In Entitlement America, The Head Of A Household Of Four Making Minimum Wage Has More Disposable Income Than A Family Making $60,000 A Year

Tyler Durden's picture

Tonight's stunning financial piece de resistance comes from Wyatt Emerich of The Cleveland Current. In what is sure to inspire some serious ire among all those who once believed Ronald Reagan that it was the USSR that was the "Evil Empire", Emmerich analyzes disposable income and economic benefits among several key income classes and comes to the stunning (and verifiable) conclusion that "a one-parent family of three making $14,500 a year (minimum wage) has more disposable income than a family making $60,000 a year." And that excludes benefits from Supplemental Security Income disability checks. America is now a country which punishes those middle-class people who not only try to work hard, but avoid scamming the system. Not surprisingly, it is not only the richest and most audacious thieves that prosper - it is also the penny scammers at the very bottom of the economic ladder that rip off the middle class each and every day, courtesy of the world's most generous entitlement system. Perhaps if Reagan were alive today, he would wish to modify the object of his once legendary remark.

From Emmerich:

You can do as well working one week a month at minimum wage as you can working $60,000-a-year, full-time, high-stress job.

My chart tells the story. It is pretty much self-explanatory.

Stunning? Just do it yourself.

Almost all welfare programs have Web sites where you can call up "benefits calculators." Just plug in your income and family size and, presto, your benefits are automatically calculated.

The chart is quite revealing. A one-parent family of three making $14,500 a year (minimu wage) has more disposable income than a amily making $60,000 a year.

And if that wasn't enough, here is one that will blow your mind:

If the family provider works only one week a month at minimum wage, he or she makes 92 percent as much as a provider grossing $60,000 a year.

Ever wonder why Obama was so focused on health reform? It is so those who have no interest or ability in working, make as much as representatives of America's once exalted, and now merely endangered, middle class.

First of all, working one week a month, saves big-time on child care. But the real big-ticket item is Medicaid, which has minimal deductibles and copays. By working only one week a month at a minimum wage job, a provider is able to get total medical coverage for next to nothing.

Compare this to the family provider making $60,000 a year. A typical Mississippi family coverage would cost around $12,000, adding deductibles and copays adds an additional $4,500 or so to the bill. That's a huge hit.

There is a reason why a full time worker may not be too excited to learn there is little to show for doing the "right thing."

The full-time $60,000-a-year job is going to be much more demanding than woring one week a month at minimu wage. Presumably, the low-income parent will have more energy to attend to the various stresses of managing a household.

It gets even scarier if one assumes a little dishonesty is throwin in the equation.

If the one-week-a-month worker maintains an unreported cash-only job on the side, the deal gets better than a regular $60,000-a-year job.  In this scenario, you maintain a reportable, payroll deductible, low-income job for federal tax purposes. This allows you to easily establish your qualification for all these welfare programs. Then your black-market job gives you additional cash without interfering with your benefits. Some economists estimate there is one trillion in unreported income each year in the United States.

This really got me thinking. Just how much money could I get if I set out to deliberately scam the system? I soon realized that getting a low-paying minimum wage job would set the stage for far more welfare benefits than you could earn in a real job, if you were weilling to cheat. Even if you dodn't cheat, you could do almost as well working one week a month at minimum wage than busting a gut at a $60,000-a-year job. 

Now where it gets plainly out of control is if one throws in Supplemental Security Income.

SSI pays $8,088 per year for each "disabled" family member. A person can be deemed "disabled" if thy are totally lacking in the cultural and educational skills needed to be employable in the workforce.

If you add $24,262 a year for three disability checks, the lowest paid welfare family would now have far more take-home income than the $60,000-a-year family.

Best of all: being on welfare does not judge you if you are stupid enough not to take drugs all day, every day to make some sense out of this Mephistophelian tragicomedy known as living in the USA:

Most private workplaces require drug testing, but there is no drug testing to get welfare checks.

Alas, on America's way to to communist welfare, it has long since surpassed such bastions of capitalism as China:

The welfare system in communist China is far stringier. Those people have to work to eat.

We have been writing for over a year, how the very top of America's social order steals from the middle class each and every day. Now we finally know that the very bottom of the entitlement food chain also makes out like a bandit compared to that idiot American who actually works and pays their taxes. One can only also hope that in addition to seeing their disposable income be eaten away by a kleptocratic entitlement state, that the disappearing middle class is also selling off its weaponry. Because if it isn't, and if it finally decides it has had enough, the outcome will not be surprising at all: it will be the same old that has occurred in virtually every revolution in the history of the world to date.

h/t Nolsgrad

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NoLongerABagHolder's picture

Rape crimes on the middle class bitchez.....

Fish Gone Bad's picture

I have long thought that the homeless really have it made.  They get to live under overpasses for FREE.  They don't have to do laundry, water a lawn, or even take baths.  They get about 35% usable free lighting from lights under the overpass.  All they really HAVE to do it dig through some dumpsters for perfectly good or half eaten food.  Now I find out that they aren't paying taxes, and work under the table.  Next thing I am going to find out is they get to use ventilators for free and I have been breathing on my own like a sucker.

</humor>

More Critical Thinking Wanted's picture

Yeah. Also lets start with entitlements that Tyler is using every day:

  • The entitlement to make money in the United States of America.
  • The entitlement to use most US public roads free of charge.
  • The entitlement to be protected by the US military from those hordes of foreigners.

There's another 5 billion people who do not have those entitlements but who finance Tyler's lifestyle, so yes, the whole planet could whine about Tyler being entitled to so many things in the USA while they are not.

And the right-wing fringe whines about $10-$20b per year social programmes (which keep the poor from actually bludgeoning the rich to death and stuff like that), while the rich are entitled to make trillions and trillions and are allowed to use infrastructure that is worth hundreds of trillions of dollars?

LOL at those right-wing whiners - intellectual consistency was never their strong point :-)

Non Passaran's picture

Because one wrong is not righted, another wrong is fine, too.

Intellectually consistent: check

The right-wing fringe whines: who said anything about politics?

TFA is about the fact that a one-parent family of three making $14,500 a year can have more disposable income than a family making $60,000 a year.  Not a right-wing, rich family. To understand the issue better, read Shameful's first hand experience in comments below (or click here and here).

Sneeve's picture

Small reality check:

Seen from Europe, the american left-wing is somewhat to the right of our Genghis Khan wingnuts. And the US welfare system is pale and miserable compared to what exists in a lot of European countries. No one outside to the US would call your welfare system "the most generous in the world" without ROFLAO.

Nels's picture

Are  your 'Genghis Khan' rightists the folks claiming to be real Nazi's, or the folks pining for Napoleon?  What definitions of left vs right are you using?

I think our local Stalin lovers would fight inside your definition of 'left'.  The fact that they've been ineffectual until recently doesn't mean they don't exist.

traderjoe's picture

Um, I think your comment lacks intellectual consistency. 

1. The right to life, liberty, and the pursuit of happiness (to make money) is a sovereign right. One could argue that might fit within the broad definition of entitlement (http://www.merriam-webster.com/dictionary/entitlement), it's not the same as benefit program which the article is about. 

2. Road construction and maintenance is in part funded by user gas taxes, license fees, etc. Whether these taxes and fees pay the full cost of road maintenance is doubtful, which means there might be a disproportionality of benefits received by the subsidization of roads by the government (and therefore taxpayers) at large. But most everyone benefits from the public good of roads, since that is how food, materials, etc. are transported. 

3. Defense is a public good, not necessarily an entitlement. 

The distinction you are failing to make is that there are public entitlements that apply to the entire class of citizen (defense, roads, pursuit of happiness) and private or specific entitlements that apply to only certain citizens that fit within the proscribed criteria. Obviously, not everyone qualifies for Section 8 housing, but everyone qualifies for the entitlement of "use of the roads". These specific entitlements are funded by taking from one citizen to give to another. Public goods are typically funded by taking from all, even though the some users might benefit more then others. 

I don't know how the 5 billion person comment comes in, so I don't know how to address that. How do they finance 'our' lifestyle?

How do you get your $10-20 billion tab for entitlements? Were you referring to a specific program or the entire ball of wax? As I am sure you are aware of, the annual cost of entitlements is much higher. 

I don't think people on this site would defend the 'rich are entitled to make trillions and trillions' either. 

More Critical Thinking Wanted's picture

 

The right to life, liberty, and the pursuit of happiness (to make money) is a sovereign right. [...]

That is your opinion and it is your weighting of values. Other people include things like this amongst fundamental rights:

  • the right to health (for example the right of poor children to not die due to poor health care)
  • the right to education (so that someone born as a poor child does not stay poor due to sub-par education)
  • the right to dignity

You could sum these up as having the right to a fair chance at pursuing happiness. (Tell the ghetto kid that he has a fair chance to become a Wall Street banker.)

What you consider a 'right' might be an 'entitlement' to another person.

What you consider an 'entitlement' might be a 'right' to another person.

You are probably healthy, you are probably rich (or at least not poor) and you are probably not overly old either. Of course most social projects are an annoyance and are unnecessary overhead to you!

And since societies are not just made up out of you, but also (in the case of the US) consist of another 300 million voting people who might have a different opinion, some sort of (inevitably imperfect) compromise gets implemented, dynamically.

IMO you need to be able to see things with other people's eyes to understand any of this. You need some basic empathy to step beyond the "this is my definition of sovereign rights" dogma.

Non Passaran's picture

The issue at hand is not entitlements (or "rights") per se, but the fact that people are gaming the system with impunity.

If one considers that in a given fiscal year the pool of money to be shared among the poor is fixed, then any poor individual that abuses the system takes away from the rest. We don't need the middle class, the rich and anyone else in this picture to be able to conclude that such behavior is wrong.

Things that you attempt to discuss (whether or not, or to which extent, people should help and be helped) has nothing to do with the fact that those who scam the system go unpunished.

Unless, that is, you can show that increasing assistance would solve the problem (a casual observer may get the impression that the opposite has been going on).

More Critical Thinking Wanted's picture

Sure they are gaming the system, and this is a fundamental property of any insurance system (private and public alike) where there are event based payouts: if there's a possibility to fake an event there will be people who will fake the events and who will game the system.

A crucial difference is that with a nation state level insurance company (call it a 'Government' if you like) there's little interest of the insurer gaming the system.

And tell me with a straight face that private insurers are not gaming the system today. Do tell me.

No rescinding of policies on bad excuses, no funny games with lawsuits to block life insurance payouts, no increase in future fees if you make use of the policy, no "your boat is too small and too far away for the Coast Guard to save you in an economically viable way, sorry and we will send our condolences to your loved ones!", no "we are the private fire brigade and we will watch your house burn down" nonsense, etc.

Yes, the flip side is that as a result public insurance will inevitably be less efficient than a profit motivated insurance company, but heck do I want my insurance policy to work when I'm in need, not be worked around by clever lawyers at insurance companies if things get too expensive for them!

Also, there's obviously no private insurer interest in insuring the children of the poor against being poor (there's no money in that for obvious reasons), while it's a fundamental public good - even if you are a heartless selfish bastard those kids, if educated properly will increase the productivity of the country in the years to come, so they will improve your lifestyle as well. (Or if they stay in the slums they will be a drag on you - either via social programmes, and/or via crime - unless your solution is to deport or execute those who end up being too poor.)

There's two sides to the coin here really, and those painting nation state level insurance systems as the Devil reborn are being a bit simplistic and are not really thinking things through I think.

MurderNeverWasLove's picture

If one considers that in a given fiscal year the pool of money to be shared among the poor is fixed. . .

 

 Why would we want to start there as a given?  Why not say that in a given fiscal year, a lot of money changes hands.  A stable part of the commerce that occurs is wrapped up in  the support and enhancement of life.  Most people can figure out how to make enough money to get by.  Some can't or won't.  Fine then.  Let's just buy them out.  Outlaw poverty by guaranteeing poverty-level income at minimum in support of our most fundamental right, that of our very lives.

Unless, that is, you can show that increasing assistance would solve the problem

Well, let's try that little experiment.  Let's juice every beneficiary with a poverty-level allowance.  (We're talking fiat, so anything is possible!)

Unemployment go up or down?

 

nmewn's picture

"You need some basic empathy to step beyond the "this is my definition of sovereign rights" dogma."

WTF!?!

Empathy...an emotion...has nothing to do with sovereign rights.

Because I understand (empathize) you are cold and shivering does not give a right to you to have my winter jacket...it also does not entitle/grant/require you to steal property in the form of cut fire wood from someone elses woodpile because they have wood and you have none.

You are confusing emotion & charity with a right.

Furthermore, if I pull up at a stop light and you come over and wash my windshield while I'm telling you to stop doing that to my property and then you demand payment for your labor by reaching inside my vehicle, I will shoot you graveyard dead.

And I can assure you of this...I will have zero empathy for you laying there bleeding as I drive away ;-)

More Critical Thinking Wanted's picture

 

Because I understand (empathize) you are cold and shivering does not give a right to you to have my winter jacket...it also does not entitle/grant/require you to steal property in the form of cut fire wood from someone elses woodpile because they have wood and you have none. [...]

The thing is, public insurance does not come in the form of 'trying to steal property'.

It comes in form of you having to pay taxes for your entitlement of being allowed to live and make money in a given country. The millions of people who built that country are setting the ground rules (the 'fees') for you being allowed to use the vast infrastructure that the country provides to you. You didn't build it so you are not setting the rules - sorry.

If you thought you would be entitled to live and make money in the US free of charge, you were dead wrong . The USA gives you a lot of possibilities, but there's also a price to pay: various rules set by an imperfect compromise between millions of other people.

You want to freeload (you want to use infrastructure to make money but you dont want to pay your fees for the money you made using the infrastructure - i.e. you dont want to pay taxes), but millions of other people dont want you to freeload - it takes resources to build a country. Be glad you are getting that deal, there's another 5 billion people who'd gladly change place with you.

Make sure you are paying your due fees (taxes) as well, otherwise society will come after you and will imprison you.

In other words, society is telling you: stop feeling entitled to all this, stop being a parasite.

ATM's picture

You are free to go seek your free insurance from any of the countries that will accept you.

In the USA the federal government was never allowed the power to provide social insurance by the people. Our constitution doesn't say the govt can take from some to give to others under and "insurance" program. It says the govt can do very limited things and that the people are mostly free to seek their own success without the contraints of government interference.

So go peddle your 'we have to help the poor' with the rich's money bullshit somewhere else and the paying taxes to have the entitlement of living in this country.

The "millions of people setting the ground rules"? Where the fuck do you come from anyways? Where I come from the ground rules are set as laws and not from the mob who have learned that they can vote themselves bread and housing and retirement payments from the public coffers (the rich) and nobody is any the wiser.

What you are advocating is mob rule and enslavement of those who choose to work and try by those who have learned that stealing and "community organizing" is easier, cheaper, and more economically rewarding, just as this article represents.  

 

 

  

More Critical Thinking Wanted's picture

 

In the USA the federal government was never allowed the power to provide social insurance by the people. Our constitution doesn't say the govt can take from some to give to others under and "insurance" program. It says the govt can do very limited things and that the people are mostly free to seek their own success without the contraints of government interference. [...]

That's only so if the courts share your opinion.

Otherwise if you think that some old paper written by long dead people 200+ years ago has much effect on what most voting people are willing to do today you'll be surprised. Sure, as long as it lines up with what they want it's OK. But if the US Constitution crosses their interests in some major way then it will eventually be circumvented via liberal or conservative judicial activism ... (which one gets active depends on the issue)

At least that's the historic track record so far.

Kobe Beef's picture

oh, that's funny. MoreCT calls the working, taxpaying people "freeloaders". So what are the welfare recipients? Heroes?

By definition, someone producing economic goods or services & paying taxes cannot be called a freeloader.

Your argument flows from a backward premise. It is invalid. Think critically about that.

Cheers,
Beef

A Nanny Moose's picture

I for one am interested in what happens to the "heroes", when the "freeloaders" Go Galt

nmewn's picture

"The thing is, public insurance does not come in the form of 'trying to steal property'."

There is no such thing as public "insurance" you friggin idiot...for one...everyone who is "in it" would have had to have paid into it, in amounts at least as much as has been withdrawn in order for you to make any claim that it is "insurance".

This is clearly not the case...unless your saying that this "public insurance" is so much better run than the other ponzi that is called Social Security. 

You didn't even read the article did you?...it's about disposable income, retard.

What part of this are you having a problem with?

"If the family provider works only one week a month at minimum wage, he or she makes 92 percent as much as a provider grossing $60,000 a year."

Because of your theft, of my fire wood (taxes) from my wood pile (my past labor) it is more financially beneficial for you to sit on your dead ass three weeks out of every month (basically be a day laborer) and continue to have Vito come around & put the arm on me and everyone else who works, than to pay into the system yourself.

You are a queen leech.

Look at this shit;

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/Money%20Earned.jpg

Don't bother responding...I wouldn't piss on you if you were on fire writhing in agony on the ground in front of me, bank on that you fucking communist bitch. 

A Nanny Moose's picture

Well Said. Every bit of it

MeTarzanUjane's picture

Because I understand (empathize) you are cold and shivering does not give a right to you to have my winter jacket...it also does not entitle/grant/require you to steal property in the form of cut fire wood from someone elses woodpile because they have wood and you have none.

Sounds like the welfare check that Congress sends to the jews in israel, no?

skipjack's picture

What a load of socialist horseshit.  Your "rights" don't get to include the enslavement of others for your gain.

 

Your self-declared "right" to healthcare, in the absense of you paying for it with your own labor, then requires someone else to be forced to labor so you can benefit.  That, dear asshole, is slavery.

 

Rights are only yours if they do not impinge on others' rights.

More Critical Thinking Wanted's picture

You are not enslaved - you can leave the country anytime.

But if you decide to stay in the US you are required to play by the rules set by an imperfect compromise between a few hundred million people: and you have to pay taxes for being allowed to live and earn money in the US.

You are reaping the benefits of a developed country: you are using its roads for free, you are getting police protection, you have access to a developed judicial system, you are getting protected by the military, you probably have a local fire department as well - and, most importantly, you are allowed to make money in this vast (and rich) marketplace.

Those things do not come for free. If you expected to be freeloading in the US, if you expected to be able to make money while not paying due fees (taxes) you were wrong. Just like there's no such thing as a free lunch there's no such thing as a zero taxes developed country either.

Shameful's picture

Can leave whenever you want but still obligated to pay US taxes, US taxes worldwide income.  So paying taxes even if not using those "services".  Also a wait list at a lot of embassy's to renounce citizenship, hardly speedy service, and to think we are paying for it!

More Critical Thinking Wanted's picture

Can leave whenever you want but still obligated to pay US taxes, US taxes worldwide income. [...]

Not if you forfeit your US citizenship and live outside of the US, with no US interests.

(Also, in practice the US has double taxation avoidance agreements with most of the developed world so you wont pay double taxes.)

Freewheelin Franklin's picture

you are allowed to make money in this vast (and rich) marketplace.

 

You really are a stone cold collectivist Communist. Allowed to make money? No, I earn money.

 

You reallyy don't get it, do you? It is not just enslavement of the Middle Class in the form of taxation, it is enslavement of the poor. This proves that Welfare is a trap. There is no incentive for anyone to leave Welfare and be productive. Welfare, as we know it, encourages poverty and discourages people from being productive members of society.

Econmike's picture

I disagree. He was right, you are allwed to make money. You take for granted that we live in a society that enforces contracts. Policeman do not come to your home and steal your money and rape your wife. This is not a natural state of nature.

You take for granted the fact that our society has some degree of agreement on what constitutes laws, rights, etc. You take this social contract for granted. I can guarantee that when people begin starving because you take away their food stamps, there will be no more consensus about these issues. You do not want that society. You will not be able to "earn" money in that society.

A Nanny Moose's picture

...we live in a society that enforces contracts.

 

Rofl. Somewhere are some former GM bondholders, who would beg to differ. MBS holders may be next in line.

 

Policeman do not come to your home and steal your money and rape your wife.

Yeah, we pay TSA to do that in plain sight. This is that transparent gummint we were promised.

To your broader comment; We have the 2nd Amendment for just such a contingency. Your whole argument is predicated on paying one group of thugs, to keep another group of thugs from wrecking your shit. This is that whole die on your feet vs. live on your knees argument...sorry the former is simpler. There are no games.

 

Thee Barbarous Relic's picture

Let's see, I was born here, I work and pay taxes here(through payroll taxes) ,I pay for the roads here(through gas taxes),I pay for the police here(through property taxes),I pay for the military here(through payroll taxes)ect. and I should not complain?I can't just leave as I leave but must first find some country that will allow me to travel to and become a citizen of that country first.Could you tell me what critical thinkinking you have done on this subject? Should you not leave to escape the vulgar people with which you debate??

More Critical Thinking Wanted's picture

You can complain about the level of taxation or the nonsensical use of those resources. You'd likely even be right about your complaints - governments are inefficient. (You might even be able to effect change, if you have good enough political (or business) skills.)

What you cannot do and be intellectually consistent is to pretend that it is your 'right' to make money in a developed country and keep all of it, without paying fees (taxes). You cannot pretend that somehow the taxes owed are your 'property' - they are not.

Being able to make money in a safe environment is a benefit of a developed country - and a very expensive one to  boot. I've yet to see a single developed country that can offer this very expensive benefit to its citizens with no income or transaction taxation in exchange.

Yet many here are asking for that very expensive entitlement. How ironic, considering the topic of the article :-)

Watauga's picture

You are either totally into pulling the strings of working Americans just for kicks, or you are complete idiot.  Right now, I am betting that you are the latter.

ffart's picture

You Maoists are a fucking laugh a minute riot. You completely disregard the liberal principles that this country was founded on in granting each person soverign, inalienable rights and what the purpose of those rights were. You contend that human life must be held sacred in one breath and advocate theft and murder of anyone who doesn't go along with your dogma in the other. Then you deign to grant yourselves the authority to allow me to move to some other country if I don't like it. The public school system did a real number on schmucks like you.

DarkAgeAhead's picture

This is the post where I officially adjudge you both douchbag and completely freaking ignorant of the basic structure of the USA.

If you believe in what you write, at least be intellectually rigorous and honest enough to found your opinion on that basis, not a fundamental distortion of this country's laws.

You suck.

AmericaRacket's picture

<i>you have to pay taxes for being allowed to live and earn money in the US.</i>

 

This is trully precious.

Allowed <i>by whom</i>, deutschebag?

More Critical Thinking Wanted's picture

Healthcare is not a right.

Of course it's not - and so is it not a right to use a developed marketplace with all its infrastructure to make money without paying for it (taxes).

These are all entitlements, not rights.

Being able to live in and make money in the US is something you got entitled to by birthright (lucky you), but there's also obligations and a price to pay.

The rules for what the obligations are and what the price to pay is set by a dynamic equilibrium of an inperfect compromise between a few hundred million people.

The precise rules ebb and flow but the entitlement to make money without paying for the infrastructure in form of taxes has not existed for a long, long time.

The entitlement to publicly financed healthcare exists in most other developed nations, and seems to have been enacted in the US as well.

Get used to it that the rules change all the time.

MachoMan's picture

I've read too many of your posts already, but your entire premise boils down to little more than an argument from intimidation...  everyone has set these rules for you, therefore they are correct.  We know what the rules are...  we contend they are unjust.  Please address this issue and not whether the rules are popular.  In other words, make a value statement on where we presently are in the "ebb and flow" of entitlements, what this does to our national security (ability to even operate), what this does relatively speaking to the "productive" of society, and whether our present entitlement system is moral.

More Critical Thinking Wanted's picture

 

We know what the rules are...  we contend they are unjust.  Please address this issue and not whether the rules are popular. In other words, make a value statement on where we presently are in the "ebb and flow" of entitlements, what this does to our national security (ability to even operate), what this does relatively speaking to the "productive" of society, and whether our present entitlement system is moral. [...]

Well, a society inevitably represents many values. IMO the situation is not really that various values are opposed to each other, it's just that different people give different weights to different values.

Let me give you a few examples:

  1. Few people will argue that poor, ill children should suffer. But different people set different weights to policies that deal with this issue. We have a full range of opinions ranging from 'this is a task for charities' to 'this must be done by the government'.
  2. Few people will argue that human life is not sacred. Few people will argue that freedom of individual choice is not sacred. For a few limited issues where the two concepts collide the weighting differs drastically - and so does the desired outcome.
  3. Few people will argue that the US does not need any military defenses. Still the weighting ranges from 'there should only be local militia' to 'the US should double its military force here and now!'. Internationally we can also see a wide range of options and preferences: there are countries that solved their national security needs with literally no military force - by luck of geopolitical position, by luck of alliances - and there are countries armed to the teeth.
  4. Few people will argue that there is no need for an independent judiciary system. Still the weighting ranges from 'this is so important that it should be tax financed' to 'this should be financed by the adversaries themselves'. Internationally we can also see a wide range of options and preferences in other countries: there are countries where losers pay the costs, there are countries where most judicial proceedings are government financed, and there are countries where most of the judicial proceedings are financed by the parties themselves.
  5. etc. etc.

So to answer your question, if we both listed our 'values' I think they would match up at least 90%, if not more. Where we would differ is the ordering of those values and the policy response (if any) to different real-life situations that affect these values somehow.

Why do people still get polarized into 'right wing' and 'liberal' camps, while in reality having a large overlap of values? Firstly, because the specific policy response (if any) depends on the weighing. Secondly, because the press wants more eyeballs and blood, sex and controversy brings the most eyeballs. Thirdly, because humans have a biological, genetic tendency to organize into clan/tribe structures. 'Our efficient local politician' is loved, 'all the other corrupt politicians of others' are hated.

The other thing is, the ordering and the weighing of different values typically changes in a lifetime: it is influenced by upbringing, by education, by social environment and by general experience and is influenced by important events in your life. You can see that obvious process in various social studies: the elderly will consider medical aid to the elderly more important than young people, etc.

Modern democracies are basically a complex, weighted average of all these preferences - with some historic lag and certainly with a lot of (successful) manipulation done by capable and well-communicating interest groups.

What I was trying to point our in this thread is the fundamental fallacy that can be seen here on ZH so often: that all social programs are immoral, are used by freeloaders only, that it's all government waste and that taxation is immoral and theft. Many people think that it is not so, and for good reasons. You have to acknowledge that other people have different opinion and different preferences - and often they share many of your values.

In that sense I dont think various forms of social benefits are immoral automatically - unless you are willing to go so far to claim that the benefit of a strong and non-market-financed military, the benefit of a strong and non-market-financed judiciary, the benefit of a strong and non-market-financed police force, etc. is immoral as well. (Which would be a consistent opinion as well.)

What do I think about various US benefits? I think the US is being silly about not putting more money into public education for example. Finland and Germany both have very strong public schooling with essentially zero private schooling (not even private universities) - and their pupils are top notch in most tests, their scientific and industrial production is very strong, their workforce is highly qualified. Arguing about putting even less money into US public education is more than silly IMO ...

But that's just my personal preference and my personal weighing of this particular policy - IMO it does not transform into any fundamental argument about values.

Does this answer your question(s)?

MachoMan's picture

Somewhat.  I certainly agree as to many of your basic premises.  The problem is that morality involves not only the inherent concepts of fairness, such as a rudimentary safety net for fellow humans, but also the ability to pay for them from the present parties utilizing the system.  In other words, can we pay marginally more for education at this juncture and, further, can we expect future generations, who may derive no benefit from our spending, to pay for the increase?

In large part, we all get the academic arguments...  these are as old as civilization.  What we have to discuss is the 10% that we do not agree on and its application to our present circumstances. 

It is my basic premise (and I think I will be joined by many here) that any marginal increases in spending are completely and totally immoral given the source of funds and how they are obtained.  I guess this is the question I was wanting answered (despite not being posed in question form).  In short, if we were starting our economy from scratch and designing it on paper, our analysis as to the moral implications of our design would be different than the morality of the present "remedial" measures.  I think you're trying to argue the former in the land of the latter.

Eventually, entitlement economies hit the brick wall of desire to work and, if somehow that wall is breached, they eventually hit the impenetrable rock of a lack of available resources.  Through "ingenuity" I think we've managed to break the wall, but we're quickly approaching the rock.

More Critical Thinking Wanted's picture

I think modern/developed societies are fundamentally iterative (i.e. definitely not 'planned' - all prior attempts at planned economies were miserable failures), so no grand concept of morality will permeate the structure - the structure is just as varied and messy (and full of historic legacies) as the opinion of the people who are building it.

In that sense the 'source of funds' you refer to is just as messy and varied. Some are upfront costs, some are rents, some are cuts/fees from revenue. Some are cuts from revenue but deferred to year's end (taxes).

So declaring that just because income taxation is currently delayed to year's end, instead of being executed on a per transaction fee basis, that somehow the tax portion itself is 'owned' by the individual, is really missing the point I think. In a not so distant future I suspect all taxes will be deducted without the funds ever hitting your bank account - as it already happens with payroll taxes that go from employer to the IRS.

Fact is that 'society' wants a cut from the money we make with the help of them. Just like your broker wants a cut from your trades and just like the grocery wants a cut from your purchases of food. It will be your position and your food in the end - it will be your property - but there's a transaction cost/fee that is not your property. Taxes are really similar to that - just implemented in a weird, deferred way, making it appear for a short period of time as if you 'owned' the whole revenue. You dont really - there's an implied cost/fee that has to be balanced before you can declare it a profit that is truly 'your property'.

Taxes might eventually transform into pure VAT and per transaction taxes (which are definitely more specific, more nuanced and hence fairer than collective taxes) - and at that point it might make sense to eliminate the deferred, annual personal income taxation scheme altogether. (Although the cynic in me tells me that at that point they will keep both taxation variants.)

Regarding the brick wall of the 'desire to work' - I dont see that happen in Europe even at 50% taxation. People grumble but 50% of a ton of money is still a ton of money. But since clearly no one would be willing to work at 100% taxation there must be some effective limit inbetween.

OTOH there are people willing to work even at 90%+ effective taxation: CEOs of many big corporations are paid less than 1% of the revenue increase they manage to achieve - which is still a huge sum in the end. So if you put the question as: 'would you be willing to earn 100 million dollars?' then most would answer with a YES! - even if the true revenue was 10 billion. (I hope you wont nitpick about the fact that these CEOs do not own those companies - the concept is still similar I think: they are achieving huge sums of revenue and are still willing to accept just a small portion of that revenue - because that 'small portion' is in fact huge in itself.)

So it's not entirely impossible that a 'desire to work' would still exist even at very high levels of progressive taxation, as there's no shortage of capable CEOs today :-)

But this latter part is purely speculative so feel free to discount it entirely - the US had a period of time when there was 90% top tax bracket, but other than that there's no good historic examples to refer to.

MachoMan's picture

Jesus christ.  This reminds me of Billy Madison's response during the quiz show about finding his dog...

So basically what you're saying is that people are born into the country, go to work, and because of their predecessors' complete lack of care for their wellbeing, now have to fork over 90% of profits (compared to their predecessors' 30%) to pay for unintelligent spending and this is as morally incindiary as ocean hitting the beach.  Got it.

You also are completely ignoring the social strife in countries, regardless of the tax rates.  Meaning, what policies, in particular, lead to the present economic decisions in which literally everyone (other than complete dependents) are completely fed up and about 3 seconds away from a collective howard beale moment?  The people who are feeling the squeeze from the top and bottom (aka getting night at the roxbury'd) are fucking sick of it.  You acknowledge the historical precedent for failure, but refuse to comment on the morality of the mechanism for failure.  Telling.

Can tyranny exist in a democracy when the majority in fact are politically active?  You seem to be dancing around this question.  What happens when the majority is inclined to vote itself a perpetual standard of living at your expense?  Is this moral?  Was slavery moral?

PS, tax rates of 90% simply do not work at this point in time because should that come down the pipeline, there will be a myriad of countries with open arms accepting all the expats.  In other words, see generally Memphis, TN as to what the effect of this will be.

MurderNeverWasLove's picture

Thanks, Macho, for your patience with this creature.  I couldn't have done it.  Try to lead him to make some smarmless statements and he just gets squishier.

On your PS, though.  What would really be the problem with convincing the wealthiest to exit stage left?

MachoMan's picture

The problem, in a nutshell, is that with their wealth, so too goes ours.  All of that wealth will be invested elsewhere, technology and manufacturing developed elsewhere, and the remainder here will be just that much poorer.  The existing debt/infrastructure has no way of keeping up with payments (Memphis).  We're in a terrible pickle.

More Critical Thinking Wanted's picture

 

So basically what you're saying is that people are born into the country, go to work, and because of their predecessors' complete lack of care for their wellbeing, now have to fork over 90% of profits (compared to their predecessors' 30%) to pay for unintelligent spending and this is as morally incindiary as ocean hitting the beach.  Got it. [...]

(No, most intelligent tax schemes are progressive - so the more money you make, the higher the tax becomes - but the amount of money you make still always rises so there's always a marginal increase in taxed income.)

The other thing you are ignoring is that last I checked you still went to the polls every 2 to 4 years and reelected all the guys who have the power to change these things basically overnight with a flick of a switch, right?

And if your views that things are rotten are not shared by a few hundred million of your fellow citizens and if they do not elect the right people then yes you are stuck with that result! A fundamental property of democracy is that you do not get to make their decisions for them - even if you consider them stupid (and even if they are stupid).

You definitely do not get to call the set of rules that set the fees to work and do business in the US 'immoral' because it contradicts your views - unless you call democracy (the rule of the majority, regardless of their intelligence) immoral as well. Are you making that argument?

MachoMan's picture

What I am saying is that our system (the one backing your position) is a complete and total failure.  It is a complete and total failure because of not only rudimentary math, but also the complete and total failure of rudimentary morality, leading ultimately to the unsustainable entitlement state.  Your entire premise boils down to an argument from intimidation and is exemplified by the tyranny of the present majority.  You cannot rest your argument on "that's just the way the system is"...  that's not what we're discussing.  You have to materially contribute to the discussion of whether our present situation is the result of a truly well functioning (textbook/academic) republic.  I contend that anyone who would set out to design this system on paper is a dictator hell bent on usurpation of basic human rights.

I am making the argument that a small group of the country's elite have implemented an incentive program whereby the nation's "poor" are encouraged to remain that way and, in return, also assure the elite of their relative status...  all at the expense of the nation's middle.  This is the entire premise of the article...

You cannot sincerely advocate that the inherent limitations of a system of governance should be exploited until the point where literally the entire world is either thrust into darkness and/or war.  What I propose is that we develop viable mechanisms to identify these threats as they emerge and take a proactive stance to correcting our problems before they become so large no amount of remedial measure will help.  When you feel the crack of the whip at your back, I promise you will be singing a different tune.  It's coming, and it's coming soon.

More Critical Thinking Wanted's picture

 

What I am saying is that our system (the one backing your position) is a complete and total failure. [...]

I'm guessing here, but I get the impression that your opinion is somewhat slanted in one direction because you've never experienced a public benefits system that actually works well, right?

I am making the argument that a small group of the country's elite have implemented an incentive program whereby the nation's "poor" are encouraged to remain that way and, in return, also assure the elite of their relative status...  all at the expense of the nation's middle.  This is the entire premise of the article... [...]

That's not what I got from this article.

If you check the numbers carefully you'll see that the 'middle' income class comes off worse because it does not get fair health care benefits - they have to pay it themselves. (check the 'Medicaid and CHIP' row.)

The best public health care systems I'm aware of (and I used three of them personally) all have progressive fees  - i.e. the kind of unfair taxed income inversion you can see in the table above cannot happen.

For example in Germany (but I could mention Austria or Sweden as well) you get public health care as a 'sovereign right' [1]. Every german citizen who is living in Germany has full health care coverage [2], and for a fixed percentage of their income, with a ceiling of a max of about $650 per month, per family (an equal amount is matched by the employer). It cannot occur that the 'poor' get health care benefits while the 'middle' does not get them - the health care fees are increasing linearly and progressively with income, to the still-reasonable maximum limit.

German citizens have free choice of doctors and free choice of hospitals. If you have a specific illness, you can look up the best specialist in Germany and you have a fair chance to get an appointment with him. Since the system is so open internally, there's very good economy of scale from ~80 million patients.

In the US, the very best specialists will only treat those who are able to pay for their services - which in practice is a tiny percentage of the population. As a result patients are 'fragmented' into multiple geographical groups and there's no good economy of scale: specialists often do not get enough patients of a given type of illness to build up sufficient know-how. In Germany there are specialists who will get all patients from an 80 million population, regardless of income. This enables them to create very specific types of know-how and gives them practice and improves quality. Note that this becomes possible because there's no income dependency to meet specialists. [3]

The health care fees are deducted as part of the payroll tax - and are not conditional or treatment dependent, they are a flat percentage of income. If you lose your job, you still have full health care coverage, etc.

As a result, if for example your daughter was so unfortunate to have spent half of her life in hospital, you still pay the same amount as if no-one in your family ever needed to see a doctor in the past 5 years. This model is possible and sustainable because health care is a special benefit where freeloading is not common: a chronically ill person would gladly switch roles with a totally healthy person.

If you need two heart transplants in your lifetime you would still be paying the same health care costs as if you were healthy in all your life. (And believe me, people are not flocking to 'freeload' on heart transplants in Germany, just because it does not cost them.)

And note that this is a positive effect on quality of life: people do not get stressed from the danger of running up high health care costs - a problem for so many in the US. They know that if they need it, a health care system is there for them - just like public roads are there if they need to travel. It's their for their loved ones as well. I have not seen formal studies on it but I'd not be surprised if there's a measurable increase in productivity due to this.

The health care model we have in most of the US is the worst of the two worlds: we've got private insurers who have monopolized local markets, so we get all the disadvantages of monopolies (high costs, little incentive to compete) - but we also get all the inefficiencies of multiple private providers as well (freeloading/abuse committed by the insurers and lack of national economy of scale). As a result the US health care system is one of the most expensive ones in the world - and it still does not give you a peace of mind - a chronical illness in your family can still bankrupt you.

So my point with all this is that if you check the facts you will see that public benefit systems are not unfair by design, and do not result in nonsensical results. They can be unfair and they can be nonsensical. So your whole premise that all your income in a modern society is 'yours' (and that you are unwilling to pay any fees for it) is based on the wrong premise that any benefit is immoral because inefficient.

The thing is, if your income is indeed 'yours' and if it does not depend on the remaining population at all, then you should be able to relocate to any other country on the planet and still have the same income (which is your property after all), right? In reality that is only very rarely so - most income flows use the infrastructure of a modern society in zillions of ways.

[1] You can opt out of the public health care system in Germany and get private insurance. This is possible but is generally considered risky.

[2] There's a few areas of optional treatments where patients have to pay 50% of the costs, such as certain dental treatments, etc.

[3] So the poor also 'pay' (in a small part) for health care by providing treatment experience to doctors. This is a hidden and under-estimated effect with rare but treatable illnesses. It does matter whether a specialist diagnoses and does 20 operations of a kind per year or only 1.

MachoMan's picture

Again, Billy Madison response.

Does a "successful" system involve insolvency? 

Further, care to address any of the points in my post?