The Opium of Redistributionists

The Maverick reproduced in toto:

If religion is the opium of the masses, then OPM is the opium of the redistributionist.

Bernie Sanders, the superannuated socialist, "and his wife, Jane, paid an effective tax rate of 13.5 percent, or $27,653 in federal taxes on an adjusted gross income of $205,271." This is for 2014.  That is less than Mitt Romney paid, percentage-wise, in 2011.  But Romney paid more dollars and thus did more good than Bernie, if you assume that Federal taxes do good for 'the people' and not just for state apparatchiki.

For Sanders, a legitimate function of government is wealth redistribution so that the government can do good with other people's money (OPM).  So why did Bernie take so many (legal) deductions?  Why didn't he pay his 'fair share,' say, 28% of his AGI? Why didn't he fork over 50%?  Surely an old man and his wife can live on 100K a year!  Why doesn't Bernie practice what he preaches?

Because he smokes the opium of OPM: it is the other guy's money that is to be confiscated, not his.  By any reasonable standard, Sanders is a 'fat cat.'  But he doesn't see himself as one.  And no doubt he thinks he earned his high senatorial salary when he produced nothing, but merely spouted a lot of socialist nonsense while acting the pied piper to foolish and impressionable youth.

Negative Income Tax

City-Journal has a nice article on Milton Friedman's "Negative Income Tax," NIT.  It makes too much sense, thus it'll never happen.  Excerpt:

The NIT is easy to describe. “The basic idea,” Friedman wrote in a 1968 Newsweek column, “is to use the mechanism by which we now collect tax revenue from people with incomes above some minimum level to provide financial assistance to people with incomes below that level.” Already, he pointed out, no one pays taxes on the first few thousand dollars of income, thanks to personal exemptions and deductions. Most earners pay a fraction of their “positive taxable income”—that is, the amount by which their earnings exceed that first few thousand dollars. In Friedman’s plan, the poor would similarly receive a fraction of their “negative taxable income”—the amount by which their earnings fell short of that level. This direct cash grant would replace all other welfare programs for the poor, which, Friedman rightly observed, were generating a huge bureaucracy and extensive welfare dependency.

But wouldn’t the NIT—in effect, a government-guaranteed income—still be a disincentive to work, just as no-questions-asked welfare benefits were before being reformed in the 1990s? “Any state intervention, any income redistribution, creates disincentives and distortions,” admits Gary Becker, a University of Chicago economist and Friedman disciple. “But if society decides that a certain level of redistribution must take place, the NIT is the best, the most minimally distorting, solution ever devised.” To limit the disincentive, Friedman argued, the NIT should be progressive. Say the government drew the income line at $10,000 for a family of four and the NIT was 50 percent, as most economists recommend. If the family had no income at all, it would receive $5,000—that is, 50 percent of the amount by which its income fell short of $10,000. If the family earned $2,000, it would get $4,000 from the government—again, 50 percent of its income shortfall—for a total post-tax income of $6,000. Bring in $4,000, and it would receive $3,000, for a total of $7,000. So as the family’s earnings rise, its post-tax income rises, too, preserving the work incentive. This is very different from many social welfare programs, in which a household either receives all of a benefit or, if it ceases to qualify, nothing at all. The all-or-nothing model encourages what social scientists call “poverty traps,” tempting the poor not to improve their situations.

Happy Tax Freedom Day!!

http://taxfoundation.org/article/tax-freedom-day-2014-april-21-three-days-later-last-year