Tag Archives: Taxation and Spending

#145: The New Internet Tax Law

This is mark Joseph “young” blog entry #145, on the subject of The New Internet Tax Law.

What the Supreme Court won’t hear can hurt you.

The Supreme Court declined to hear a case appealed from the 10th Circuit, Direct Marketing Association v. Brohl, which means that the decision of the appellate court stands.  That decision means that the state legislature in Colorado has found a loophole of sorts in a very important previous case, Quill Corp. v. North Dakota, 504 U.S. 298 (1992), which has been very important to Internet sales over the past one and a half decades, in a way that means you might have to pay your local state sales taxes on purchases you make over the Internet.

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Quill is effectively the reason you don’t pay sales tax on purchases you make over the Internet from retailers in other states.  It actually had nothing to do with the Internet–Quill Corp. was a mail order office supplies dealer in Delaware that shipped orders all over the country, and North Dakota sued to require them to collect sales tax on any products they sold to customers in that state.  The Supreme Court set up standards by which in order for a company to be required to collect sales tax for any given state, it had to have some kind of physical presence in that state–offices, warehouses, retail outlets, even possibly franchises.  Absent these, the state had no authority to impose obligations on a business located in another state.

What states did in the wake of Quill was in essence to add a line to their state tax forms instructing residents to declare how much they owed in unpaid sales tax due to purchases made out of state.  Oddly, very little was ever reported.

Colorado had a new idea.  They could not require out-of-state businesses whose only connection to the state was through electronic communications and independent shipping companies to collect taxes for them–but could they require such companies to report the amount of such tax that was owed?  If you in Colorado spent a thousand dollars to have Amazon ship you books, movies, or whatever you bought from them, you were legally required to let the state know, and to remit the unpaid twenty-nine dollars (2.9%) sales tax–but if you neglected to mention it, the State of Colorado would be unable to determine that without legal action such as a warrant to open your banking records.  Under the new law, though, Amazon would be required to let the State tax board know of your thousand dollars worth of purchases, so that when you failed to mention it the state could send you a bill with penalties for tax avoidance.

New York’s Data and Marketing Association, an industry group (formerly the Direct Marketing Association), sued the state in the name of the executive director of its Department of Revenue several years ago when the law was enacted, and got a stay while the matter was being litigated.  It has now run its course:  the Tenth Circuit Court of Appeals has decided that the law is not an “undue burden” on out-of-state retailers, and the Supreme Court has decided not to hear the case, so that ruling stands within the Tenth Circuit and will probably be followed by other circuits.

The law has some specific limits.  It only applies to retailers with at least one hundred thousand dollars in gross sales to customers within the state, so it’s not going to impact your e-bay resale business unless you’re doing a lot better than most.  However, it is fairly certain that other states will be passing similar laws–it is estimated that Colorado will be able to collect over one hundred seventy million dollars a year in previously unpaid sales tax revenue, and numbers like that are undoubtedly going to appeal to legislators elsewhere.  It is less clear how important the definition of minimum gross sales within the state is to the decision, so it may be that some states will place the bar much lower with the result that small Internet retailers are going to have a hard time knowing where they are required to report what.  Meanwhile, language in the denial of certiorari (that means the written decision not to hear the case) from Justice Kennedy suggests that the Court might consider overturning Quill and allowing states to demand that retailers selling to state residents through such means collect and remit sales tax on all purchases.  Tennessee is already in the process of passing such a law, which might make it the test case in a few years.

Whatever else can be said, it is clear that the landscape of Internet marketing just changed significantly.  You can no longer avoid paying sales tax by ordering from out of state.

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#137: Conservative Penny-pinching

This is mark Joseph “young” blog entry #137, on the subject of Conservative Penny-pinching.

Over a year ago, I addressed the the notion that people who are against abortion claim to be concerned for the lives of the unborn up to the moment they are born, but after that they no longer care.  Then just over two weeks ago I was at a gathering where someone made exactly that claim, and I realized something–something I hadn’t felt when it was merely arguments on a page:  the assertion that people who are against abortion are unwilling to do anything to help the born is not only untrue and irrelevant, it is insulting.

Why it is untrue and irrelevant is covered in that previous article, web log post #9:  Abolition.  Because of the way the meeting dissolved then I was unable to call his attention to that response; knowing, however, that I would see him again, I printed it and delivered it to him two weeks later.

img0137pennies

His response was civil, even friendly.  However, he kept saying that “they” were taking all the money away from helping people, from helping young girls who were just children having children.  I asked him who “they” were, and he said “conservatives”; I pointed out that the people mentioned in the article, working hard to provide assistance to exactly those people, were in the main “conservatives”, but his feeling was that it was not “those conservatives” but some other group of “right wing conservatives”.  Having worked with those people, I observed that some of them were certainly “right wing”.  Yet he insisted that there was this conservative effort to take money away from helping the people who needed it.  It was not at all clear just who was taking what money from whom, but he was certain it was being done, and being done by “conservatives”.

If we’re honest, we have to admit that there are a lot of people who don’t care about the poor, and indeed many of them are “conservatives”.  At the same time, many of them are “liberals”–I don’t see a lot of Hollywood millionaires giving ninety percent of their income to charities, or spending their evenings working in soup kitchens or at homeless shelters.  There are also a lot of people who do care, at both ends of the spectrum and through the middle.  Not every liberal politician who argues for aid to the poor does so because he cares; some do it because they want votes.  Wealthy liberals who call for more government spending on welfare programs are not really offering to give their own money to these, but suggesting that the government should give them more of yours.  Conservatives are wrong to think that all liberals pretend to care about the poor in order to use them to advance socialist and progressivist policies; yet it is equally wrong to think that this is not true of any.

However, in our conversation I couldn’t help feeling that, at least in part, he meant conservatives were taking money away from Planned Parenthood.  You don’t have to be too far to the right of left-wing progressivists to believe that the government should not be funding an organization that in turn promotes and funds the slaughter of children.  The argument has been made that Planned Parenthood spends none of its government-granted money on abortion services, but as we noted in post #2:  Planned Parenthood and Fungible Resources, no matter how they do their accounting it is evident that they could not spend as much on abortion as they do were their other programs not subsidized by federal money.  Certainly people who believe that killing unborn babies should be criminal are going to cut funding for any program that promotes the practice.  That does not mean that these people have no interest in helping pregnant teenagers and others struggling with unexpected pregnancies, any more than that those who want to bring an end to capital punishment and stop funding executions have no interest in stopping murders and other violent crimes.  You will say that it’s not the same thing, and in a way you’re right, and in a way you’re wrong.  If you tell me that grapefruit juice is not orange juice, you are certainly correct; if you tell me that because grapefruit juice is not orange juice it therefore is not citrus juice, you are mistaken.  It is quite possible to be very much in favor of a stated objective, whether it is helping pregnant women or reducing violent crime, and still object to a specific method of achieving that objective, whether it is killing unwanted children or terminating murderers.  It is quite possible to want to do something about a social problem without resorting to an extreme measure like killing people.  It is also possible to believe that such an extreme measure is appropriate and necessary for one type of problem but not for another.  The problems are not identical; only the solutions are similar.

Of course, some people argue that the unborn are not actually people.  To his credit, he did not suggest that; he rather suggested that they were unwanted human beings that should not be forced to come into a world that does not want them.  It strikes me that this is very like an ambulance crew saying they’re not going to take this injured homeless person to a hospital because he’s a worthless human being and he might as well just die anyway.  It is rather arrogant for any of us to put a value on someone else’s life, whether or not that person has yet smelled air.

Perhaps, though, he is not talking about abortion funding; perhaps he is talking about welfare.  In thinking about this issue I did a bit of research, and learned that the Federal debt is presently increasing by about one trillion dollars each year.  The population of the United States is a bit above three hundred twenty-five million, so that’s about three dollars for every person–every man, woman, or child, legal or illegal, in the entire country.  Of course, those who are in the country illegally aren’t going to pay that, and there is not much logic to expecting those who are receiving the benefits to pay part of that.  At some point we are going to have to stop spending as much or find a way to collect more.

So where could we cut it?

The total federal budget for 2017 is just above four trillion dollars–that’s four thousand billion (4.1472 trillion).  Sixty percent of that–about two trillion five hundred million–goes to what is loosely called “welfare”, that is, money that goes to taking care of people who can’t afford to take care of themselves, that “safety net” about which we are always talking (2.4971 trillion).  In fairness, the biggest piece of that–a bit less than one trillion–is social security (972.6 billion), which includes all those retirement checks and the federal disability program (and the salaries of the people who run it), giving a meager income to people who genuinely cannot or can no longer work.  More than a trillion goes to medical assistance, that is, Medicare (605.0 billion) and Medicaid (527.4 billion) including the Obamacare expansions, providing health services to people who cannot otherwise afford them.  Less than half a trillion goes to everything else we loosely consider “welfare”, social support services (392.1 billion).

It is argued that we should cut our outrageous military spending, but that outrageous military spending is less than a trillion dollars (0.8536 trillion), less than the medical care spending, less than Social Security.  We’ve been working on reducing military spending for a long time, and it is a much smaller portion of the budget than it was in the past–but in that time our “entitlements” and “welfare” programs have exploded to take the largest share of the budget.  Together, that’s over eighty percent of the budget; all other programs combined come to only seven hundred ninety-six and a half billion dollars, less than twenty percent, less than the military portion.  Saving money there is a bit like trying to make a package lighter by using less tape to seal it.

It is not unkind for me to cut my son’s allowance in order to pay the utility bill; he might think I should pay less to the utility company, but he would be upset if we said we couldn’t afford to run his video games or heat the water for his showers.  That national debt that’s going up another trillion dollars this year is very nearly twenty trillion already–sixty dollars for every person within our borders.  We keep saying that we’ll pay it off when things get better, but they’re getting worse and the amount is increasing like a bad debt owed to a loan shark.  Economists argue about whether it is bad for nations to go into debt, just as they argue about whether it’s bad for people to go into debt, but although we’ve at times managed to reduce the debt we have not paid it off entirely in a long time, longer than my lifetime, and the people who are lending us the money (what, did you think we borrowed it from God?) are beginning to think maybe we’re not so good a risk as they once thought.  Many economists assert that a high national debt depresses the economy, raises the prices of goods, and reduces the availability of jobs.  Somehow we have to reduce our spending.  It certainly is important for us to help the poor, but this ongoing forced philanthropy might not be helping so much as we want to think, and can’t continue at this level forever.

One way or another, there is going to be less money for those in need, because the way things have been going there has been less and less money for all Americans.  We laugh when in Fiddler on the Roof Nahum the Beggar complains to Lazar Wolfe about the smaller donation he gave this week, “So if you had a bad week, why should I suffer?”, but the truth is that when the rich have less money, everyone has less money, and when we make the pie smaller everyone’s piece gets smaller.  Not everyone can work; not everyone can contribute to the productivity of the nation–but if we don’t find a way to get more people working productively, there won’t be enough money for those who can’t.

Someone once challenged the original Mr. Rockefeller that his millions (which were then worth a lot more than they would be today) should be shared among everyone.  Rather than arguing the point, Rockefeller agreed, reached into his pocket, and handed the man a dime as his share.  If you stripped the top one percent of everything they owned and gave it everyone else, it would be a small amount divided so many ways, and there would be no comparable wealthiest people to rob the next year.  You cannot feed the poor by robbing the rich; you have to teach them to fish, that is, give them jobs, not money.  How to do that is much debated, but it seems that part of it has to be to reduce the amount the government is spending, and the obvious place to do that is where it is spending the most.

That hurts, but it may be necessary.

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#127: New Jersey 2016 Election Results

This is mark Joseph “young” blog entry #127, on the subject of New Jersey 2016 Election Results.

We provided some advance explanation of the two Public Questions which were on the ballot, and did a quick rundown of the major candidates in the twelve congressional districts, and now we’re following up with the election results.  After all, with a lot of these events there is a great deal of coverage in anticipation of the moment, and then if you blink, you miss the outcome.  That shouldn’t be.

In the Presidential race, New Jersey consigned its fourteen electoral votes to the loser, Democrat Hillary Clinton, as Republican Donald Trump won comfortably.

Map of New Jersey's Electoral College vote, from Google, 3:00 Wednesday morning.
Map of New Jersey’s Electoral College vote, from Google, 3:00 Wednesday morning.

Public Question #1:  Constitutional Amendment to permit casino gambling in two counties other than Atlantic County, went down hard, about four to one against.  That means for the present casino gambling will be confined to Atlantic City, and the city will have to figure out how better to manage what it has.

Public Question #2:  Constitutional Amendment to dedicate additional revenues to state transportation system, ran very close, but sometime after midnight had clearly passed by a narrow margin, under fifty-five percent of the vote favoring it.  That means the state government will be forced to put the gasoline tax revenue into a dedicated account strictly for use by the Department of Transportation, which was the justification for the tax originally.

In the House of Representatives, all the incumbents were re-elected easily except in Congressional District 5, where Republican incumbent Scott Garrett was hurt by Libertarian Claudio Belusic in his race against Democrat Josh Gottheimer.  The Libertarian’s two-point-two percent of the vote was the best of any Libertarian candidate in the state (Libertarian Presidential candidate Gary Johnson took two percent of the vote in the state, the best showing of any third-party candidate), but even apart from that Gottheimer would have edged out a victory, with fifty-point-five percent of the vote in his favor.

This tips the balance of New Jersey’s Congressional delegation, which for the past several years has been evenly split with six Republicans and six Democrats; with Gottheimer replacing Garrett we will be sending seven Democrats and only five Republicans to Washington.  Nationally the Republicans still hold the House, with two hundred thirty-six seats, a few lost from their current majority.  In the Senate, Republicans also lost one seat (in Illinois), but still hold a bare majority at fifty-one.

Here are the incoming United States Congressmen from New Jersey by district:

  1. Donald Norcross, Democrat, Incumbent.
  2. Frank Lobiondo, Republican, Incumbent.
  3. Tom MacArthur, Republican, Incumbent.
  4. Chris Smith, Republican, Incumbent.
  5. Josh Gottheimer, Democrat, Newcomer.
  6. Frank Pallone, Democrat, Incumbent.
  7. Leonard Lance, Republican, Incumbent.
  8. Albio Sires, Democrat, Incumbent.
  9. Bill Pascrell, Democrat, Incumbent.
  10. Donald Payne, Jr., Democrat, Incumbent.
  11. Rodney Frelinghuysen, Republican, Incumbent.
  12. Bonnie Watson Coleman, Democrat, Incumbent.

That gives us the shape of our Federal Government for the next two years.

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#126: Equity and Religion

This is mark Joseph “young” blog entry #126, on the subject of Equity and Religion.

I saw an article online, from the St. Louis Post-Dispatch, entitled Amendment 3:  A Stealth Attack on Religious Freedom  The title intrigued me, since I had no notion of what was happening in Missouri, so I skimmed the piece–and was rather surprised at what I found.  It struck me that the author did not have a very good grasp on exactly what “religious liberty” is, so I decided to pursue the matter here.

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The purpose of “Amendment 3”, apparently Missouri’s version of what we in New Jersey now call a Public Question, is to create a cigarette tax and use the money to fund early childhood education.  The tobacco industry has not made a lot of noise about it, at least directly–they have learned that people who smoke are very unlikely to stop simply because the amount of money they burn increases.  It seems like a positive idea, that if people are going to kill themselves slowly at least they can help fund the education of our children.

At issue is text that says the disbursement of funds raised will not be limited or prohibited by the State of Missouri Constitution’s “Prohibition of public aid for religious purposes and institutions” clause.  That means that if whatever method of distributing the money to help with preschool education would otherwise mean that a Lutheran- or Baptist- or Muslim or Jewish-run facility would qualify for some of that money, that facility is not automatically disqualified simply because it is administered by a church, mosque, synagogue, or other religious organization.  Opponents of the measure say that this is an attempt to bring funding of religious organizations in through a side door, and so force people to pay for religious education with public money.

It is not at all clear that that is what this is, and in fact from the description it sounds rather as if it is an attempt, not to show religious preference, but in fact precisely not to show it.  It is saying that the fact that a group of people trying to provide early childhood education happen to be believers of a particular religious philosophy will not disqualify them from being funded by this program–exactly what freedom of religion means, that we will not discriminate against you on the basis of what you believe.  As long as the program is administered impartially, part of that impartiality has to be that a program is not disqualified based on religious connections.

That is important for multiple reasons.

Social programs and particularly education have always been spearheaded in the Anglo-Saxon world by Christians and Christian organizations.  Our Ivy League colleges and many other schools and universities were originally founded by Christians to educate doctors, lawyers, and ministers.  Christians were the first to attempt to help the poor in England through education of their children.  In America, many settlers would arrive in a new location and build a church and a school as the fundamental institutions of society.  Meanwhile, the Jews have long put a heavy emphasis on educating their children, going back more than centuries, possibly millennia–a Hebrew boy became a man by proving he could read from the Torah, at least as early as the first century.  Religious people have been proponents of education, and education for all, even when the approved thinking was that education was for the privileged and powerful, to maintain their power and privilege.

Encouraging a group to do what we want them to do and they want to do anyway is good politics.

Besides, if the objectors are saying that it is a violation of the principle of freedom of religion to fund any organization that promotes a religious position, they’re going to have to stop funding public education as well.  St. Louis is a particularly interesting case, as it is the home of the headquarters of the Missouri Synod Lutheran Church–not the most conservative Lutheran group, but conservative enough that they honestly believe in a six-day creation.  You might disagree; I don’t know that I agree.  However, whenever the State of Missouri uses its collected tax money to teach the scientific views about the Big Bang Theory and the Theory of Evolution, it is spending money to promote a religious idea–the idea that the Missouri Synod Lutheran belief in six-day creation is wrong.  Our objectors say that they do not want their tax money spent to fund organizations that will promote religious notions with which they disagree; now they know how their Lutheran neighbors feel.

The only way to treat religious people and their organizations fairly is to make the question of religious belief irrelevant to the question of funding social efforts.  Otherwise, it would be the same as saying that the government will not fund a day care run by a black man, or a preschool run by a woman.  Not discriminating on the basis of religion means that religious views are not a factor in the decision.  That’s what the amendment is saying.

How those programs are going to work has not yet been determined.  The simple way, though, is for the government to provide scholarships or tuition reimbursement for needy families trying to send their children to whatever preschools are available.  Some have argued that this kind of “voucher” system unconstitutionally funds religious schools because the parents can give the money to those schools and the government winds up paying the church, as it were.  However, to do otherwise unconstitutionally discriminates against religious groups, requiring that parents send their children only to schools which reject religious views entirely–itself a religious view–or forego the government assistance they cannot afford to be without.

It would be akin to refusing to provide food stamps to any family that says grace before meals.

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#108: The Value of Ostentation

This is mark Joseph “young” blog entry #108, on the subject of The Value of Ostentation.

As sometimes happens, one of my political web log entries got me involved (I hesitate to say “embroiled”) in a discussion.  This time the post was mark Joseph “young” web log entry #105:  Forced Philanthropy, and the argument was carried on Facebook.  In that discussion, someone said

I would just rather live in a world in which people don’t starve while others walk around with $5000 purses and $25,000 watches.

My gut reaction was to agree with that–but then something in my brain started nagging at me.  Why?  That is, what does the one have to do with the other?

The half million dollar Audemars Piguet Diamond Fury ladies' wristwatch
The half million dollar Audemars Piguet Diamond Fury ladies’ wristwatch

I got to thinking about that expensive purse and that expensive watch.  The very definition of “expensive” means that our ostentatiously wealthy person parted with a large amount of cash to obtain it.  I expect that somewhere there are designers who themselves are becoming ostentatiously wealthy from the sales of their products, but ultimately someone–undoubtedly several someones–is getting a paycheck.  I don’t know that it matters whether that money is funding a few very healthy paychecks of skilled craftsman or a lot of factory wage checks for employees–it is moving the money from the bank accounts of very rich people to the wallets and pocketbooks of ordinary working-class families.  It is creating jobs.  That expensive bauble is proof that that wealthy person parted with a large sum of cash.

So it seems that in some sense the purchase of those expensive purses and watches is money going to feed someone other than the very wealthy owners of said baubles.  It is in that sense communicating exactly the opposite of what the critic perceives–not money wasted that could have fed people, but money spent to provide paychecks so people can eat.

Sure, some of it goes into nonsense like all those diamonds that stud the watch, but ultimately we’re still talking about money moving away from the wealthy bauble purchaser toward the working classes.

The objection seems rather to be that the wealthy person is showing off how much money he has by spending it on severely overpriced merchandise.  Why should anyone spend that much money on a handbag?  Indeed, our wealthy person could have walked into Walmart and purchased a perfectly functional handbag for under twenty dollars.  My wife does so frequently.  It seems that the only reason to spend more than that is to have something that will say, “Look at how much money I wasted on a handbag, because I am so incredibly rich that I can.”

Of course, the makers of those expensive products will argue that the price is justified by the quality.  The purchasers, likewise, will say that the products they bought are genuinely better in real ways than the ones everyone else buys cheaply.  After all, “cheap” generally means both that something doesn’t cost much and that it isn’t worth more.  What we have a hard time imagining is that the expensive handbags and watches and other baubles are really worth what the wealthy pay.

That may be something we cannot genuinely or fairly assess.

I have never played a Stradivarius; I have heard a few of them played, but only reproduced over computer sound systems.  They’re said to be priceless, and those few people who have the opportunity to play them believe them to be worth every penny paid for them.  How can I know?  I’ve played a few violins of varying quality, and would say that some are worth more than others, but I cannot really imagine one being so much better that it would be worth as much as that.  I have played a couple of Fender Stratocaster guitars.  They’re good guitars, but I’ve always had the feeling that they were way overpriced–you can get a decent electric guitar for a tenth of what some Strats cost.  Yet there are professional musicians who won’t play anything else, or at least who insist on having one in their collection for use when they want it.

I agree that some instruments play better than others.  When I was in high school, tenor saxophone was one of my instruments.  I often wondered whether I could play alto, and one day I saw an alto sax lying around and tried it, and was impressed with how nicely it played so I looked at the stamp–and discovered that it was the band director’s instrument.  I once picked up a Rickenbacker bass, and it was also very nice.  I’m not sure what these instruments cost, and I’m not sure I could justify spending that much on one.

On the other hand, when I was in The Last Psalm I purchased recording tape for every concert.  RadioShack® then had three grades, and I bought the cheapest for the first few years–and told the sound engineer that as soon as I could hear the difference, I would upgrade to the better grade.  I did so for the final years of the band’s run, because my hearing was better.  I wonder today whether the costs of producing high-quality recordings are worth it, because most people listen to low-quality mp3 copies on low-fidelity equipment.

The point is, an assessment of the quality of a product and the value of that quality is an essentially subjective question.  I can’t imagine a watch being worth as much as that, but some people see it as a quality issue.  If someone puts that kind of effort into producing a product that is in some way better than the norm, and can persuade wealthy people to pay that much for it, that is probably overall better for the economy than having the wealthy people buy the ordinary quality products at the ordinary price.

And the rich person who spends five thousand dollars on a designer handbag instead of twenty dollars on a practical Walmart model has parted with an extra four thousand nine hundred eighty dollars that has gone into paychecks that feed ordinary people somewhere.

So what is it that bothers us about these ostentatious baubles?  Perhaps more precisely, what is it that we want instead?

Some of us want there to be no wealthy people in the world.  Of course, as one of the people in the referenced conversation reminded, half of everyone is below average.  He was speaking of intelligence, but it’s true of wealth as well, and so is the converse:  half of everyone has more than average.  I might feel it unfair that Donald Trump owns his own hotels or Hillary Clinton can jet to Europe on a moment’s notice without checking her bank balance, but I might as easily object that my neighbor could afford to install automated lawn sprinklers or an enclosed garage.  Some people will have more, some will have less.  It is the nature of such differences that they form a bell curve, and it is the nature of natural bell curves that the extremes are extreme–fewer and fewer people having more and more (or less and less).

We can, of course, try to alter that unnaturally–perhaps create a tax that takes 100% of all income or assets over a certain amount.  That is problematic on so many levels.  A fixed amount means that the inflation which drives down the value of a dollar correspondingly drives up the amount of money that is needed for the same standard of living, and so more and more people will hit the ceiling.  It is also detrimental to the economy:  if after this point I am not making any money, why should I work?  That also applies to questions like why should I invest–I won’t hire the people to build the new hotel if once it is finished I make no additional income from it.  No, putting a ceiling on income is not a good plan for the economy; the fact that people can become incredibly wealthy is one of the incentives that drive economic progress.  It is also one of the incentives that drive technological progress:  people invent new devices in the hope that it will make them rich.  It also drives people into popular culture, giving us movies and music and other art forms, as well as star athletes.  You can’t both have the incentive that people work hard to make a lot of money and the limit that no one can be ostentateously wealthy.  That part does not work.

Perhaps we feel like there shouldn’t be anything we, ourselves, cannot afford if we want it.  That is, if I admire your car, I should be able to afford to buy a similar car–maybe not today, but within a few years if I work at it.  Everyone should be able to afford a basic standard of living much higher than everyone can afford–a car, a house, a college education for his children.  What about a boat?  What about an indoor swimming pool, a private indoor gym, a personal jet?  What defines this minimum standard of living?  The reality is, and has always been, that some people will have more than others, and those who have less will be envious of those who have more.  It does not really matter, as we just noticed, how much more or less; the envy exists because it is never exactly equal.

Perhaps that aspect of things we cannot afford goes the other direction:  handbags and wristwatches should not cost that much, no matter how good they are.  How much, though, should they cost, and how do we decide this?  If I can sell the rights to a song I wrote for thirty dollars, is there a reason why I can’t sell the rights to a song I wrote for thirty thousand dollars?  J. K. Rowling sold the rights for the first printing of the first Harry Potter book for a paltry sum; by the time she finished selling the movie rights for the seventh book, she was (literally) richer than the Queen.  Can it be said that the books were not worth that much money?  Obviously the movie producers thought they were, and presumably made much more on income from the movies than they paid her for the rights.  Would we be screaming that she got shorted if they paid her a lot less?  And why, then, should it be different for a handbag or a wristwatch?  Pricing is not arbitrary:  it is based on what people are willing to pay.

So why are wealthy people willing to pay so much for baubles which perform functions suitably managed by considerably less expensive items?  Perhaps that is our objection:  they do it to get attention, to display their wealth, in essence to be ostentatious.  Is that what bothers us?  What is interesting about that is that it only bothers people who care about it.  I would not know the difference between a five dollar pocketbook and a five thousand dollar handbag.  I might be able to tell if I examined it closely that one was better made than the other, but at a glance it means nothing to me.  It only means something to two groups of people:  those who can afford such expensive objects, and those who wish they could and so read about them and drool over them.  The cost of these baubles only matters to people who want to show off and to people who are impressed by them.  The rest of us don’t really care how much it cost.  If I knew how much the handbag cost, my impression would be that had I that much money, I would spend it on something I would enjoy a lot more.

But then, I don’t have that much money, and I don’t really know what I would want to own if I had it.  Would I buy a Stratocaster?  A Stradivarius?  And that raises the question of what we want these wealthy people to do with their money instead.  Should they hide it in storehouses like King Midas?  Should they spend it on armaments or their own personal armies and fortresses?  Should they buy companies, and so make more money?  However they spend their money, it is going to be ostentatious in the eyes of someone.

We would rather have them give it all away to people who have less.  Even when that doesn’t mean “including me”, it is still asking them to spend their money for our benefit:  if they give their money to aid the poor, we don’t have to part with so much of ours and don’t have to feel bad about not being able to do more for the poor without suffering more ourselves.  We don’t have “enough” money for ourselves.  However, a long time ago I learned about the concept of rising aspirations:  the more money you have, the more things you perceive as necessities.  Does anyone really need two televisions?  Two cars?  Two warm coats?  We complain about ministers who own their own personal jets, but these are people who have to travel to the places they have been asked to speak and arrive comfortable and refreshed, so they see these as needs.  No one has “too much” money; everyone can think of what he would do with a little more.

And if we get wealthy people to spend money on ostentation, we get that money into the hands of poorer people as surely as if we were to tax it or coerce them to contribute it to charity.  We get them to part with that money voluntarily, not under compulsion; and we do so in a way that creates jobs instead of making more people dependent on our generosity or pseudo-philanthropy.

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#105: Forced Philanthropy

This is mark Joseph “young” blog entry #105, on the subject of Forced Philanthropy.

Somewhere in the archives of Charles Schulz’ wonderful Peanuts comic strip is the one (shown below) in which Linus says, “When I get big, I want to be a great philanthropist!”  Charlie Brown observes, “You have to have a lot of money to be a great philanthropist…”.  After a moment of consideration, Linus clarifies, “I want to be a great philanthropist with someone else’s money!”

We laugh.  It is funny because it is absurd.  There is nothing particularly charitable about giving away money that belongs to someone else, regardless of who benefits.  It is completely absurd.

img105Linus

Yet when politicians say it, for some reason no one laughs.

That’s probably because politicians have demonstrated that they are quite able to do exactly that:  They have the power to take money away from some people and use it to help others.  We have given them that power, and there is a degree to which we are pleased with the outcome, as programs like food stamps and medicaid have reduced poverty in this country to the point that very few Americans are really truly poor.  That is, the kind of poverty we see in Third World countries including India and parts of Africa just does not exist here; we have relatively isolated cases of people “falling through the cracks”, not cities packed with homeless people mobbing the streets and refugee camps bursting at the seams.  We could do more, and we are doing more, but what we have done has been accomplished in significant part because politicians have decided to be philanthropists with our money, and we have approved that.

Yet when Hillary Clinton starts talking about how she would use Donald Trump’s money claimed by the Estate Tax he wants to eliminate, it bothers us.  As Mitch Album (Detroit Free Press) says,

The whole image of the government rubbing its hands as you take your dying breath should creep you out.

We have seen it in Blackadder, as the wealthy nobleman is dying and the King and the Archbishop are drooling over who should get his estates.  Hurry up and die, Donald:  Hillary is already counting the share of your money she is going to give to the less fortunate.

Let’s be clear on this.  It’s one thing for us to agree, however reluctantly, that all of us who are scraping by will sacrifice a little money we could really use for something else, and let the government use it to help those who are not scraping by.  It is entirely different for all of us who have enough to be comfortable to decide to gang up on the few who have more than we do, take their money, and give it to the less fortunate.  The former is almost altruistic, and with bit of stretching can be made to appear as if it is our generosity helping the poor.  The latter is simply criminal–and however much we want to admire Robin Hood, we would have little sympathy for a modern criminal waylaying everyone driving expensive cars and giving the money to farmers who feel their tax burden is too high.

However, somehow politicians have persuaded us that it is a noble idea to rob from the rich and give to the poor, that in doing so they are being charitable.  Like Linus Van Pelt, though, they prove to be philanthropists with someone else’s money.  It is not admirable to take money from the rich and give it to the poor when it is not your money.

I don’t know what Donald Trump has done that counts as charity.  I’m told that Hillary Clinton and her husband own and operate a major charitable fund, and accept contributions from many very wealthy donors.  I gather, too, that they have both personally profited substantially from operating that fund.  She seems to have demonstrated a talent for taking money from other people and making it appear she is a philanthropist.  I suspect she has made more money on her philanthropic activities than she has contributed from her own independent income.

However that is, though, it does appear that she is ready to take money from anyone who has it.  I can only be grateful that I don’t have enough to catch anyone’s attention.

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#2: Planned Parenthood and Fungible Resources

This is mark Joseph “young” blog entry #0002, on the subject of Planned Parenthood and Fungible Resources.

I’m remembering being a kid.  I’ve saved two dollars from my fifty cent weekly allowance, and now have permission to walk the couple miles down the busy road to the corner store.  I’m planning to spend my allowance on candy and comic books.  Candy is usually ten cents a bar, with gum and Lifesavers® a nickel; comic books are, if I remember aright, a quarter.  I have not decided how much I will spend on either candy or comic books, because I haven’t seen what they have, but I’ll probably split it down the middle, a dollar on each.

Hey, this may sound like fantasy to you, but that’s what it was like when I was a kid.  Also, New Jersey did not have a sales tax then, so I don’t have to worry about that in my calculations.  Only the next part never happened–but it might have.

So as I’m leaving my mother in a fit of generosity gives me an extra dollar–but she says I am not to spend any of it on candy.  So now I have three dollars, two of them my own to spend as I like and one that is specifically limited as “not candy”.

I look over the comic books and find four that I like, and that’s a dollar; so I spend my mother’s dollar on the comic books, and buy twenty candy bars with my two dollars.

Of course, I did not spend a dime of my mother’s dollar on candy; I spent it all on comic books.  However, because I had that dollar from her, I could get four comic books with her dollar and free up my own money to spend on candy.  The result is that I got the same number of comic books (half of the money with which I started would have bought those four books) and twice as much candy, because having my mother’s dollar for the comic books I did not have to spend my own money on them and I could get the candy.

planparlogo

Planned Parenthood swears that it does not spend any Federal money on abortions.  I believe them.  They undoubtedly have strict accounting procedures that enable them to track where the Federal money goes, so they can account for it.  That money goes into services that are certainly valuable to men and women alike.  In fact, those services are so important that Planned Parenthood would probably make the effort to fund them by other means were there no Federal money to provide them.  Fortunately, mom gave them a dollar that they can spend on those other services, which frees up that much money that would have gone to those services to pay for abortions.

Certainly Planned Parenthood does not spend as much on abortions as it gets from the Federal government; for one thing, that would be obvious, and for another they have plenty of other services for which to pay.  It is undoubtedly true that the Federal money makes it possible for them to provide more of those services than otherwise, as well as divert other monies to abortions, and that without the Federal money they would still offer everything, including abortions, but that they will provide fewer services overall to fewer people.  Yet no matter how you argue it, it is still obviously the case that the Federal money makes it possible for Planned Parenthood to put more money into abortions, money which would have to go to other services if they did not have that Federal money to pay for those other services.  The administrators who are paid in part from Federal money are in part running the abortion services of the organization.  The buildings that are funded by Federal money are used in part to facilitate abortions.  Money that keeps Planned Parenthood operational is de facto money that supports its abortions programs.

The argument that no Federal money goes to abortion does not work.  The fact that Federal money pays for programs, services, facilities, and personnel that would otherwise be paid out of money that now pays for abortions means that abortions are being subsidized by that money.  We can argue–we are indeed still arguing–as to whether an abortion is a means of freeing a woman from the enslavement of an unwanted child or the murder of a child by its mother; we can argue whether we want tax money to pay for such things; we cannot argue that it does not enable them rather directly.

It really cannot rationally be said to be otherwise, as long as the one organization receives money from the Federal government and spends money on abortions.  I can argue that I used my mother’s dollar to buy the comic books and bought the candy with my own money, but obviously I would not have spent as much on candy if I did not have that dollar because I would have bought some of those comic books with my money.  Planned Parenthood can argue that the Federal money does not go to abortions, but just as obviously they spend more on abortions because they have the Federal money to pay for other programs that would otherwise come out of their regular budget.

The author has also written Was John Brown a Hero or a Villain?, Professor Robert Lipkin, the Concert Violinist, and Abortion, and the song Holocaust, addressing related issues of abortion, on this site.

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