The hang-ups to progressive taxation are based on few ideals: (1) folks have a vested property interest in their salaries and do not want to have it taken away or feel penalized for hard work; (2) folks believe that capitalism and the free market should decide this issue and view re-distribution as socialist. I think both of these are faulty premises, and I'll explain why.

A few days ago, I posted a blog entry trying to construct a relatable framework (via a Sports Analogy) to the average Joe that can help one at least understand the concept of progressive taxation (http://www.fooze-change-government.com/2008/10/obamas-civility-and-defense-of.html), but I think perhaps the best way to understand it's necessity and equity is ultimately through the prism of the recent economic crisis.

I don't think anyone rational would now doubt that the economic crisis proves that the free market does not always function properly, especially when it's ascribing value to intangible things. The economic crisis has shown that an unfettered "free market' can fall prey to excessive greed and result in assets being artificially over-valued, while other assets are under-valued. The economic crisis has shown that the free market can benefit from regulation and overt correction.

Now - how does this relate to progressive taxation?

What most people don't understand is that salary is just another manifestation of the free market. It's an ascribed value given by the market to our job/work product. Once you recognize that fact, then you can understand why progressive taxation is necessary. Unfortunately, rich people tend to have an inflated assessment of their own worth and want to believe that they are worth what the market is willing to pay them - and therefore they view the money as rightfully their property. But if you go back to the learnings of the economic crisis, you'll understand that this is not actually the case.

The underpinnings of this argument is based on one simple premise: the free market does not work in assigning salaries to individuals, and I think that's undisputable. The free market does not work for a variety of reasons: (1) it is subject to greed; (2) it is subject to arbitrary whims about what is important at a particular time; (3) it is subject to undue manipulation by external forces (war, power structures, etc.); and most fundamentally (3) it is subject to real and profound barriers to entry that are not characteristic of a true free market. People start out in inequitable positions and may never get the chance to get to their true value.

Just like we learned with bubble bursts and asset valuations in the economic crisis, the ultimate test of whether the free "salary market" works or not is in objectively viewing its results. If you take a moment to look at the results - it cannot be disputed that it's not working. It just takes folks being humble. Examples: Adam "Pacman" Jones is a felon and criminal without any translatable skills whose only talent is the ability to play cornerback and run with a football. Yet, he makes millions of dollars while a person who has labored their whole life and studies for 15 years to get a PhD cannot approach six figures as a professor teaching tomorrow's youth. Same is true in accounting for the gap between the CEO and the brilliant workers in his company who actually come up with the ideas that drive his company's success.

A more centered example. I am an attorney who comfortably makes six figures; I have worked hard and gone to the best law schools. But I also now have a job that really has no real value to society - yet I make a great living.

A person just as smart as me may have never gotten the chance to enter this free market because of the place they grew up in, or the inability to pay for school.

My brothers, who are by all objective measures smarter than me - each attended the finest universities in America and received PhD's, but could not get any jobs in the sciences (professor or research) that paid half my salary.

My mother is a small business owner and licensed day care provider who has devoted her life to teaching and caring for toddlers and she can barely make the mortgage.

All of these examples, and especially the barrier to entry ones, show that the salary market is not working properly if left unfettered. If you can come to grips with that fact, then you may come to realize that in order to fix the situation you need a market correction or some form of market regulation. A true market correction would involve complete re-assignment of values, re-distribution of wealth, and would be too drastic and too subjective for anyone to accomplish in a practical manner. But tax policies and progressive taxation are at least a form of market regulation that help alleviate some of the burdens and inequities created by the malfunctioning salary market.

Fascinating exchange starting at 6:00 mark.  Forget for a second the subject of the question (Palin) and listen carefully to John McCain explain his view of who would be a great president for these times - isn't this the perfect argument for Obama?  Is John McCain too stupid to realize how easily this translates?

http://www.youtube.com/watch?v=hV93U115RnM

I posted a few days ago about the ridiculous and misplaced media obsession with budget cuts and deficit spending during this economic crisis.  Looks like our Nobel Prize Winner agrees:

http://www.nytimes.com/2008/10/17/opinion/17krugman.html?ref=opinion

I am a white heterosexual male who falls into the highest tax bracket and am an unabashed liberal, and perhaps as important a reason as any for it is that I cannot ever agree with the discriminatory/oppressive platform of the GOP with regard to social and civil/human rights issues. But I have always admired and respected certain aspects of the conservative ideology, especially when it came to fiscal conservatism. I may not always agree with all of it, but I respected it.
With that, I wanted to share my thoughts as to what I think is most wrong with the Republican party, and why I have come to actively and profoundly dislike the GOP in recent years. From my standpoint, it comes down to the point that I believe the GOP has for the last decade or so, from a collective action and blueprint standpoint, solely been focused on acting in a fashion that expands its power. Domestically, it has focused all action on attempts to set up "a permanent political majority" and internationally, it has focused on becoming the sole permanent world power with military dominance over key and fleeting world resources as part of the "Project for a New American Century". This is the teaching/script of Karl Rove and the Neo-cons at American Enterprise Institute and is evident in the Republican's stated domestic and foreign agenda; and unfortunately, this has resulted in selfish action aimed at furthering that goal without regard to principle or consequence.
The GOP of today is not interested in carrying out its elected function as a government, or staying true to its stated conservative pricniples, or to tending to the needs of the electorate; More to the point, it is not interested in fixing the actual problems that plague or threaten the country; it is solely interested in figuring out how best to present and repackage a problem as a launching point to settle a score or undermine a potential threat to its desire to stay in power and build its permanent majority. There are many case studies to support this thesis, but nowhere is this more manifest than in looking at how the GOP has responded to three recent crises during the Bush presidency - the most elections (2000-08, including mid-terms) and real issues of voter disenfranchisement/suppression/fraud, 9/11 and the "War Against Terror", and the recent economic crisis. In each instance the response by the GOP was transparently hypocritical and not designed to solve the actual problem, but to further its own selfish interests.
With regard to voter issues - rather than try to fix issues of gerrymandering, suppression, fraud or disenfranchisement, the GOP chose to repackage this real issue and present it as a problem solely caused by ACORN. It's one thing to hear Mark Levin and the right wing nut jobs talk about this - but to hear John McCain call ACORN the greatest threat to the fabric of democracy is beyond the pale. The ridiculousness of this assertion has been debunked numerous times, including recently by Governor Crist of Fla, and Attorney Generals from various States. Voter registration fraud is not equivalent to voter fraud (Mickey Mouse ain't showing up to the polls). And any fraud perpetrated is a statistically insignificant issue (NY Times has an article on this today: http://www.nytimes.com/2008/10/17/opinion/17fri1.html?ref=opinion  and Josh Marshall covers it all the time in TPM). The real problems that we need to deal with is redrawing electoral maps, voter suppression, and voter fraud b/c of faulty voting mechanisms - but none of those will help the GOP. So instead, we have this incessant railing on about ACORN. And no one mentions that the true reason the GOP wants ACORN out is because it's very successful at enabling a group of unattended and disenfranchised voters to exercise their constitutional right to vote - and they tend to be overwhelmingly democratic.
With regard to 9/11 - it's now well documented, but the problem and the issue to address with 9/11 was a way to defeat Osama Bin Laden and Al Qaeda and handle Islamic Extremism. What the GOP instead decided to do was to distract us from Al Qeda, Afghanistan and Pakistan, and instead sell us a bill of goods on Iraq (and they're trying hard with Iran) because of their desire to defeat hostile governments and set up permanent bases or a presence in those places as the world continues its desperate fight for the limited natural resources still left. And the consequences of that have obviously been disastrous - whether it be in undermining our security, allowing Al Qaeda to rebuild, devastating our economy, inflaming tensions and helping recruitment for Islamic Radicals, etc.
With regard to the Economic Crisis - no one truly understands the entirety of what's going on, but we all get that the issues related to greed and unregulated/unfettered actions by banks/firms on Wall St., and the spread and multiplication of derivatives and mortgage-backed-securities and other instruments that were repackaged, bundled and resold time and again without any regard to their relationship to the actual tangible thing of value to which they were supposedly tied. The Stock Market had stopped trading on capital and actual goods, and was now solely speculating based on ascribed value. What the GOP did in response to the crisis was not to try to fix the underlying problems - but they affixed blame on Democrats and Fannie and Freddie; again, all a transparent ploy to try to keep their power. Everyone who has looked at the issue understands that Fannie and Freddie have really the most remote connection to the actual problem at hand, but the GOP needed to focus there because blaming the Dems and those institutions allowed them to argue for staying in power or getting rid of institutions that helped empower folks who had democratic leanings.
The most astounding aspect of this whole thing is that no one is pointing it out. Their playbook of hypocrisy is transparent - we're just not paying attention or calling them on it.
We have seen the ACORN thing tried before - that was the whole genesis of the Attorney Firings Scandal because Bush-appointed State Attorneys looked into this issue pushed by the GOP and decided rightly that there was nothing to the voter fraud allegations (http://www.talkingpointsmemo.com/archives/237825.php). But because they told the truth - they were fired. So now the GOP is at it again.
With regard to Iraq - anyone who reads the writings and thesis of the AEI and Project for New American Century -
(Read it and see who the project members were: http://www.newamericancentury.org/RebuildingAmericasDefenses.pdf it will literally send chills down your spine") -
will see that Iraq and Iran has been what they've been after all along and the travesty of 9/11 is that the unforgettable tragedy dulled us to the neo-cons and allowed them to get their "pearl harbor" (see p. 63) and enact their agenda.
With regard to the housing crisis - it's no secret that Republicans have been after these institutions for years, and now they're trying to use it as the scapegoat to get rid of the institutions and blame the dems. A good analysis, here: http://www.delawareliberal.net/2008/09/28/republican-talking-point-smackdown-freddie-mac-and-fannie-mae-are-not-responsible-for-the-meltdown/.
So where does that leave us?
I'm disgusted with the Republican Party. I'm disgusted that politicians elected to serve our interests don't actually do anything to help us, but only focus on their power-grabbing agendas. Mostly, I'm disgusted that we have let all this happen even though the playbook is right before our eyes.
I have hope though. I hope the polls are right. I hope that I'm right. I hope that that the Conservatives who are starting to see the light and repudiating the Bush/Cheney/Rove tactis stick to their guns. I hope that we have a landslide victory -not only because I believe in Barack Obama and his policies - but because it may drive the GOP to self-examination and abandonment of Rovian politics - a return to the commendable conservative principles that I can disagree with on an ideological perspective. The country needs both parties - we will be better off for it.

So a funny thing happened on the way to the forum:

http://www.toledoblade.com/apps/pbcs.dll/article?AID=/20081016/NEWS09/810160418

Turns out that Joe the Plumber is actually not a plumber (licensed one anway), has a lien against him for failing to pay his taxes (maybe explains his opposition to taxes), is not an undecided independent (registered as a republican), hates social security (http://www.talkingpointsmemo.com/archives/237630.php) and may even have an indirect relationship to Charles Keating and Savings & Loan Scandal (I am not asserting this last one as fact - but here is the link:  http://www.eisenstadtgroup.com/2008/10/15/joe-the-plumber-wurzelbacher-related-to-charles-keating-oops/)

**UPDATE (6:09) - Keating assertions proven to be false (http://www.dailykos.com/story/2008/10/16/133831/42/1001/632600) 

Best of all is admittedly better off under Obama's tax plan than McCain's.

Looks like another wonderful job of vetting someone by McCain and his staff.  You think he'd learn his lesson from Palin and dig a bit into backgrounds before he introduced another unknown figure on a grand stage.

 

 

 

The following exchange between Barack Obama and a small business owner regarding his tax policy and the concept of progressive taxation should be watched by all because its fascinating and revealing in several respects:

http://www.youtube.com/watch?v=vFC9jv9jfoA

First, I think Obama makes a compelling case for the sensibility and equity of his tax policy and progressive taxation principles in general.

Second, I think this exchange provides great insight into what kind of leader Barack Obama is and how he walks the walk on his promise to elevate the civility and discourse in this nation and rise above politics. In short, he was confronted by a person obviously opposed to his policies and rather than shun him or ignore him or call him names/stupid, Barack engaged him, respected his views and tried to explain in very real concrete ways, ways that the person himself can relate to, as to why his policies were good ones and might in fact be beneficial to the questioner. In the end, even if the man was not converted (unsure), it was clear they both walked away from the exchange better informed and with more respect for each other. Related to the last point, it's a great contrast to how we see the right and McCain/Palin treat their opponents. If a person opposed GOP tax policies, he/she's either ignored altogether or just demonized as a socialist in favor of income redistribution - there is simply no acknowledgment by McCain/Palin that there may be merit to the position or respect warranted. This civility in discourse is something we've seen in all Barack's appearances, including the debates. I do not think we can underestimate how important a "Change" this is and how much further it'll bring us as a nation as we aspire to bridge divides and heal wounds of partisanship.

Third, I think this shows that Barack is not scared to tackle tough issues, where others may run away from these challenges. Dems have often run away from frank discussions of tax policy or arguments for "progressive taxation" because they were afraid of making the case for it. Barack made a good case for it in a realistic context.

I have always thought that Progressive Taxation is a no-brainer for any civilized society that wants to be successful in the long term. I think the struggle has always been over how to frame the issue and explain it in a way that makes sense. As I said, I think Barack did a good job above. But I also think beyond appeals to fairness and equity, another line of argument can be that Progressive Taxation is misbranded as socialism. In reality, it's actually a capitalistic enterprise that we see play out in all walks of life.

One way to think of this and explain it to every day folks is through an analogy to how a sports franchise runs its business - no doubt a capitalistic endeavor. Think of what we see in ticket pricing all over the map. A sports franchise sets its policy with a set budget (expected revenue) in mind. It realizes that some seats are better than others and offer more amenities (better views, more comfort, proximity, etc.). It recognizes that its constituents are not all equally positioned from a financial perspective. It recognizes that if its cost is too severe in either direction, it risks alienating the top or the bottom and losing revenue. It recognizes there is alternatives to doing business with it (cable, other franchises, minor leagues), albeit remote (just like a taxpayer can be potentially disincentivized and choose to do less/no business or take his/her business out of the country - things that are possible, though they require effort). And it's key to realize that this is just illustrative and not meant to be exact, but the counter-argument that one has the choice to say no to higher prices with regard to buying tickets is really not a valid distinction or inapposite here, because just like that - I'd argue that the ones who are complaining (i.e., the rich) do not have to benefit from the great US economy (or make millions of dollars so as to qualify for higher taxes) if they don't like the tax consequences.

The key here is that in every instance, what you see as the solution that emerges is a progressive (not proportional or flat) pricing policy that charges significantly higher prices for the better seats and lower prices for the worse seats so that it can keep these seats affordable for all. A flat rate simply wouldn't work because of the reality that the landscape is unequal. A proportional rate simply won't work for much of the same reason, because too many folks get priced out at the bottom end. So in effect, what you get is redistribution/subsidizing. The pricing is tweaked (by reacting to the market reactions - free market) to hit the spot that you achieve your revenue goal and sell-out the place.

At the end of the day, despite gripes (nothing is ever easy) most recognize the inherent necessity and fairness of this concept in this context - so hopefully they can see the translation.  The tax policy can be likened to this in every respect. The progressive tax rates are tweaked to achieve rates that invite maximum participation and obtain the desired budgetary revenues. The benefit of the bargain is still worth it, and more people get to benefit/participate.

Last night on CNN, and on both debates, the media again pushed this notion that both candidates are being irresponsible and dishonest about their plans by refusing to acknowledge what programs or spending initiatives would be cut in light of the cost of the bailout and the economic crisis. It's really fascinating to have people with no economic expertise offer opinions that chastise the candidates as if there is no other option.

While I agree that our deficit is out of control and that the ideal is to balance budgets, most responsible economic theorists and our experience would tell you that one of the only times you can justify deficit spending is during times of economic recession/depression. These initiatives and temporary public works type projects that were symbolic of the New Deal help instill confidence, stimulate the economy, stem unemployment growth, and keep money in the pocketbooks of Americans. Essentially, they substitute for the private sector projects until such time as it can get back on its feet and then gov't steps back and focuses on re-balancing the budget.

The Republican approach to deficit spending (to finance unnecessary wars, give huge unnecessary tax breaks to the filthy rich, and feed our addiction to oil) is what hurts the economy and is wrong about our growing deficit. Barack's approach is right.

What these pundits need to do is to look back at history and the New Deal and assemble some actual experts on their panels (as opposed to political pundits) and ask them whether there is any value to this type of deficit spending for public works projects and economic stability during times of private sector shortcomings and I bet they'd be in for a surprise.

BTW - an interesting look at economic impact of Dem v. Rep policies:

http://www.nytimes.com/interactive/2008/10/14/opinion/20081014_OPCHART.html

I know this is a bit philosophical at a critical juncture of the election, but I had to get this off my chest, because I actually think this is relevant to the flames Sarah Palin is trying to fan when she speaks of "Barack Obama is someone who views America as imperfect ..." and tries to contrast it with her notion of a Perfect America serving as the shining city on a hill.

This notion of perfection and American infallibility is one of the most dangerous, misguided notions out there and it is to our serious detriment as Americans. In truth, it is a tool of oppression that has been used by radical dictatorial regimes in the past and is now being used by the right wing politicians in the present in America. It is an oppressive tool that equates and conflates this ridiculous and demonstrably false notion of perfection with Patriotism and then tries to bully, ostracize, and suppress anyone that dares question this thinking or the policies of America's leaders as unpatriotic. In this world, everything is simplified and painted in a "you're with us or against us" or "good guys v. bad guys" picture. If you question or assign fault to anything that the country has done or any policy that the country has implemented, you're being unpatriotic, emboldening enemies, and questioning America.

This is the kind of radical notion that oppresses critical thinking and progress, that enables, rationalizes and tacitly approves misguided or unjustified wars, hideous acts of torture, abandonment of communal or global principles and treaties. It's all done under the self-serving guise that it's ok because it's in our immediate national interests; that it's ok because we know what's right and wrong and when we can tell when we can't afford to abide by old norms in times of crisis; and that ultimately we shouldn't question it or worry because America is doing it - and that because we all know and agree that a America is a great country - we should know that it wouldn't anything wrong or do something "seemingly wrong" unless it was absolutely necessary.

We've seen this playbook followed to script in the Bush/Cheney years. Anyone that questioned the start or the conduct of the Iraq war, American policies of torture and rendition, American abandonment of global treaties, etc. was branded and demonized as unpatriotic, defeatist, and as emboldening the enemies/ terrorists. We're seeing this playbook again with McCain and Palin. McCain uses much of it in his discussion of foreign policy and Palin's entire worldview can be summed up by this theory (I wish I was kidding - listen to her speeches). She uses it in all her rhetoric.

Once you take a step back - the danger of this is and should be clear. Not only does it polarize and divide Americans, but it antagonizes, incites violence, and suppresses rational critical thinking that would lead to better discourse and informed judgments.

But most importantly - it is the exact opposite of patriotism and the foundations of America which we all love. To be patriotic is to love one's country - not to view it as perfect. To be patriotic is to always strive for ways to make America an even better country, even if that means voicing dissent. The key to patriotism is upward, forward and organic. It is to commit yourself to loving and supporting your country and working toward that cause if it's being derailed. Not to abandon it, criticize it (without action) or to blindly and uncritically adhere to what is currently happening.

Bush, Cheney, McCain and Palin have it exactly wrong. America is not perfect in practice, and history has boundless examples of things we've done wrong - whether it be slavery, torture, camps in WWII, female suppression, etc. But the beauty and the perfection in America lies in that its democratic structure and its ideals of free speech enable us to question our policies, denounce bad practices, and ultimately change direction toward a more perfect democratic union.

Don't you see - that's why the constitution has checks and balances, freedom of speech and the free press; that's why it allows for impeachment and an amendment process; that's why we have elections. It is to enable us to constantly strive for perfection and betterment. It is to allow us to have discourse, dissent and critical thinking.

This is one of the things I most love about Obama's speeches. He gets the beauty of America. he understands what our founders understood when they set out to create a governmental structure that would help us "form a more perfect union". As he said in the historic speech about race or in his acceptance speech (really worth the read:

http://www.huffingtonpost.com/2008/03/18/obama-race-speech-read-t_n_92077.html-

it's not that we're perfect, it's that we love this country and its ideals so that we can realize and overcome our imperfections and continuously strive for a more perfect union. That's the kind of leader he wants to be. That's the kind of leader that allows for diverse viewpoints to inform his judgment. That's the kind of leader that won't make rash impulsive decisions. That's the kind of leader that transcends bitter political divides and brings people together. That's the kind of leader that has his eyes on the actual prize - the betterment of America as opposed to tending to self-serving immediate goals, seeing himself as an elected leader obligated only to reward those who voted for him, or his lobbyists, or the military industrial complex. That's the kind of leader that understands we can only serve as that shining city on a hill, not by blindly calling ourselves infallible and plowing ahead with policies determined to unilaterally expand our power, but by setting an example that understands and respects humanity for all its components - its fallible and delicate nature, its good intentions, and its desire for finding a way to prosper amidst a peaceful existence. In short, America recognized the desire and embodied the ability to organize civilized institutions that would and could be greater than the sum of our parts and would enable us to recognize, overcome and transcend our own faults and prejudices and our collective mistakes to better ourselves as a society.

Now - that is patriotism.