to lower group rates (which DO NOT exclude smokers) to hold mature productive workers hostage.

The corporate world isn't all that indisposed to collectivism if it can be structured in its favor, and the only answer to this is a little more empowerment of the responsible individual.

Because once in a while, that individual deserves the right to look his boss straight in the eye and deliver a resounding NO! without fear of retribution.

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Perhaps things are changing

by ProtiusX In reply to 90+% True, Max.....But

Being the time of year it is I am sure you all, like me, had to renew your benefits for the coming year - Open enrollment time. Now this year I noticed some very different things in the options my company offered. Firstly my PPO standard rate flat lined from the previous year (very good!) and that the PPO HIGH rate increased a great deal. This was explained as an attempt to defer the costs of the coverage to those that actually use it which sounds good to me. So this may be a precursor of things to come with regard to making our health insurance more affordable.
As a side note: one of the other changes is that our company now recognizes ?unions? regardless of gender. It is limited to two people though so my goat will just have to wait;o)

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No Healthcare

re:
Being the time of year it is I am sure you all, like me, had to renew your benefits for the coming year - Open enrollment time.
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Perhaps you haven't heard. Most Americans don't have health insurance of any kind whatsoever.

You and I part of a privledged minority but it's indecent to whine about your shoes, when you're surrounded by people who have none.

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Beware Unintended Consequences

by TheChas In reply to The biggest threat to ind ...

I basically agree with your premise that the US tax code is structured to reinforce desired behaviors and discourage other behaviors.

Still, I am concerned that we are apt to suffer from the law of unintended consequences when we tinker with the code.

Switching to a flat tax would end up devastating our economy.
Why?
The bulk of retail sales come from the lower and middle class both in bulk and as a percentage of income. A flat tax would double or triple the tax burden on the middle class significantly reducing money available for spending.
Not to mention what losing the mortgage interest deduction would do to the housing market.

If you take a close look at the tax code changes from the Reagan era, you will notice that the bulk of deductions that were eliminated had a greater impact on the middle class than they did on those earning the big bucks.

Things I would suggest make sense:

Change the tax code to a flat tax for business income ONLY. Start at something like a 10% rate, and drop it 0.2% a year until it reaches 5%.

The only deductions would be based on corporate citizenship not dollars spent.
Factors like:
Pay all employees a living wage;
Meet pollution standards;
Control CEO compensation;

would allow a company to use a lower tax rate as they would be less of drag on the overall economy.

For individuals, keep the present progressive rate structure.

Drop the Alternate Minimum Tax. Or at least index it for inflation.

Keep at least these deductions:
State and local taxes;
(Including re-instating the sales tax deduction)
Primary residence mortgage interest;
(but limited to the original loan)
IRA's;
(include net deposits to savings accounts held for over 2 years)
Health care expenses;
Charitable contributions;

Chas

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Freshman Argument

"The results of meddling with the free market is nothing *but* unintended consiquences" - Keynes

I kinda like the way you start out by saying "simplify the tax" and then, by the end of your post, have come up with a complex array of loops and holes. That's how our current tax system got where it is today.

The devil won't let you make just ONE deal with him. If you're in for a pfenig you're in for a mark.

If you gotta raise socialist money (i.e. taxes), you gotta keep it simple or you end up with a beaurocracy that collapses of its own weight - if you're lucky. If you're not lucky, it has to be taken down through Bloody Revolution. The wages of sin are death.

If you decide to issue a flat tax - fine, do it. Progressive? Great. Regressive? No better or worse.

Ever play SIM City? The cities do OK as long as you don't jack with taxes too much. Progressive, regressive, high, low - it doesn't matter. The free market will correct itself to meet the balance. But it can't if there's no stability - it's hard to hit a moving target.

I heard that it takes 1000 judges, lawyers and clerks to manage the traffic generated by one volume of the federal tax code. Wouldn't it be great if there was only one volume?

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Flat taxes .....

by jardinier In reply to Beware Unintended Consequ ...

I am amazed that so many people can't see how easy it would be to introduce a flat tax rate without disadvantaging anyone.

Simply adjust gross wages across the board so that everyone would still receive the same net income as they do now.

A flat tax rate would encourage people to work harder (no penalty for moving into a higher tax bracket) and discourage dishonesty (no need to hide income to avoid moving into a higher tax bracket).

There would also be a massive drop in paperwork if a one-tax system was introduced.

So why does it remain a pipe dream? Presumably because too many people (accountants especially) have a vested interest in keeping the system complex.

We had a marvellous debacle in Australia a few years ago when John Winston Howard -- after previously vowing that he would never do so -- introduced a GST (Goods and Services Tax).

This was to be a "fair and simple" tax. In fact the changes to the taxation legislation took the tax laws from 800 pages to 3,500 pages. It also placed a heavy burden on small business people who in affect became unpaid workers for the Taxation Department.

The demarcation between goods which attract GST and those which don't, is chaotic and irrational. For example, there is no GST on unprocessed food, so theoretically fresh produce should not have increased in price. However merchants have to pay GST on their rent, electricity and so forth, which has to be passed onto the consumer.

There was an instance recently which provoked me to send a mass email to my friends. I don't remember if I included my American friends. But it related to a certain brand of fruit juice. Apple juice attracted no GST, but apple and blackcurrant juice did, because it was "processed" -- that is, a small amount of blackcurrant juice was added to the apple juice.

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