Monday, November 3, 2008

Happy Election-Day Eve

By now most people have cast their vote for the next US President, so these comments should not be construed as an attempt to sway any opinions. I simply thought I'd share a few intriguing tidbits I've come across in my explorations as an Independent Voter.

Here's a fun story to get us rolling:

Suppose that every day, ten men go out for dinner and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do. The ten men ate in the restaurant every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your meal by $20."dinner for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still eat for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to eat. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same percent and he proceeded to work out the amounts each should pay.

And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to eat for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"
"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The next night the tenth man didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore.

David R. Kamerschen, Ph.D. Professor of Economics University of Georgia
For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.

I read that analogy for the first time a few years ago, and I hate to admit that it initiated my education about our top-heavy tax system. I was actually ignorant to the fact that the percentage of taxes paid across the population was so drastically divergent. I knew that rich people paid more in taxes than poor people, but naively assumed that was just an effect of their relative income levels.

So how might our taxes be affected by the next administration? Here is a great visual summary from the Washington Post:
Notice that under Obama's proposal the top earners in our country will pay an average of over $700,000 MORE in taxes than they already do , whereas McCain's plan would reduce their amount paid by an average of nearly $270,000. As in the restaurant story above, I think many people vilify this tax break for the rich. Nay, I know they do, because you can read about it in newspapers and blogs ad nauseum. I'm certainly nowhere close to the top 1% of income earners, but I don't think it's fair that they paid 40% of all income taxes in 2006, whereas the the bottom 50% of taxpayers paid only 3%. This is all a very good way to disincent entrepreneurialism and achieving the American Dream.

Of course, reduce those taxes too far, and the national deficit will be grossly affected. So a flat tax isn't the answer either, but perhaps consumption tax deserves a fair look.

I am not a Republican. In fact, my views on social issues tend to be more liberal. But has anyone else noticed that the media seems to lean a little to the left? Well it's not just an opinion. A new independent study by the Project for Excellence in Journalism researched how different media have covered the election, and found that "In cable, the evidence firmly suggests there now really is an ideological divide between two of the three channels, at least in their coverage of the campaign."

There are many interesting data charts throughout the study, but I found this one particularly comical. Fox News is often criticized for being too conservative, but as you can see their percentage of negative, neutral, and positive stories for both candidates is nearly identical. On the other hand, 73% of MSNBC's stories about McCain were negative, with only 14% negative for Obama.

You might be thinking, "Well, there are simply more negative stories about McCain than Obama. MSNBC and my favorite newspaper(s) just report the news." Nope. That ain't it. According to the research, "MSNBC stood out for having less negative coverage of Obama than the press generally (14% of stories vs. 29% in the press overall) and for having more negative stories about McCain (73% of its coverage vs. 57% in the press overall)." So they reported only half of the negative issues surrounding Obama that the rest of the media felt were newsworthy.

Newspapers were found to "portray a more extreme version of the overall press treatment of both McCain and Obama...Indeed, of all the media sectors studied, John McCain received the most negative coverage in print. In all, 69% of the newspaper stories studied about McCain were clearly negative, while only 6% were positive, a ratio of about 11-to-1. (The press overall was 57% to 14%, a ratio of closer to 4-to-1.) Only MSNBC offered more negative coverage of the Republican nominee." Eleven to one? That's pretty sad.

I'm not feeling very eloquent tonight, so I'm borrowing one more quote to sum up my thoughts on the media bias. This one comes from Bernard Goldberg:

...There are a whole array of stories that conservative people in America are interested in that the big, mainstream media have little to no interest in. Reverend Wright, Bill Ayers, Khalidi, the Palestinian professor at Columbia, and ACORN, things like that. ...the New York Times and the other big organizations, they have their own news judgment. I get that. ...But when you ignore or virtually ignore stories that so many Americans, millions and millions and millions of Americans, care about, then I think that detracts from your stature as a big national news organization.

I'd like to continue musing--we haven't even touched war and socialist healthcare--but I realize most people probably got bored and stopped reading a while ago. And those who are still with me might be fuming and wondering how we ever became friends in the first place.

An assumption which brings me to my final point for this evening. Why is it that those of us with conservative views (at least in my area of the World) are forced into a sort of undercover secret society? The Democrats I know have no problem broadcasting their elitist opinions to a room full of acquantainces at best. The prevailing belief seems to be that any such room is filled with only two types of people: those who agree and those who are idiots. We--the latter, supposedly--keep our mouths shut in these situations because a respectful debate doesn't seem plausible. [Okay, that's the worst of my commentary, please forgive.] But there IS a wise argument for the other side of the issues. It has become increasingly less shocking for me to be tiptoeing through a sensitive conversation with someone, only to have it come to light that we hold similar political ideals, and the sense of relief is almost tangible. It happened to me just tonight! Perhaps a secret handshake or code phrase would simplify that delicate dance.

Once I boldly asked a new-ish friend, "So, are you a Democrat or a Republican?" She sighed and sheepishly (!) said, "Actually...I'm a Republican," possibly hoping the conversation would safely end with my "Oh. I see." Instead we examined why hers is a shameful confession mainly uttered in private.


Bridget said...

If people like you and me feel ashamed to admit our Republicanicity, then that's a problem with the party, not us.

Plus, Democrats just have a hipper image. Not as many old white guys, you know?

I like that explanation of taxes.

Wiyaka said...

Ok- are you ready for my comment?

If the Reblican party was as it once was, I too would support their party. I am all for small government, less laws and what was the foundation of Reblican. Unfortunately, the party has been taken over by right wing conservatives, whose agenda is based on big business and feeding the rich. Weeding out the middle class. Naturally, there are good and bad people on all sides.

I voted Democrat. On the other hand, I am not a loyal supporter of their party. They bring up many issues that I don't agree with.

Once again, stuck in the middle!

Thank you for posting your opinion. I love to see how other people view our government issues. That is the beauty of our county, we have the right to express ourselves! Because of that, I do not have judgement over people whose opinions differ from mine.

Lots of love, Wiyaka

Wiyaka said...

Republican. I swear that I can spell! Thats what happens when my thoughts are faster than my fingers can type!

Kristen said...

I am not ashamed of my political beliefs. I am simply curious about how I've been trained to assume every person is liberal unless they reveal otherwise. And people do the same to me. I think that is kind of weird.

Democrats having a hipper image is a big part of the problem. Many voters--especially young ones--rely on that image to base their political views and ultimately votes. And when the media is in the tank for their guy, there is no hope they will get all of the information.

Wiyaka, please do not ever feel bad about sharing your opinions with me! If we can't have discussions like this, then what's the point of talking?

Remember, I am not a Republican, and it's not the party I support.
I was undecided for a long time. I personally think some of your broad generalizations of the GOP are extreme, but you can't be blamed for that, as I stated above. Capitalism promotes competition, which breeds excellence. Socialism promotes an entitlement attitude, which breeds laziness. Increasing the marginal tax rates on the rich disincents entrepreneurs who drive our economy. Eventually "The Rich" (always made out to be the bad guys for some reason) will no longer be playing the game, and there won't BE more money to give to people deemed to "deserve" it.

In any case, McCain wasn't my dream date either, but I happen to disagree more strongly with and on the more important issues of Obama. Also, although most of America fell in love with his charismatic ways, my vote was also based on _evidence_ of character. If McCain had run a more effective campaign, perhaps America would have seen the man he was beneath the white hair and wrinkles.


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