Friday, March 04, 2011
In Federalist 12, which was a marketing brochure for ratifying the Constitution, Publius (probably Hamilton) takes on the subject of The Utility of the Union In Respect to Revenue.
Although he completely poo-poohs direct taxation* (such as the Income Tax), saying...
It is evident from the state of the country, from the habits of the people, from the experience we have had on the point itself, that it is impracticable to raise any very considerable sums by direct taxation. Tax laws have in vain been multiplied; new methods to enforce the collection have in vain been tried; the public expectation has been uniformly disappointed, and the treasuries of the States have remained empty. The popular system of administration inherent in the nature of popular government, coinciding with the real scarcity of money incident to a languid and mutilated state of trade, has hitherto defeated every experiment for extensive collections, and has at length taught the different legislatures the folly of attempting them.
In so opulent a nation as that of Britain, where direct taxes from superior wealth must be much more tolerable, and, from the vigor of the government, much more practicable, than in America, far the greatest part of the national revenue is derived from taxes of the indirect kind, from imposts, and from excises. Duties on imported articles form a large branch of this latter description.
In America, it is evident that we must a long time depend for the means of revenue chiefly on such duties.
He seems not to be arguing against direct taxation in principle, only in effectiveness. He is saying that you just can't raise enough revenue to make Government work through direct taxation. At the time, "direct tax" had an extremely negative connotation due to the highly effective campaign against the Stamp Act of 1765.
I'm bringing this up because it seems to me that our benevolent overlords have decreed that we be taught that America was founded on the notion that Taxes Are Evil, and it's just not so. The revolt was not against Taxation, but against Taxation Without Representation, because the colonies had no one in Parliament. For this reason, the colonists absolutely rejected Parliament's power to lay taxes, but acceeded to all kinds of taxes within their own systems of self-government.
That direct tax, the Stamp Act, didn't pan out for the Brits, so they decided to back off of that idea and try an Indirect Tax. The Revenue Act of 1767 (the "Townshend Act") imposed tariffs on imports of paper, paint, lead, glass, and tea (basic commodities that were not produced in the New World) to the colonies. They thought that the Sons of Liberty's propaganda campaign against the Stamp Act, which had made "direct tax" a four letter word, inoculated these tariffs against negative advertising. They were wrong.
The real problem was that they were trying to raise enough money so that Britain could afford to pay its Colonial Governors a salary. You see, those guys were appointed and anointed by the Crown, but they were paid by the colonists, from taxes laid by colonial governments. The colonists held, through their elected representatives, the "power of the purse" over their benevolent overlords, and they were right to see the danger in delegating that power to Parliament. The reaction was so bad that in 1770, the tariffs were rescinded on all those commodities except one: tea.
They left that tax on tea in place because it continued to assert their right to tax the colonies. They stated that openly.
Britain got all of its tea through a private corporation, the British East India Corporation. BEIC was granted a monopoly on the tea harvests in India, and the tea business in England, in exchange for a tariff on all the tea the imported to the Isles. The law that granted this monopoly also required that all of their tea had to land in England, and pay the tariff there. After that, they could send some on to the colonies, and pay that tariff too.
This double taxation and shipping cost made BEIC tea pretty expensive over here, and since it had that ugly taxation without representation attached, people wanted to avoid it anyway. A healthy business in smuggled Dutch tea arose, and some of the Founders were raking in good money in that space. Meanwhile, BEIC was behind in its payments to the Crown. Parliament had structured the rules for the BEIC so one-sidedly that the corporation was in trouble, so they decided to pass a law that made things easier on them.
If you ask any random American what the Boston Tea Party of 1773 was about, they'll likely answer "a tax on tea". This would be sort of correct, but the "Tea Act", which caused all the trouble, contained no taxes at all. Instead, it provided that the BEIC could move tea directly from India to the colonies, bypassing the British tariff. There was no change to the tea tariff on the colonies, which had been in place for six years.
This law had the effect of halving the price of tea in the colonies, undercutting the price of smuggled Dutch tea (which was, by the way, an inferior product). It was a strong arm play to push the "taxation without representation" of the Townshend tariff through "market" processes, and the money was going to strip the colonists' financial leverage over their local Governors, to boot.
What got their panties in a wad wasn't any new tax, it was a TAX BREAK for a corporation that was in tight with the
It really pisses me off that we don't teach History in this country.
*Tea Partiers and such may latch onto this to argue against the Income Tax (ED: another day), but you just can't escape the basic fact that Government requires revenue, which must be obtained by taxation. As far as I know, this was not in dispute at the time, certainly not among the Founders. In case there was any doubt, Publius adds...
A nation cannot long exist without revenues. Destitute of this essential support, it must resign its independence, and sink into the degraded condition of a province. This is an extremity to which no government will of choice accede. Revenue, therefore, must be had at all events. In this country, if the principal part be not drawn from commerce, it must fall with oppressive weight upon land.
Friday, November 19, 2010
I have a new favorite blog, or whatever you call it.
Hyperbole and a Half/
Thursday, October 21, 2010
What Digby Said
(Talking about Christian conservatives)
These people simply don't believe in democracy and they refuse to accept that they have to share the governance of the country with people they don't agree with.
As it turns out, William S. Burroughs was a genius after all.
"I deplore brutality," he said. "It's not efficient. On the other hand, prolonged mistreatment, short of physical violence, gives rise, when skillfully applied, to anxiety and a feeling of special guilt. A few rules or rather guiding principles are to be borne in mind. The subject must not realize that the mistreatment is a deliberate attack of an anti-human enemy on his personal identity. He must be made to feel that he deserves any treatment he receives because there is something (never specified) horribly wrong with him. The naked need of the control addicts must be decently covered by an arbitrary and intricate bureaucracy so that the subject cannot contact his enemy direct."
"While in general I avoid the use of torture-- torture locates the opponent and mobilizes resistance --the threat of torture is useful to induce in the subject the appropriate feeling of helplessness and gratitude to the interrogator for withholding it. And torture can be employed to advantage as a penalty when the subject is far enough along with the treatment to accept punishment as deserved. To this end I devised several forms of disciplinary procedure. One was known as The Switchboard. Electric drills that can be turned on at any time are clamped against the subject's teeth; and he is instructed to operate an arbitrary switchboard, to put certain connections in certain sockets in response to bells and lights. Every time he makes a mistake the drills are turned on for twenty seconds. The signals are gradually speeded up beyond his reaction time. Half an hour on the switchboard and the subject breaks down like an overloaded thinking machine.
"The study of thinking machines teaches us more about the brain than we can learn by introspective methods. Western man is externalizing himself in the form of gadgets.
"Ever pop coke in the mainline?" (...)
From Naked Lunch
© 1959, William S. Burroughs
Hat tip to the hoary dowager.
Monday, October 11, 2010
A Second Look
Let's look at this another way.
Let's say I'm a single guy with a taxable income of $200,000. Sweet. Under Bush's plan, which has been the law of the land for ten years, my 2011 taxes would be $56,256.00. If we have gridlock, that is if no new law is passed, this will be my tax. Under Obama's plan, or the current Republican Party proposal, my 2011 taxes would be $50,876.50. That is to say, if you're single, and paying less than $50,876.50 in income taxes, the Republican Party isn't offering anything different this year.
Now let's say I'm extra-productive, and I make $210,000 after deductions. The Republicans are offering me a tax bill of either $59,856.00 or $59,556.00, depending on whether they pass a bill or not. Obama is putting $59,856.00 on the table straight up. For the upper middle class (if you call the top 2% "middle class") taxpayer, Obama is asking $300.00 a year out of my extra $10,000.00. Of course the dollar amounts go up if you're making a lot more, but the federal deficit projections are cut by $826 billion under Obama's plan, vs the Republicans.
On the other hand, he's black.
The Galt Tax
Of course the usual suspects such as the Wall Street Journal and Mankiw are all about trying to convince us that raising the top marginal income tax rate from 35% to 39.6% would make the geniuses who run our world stop gracing us with their precious contributions. They are essentially threatening to go on strike, like common laborers, if taxes on their income above $250,000 are raised by single digits.
Let's be clear here. We're talking about less than 2% of income earners in the USA. You've met them, if only on the freeway. They're the ones who must be in front of you, even if it means creating a six-car pileup in their wake. These are the cats who are going to pass on the deal that would have made them $3,250,000 this year ($5,000,000 less 35%) because it will only net $3,020,000 ($5,000,000 less 39.6%) next year. Instead, they'll be planning to keep their taxable incomes under $250,000.
What kind of idiots are persuaded by these arguments?
Thursday, October 07, 2010
Another Vince Lombardi Post
I'm in the habit of occasionally posting excerpts from the last public speech Vince Lombardi gave. I've always carved out parts that any liberal can sign on to, like the part about love:
Mental toughness is spartanism with its qualities of sacrifice and self-denial, also the qualities of dedication and fearlessness and love. Not the love that you have for your wife or your wife may have for you. The love I am speaking of is loyalty, which is the greatest of loves. Teamwork, which is a form of love, and the love that one man has for another is respecting the dignity of another man. The love I speak of is not detraction. You show me a man who speaks ill of another and I'll show you a man who is only temporarily successful. Or one who is not charitable. Or one who is not loyal.
and so forth.
For a while, the full transcript of this speech seemed to have fallen from the internet, but I recently ran across it again at a "conservative" site ("conservative" is in scare quotes because it's Canadian conservatism, not the real beastie).
I think it might serve the Progressive Seeker to consider some of those parts of the speech that are likely to resonate with conservative thinkers.
I want to talk a little bit about attaining a goal, a success -- what I think it is. I want to say first that I think you've got to pay a price for anything that's worthwhile and success is paying the price. You've got to pay a price to win, you've got to pay a price to stay on top, and you've got to pay a price to get there. Success is not a sometime thing -- it is an all-the-time thing. In other words, you don't do what is right once in a while, but all of the time. Success is a habit just like winning is a habit. Unfortunately, so is losing. So it has been the American zeal, gentlemen, to be first in everything that we do and to win and to win and to win.
Today we have a new ideology -- that is to be homogeneous, no letter grades, no classification. The only line that some of our people seem to want today is a line between passing and failing. There is no hunt for excellence in other words. And you and I both know that this is the easy way. The prevailing idea today is to take the easy way -- and that effort and that work are unnecessary.
You've got to pay a price. Losing is a habit. Be first in everything. Win, win, win. Classification of people is an ideology, and one that is superior to the alternative.
It just can't be overstated how thoroughly these ideas are inculcated into American kids as foundational values, as the primary lens through which all of life should be viewed. It's especially true of kids who play in organized sports, but all kids get this message in some measure.
In the right context, it's good stuff. This is the work ethic of high achievement, and it really is the road to excellence. The problem arises when people begin to view all of reality as a stinking football game, and everybody in the world (or at least everybody not on "our side") as an opponent to be vanquished. In that context, it becomes immature, and cruel, and destructive, and not just thoughtless, but anti-thought. This is not what Vince Lombardi would have wanted, but it's the American Politics of today.
Read the whole speech at the Canadian Conservative Forum.