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Friday, October 24, 2008

Palin needs a lesson in basic economics

Shouldn't someone explain to Sarah Palin that merely supporting a progressive income tax system, as Barack Obama apparently does, does not make a person a socialist? Virtually every Western nation, including the US, employs progressive income tax systems and have done so since the early 1900s.

And in any progressive income tax system, the wealthy pay more than the middle class which pays more than the poor.

In other words, such a tax system shares the wealth.

Imagine the Republican Party presenting this woman to the American people and the world as a potential future president. Her naiveté about international issues is appalling. Her mindless willingness to parrot Republican mumbo jumbo is disappointing.

5 comments — This is a moderated blog and comments will appear when approved. Please don’t resubmit if your comment doesn’t appear immediately, and please do not post material that is obscene, harassing, defamatory, or otherwise objectionable.

  1. Imagine the Democratic Party presenting this man to the American people and the world as a potential future president. His naiveté about international issues is appalling. His mindless willingness to parrot Socialist mumbo jumbo is disappointing.

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  2. Russ, absolutely correct. While I personally support a flat tax system, it's not socialist to support a progressive system. Almost every nation on Earth employs it.

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  3. You're obviously not an economist either, Russ.

    Preface this: I am no Palin fan.

    As taught to me, in a mainstream economics degree program:

    A) progressive taxes, particularly ones with a high marginal rate as found in typical socialist countries, cause a serious distortionary effect in regards to total factor productivity among other things. A recent OECD report compiling economic studies maintains.

    B) progressive taxes do not "share the wealth" as you so curiously write. In fact all income taxes pose a harsh penalty on poor people due to the initially high marginal tax rate they face as they enter the market.

    C) progressive taxes do not "share the wealth". As Gordon Tullock proposed: "Tullock states that the income redistribution process [social programs] is one that yields gains back and forth across the middle class with little gain at the lower end of the distribution due to voter preferences.". In other words the middle class containing most of the voters, gets most of the money. Economists Slottje and Scully provide evidence. (Read about sharing wealth here

    Condemn Palin when she deserves it, but I do think it's hypocritical not to put Obama under the same flame. Arguing about the social benefits of the "progressive" income tax is a fair economic argument and should be open to discussion without name calling.

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  4. Actually, the progressive tax system was introduced to lessen the appeal of marxism.. It is in fact a socialist scheme of wealth re-distribution. Alberta is an excellent example of how flat-tax rates increase government revenues, while ensuring equality and improving economic conditions. Progressive taxation punishes the successful and rewards the unsuccessful. It has negative effects on productivity... so you may wan to erroneously claim that it is not socialism, but it is in fact the very definition of socialism.

    You've made the assumption that the US is currently a fully capitalist system, and that assumption is so completely off base...

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  5. Jordan Alcock: Where have I "made the assumption that the US is currently a fully capitalist system?"

    All: My point is not to defend a progressive tax system, but to point out that "merely supporting a progressive income tax system … does not make a person a socialist."

    BTW, I can find no "name calling" in my post—I leave that to the McCain campaign, they're past masters at it.

    A good discussion, though, and I thank you all for it.

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