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Politics : View from the Center and Left

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To: Paul Smith who wrote (149522)	11/11/2010 2:19:08 AM
From: wonk	Read Replies (2) of 541685

...I don't think it is appropriate to view contributions to social security as the same as income tax. Then you fall into the trap. As long as the Cash goes into the general operating budget, and there is EXCESS Cash on a period over period basis, then it is a subsidy to the wealthy and disproportionately lowers income taxes rates over what should be paid as a function of income. It is no different if you were the sole owner and President of an insurance company that sells life and property. Premiums are revenue. Claims are expense. Once the Cash from the premiums is in the bank account, it doesn't really matter where it came from - you use the cash to pay expenses, and dividends if you have profits. Now if it turns out that you have high claims in a particular year in your property line (say a hurricane) your Balance Sheet doesn't give a hoot that you took excess cash from the life premiums to pay property claims. The Dollars don't have names on them. All you care about is Free Cash Flow. As for ...you advocate a flat tax system.... Not necessarily for the exact reason above. You want to segregate Social Security. I'd say in a flat tax system that Social Security would be the one permissible Credit (not deduction) on one's Federal return. You'll say - as would quehubo - ...its an insurance programs and should be segregated out so that the receipts match benefits.... I'll counter - what's good for the goose is good for the gander. If you want to apply Accounting Matching Principles then we should disproportionately charge for the Federal Courts, which are predominately used by the business interest and wealthy. We should disproportionately charge for the Commerce Department, and State and much else for the same reasons. Same thing for TSA and defense if not most of what Government does. You've got a lot more economic value at risk - do you not? In one sense, local property taxes are one of the most fair. We don't explicitly charge you for Police and Fire Protection based on the value of your property but it is implicit that higher value properties pay more in tax. Maybe we should tax that way. Just have everyone report their net worth every year, and we'll charge them a flat percentage basis. Isn't that fair? Again, the wealthy have more value at risk and social disturbances are not conducive to wealth accumulation. Right? Shouldn't Doctors base their charge for services on the value of your life? I'd wager that your life is worth a heck of a lot more based on the present value of your future earnings stream than the minimum wage burger flipper at McDonalds. This is good business. Anything else would be socialism.

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