Sunday, October 26, 2008

Political Interlude: Obama's Redistribution of Wealth

UPDATE: Beldar has an explanation as to HOW TO EXPLAIN OBAMA'S REDISTRIBUTION to a KID

Grades come out tomorrow," said my daughter Molly, an eighth grader, when I picked her up at school this afternoon.
"Great," I answered, "How d'ya think you're gonna do?"
"Pretty well," Molly said confidently.
"What will probably be your best grade?" I asked.
"Guitar," she said, "That will probably be a 97 or a 98."
"Cool," I said. "You really have been successful. But I think you should tell your Guitar teacher that you want to give six or seven of those points to some of your classmates who haven't practiced so hard or don't have the talent you have."
She looked up at me, startled. "What?"
"That class is easy for you, and you have lots more points than you need for an A. They need those points more than you do," I explained.

"Then they should have worked harder!" she protested. "Yeah, I'm sort of talented, but I worked hard to get those grades! I earned them!"

"So you're telling me that you think it's fair for you to get to keep all of those good grades, both the part that comes from your having worked harder than your classmates, and the part that comes from the musical talent you inherited from me and your mom. Is that what you're saying?"
"Well, yeah!" Read the rest at the link above

Got this in my email:

Redistribution of wealth
Today on my way to lunch I passed a homeless guy with a sign the read "Vote Obama, I need the money." I laughed.

Once in the restaurant my server had on a "Obama 08" tie, again I laughed--just imagine the coincidence. When the bill came I decided not to tip the server and explained to him that I was exploring the Obama redistribution of wealth concept. He stood there in disbelief while I told him that I was going to redistribute his tip to someone who I deemed more in need--the homeless guy outside. The server angrily stormed from my sight.

I went outside, gave the homeless guy $10 and told him to thank the server inside as Ive decided he could use the money more. The homeless guy was grateful. At the end of my rather unscientific redistribution experiment I realized the homeless guy was grateful for the money he did not earn, but the waiter was pretty angry that I gave away the money he did earn even though the actual recipient deserved money more.

I guess redistribution of wealth is an easier thing to swallow in concept than in practical application.



Anonymous said...

Your experiment made no sense a all..Obama is only going to tax the very top 5% of the tax payers...if you make less than $250,000 adjusted income you will actually get a tax the poor waiter that you screwed out of his hard earned tip is not in the demographics that you should be concerned about.He will actually get a tax decrease under Obama..of course what you are really worried about is all of the tribal members that make well over the $250,00 a year that they steal (oops I mean win)from the Casino patrons.They will get a tax increase.(but what do they care, they will just lay-off more people and tighten the machines some more!)
So you should be really proud of screwing the waiter over just because his political beliefs didn't match yours.(isn't that what your tribe did to you?? and aren't bitter about it at all..are you??)
Really read the tax codes that he is proposing and don't just listen to sound really might be suprised..

just do it said...

I believe the $250,000 was meant for a Couple another words 2 people and wat is not mentioned that anyone who earns $125,000 will be taxed the same as the Couple.
was heard on the news channels.
is it true, if so,no one talks about this.

O Pechanga said...

From the Wall Street Journal:

Obama's 95% Illusion
It depends on what the meaning of 'tax cut' is.Article
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One of Barack Obama's most potent campaign claims is that he'll cut taxes for no less than 95% of "working families." He's even promising to cut taxes enough that the government's tax share of GDP will be no more than 18.2% -- which is lower than it is today.

APIt's a clever pitch, because it lets him pose as a middle-class tax cutter while disguising that he's also proposing one of the largest tax increases ever on the other 5%. But how does he conjure this miracle, especially since more than a third of all Americans already pay no income taxes at all? There are several sleights of hand, but the most creative is to redefine the meaning of "tax cut."
For the Obama Democrats, a tax cut is no longer letting you keep more of what you earn. In their lexicon, a tax cut includes tens of billions of dollars in government handouts that are disguised by the phrase "tax credit." Mr. Obama is proposing to create or expand no fewer than seven such credits for individuals:
- A $500 tax credit ($1,000 a couple) to "make work pay" that phases out at income of $75,000 for individuals and $150,000 per couple.
- A $4,000 tax credit for college tuition.
- A 10% mortgage interest tax credit (on top of the existing mortgage interest deduction and other housing subsidies).
- A "savings" tax credit of 50% up to $1,000.
- An expansion of the earned-income tax credit that would allow single workers to receive as much as $555 a year, up from $175 now, and give these workers up to $1,110 if they are paying child support.
- A child care credit of 50% up to $6,000 of expenses a year.
- A "clean car" tax credit of up to $7,000 on the purchase of certain vehicles.
Here's the political catch. All but the clean car credit would be "refundable," which is Washington-speak for the fact that you can receive these checks even if you have no income-tax liability. In other words, they are an income transfer -- a federal check -- from taxpayers to nontaxpayers. Once upon a time we called this "welfare," or in George McGovern's 1972 campaign a "Demogrant." Mr. Obama's genius is to call it a tax cut.
The Tax Foundation estimates that under the Obama plan 63 million Americans, or 44% of all tax filers, would have no income tax liability and most of those would get a check from the IRS each year. The Heritage Foundation's Center for Data Analysis estimates that by 2011, under the Obama plan, an additional 10 million filers would pay zero taxes while cashing checks from the IRS.
The total annual expenditures on refundable "tax credits" would rise over the next 10 years by $647 billion to $1.054 trillion, according to the Tax Policy Center. This means that the tax-credit welfare state would soon cost four times actual cash welfare. By redefining such income payments as "tax credits," the Obama campaign also redefines them away as a tax share of GDP. Presto, the federal tax burden looks much smaller than it really is.
The political left defends "refundability" on grounds that these payments help to offset the payroll tax. And that was at least plausible when the only major refundable credit was the earned-income tax credit. Taken together, however, these tax credit payments would exceed payroll levies for most low-income workers.
It is also true that John McCain proposes a refundable tax credit -- his $5,000 to help individuals buy health insurance. We've written before that we prefer a tax deduction for individual health care, rather than a credit. But the big difference with Mr. Obama is that Mr. McCain's proposal replaces the tax subsidy for employer-sponsored health insurance that individuals don't now receive if they buy on their own. It merely changes the nature of the tax subsidy; it doesn't create a new one.
There's another catch: Because Mr. Obama's tax credits are phased out as incomes rise, they impose a huge "marginal" tax rate increase on low-income workers. The marginal tax rate refers to the rate on the next dollar of income earned. As the nearby chart illustrates, the marginal rate for millions of low- and middle-income workers would spike as they earn more income.
Some families with an income of $40,000 could lose up to 40 cents in vanishing credits for every additional dollar earned from working overtime or taking a new job. As public policy, this is contradictory. The tax credits are sold in the name of "making work pay," but in practice they can be a disincentive to working harder, especially if you're a lower-income couple getting raises of $1,000 or $2,000 a year. One mystery -- among many -- of the McCain campaign is why it has allowed Mr. Obama's 95% illusion to go unanswered

Anonymous said...

no its $250,000 single or married..and only 5% of the population reach that amount...

Anonymous said...

Krugman in the NYT says the bracket starts at $182,000 for head of household.

ex-pechanga-gambler said...

Isn't that what the tribes are doing with the casinos??...taking money from the people with more disposable wealth and redistributing it to themselves?????

O Pechanga said...

One difference is that casino's and other businesses provide a service, gambling, food, entertainment.

Taxes are forced contributions and not supposed to be for redistribution of wealth.

Anonymous said...

How do you think you used to get the Government checks before the Casinos?...thats right...FROM taxes....

O Pechanga said...

You obviously have me confused with someone else.

I was not one of the Pechanga people who were on welfare, and in fact am doing well enough to NOT get a rebate check this year.

But those checks you mention WERE from forced distribution. And we certainly don't need higher taxes, we need less spending.

Anonymous said...

Yes, not ALL Pechanga were on welfare...

Anonymous said...

Redistribution without doing anything for it will not be good for the country.

Obama has promises, but that's about all. If only we knew as much about him as we learned about Joe the Plumber. We have two lousy choices.

Anonymous said...

Well, let's see, we have Obama being endorsed by Pechanga Chairman Mark Macarro. That seems to me a good enough reason to vote for ANYONE else, other than Mark's choice.

Anonymous said...

Biden's now coming out with $150,000 as the new level..... How slippery is that slope anyway?

Anonymous said...

What you guys are all missing is that neither Obama or McCains tax plans are going to be passed by them alone...they have to get passed by the House and Senate that is why it is called a "plan"...neither will probably ever see the light of day...and McCain just wants to give tax bail-outs to huge companies already making billions of dollars in profit...and the oil companies sure haven't passed those reductions down to the public, so his tax "plan" flawed as well.

Anonymous said...

Is it that you really are worried about the top 5% of the wage earners that will be taxed higher by Obamas plan or the fact that the tribe gets about $360,000 a year and you are just worried that if you get back in the tribe that your taxes are going up?
At least Obama will be targeting himself with this tax increase...he falls in the 5% category.!....and don't worry, the other 95% of the population will get a tax they can bring it down to your casinos and make you even richer!!..

The Local Crank said...

Taxes are neither "forced contributions" nor "theft." They are voted upon by representatives elected by the people. If you don't like the level of taxes you are paying, vote for someone else. Gigantic corporations decided they didn't want to pay any taxes, and in fact wanted to be subsidized by the federal gov't, so they support the Republicans who only believe in welfare for the wealthy.

Temeculan said...

Oil companies are running at a 9% profit margin and are NOT in control of oil prices. What bailouts are you talking about? The ones that both he and Obama wanted passed now?

Or, are you talking about McCain wanting to keep the taxes the way they are now? We don't need federal taxes going up. And states should raise their OWN taxes to pay for their needs.

If Obama was going to use the money to pay down our debt, then I'd be more inclined to lean his way. As it is, we just don't know enough about him

Anonymous said...

i believe the greed of people who do not want to share with others (basically a fair distribution of wealth) is what is destroying our indian nations...PARTICULARLY of gaming tribes such as pechanga, picayune, table mountain, etc.

this seems no different than the destruction of greed of those who would not support the redistribution of wealth in this country supported by senator obama...

all my relations...the GREED of INDIVIDUALS is what is destroying our indian culture, AND the society of our entire country as well...remember and follow the traditional indian way, and that is to care for ALL people, with leaders being the last to partake after all of the people have been cared for...

greed--above and beyond all else--will be the demise of our people, and of our country as well...remember the WHOLE, and stop thinking only of one's self...

Anonymous said...

There is a difference in what the tribes have done, as they have terminated rightful members.

In the second graph, redistribution of wealth that the Senator subscribes to is NOT what America is about. The government needs to provide the route for businesses to create jobs and not tax them too much that they can no longer be competitive. Taxing people so that others can have their money is simply wrong.

In Picayune's case is was totally greed.