A Philosopher's Blog

Philosophical Essays on Many Subjects

Archives for February 2012

Corporate Taxes, Again

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Tax
Tax (Photo credit: 401K)

One common theme pushed by folks on the right is that corporations are taxed too much. When making a case for this, people point to the fact (and it is a fact) that the corporate tax rate is 35%.  From a sensible view point, that does seem rather high. After all, having the state skim 35% off the top would make it much harder for business to hire people, re-invest and do all those other things that are rather important to keeping the balloon of capitalism expanding. As such, the call to cut corporate taxes often has significant appeal. However, there is on rather obvious problem with the argument: some corporations pay no taxes and the average is around 12%.

This lower actual rate is due to the fact that corporations are able to take advantage of various tax laws (often created at their behest or via heavily lobbied deals). This laws allow corporations to use loop holes and other means to lower their taxes significantly. Lest I be accused of ignoring the obvious, the tax laws also allow individuals to also lower their taxes through various deductions and exemptions.

One reason why the facts are important in this situation is that much of the rhetoric and (limited) arguments for lowering  corporates taxes are not based on what corporations actually pay. To use the obvious example, when someone rails against the high corporate tax rate, they do not say that the average tax rate for American corporations is 12.1% and they most certainly do not mention that some companies (most infamously GE) are able to avoid having any tax obligations. After all, a 12% tax on what are often massive profits would not strike most people (especially those of us who work for a living) as particularly onerous. In fact, given the significant benefits enjoyed by corporations (corporate subsidies, use of infrastructure, military and diplomatic operations on their behalf and so on), this seems like an excellent deal.

Another reason why the facts are important is that they are rather important to having a rational discussion of what corporate tax rates should be. As noted above, the stock line is that corporations are being harshly taxed and these taxes need to be lowered. When the tax percentage is presented as 35%, that does seem rather harsh and lowering it seems reasonable. However, this claim has the obvious problem of not being what corporations actually pay. The average is, as noted above, 12.1% and this seems like a rather low figure already relative to corporate earnings. Also, if someone where to argue that the tax rate for corporations should be 15% (the cap for capital gains taxes), then the obvious response is that corporations already pay a smaller percentage, thus eliminating the need for such a reduction.

But perhaps the people who point to the 35% and call for lower taxes do not mean that they think that 35% is too high. Perhaps they are well aware of the real percentage but merely use 35% as a rhetorical trick because they think that the percentage that corporations pay on profits should be even lower than 12.1%. Of course, that would seem to be rather low, given what wage earners pay in terms of a percentage of their income. After all, corporations already tend to pay a lower % than many folks who work for a living. This might, of course, mean that the taxes on the working people are too high as well.

But, if they are, then we must explain the deficit entirely in terms of needless overspending. After all, if the state is taking in too much money, then the most plausible explanation for a deficit would be that we are spending too much on needless programs. This could very well be the case and should be duly considered. Of course, the key word here is “needless”-if we actually do need to spend tax dollars, then the tax rates should be devised so that they enable us to meet our legitimate expenses. The challenge, which is a very serious one, is sorting out the needless spending from what we should be spending. Naturally, everyone tends to hold that what the think benefits them is essential and what they think does not benefit them is needless. Unfortunately, there seems to be little tendency to address this matter in a rational way and the “discussion” seems to be based mainly on rhetoric, partisan ideology and unrestrained emotion.

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Delusions of Self-Reliance

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When the Tea Party movement was in the upswing, comedic critics of the movement loved to point to the wonderfully inconsistent command to “keep your government hands off my Medicare.” While it is easy enough to dismiss this remark as being an aberration, it actually seems to represent a relatively common ignorance regarding government assistance.

Paul Krugman notes that some of the people who are very vocal in their opposition to government assistance and who often support politicians who promise to eliminate such assistance are themselves recipients of that assistance. This is based on the research of Suzanne Mettler:

Percentage of Program Beneficiaries Who Report They “Have Not Used a Government Social Program”
Program “No, Have Not Used a Government Social Program”
529 or Coverdell 64.3
Home Mortgage Interest Deduction 60.0
Hope or Lifetime Learning Tax Credit 59.6
Student Loans 53.3
Child and Dependent Care Tax Credit 51.7
Earned Income Tax Credit 47.1
Social Security—Retirement & Survivors 44.1
Pell Grants 43.1
Unemployment Insurance 43.0
Veterans Benefits (other than G.I. Bill) 41.7
G.I. Bill 40.3
Medicare 39.8
Head Start 37.2
Social Security Disability 28.7
Supplemental Security Income 28.2
Medicaid 27.8
Welfare/Public Assistance 27.4
Government Subsidized Housing 27.4
Food Stamps 25.4

Since all of the above are government social programs, 100% of the people using them have, in fact, used government social programs.

Tea Party
Tea Party (Photo credit: nmfbihop)

In some cases, such as the tax deductions or tax credits, people might believe that these are not government social programs. After all, when most people think of a government social program they think of the government handing out food stamps, cheese, health care or money. However, these programs are government social programs. While people no doubt think that they have earned the credit or deduction, they are actually getting a financial benefit from the government at the expense of the taxpayer. For example, in the case of mortgage deductions this means that the taxpayers are subsidizing the home owner’s mortgage by allowing him or her to pay less taxes because s/he owns a house. While this is not as obviously a social program as getting food stamps, it is essentially the same. Naturally, it can be seen as a negative program (paying less) rather than a positive program (getting something) but the results are the same-either way, the person gains from a government social program.

As noted above, people who are opposed to government social programs seem to often be unaware that they themselves are beneficiaries of such programs and they are, as in the quote above, often inclined to want to keep these programs. As Paul Krugman contends, these folks can hold to inconsistent views because they simply do not realize that the programs they wish to keep benefiting from are the programs that they also think they wish to eliminate. That is, they are operating under a delusion of self-reliance when they are, in fact, benefiting from the very thing they profess to loath. This creates an interesting epistemic and ethical problem. That is, they do not know they are doing wrong by their own principles.

To be fair, there are obviously people who are well aware of that these programs are government social programs and they oppose them. Perhaps some of these people even refuse to avail themselves of such programs and live in a manner consistent with the principle that the state should not provide assistance to people.

Even if there are not such people, the arguments against such programs can still have merit. After all, the mere fact that many (or some) people who are against  government social programs in principle also use such programs does not prove that the arguments against such programs are flawed.  To think otherwise would be to fall into a classic ad homimen fallacy (ad hominem tu quoque). They might, in fact, be excellent arguments.

That said, the fact that people avail themselves of these programs in seeming ignorance of their true nature is rather interesting. It does suggest that at least some of the people who are critical of said programs are critical from ignorance and that perhaps they would modify their views if they were aware  that they benefited from what they have been attacking. At the very least informing these people would allow them to act consistently with their principles by refusing to avail themselves of such programs. They could simply refuse to claim the deductions and credits, mail back any checks they receive from the state, and refuse to use Medicare. After all, while not practicing what one preaches does not show that the preaching is incorrect, one should (morally) follow one’s own sermons or at least have the decency to remain silent and thus avoid compounding one’s sin with hypocrisy.

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Virginia’s Ultrasound Law

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English: The state seal of Virginia. Српски / ...
Image via Wikipedia

The Virginia state legislature is on track to pass a law requiring women to have a transvaginal ultrasound before being permitted to have an abortion. As might be imagined, there is considerable opposition to this law. Some critics have  even argued that forcing women to undergo an invasive procedure could actually be a sex crime under Virginia law. As might be imagined, this matter raises numerous moral concerns.

One point of concern is that, as presented in comedic fashion on the 2/21/2012 Daily Show, some of the folks supporting the bill seem to be directly violating their own professed principles regarding the appropriate role of the state. For example, the woman who put forth the bill previously argued against “Obamacare” on the grounds that the state should not make such an imposition on liberty. As another example, the governor of the state was critical of the TSA “pat downs” as being too invasive. He has, however, expressed his intent to sign the bill into law.

As might be imagined, forcing women to undergo such an invasive procedure seems to be rather inconsistent with the past arguments by these folks regarding individual liberty and the appropriate role of the state. After all, if it is unacceptable for the state to force people to buy health insurance because it violates their liberty, forcing a woman to undergo penetration against her will seems to be even more unacceptable.

Naturally, I am not claiming that these people are wrong now because their current view seems to be inconsistent with their past views. After all, doing this would be a fallacy (ad hominem tu quoque). However, it is fair to simply take the reasons they presented against forcing people to buy health insurance and apply them to their own view on the forced ultrasounds. As such, if they were right then, then they would seem to be rather wrong now. Naturally, people tend to not be very big on consistency-as Mill noted in his discussion of liberty, people generally take the view that the state should do what they want and do not base this on a consistent principle regarding what is fit and unfit for the state to do (or not do).

The most important point of concern is, obviously enough, whether or not it is right for the state to mandate such a procedure. While, as noted above, proponents of this bill seem to have railed against state imposition in other matters,I will accept that  there are cases in which the state can justly impose. The question then is whether or not this is such a case.

The most common basis for justifying state imposition is the prevention of harm. To use an obvious example, the state justly forbids people from stealing. In the case of the ultrasound, the assumption seems to be that this law will help reduce the number of abortions and this will, as some folks see it, combat a harm. However, the evidence seems to be that this will not be the case. Dr. Jen Gunter has a rather thoughtful analysis of this matter that addresses this point. As she notes, sex education,access to medical care and  contraception have the greatest impact on reducing abortion rates. These are, oddly enough, often opposed by the same folks who are vehemently opposed to abortion. As such, the law makes no sense as an abortion reducer even if it is assumed that the state has the right to make impositions with the goal of reducing abortions. In light of this, it would seem clear that the law is morally unjustified.

Even if the law would, contrary to fact, reduce the number of abortions, there is still the question of whether or not the state has the right to make such an imposition. After all, there are appealing arguments for individual liberty and keeping the government out of peoples’ business-often made by the very same people who back this particular intrusion into liberty (as noted above). My general principle is that the burden of proof rests on those who would make such impositions into law. That is, they have to provide a sufficient reason to warrant impinging on personal liberty and choice. As its stands, the proponents of this law have not made such a case. After all, it will not even achieve its apparent goal of reducing the number of abortions. There are also no legitimate medical reasons for making such an imposition and, as such, it seems to be an unwarranted and  needless attempt to legalize the violation of the rights and bodies of women.

 

 

 

 

 

 

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“Shovel Ready”

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Spade
Image via Wikipedia

I’ve heard “shovel ready” thrown around for a few years and finally decided to determine the best meaning for the phrase. Here are my contenders:

1. “Ready to be hit by a shovel.” For example, “that guy is such an ass that he is totally shovel ready.”

2. “Ready to be buried by a shovel, perhaps after being hit by a shovel.” For example, “that guy I hit with the shovel is now shovel ready.”

Feel free to add your own definitions. Winner might get a shovel. Or not. It depends on how ready the shovel is.

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AeroShot

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English: A photo of a cup of coffee. Esperanto...
Why drink this when you can inhale it?

In our society people tend to stay up later and sleep less than in the past.  As historians have noted, part of this is due to electricity. Of course, there are other factors that have caused people to sleep even less these days. One likely factor is the increase in work (at least for Americans-though we are often cast as lazy, we work more than other Westerners and take less vacation time). Children also are apparently sleeping less, perhaps due to the impact of electronic gadgets and the internet.

Because of the lack of sleep, it is hardly a shock that people have been increasingly turning to energy drinks. While coffee has been around for a long time, recent years have seen the proliferation of high energy drinks. Some of these were combined with alcohol, thus allowing sleepy folks to party all night (and drink themselves into the hospital). Apparently consuming a drink now takes too much time and a new product, AeroShot, is available.

AeroShot is more or less a small plastic tube loaded with caffeine powder. The user inhales it and gets the equivalent of a large cup of coffee in one huff, nicely avoiding all that tedious drinking. Currently it is available in the US and France.

In the United States  the AeroShot was able to bypass FDA testing because it was classified as a dietary supplement. Some critics see this as a dangerous loophole that allows products to get on the market without testing. Others see it as a legitimate category that allows companies to get products on the market without onerous government testing.

In the light of Four Loko (or “blackout in a can” as people called it) it is hardly surprising that Senator Schumer pushed the FDA to review the product. His concern is that kids will abuse the product by taking hit after hit while partying. As might be imagined, this raises the usual moral concerns about testing and limiting products.

On the one hand, the state does have a legitimate moral role in testing products so as to protect citizens from harm. After all, protecting citizens from harm is one of the basic functions of the state-whether that harm comes from foreign invaders, domestic criminals or dangerous products.

If AeroShot does present a health risk, then it would seem to be morally correct for the state to take action, based on the state’s obligation to protect citizens. Naturally, a utilitarian argument can also be made that the state should act in this way to protect the citizens so as to avoid said harms.

On the other hand, caffeine is already an established and accepted (legally and morally) product. As such, concerns about AeroShot’s ingredient would thus seem to also extend to all forms of caffeine. Thus, if it is morally acceptable for people to have access to coffee, then the same would seem to hold true of AeroShot. After all, if the kids want to stay up all night partying, they can legally buy all the coffee they might care to consume and this would seem to make any attempts to limit AeroShots pointless.

One reply is, of course, that the AeroShot makes it easy to rapidly dose oneself with caffeine. As noted above, a quick huff of AeroShot is like drinking a large cup of coffee. In the case of a large cup of coffee, the time to consume it will be longer and there is also the rather important fact that the coffee will fill up the drinker’s stomach, thus limiting the dosage.  Thus, the concern about AeroShot is not so much that it contains a lot of caffeine but that it provides a very rapid and efficient means of delivering caffeine.

The obvious counter to this is that kids can go to the grocery store and buy a bottle of caffeine tablets quite legally. These tablets have 200 mg of caffeine (twice that of the dose in the AeroShot) and usually sell for $5-1o per 100 tablets (AeroShot sells for $2.99 a dose). Taking a tablet is far quicker than drinking a cup of coffee and tablets are rather small relative to the volume of a cup of coffee. As such, these tablets would seem to be as dangerous as AeroShot (if not more so, since they are cheaper and have more caffeine per dose). As such, if these tablets are morally and legally acceptable, than AeroShot would seem to be just as acceptable.

One final counter is that perhaps AeroShot poses a special threat because it is “cool.” That is, kids will be more inclined to overuse AeroShots because of the novelty of inhaling caffeine relative to drinking it or taking a tablet. While this is a point of concern, there is the obvious worry that restricting such a product on the basis of its “coolness” rather than its contents would be rather problematic. After all, how would labs test for “coolness” and how would such a standard be established in a principled way?

People more cynical than I might suspect that the “attack” on AeroShot was motivated by some factors other than concern for the youth, such as the desire to get media attention or to get the makers of AeroShot to cough up lobbying money to ensure that they can keep selling their product (that is, a political shakedown). But, of course, I am not that cynical.

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