"There is Nobody in this Country Who Got Rich on His Own"

After watching the below video, sent to him by Matt, Stephen was so enraged that he needed to respond to what he called "utter horseshit." As a man who doesn't use the word horseshit lightly, now is his time to refute this garbage. Here's the article that made Stephen so mad that he was ready to dump toxic waste into the Hillsborough River just to get back at Matt.

First, I'd like to start by agreeing with Elizabeth Warren, yes the wealthy did not spontaneously pop into existence. But does that really prove your argument or anything you really stand for? Actually, the way I see it it's painful to the liberal movement to remind us all of the Social Contract (which this argument plays off).

1 - Leave it to liberal "intellectuals" to reignite a debate that was settled in the mid-1700's. Yes, I understand the Social Contract, we all come together into society because alone we cannot provide all the goods society can. In return, we sacrifice some things. Fine, but I can't see how that leads to progressive liberalism, Matt if you would be so kind please explain.

Read the rest of Stephen's argument and check out Matt's response after the jump...



2 - Don't we all use roads? Maybe I'm just a rich elitist living in a bubble, but I thought myself and the poor enjoyed the interstate system. Apparently I could not be more wrong (although, maybe I'm not welcome since only the factory owner is supposed to be privy to the roads). Does our education not serve me more than my employer? Do police and firefighters not serve the poor and the wealthy? I thought they protected the factory owner's plant and the laborer's car. Apparently, I'm out of touch with society, the police only protect me. But since the poor and the wealthy consumer public goods like police and roads equally, why should the wealthy pay more for their services? Matt, please explain the modern liberal's rationale.

3 - If anything, this argument lays the case for why everyone should pay equal taxes. Since we all enjoy public goods and services equally, why should the wealthy be charge more? That seems against fairness. Since the rich don't receive anything special (and yea, their factories also pay taxes so they can be protected), why is it rational that they pay more? Please explain.

4 - This clip says nothing of why progressive liberal social safety nets need exist. Please don't misunderstand me or my conservative counterparts. Neither of us is calling for the return of a Hobbesian wilderness, we're totally OK with paying gasoline taxes and tolls to pay for roads, and paying property taxes for policing and firefighters, and some income tax for our armed forces protection. Fine, but collectively that's what 30% of the budget? Overuse of the roads by a factory isn't bankrupting America.

5 - My knockout punch. Matt, please explain why/how you can defend benefit = cost logic. Last time I checked, it seemed most fair to pay for services, regardless of how we used them. But let me paint this in an example the modern liberal can understand (since they almost certainly have not worked in the private sector yet): Matt, do you think those who achieve a 4.0 GPA in college should pay higher tuition? If you don't this debate is over, since they clearly benefited more from the same teachers, library and facilities as those who only could achieve a 2.0. So you should pay more in tuition than our colleagues who could only get 2.0s at Georgetown, since you achieved more. This is the equivalent of what Elizabeth Warren proposed above.

Finally, the only thing this argument actually proves is twofold. One, collective goods (policing, roads, firefighters, currency, military) should be provided from taxes, and I agree. Two, everyone should pay equal taxes, since we all use roads and police, regardless of whether we own a factory or just work at one. Police are nice for both parties. But in no way, at all, does this even remotely logically hint that the wealthy should pay more than the poor for these goods and services or that liberal social programs (like welfare or foodstamps) ought to exist. This whole argument reminds me logically of this:

****
Matt responds (2/15/12):

I am a bit puzzled by Stephen's decision to make this debate all about the Social Contract, which it isn't really. Does the Social Contract play into Elizabeth Warren's argument? Yes, of course it does. Considering it is the universally accepted philosophical underpinning for every modern form of government, ever, this should come as no surprise. The Social Contract's reach has been endlessly debated, and will continue to be debated, because reasonable people will never stop disagreeing about the price, in terms of individual rights, of living in a fair society.

Elizabeth Warren, and liberals like myself, aren't arguing for the mere existence of the Social Contract. We're arguing that it goes farther than people like Steve think it does.

Specifically, Warren was rebutting the conservative dogma that wealthy people have earned their fortune solely through their own perseverance and intuition, and should thus be entitled to keep a greater share of it in the form of lower tax rates. Before Stephen accuses me of class warfare, let me clarify my respect for anyone who works hard and finds success. That's great, and we should absolutely encourage it. As Warren says in the video:

You built a factory and it turned into something terrific or a great idea - God bless. Keep a big hunk of it...

The question is how big of a hunk you are entitled to keep as a member of a society. Back to Warren:

But part of the underlying social contract is that you take a hunk of that and pay it forward for the next kid.

Why should the wealthy pay more in taxes? Because, to paraphrase the title of this post, no one gets rich on their own. You OWE a certain amount of your money to the government that provided the conditions for your success - and is charged with providing the conditions for success for others. Social safety nets exist to insure that everyone has a chance to build a factory.

The question is how we pay for a government that not only spends a small portion of its money on these safety nets, but also provides Social Security, Medicare, and other direct services people overwhelmingly support, and must pay for the upkeep of roads, bridges, parks, public safety, and other things that even my worthy opponent agrees governments should fund. If you've made more money, you ought to pay more money. It's not like there's some massive injustice at work here. Do the math: you make $45,000 and pay a quarter of that in taxes, you're left with $33,750 - barely enough to pay for the rising cost of living in this country. You make $10 million and pay a quarter of that in taxes (less in most cases), and you're still a multi-millionaire multiple times over. Why is it unreasonable to ask the wealthy to pay a higher rate?

And I'm sick of this whole "bankrupting America" argument. You know what's bankrupting America? It's not "liberal social programs," as my opponent would have you believe. It's the fact that one party in Congress refuses to raise taxes under any circumstances, even to the levels of the economic boom of the 1990s, or to the rates overseen by their strange political deity, Ronald Reagan, in the decade before.

My response to your point about college - no, I should not pay more for academic success, because my college grades don't pay to keep cops on the street. Education is a public good, not a commodity. There is no way you can quantify, in monetary terms, who "benefits" more from it.


****
Stephen's Final Response:

Matt, that last paragraph cost you any logical grounds in this debate. Are roads, policemen and firefighters not also "public goods"? If so, they are in the exact same realm as what you declare education to be (personally, I wouldn't go there). So if education is a public good, and you cannot determine who "benefits" more from public goods, you also cannot determine who benefits more from roads. Therefore, if the factory owner does not benefit more from roads (which is the only logical way I see this liberal rendition of the social contract potentially passing itself off as logical), then why ought he pay more for their maintenance? Now, if you're reasoning, which it must be since there is no other, is solely that he is capable of doing so, then it is an argument biased against those with wealth. For you are claiming he must do it not on any moral principal but on the idea that his wealth is for the collective, solely on the fact that he possess it. The alternative, Matthew, is that you agree that those who benefit more (which Ms. Warren implies throughout the clip can be measured by success) ought to pay more, in which case you ought to contribute to a higher tuition than those who coast through an institution like Georgetown with a 2.0 (and yes, your tuition is - in the analogy - a tax that enables the university to provide teachers, public safety, maintenance, a library etc. which are all collective goods for University Citizens). But don't worry, even if you agree that higher benefit means you ought to pay more in taxes, then we still need a discussion on whether a factory owner actually benefits more. (We've also said nothing of that fact that 25% of a million is a whole lot more than 25% of 100,000).

Now some slightly mocking observations:
1- You can't just declare you respect the wealthy while acting on a bias against them, this is hypocritical. Remember, actions speak louder than words. Just treat them equally, like I am trying to do.

2- The "case for liberalism" has been proven to be nothing more than an unsupported assertion, unreasonably extended from an theory no one is arguing against. You can't just declare that welfare is intuitive because roads are.

3- Matt, please tell me you hired a professional to do your taxes. Your hypothetical case has this poor man overpaying by anywhere between 200 and 400% depending on marital status.


****
Matt's Rebuttal (2/19/12):

I didn't expand on this in my first response, but my point is that your academic success analogy, while superficially compelling, compares apples and oranges. My college grades possess no monetary value. There is no way to predict whether or not a 3.7 will result in more future earning power than a 2.5 - so how can you argue that grades are an indication of who has "benefitted" more from education? I could choose to pursue a less lucrative career, or the guy/girl who graduated with a 2.5 could turn out to be a much better businessperson or working professional.

Taxes, on the other hand, are levied on real money that one has earned, and used by governments to pay for real things that also cost money. Those who earn more money ought to pay a larger percentage of that money for the purposes of society as a whole. Conservatives like Stephen love to hold up the unjustly persecuted rich person as a justification for their economic agenda, but taxing the rich at a higher rate isn't a bias against wealth. Liberals respect wealth, and encourage it. The progressive tax, however, derives from the principle that we are all part of a social collective, and that as you benefit more from that collective through your personal earnings, you should owe a greater share to insure that others can benefit as well.

Also: welfare is absolutely intuitive because the promise of surrendering your rights to a democratic governing body is the idea that everyone will have a chance - not a guarantee, but a chance - to benefit equally from that governing body. If the free market isn't providing that chance on its own, then government needs to step in. Conservatives justify inequality on the grounds that we are a country of upward mobility, but that's not borne out by the facts. In terms of social mobility, the US ranks near the bottom of western countries - far below Denmark, Norway, Finland, and other bastions of socialism that top the list of most socially mobile societies, and even below France, with its 35-hour workweek and other statist traditions.

Note that this excludes entirely the economic, demand-focused rationale for strong government investments.