Entitlements, Fair Taxes, And The Blame Game

Ah, the blame game; its fun for the whole family and has an appeal that jumps every racial, ethnic, or socio-economic boundary. All you need to play is a problem you want to solve (in your mind), and someone you either don’t like or don’t know and, voila, problem solved. It is always easiest to group people together into large problem-creating monsters; Republicans, conservatives, Democrats, liberals, progressives, immigrants, poor people, rich people, corporations, lawyers, bankers.

There are of course people who profit from our collective assignment of blame; if we blame Republicans for the housing bubble and crash, Democrats benefit. If we blame Democrats for terrorism, Republicans benefit. But times of economic crisis really do bring out the creativity in us. When things go really bad, economically speaking, we blame the poor (and usually, ourselves even if we don’t realize it at the time). If only they took personal responsibility for their plight and didn’t rely on what I have paid for with my taxes, then all would be well and beautiful again in our land. My father-in-law has a saying that describes this perfectly; “Ah Puke!”


A recent column included this darkly amusing line of garbage;

“If I’m paying their salaries and benefits, I’d like a little more say in what they do. How come I have no more say (one vote) than someone who has never contributed a nickel to big government, moreover who has never earned the nickel the government is paying them for so called entitlements?”

I have read and heard this before, and from many different sources. Several questions immediately leap to mind:

  1. Have you read the Constitution, if so, did you find the spot where the Founders allowed for a modification of voting rights?
  2. Whose salary and benefits are you paying, and on what salary do you claim preeminence over others?
  3. How do you define entitlements?

Is Social Security an entitlement? The proceeds from annual FICA taxes are enough (in a normal economy) to cover the outflow; but the math is not in your favor if you are a current recipient. If you are a senior, than I am paying for your benefits. Does that mean seniors shouldn’t vote? How about Medicare, that socialist program that so many seniors would fight to keep? Is Medicare an entitlement? FICA taxes are no longer sufficient to cover the full program; should it be suspended or should we just stick with seniors losing their vote? Unless of course, those seniors are as wealthy as you.

Are we entitled to national defense? The DOD, VA, and Homeland Security absorb almost three-fourths of all discretionary spending in our nation. How much money are you contributing to our national defense? Something on the order of 80% of Medicare and Social Security costs are paid for via a regressive tax; everyone pays the same rate up to $102,000 or so. Since many middle and (presumably like you) upper-middle class folks pay less than 12% in effective income tax, lower income wage earners and illegal aliens are paying a higher percentage of their discretionary income to Uncle Sam than you are. Nobody gets away without paying FICA, unless their employer is cheating.

Perhaps education is an entitlement, poor and lower middle class folks send their children to school all the time. Wealthy folks such as yourself are undoubtedly picking up that tab. Education represents one half of the investments in the U.S. welfare state, which totals around 35% of our annual GDP. Lower middle class, the working poor, and the lazy probably pay less than 40% of the costs of those programs. Of course, since most education (at least at the elementary level) is paid for via property taxes, this might not count. You of all people know that no one (illegal or otherwise) escapes property tax, unless they live in a box. But maybe it does count; maybe two public school teachers in their late twenties who send their two children to school should lose their vote. After all, the statistics are clear; two teachers at that stage of life probably make less than $60,000 combined. Happily for you, they won’t qualify for food stamps, but they probably contribute very little income tax compared to a man of means like yourself.

All of those disgusting poor people, and those filthy retail clerks and farm laborers! Minimum wage types may think they are working for a living, but you and I know that since they don’t pay income tax, like you and I do, their vote shouldn’t count; right? You know what I do, when I am having nightmares about the loss of the American Dream (as I know you are), I justify these programs (as liberals will sometimes). I say to myself; “Those tax dollars (or more accurately, proceeds from government note sales), being paid to losers and lowlifes really aren’t going to them.” “Those dollars pass through the dregs on their way to convenience store tills, restaurant deposits, and mortgage companies.” Small business and big business alike reap the benefits of aid to the poor and working class.

Moody’s is where conservatives go when they don’t trust the CBO, and they found that the economic benefit of unemployment payments is twice that of tax cuts. Not terribly surprising; no one has ever explained to me how an income tax cut will help a business reporting pre-tax losses or an individual with no job (and therefore, no income). To be certain, there are dogs in the system; the original incarnation of welfare formed an economic trap for its recipients. Fraud is all around us (of course we could be looking at bankers when we say that). The recession blew a $500 billion hole in federal tax revenue, and a potentially larger one in state receipts. The cost of unemployment insurance could add $200 billion to that tab, the two facts combining to explain one half of the federal deficit.

People are slowly finding jobs, and the middle class is slowly recovering. It is the working class, that 60% slice of American households that earn less than $80,000 per year, that will take the longest to recover. It will be a long hard trek, and as with other recessions, we won’t recover all the wealth lost. But the point here is simple; while there are a lazy few who cost the many $200 billion per year, an even smaller number took $1 trillion last year from us and our children. If Wall Street insiders continue to convince good Americans that the debt crisis is real, and that the poor are to blame, they will succeed with their ultimate goal; the dismantlement of Social Security and Medicare and the transfer of $1 trillion dollars to their accounts every year.

I am angry also, but read the federal budget summaries for the last few years; they are not difficult to find or follow. Understand what costs are truly driving our difficulties, and which costs generate real long term benefit. It will take more work than the blame game, but the results are much more satisfying.

The Rational Middle is listening…

9 thoughts on “Entitlements, Fair Taxes, And The Blame Game

  1. Thank you Hank…and their is never a question of being allowed here; just a request. Please continue to voice your positions.

  2. (previous comment continued)

    Note: I did not argue with your "math" concerning Social Security. I simply say it is abhorrent for these crooks to take from you, spend the money in a cut and dried, if not illegal act of breach of fiduciary responsibility, and then be told I'm on the wrong end of the "math". When the "math" includes empowering people to take your money for one thing, then spend it for something else, how can I be at any sort of blame for mathematical irregularities.

    To my "less educated" mind, I feel you have fallen into the tired old liberal schtick with much of your argument here. "Well, you don't want Government interference with your prostrate exam so why aren't you complaining about Government efforts to safeguard the air ways?" I just find that an intellectually bankrupt position. And coming from you, I was unpleasantly surprised.

    And you call it anything you want. But if you come home with your pay on Friday, and I take $10 from you without your permission, and hand it to your neighbor who has sat on the front porch all week, sipping on his 48's and REFUSING to sully himself doing what YOU do to make that money, I call that Redistribution.

    One last thing..for your benefit and any misguided person paying attention. I participate on Liberal Blogs to learn. There are some very well constructed and presented Conservative Blogs. But I learn nothing from agreeing with people. Where I HOPE to learn the most is in exchanges such as this where I can state my opinions, however uninformed, uneducated and erroneous they might be, and participate in the exchanges telling me how and why I am wrong! Nothing to be gained from sitting around listening to or watching people pat each other on the back, commenting how witty they are and how stupid anyone is who views things differently than they do!

    If you'll allow, I don't care for your "friend's" tawdry, immature style and I'll leave it at that.

    "There is no justice, and great harm, in diminishing the whole array of future opportunity to save a few people from a regrettable fate."

  3. (Have to do the two part thing again.)

    A couple of quick points then off to make some wealth to share.

    It only takes reading one of your posts for a reasonable person to recognize your capabilities. Even if one might consider them misdirected. :-)

    Please don't tout the Obamas tax largess. At least not for my benefit. If I remember the figures correctly they paid approximately one fifth of their earnings in taxes? Percentage wise, I paid around 25%. But without revealing more personal information than anyone needs to know, in recent years I have paid MUCH more. For a couple of years, almost double what the Obamas paid last year so yes, I've paid my share.

    Also, having owned my own businesses virtually all my life, employing more than 75 people at times, my contribution to FICA has been quite substantial. And I STILL don't agree with the notion that I get NO CREDIT for that. (Nor did my high priced Workmen's Comp Insurance cover Me!) The people that worked for me are scheduled to draw much more in SS assistance than I ever will. (Actually, the way things are going now, I suspect the government will end up simply absconding with the SS money of those over a certain income bracket. Thievery! But another post.)

  4. Well thank you Hank…I thought perhaps the cat had got your tongue. If I were to lose sleep about anything, it would be the notion that I could "contract" an idea from anyone. I have a Masters in Business Administration (with an emphasis on Finance and International Business). I have a Bachelors in Supply Chain Management. I have a solid 15 year career running profitable businesses. It takes a strong argument to bring me around to a point, and I passed the point of virgin naivete a long time ago. You are of course welcome to your opinions, so long as you limit your most aggressive point making to me; criticizing Mario or any other blogger on my site just makes me feel unloved (I need my attention Hank). As for your points; first, yes, we pay government officers so they should listen. Guess what Hank…the single most underrepresented group of voters in our country is the poor. The entitlement "moochers" aren't voting. Working Democrats, progressives and liberals vote, and they pay a boatload of taxes. The President and First Lady redistributed $1.79 million of their funds to big government for 2009….how much did you pay Hank? Democrats own big companies and write big checks, just like Republicans. Secondly, anybody who has ever run a business knows that you must reinvest to grow and survive. Progressive taxation is the foundation for reinvestment…in physical infrastructure and human capital. The Father of capitalism, Adam Smith, believed it; a Founding Father of our Republic, Thomas Paine, believed it. Our periods of greatest national productivity are characterized by tax sums, expressed in GDP, of around 19%. The market cannot and will not do many things that an economy needs over time…it just isn't geared that way Hank. Corporations and industries focus on much more narrow streams of information and cash. That is why they lobby the government to build infrastructure, both physical and mental. You are of course free to continue to call the practice redistribution, and lobby against it; I'll not censor the viewpoint and would encourage you and others who comment to continue to bring these arguments to this space. But I disagree with it on principle and in practice, and will leave it at that. The math of Social Security is rather straightforward, and not the product of bias. Monies paid in via FICA over time are invested at essentially the risk-free rate, which is to say not much higher than inflation. It doesn't lose value Hank, but the money that you, your father, or my father earned and paid via FICA in 1970 won't go very far in 2010. The notion that you are questioning Hank, is the very one that conservatives base the idea of privatizing Social Security on, so you are swimming upstream against a conservative current in questioning my math on social security. One final thought sir, please remember the Middle is the place (I hope) that friendly parties come for conversation and reasoned debate, as I believe I explained in an earlier post. It is a location for parley more than a spot on the spectrum. I view programs and the taxes that pay for them through the prism of business and investment, but my post history (which I proudly put my name on) clearly defines me as left of center in the antiquated spectrum we seem so found fond of. And to everyone else…come on in, the water is fine, and the RM is listening…

  5. (Sorry but for some reason I had to break this up into two segments)

    On to your question #2: Every one of us that pay taxes is paying the salary and benefits of our elected officials. Most of their support staff and personnel. And who knows what else! If you work for Hank’s Trucking Service, and your salary is paid by “Hank”, why would, let’s say “Mario”, who pays you nothing, have any say over your actions? Is it not reasonable that Hank should expect to have some measure of control over your actions on behalf of his company? And on the other hand, why would you be compelled in any manner to take direction from Mario? This seems such a simple premise that I fear I may be misconstruing your intent or simply misunderstanding your question.

    Question 3: I guess I could answer more simply by saying what I do not think is an entitlement. For the most part, money that is returned to me, that I have given the Government ostensibly so they could save it for me and return it to me in my later years when I may need it, is not an entitlement. And why Michael is the math not in favor of those of us that have given the Government 5% to 8% or more of our earnings all our life? Not to mention the matching funds submitted in our behalf by our employers? Is it my fault that these pimps and whores will spend all my contribution BEFORE I am old enough to seek its return? This is a whole ‘nuther argument, but to return MY money to me is not an entitlement. I understand what you are saying, but because these thieves have misappropriated and squandered my contribution does not put me on the wrong side of the math. It just makes them incorrigible thieves and liars. Now, if you want to debate the gross mishandling of Social Security and Medicare, I think that’s gonna take another post.

    The Constitution entitles us to expect certain functions of the Government. Defense, Security, SAFEGUARDING OUR BORDERS, are but a few of the things we should willingly pay taxes for. But the Government (in my humble opinion) has overstepped its authority in the arenas of Social Engineering and has a difficulty now funding those rightful obligations to the Citizenry. Perhaps if they were to stick to those powers enumerated by the Constitution and spend less time, effort and resources buying blocks of votes through entitlement programs, we wouldn’t have States like Arizona frantically trying to protect their citizens.

    I’ve got to quit for now. But I really do want to address the balance of your post. I’m probably not quite as sharp as you are. Certainly not as well spoken. But some of the stuff you’ve written just reeks to me.

    I’ve got to say, and I’m really hesitant because I know you’re gonna lose a lot of sleep over me saying it, but I find this post very ”Un-Rational” and certainly nowhere near anyone’s “Middle”. This is way beneath the quality of commentary I’ve come to expect from you.

    This sounds more like some of the hate and fear mongering Piperni would generate from his “unique” perspective of being a Foreign Expert on U.S. Politics!

    Part Deux after a good night’s sleep and a glass (or 2 or 3 or 4 or…..) of wine.

  6. Michael, Michael, Michael…..I’m not sure where to start. I have to say I feared this. You’ve been hanging around Piperni’s Dump too much and have apparently contracted some sort of virus! If you’re going to insist on playing on that hateful little “Irrational” dump site, you must get vaccinated!! ;-) ;-)

    I would have to take issue with your description of “garbage” for the sentiment expressed. While I may not agree completely with this gentleman’s sentiment, one has to understand the frustration he expresses. We have given power to the “moochers”. Granted, there are many truly needy. But there are also (and this is where I feel many Liberals are naïve) many out there who have no ambition. They do not aspire to any better or greater standard of living. They are and will remain perfectly happy to exist off the productivity and accomplishments of others. And unfortunately, that is just reality.

    With the percentage of tax neutral individuals in the U.S. approaching, if not exceeding 50%, a man now is literally able to “vote” for the politician who will take away from one group and give them the most, while they contribute nothing. This is understandably a concern for those who design, build and operate the “motors” of our society. But my question to you, as well as my fear for my country, is where will it end? What happens when the moochers outnumber the producers? Is it fair for a growing number of our society to literally be able to vote in an Administration that vows to take away from one group to enrich the other?? Even thought the one group contributes nothing??

    Come on Michael. Without employing any of the “isms”, this is pure Wealth Redistribution of the most heinous type. Where those receiving have a majority stake in the process of taking and from whom it is to be taken! And no, you will not find a spot in the Constitution modifying Voting Rights. But how can you so cavalierly dismiss the concerns of one segment as “garbage”? Honestly, I have come to expect more respectful and “Rational” commentary.

  7. I say it's your fault Michael for taking my hard earned tax money to spend on your genetically engineered hog research facility in Illinois.

    J. Martin, and you too Michael, of course, make some good points. Rational points — therefore they will assuredly be lost on the average tax-hating Joe sixpack type who doesn't like his money going to all those leeching degenerates he's heard so much about on Fox News.

    I think you might want to mention that taxes also support the roads we drive on, fire, police, and a myriad of other things we take for granted. In your analysis, if we drive on a road, shouldn't we lose our vote taking advantage of the "nanny state?" If the fir department comes and puts out a fire at our house, we should definitely lose out vote.

    It's just amazing the intolerance and ignorance of some people. I was talking with some in-law types of people about a month ago. One happens to be "liberal," by that he votes democrat and rags on Republicans. He was bitching again about wasting his money on those no good lazy welfare types. I tried to explain that public welfare is a very, very small percentage of our taxes. Pretty funny considering I'm on medicaid and I think he knows that.

    I brought up the notion that he should just stop driving because I'm sick of my taxes — yes, even a poor medicaid case like me pays taxes, quite a bit actually — going toward supporting his no good lazy driving habit. Not sure if it made a difference, but is along the same rational lines as bitching about money going toward actual human beings who may have been historically disenfranchised.

    I won't even get into Corporate Welfare — I guess you brought that up the other day Michael.

  8. Jason, I think that the issues with the VA are quite complicated indeed. Many if not most of our returning heroes suffer from some level emotional trauma (to say nothing of their physical scars). We have, as a nation, done a poor job of helping vets deal with these traumas; a fact that is underscored by the percentage of homeless through time that are/were combat veterans. The folks serving as case managers in today's VA are quite simply overwhelmed by the numbers who need assistance, the difficulties in coordinating with the DOD, and shear funding deficits. Members of Congress from both parties have, historically, been much quicker to rise in support of big-ticket systems requests than programs for the emotional wounds of veterans. There is still some element that believes PTSD to be a sign of weakness, and the support or treatment of it, to be a bleeding heart project. Citizens interested in this problem should, as we approach Memorial Day, contact their representatives or the office of General Eric Shinseki, the Secretary of Veterans Affairs.

  9. (in case my original post is still up, feel free to delete it. It has spelling and grammar errors I didn't see till it was too late.)

    Thanks for writing this. I'm sick to death of hearing about "the nanny state" or "the socialist plot to support the lazy" or "Obama want's to use money from hard working Americans to sustain lazy, hippy children!"

    Growing up with not a lot of money, myself and my family have had little choice (except maybe for just dying, we never used that option) but to use aid from both government and our church. As not even a married man for very long, I'm still in the position of from time to time using that same aid and I know people who have needed to use more then myself.

    What those with money who are complaining about "the nanny state" don't realize is first off how degrading it is for the majority of us who do have to use aid. I honestly feel like less of a human being at times, part mostly because of those complaining. Yes, there are some who misuse it, I know of people like this. But I also know of way more who literally could not afford to be alive without it.

    It's interesting you mention how many tax dollars go to the VA. They must not be using those dollar effectively enough. I know for a fact that the strong majority of the homeless on the streets of LA and Santa Monica are vets. I know this because besides reading new papers I talked with a lot of them. There were very few homeless that I ever encountered that did not serve in some war or another and that 9 out of 10 times it was as a result of fighting in whatever war that it led to their being homeless in the first place. I truly believe after these experiences that there are more ways then death for one to give their live to their country.

    I also know that the VA hospital in Westwood, CA at least for the longest time had empty buildings doing nothing. Gov. Schwarzenegger's brother-in-law, Bobby Shriver, who was on the Santa Monica City Council (I'm not sure if he still is) ran his original campaign with the promise to get the Westwood VA to actually use these empty buildings to house the homeless Vets. I don't remember if he was successful, I think he wasn't, but I do remember the out cry from people who "didn't want to pay for lazy bums."

    I've thought about it many times. Seems to me the ones who really are pay taxes are the poor and middle class, with the wealthy skipping out on taxes more times then not. Guys like actor Wesley Snipes who illegal skip out on their taxes, or normal wealthy folks that us their wealth and power to skip out on paying their fair share of the load and leaving the rest of us to pick up the tab. Truly if their is a "nanny state" it's us taking care of them!

    The whole things reminds me of pre-"A Christmas Carol" Scrooge, who said before he changed something along the lines of "…decrease the surplus population." when it came to his feelings about letting the poor die. I feel that many in the county fully follow the admonition of pre-changed Scrooge and most likely are in fact just waiting for the "surplus population" to just die off. It makes me sick!

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