Reality: Taxes or cuts; if cuts, specify where

Of newspaper editors, Cal Beverly must certainly be ranked among the fair. While possessing a strong conservative bent, he prints entire letters with which he must strongly disagree.

However it seems even he cannot escape his own prejudices, and this was most apparent in his headline for my Letter to the Editor of last week. It was titled: “So-called conservatives now are playthings of the rich who benefit most but contribute least.”

Headlines are supposed to catch the reader’s eye and the main idea, and I can only surmise Cal took away from my letter the supposition that I believe the rich contribute the least.

As humans we are all victims of our preconceptions. Yet our ancestors, through honest and difficult debate were able to agree on a completely new form of federal government in the face of political extremism certainly equal to anything extant today.

Fifty-eight men from 12 states met in Philadelphia to reform the Articles of Confederation and within days went well beyond the stated purpose of the convention. They were certainly not of like mind, and two New York delegates left rather than remain part of the convention.

From June to September the delegates remained sequestered behind closed doors and windows in a heat wave debating and re-debating ideas and practicalities.

Some, like Luther Martin of Maryland, were there only to disrupt the proceedings. Others, like Alexander Hamilton, staked out extreme positions on executive authority which he must have known were unacceptable.

In the end, enough of them found enough to agree on to recommend this entirely new form of government to a skeptical Congress and an eager nation.

I believe they did so because they saw the immediate danger of not doing so. There was rebellion in Massachusetts, trade disputes between New York and Connecticut, an empty national kitty, treaties not honored by foreign nations, hostile natives who were naturally opposed to the theft of their land, and a growing knowledge that the great experiment in popular government was about to fail.

Today we seem to be victims of their success. Like children given too much and challenged too little, we squander our advantages, and waste our resources. The growth of right wing charlatans and resultant popular delusion is a direct result of this national petulance.

About 80 percent of the national budget goes to defense, Medicare, Social Security, and interest on the national debt. The Tea Party swept in on the idea that we must cut expenditures but when pressed can give only vague notions of where those cuts must occur.

If we haven’t the political will to cut then we must tax.

According to the Economic Policy Institute in Washington, the top 1 percent of Americans owns 34 percent of America’s private net worth. The bottom 90 percent owns 29 percent. In income the top 1 percent receives 24 percent of income in the United States every year.

The expiration of the Bush tax cuts would have meant about a 4 percent increase in marginal taxes for the wealthiest 1 percent of Americans. The Republicans made it their TOP priority to save the Bush tax cuts, and then increased the amount of wealth sheltered by death from $1 million to $5 million for an individual and $10 million for a couple.

This by itself means more than 700 billion dollars in tax money forfeited by the national treasury when it is most needed.

Our Maginot Line is our inability to speak straight about cuts and our unwillingness to tax. If the Tea Party and the Republicans wish to cut, then they must speak openly and honestly about real cuts to real programs to somehow achieve a balanced budget.

Cutting the Department of Education isn’t going to do it. Cutting Visitor’s Centers from the defense budget (as proposed by a main Tea Party advocate on Eliot Spitzer’s show) won’t do it either.

And all you people on Social Security and Medicare; all you military retirees with your pensions and healthcare; all of you government employees and retirees; all you military industrial producers and workers had better realize that your pie is but a piece of the national pie and it must be part of the debate about cuts if we are unwilling to increase taxes.

Our system relies on the rich. It is the accumulation of wealth which can then be invested which allows us to produce wealth.

I never said the wealthy contribute the least. I did say they have benefitted the most in income while using their power to skirt their obligation to the system which has allowed their tremendous accumulation of wealth.

This latest increase in shielded estate tax money is an even more egregious example. We would never agree to make political power hereditary, but we seem easily convinced to extend the courtesy to monetary power, which remains always the basis of political power.

Let us then remove ourselves from the inflammatory and look for leaders who will engage in honest debate. I have little faith it will happen.

Colonel Charles DeGaulle went to visit General Gamelin, commander of French forces, to argue that France must concentrate her armored forces to attack Germany and if necessary to repel the coming armored attack. General Gamelin could only respond: Il n’est pas possible!

As a nation (not 50 sovereign states), we either address reality or wait for it to address us. And that is neither a conservative nor liberal idea.

Timothy J. Parker

Peachtree City, Ga.

[The editor replies: Mr. Parker’s exact quote — from which I fashioned the offending headline — is as follows: “The so-called conservatives in this country have become the intellectual playthings of the very rich who benefit most from our society but wish to contribute proportionally the least.” I left out one big word from an already overlong headline, “proportionally” and one small one, “wish.” I leave it to the reader to decide — proportionally — whether the omission materially — and wishfully — distorts Mr. Parker’s meaning.]

citizenal
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Engaging letter but a sad sign of the times

I have to compliment Mr. Parker on a fine letter. I wish we would all put the time and thought into our comments and engage in a civil debate. I also share his frustration that we have not balanced our fiscal balance sheet either by cuts or by taxes. Unlike Mr. Parker I favor cuts, deep major curtailments of government's grasping and corrupt power and a major relocation of power back to state and local governments. I just don't understand why Mr. Parker feels, though it is a growing feeling, that what people earn is not theirs to keep and enjoy and spend how they deem worthy. I don't understand why he and others like him cannot see that when they open that door they cannot shut it again. Once they establish that what is theirs is not really theirs but "ours" they will never be safe again. Mr. Parker seems quite well read and in his discussion of the founding fathers I wonder that he does not see that in their many disagreements one thing that there was greater agreement on what that private and personal property was to be honored and protected.

The bottom line is that the government is not the owner of everything and does not bless me with its benevolence to allow me to keep a small bit of it. Yet, this is clearly Mr. Parker's view. Even his discussion about the death tax is clear. After I pay taxes all my life on what I have earned why should anything I have left be taxable? What business is it of his if my children are more powerful because of what I leave them. It is not his to decide.

But yes, he has done us a favor in his letter. He has focused the issue clearly. Coward Republicans are going to have to give account. It was right to stop a tax increase. It was right to curtail and someday eliminate the death tax. NOW, it is right time to balance the budget. As a boomer I can say I expect to see my social security cut. I hope to see EVERY government program and EVERY government salary reduced. Then I expect to see every state and local government salary and program reduced.

You are right Mr. Parker. It is time to cut - painfully and deep. And, just so you know, I am ready to fight to stop you and people like you from taking from me to give to what you think is important.

birdman
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Citizenal, great comments

I really enjoyed your comments, especially the idea of "civil debate." Too often, not just in this blog, but everywhere we debate in "attack mode."
I appreciate your points, but as a counterpoint, taxes do provide many services. It isn't that the government is "bless[ing] me with its benevolence to allow me to keep a small bit,..." but you and I pay for Defense, Infrastructure, Interstate Commerce, and a host of other services. Yes there are too many "entitlement" programs. Yes there are ridiculous expenses, all that need to be looked at. But without "civil debate," how can we agree? Additionally, if half our society looks at taxes as "theft," how do we fund our government?
As to the "death tax," this is a whole different debate. Problem is that now only 2 percent of all estates will be taxed. 98% will be tax free. The elimination of the "Death Tax" will result in ALL estates being taxed on normal Capital Gains. Is it fair to say that most Middle Class estates are wrapped up in property? The new law exempts the first $5 million (?). Since only 2 percent of estates fall above this number, it is safe to assume that all Middle Class Estates will be tax free. Eliminate the Estate Tax and 100 percent of all Estates become subject to normal Capital Gains taxes. This significantly helps the 2 percent above the cutoff, as they are already subject to taxes. But the Middle Class gets hammered.
Now, I am not defending estate taxes. I am only pointing out that the benefit of eliminating a tax that has been with us for generations helps the top 2 percent at the detriment to the lower 98 percent.
Example, my parents own a house worth about $1 million. It will be sold and divided among the siblings. It was bought many years ago for about $40,000. The "cost basis" is effectively zero. Today we will inherit $1 million to split. Eliminate the Estate taxes and we will split about $820,000. A significant difference. Now I will admit that it isn't necessarily fair that the upper 2 percent of estates bear an unfair burden, but adding taxes to 100 percent to help 2 percent isn't necessarily fair either. And rest assured, there are plenty of ways to protect much of an estate through partnerships, trusts, generation skipping, etc. In fact one reason you will probably never see an elimination of Estate Taxes is because CPA's and Lawyers make fortunes off protecting high estates.
As for your final comment, "taking from [you] to give to what [I] think important," that is already being done in reverse. My job, investments, pay, benefit packages, retirement have all been reduced or eliminated in order that the upper 2 percent of our society, who hold 95 percent of the wealth, can benefit through tax reductions. The lions share of the economic "issues" has fallen to the Middle Class. The average Marginal Tax Rate for the wealthiest tends to be about 15-18% as most of their taxable wealth is in Dividends and Capital Gains as opposed to Payroll. My average Marginal Tax rate over the last 10 years hovers around 20-24%. I am paying between 5 and 9% more of my income in Federal Taxes than the highest income earners. Is that "fair?" If you look at the lions share of Bushes tax cuts, they went to Corporations and the highest 2 percent. The biggest tax cuts were in the area of Capital Gains and Dividends. The whole idea of Boehner holding the Middle Class hostage to a very expensive tax plan is just plain wrong. Rest assured, if Boehner is saying its "good for America," he really means "good for us wealthy folk." I am not a "classist," but I am tired of bearing the burden for the gain of the wealthy. As Tim said we all need to sacrifice. The magic bullet to save the economy isn't to cut taxes to the rich, it is to freeze, or even raise taxes for all cut exnenditures and try to buy down the debt. It will be long and painful but necessary. But we need to face the reality that extending Bush tax cuts for the wealthy will not stimulate the economy, they will not take that $100,000 they gain and say "oh boy, now I can go to Walmart and buy that TV I've always wanted." But if the lowest income earners see more money, the WILL go to Walmart and spend it. This will stimulate demand, thus stimulating supply, thus stimulating jobs. The wealthy and business owners will see growth in business and investment and earn much more than what they are paying in additional taxes.

This may not be what you want your taxes spent on, but it is what I want my taxes spent on because it is an economic benefit to me.
Anyway, hope we can debate in a civil manner. We all have good ideas even if we don't agree.

Take care.

PTC Observer
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citizenal - !

Excellent and to the point

Robert W. Morgan
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New Parker headline: Our system relies on the rich.

Sorry you are upset with the headline Cal picked out for you last week - or even this week. But here's an alternative -taken from your letter word for word fair and square:

Our system relies on the rich. (and you continue) It is the accumulation of wealth which can then be invested which allows us to produce wealth.

Wow, when you're right, you're right! I, of course take the position that the accumulation of wealth will create more jobs (and more wealth) if managed by the person or entity that created that wealth in the first place. They must know something about it since they created the wealth in the first place. You may argue that siezing that wealth so that government can invest it is more efficient. The extreme position is that those that have the wealth don't deserve to keep any of it because that is not "fair".

And by the way, those that have their eyes on inherited wealth are simply not paying attention to reality. No matter where you set the upper end exemption on income, you won't be able to touch the real wealth. The truly wealthy (Kennedy's, Heinz-Kerry and Walton family to name a few) have converted their income to either tax-free or lower taxed dividends or capital gains and sheltered the whole thing in various trusts that thumb their nose at any inheritance tax. After all these second and third generation wealthy are not stupid, but even if they are they can hire some pretty high powered help.

PTC Observer
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Mr. Parker's Latest

Notwithstanding this latest mediocre letter from Mr. Parker, his past letters to the editor have fully disclosed his political philosophy.

Mr. Beverly clearly captures this philosophy in his headline much to Mr. Parker’s apparent displeasure.

If you don’t believe what you write Mr. Parker, stop sending in letters to the editor.

As to where to cut, in my opinion we need to take a fiscal meat axe to the entire government apparatus, starting yesterday.

Observerofu
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Well PTO what else does Parker have?

His "Hope" for "Change" actually happened just not like he expected. So now we get the end results. A whining pathetic bacon styled letter to the editor.

He can't handle being on the wrong end of history again so let's write long wordy letters crying and lamenting on how unjust everything is.