Redux: The Non-Taxpaying Class

I am getting a lot of hits (my definition of “lot” may differ from yours) for searching on this WSJ editorial. I am #11 (yes, that’s near the end) on Google. I thought I should point my readers to my posts as well as others.

Tax the Poor

It seems like the Wall Street Journal editorial I mentioned before was inspired from Neal Boortz. Writing on his website on Aug 1, Boortz describes “THE DEMOCRATS’ (SECRET) PLAN FOR AMERICA”:

Remove a majority of voters from responsibility for income taxes
This is the biggie —- and they’ve made no attempt to hide their goals here. The Democrats have been working on this plan for decades —- with no small amount of help from the cowardly Republicans. The idea is simple. Using “refundable” tax credits and deductions and such ideas as the fraudulent Earned Income Tax Credit the Democrats are working to shift the entire burden for the payment of federal income taxes onto a minority of US taxpayers. Right now the top 50 percent of taxpayers pay almost 96 percent of the taxes. The Democrats are close to their goal. When the majority of voters have no federal income tax liability it will be almost impossible to pass any meaningful tax cuts ?— and further tax increases will be a piece of cake, especially if the taxes only affect those to be considered to be rich. Through this ploy the Democrats plan to create a defeat-proof socialist congress.

Jeez!

Voting Systems

I have always felt that the first-past-the-post (or plularity) voting system as practised in the US (except the Louisiana senate seat) and the UK is flawed since a house elected using this system does not reflect the will of the voters. A political party can easily get a two-thirds majority in parliament with only a third of the vote if there are more than two parties running for election. However, a pure proportional representation system has its own flaws. It gives more power to the fringe elements and makes the system somewhat unstable. A lot of countries therefore follow some sort of a hybrid system. For example, Turkey uses proportional representation with a minimum of 10% votes required to be represented. This resulted in 363 out of 550 seats in parliament for the AKP in recent elections even though they got only 34% of the vote. In fact, the elected parliament there represents only less than 54% of the electorate (I am talking of the people who voted; in such discussions, I don’t care about those who did not bother to vote.) Just a few more seats for the AKP would have given them the power to amend the constitution with a two-thirds majority. What’s more, they did not even need more votes to do that: if the share of the opposition party (CHP) had been a bit smaller than the 19% they got, it would have given AKP 367 seats.

The flaws of the above systems then are obvious. However, studies of voting systems have shown that all systems can give bizarre results under some conditions. Consider an instant-runoff system with three candidates. If 35% of the voters prefer A first and B second, 33% B first and C second, and 32% C first and A second, then the votes of the last-placed C go to A resulting in a win for A. However, if A does something great during the campaign and increases his support at the expense of B, then B places last in the election. So, B’s votes are assigned to C and C wins the election.

Another problem with all voting systems other than the plurality vote and proportional representation is that they are more complex for the voters. I guess they can’t be used in Florida then.

In my opinion, the following characteristics are required for a good voting system:

1. It should reflect voter opinion somewhat accurately.
2. Fringe parties/candidates should not have much influence. This can probably be accomplished by instituting a minimum threshold of votes required for seats in the parliament. However, this threshold should not be too high, a la Turkey, to undermine #1.
3. Usually two-third majorities in parliament have a lot of power, including the power to amend the constitution. Therefore, two-third majority should be very difficult to achieve without a mandate from the electorate.
4. The system should encourage a smaller number of parties (preferably 2) without making it impossible for new parties to break through.

I know most Americans are not interested in changes in the voting system. However, being the oldest demoracy, we are working with an old system while there are better alternatives available.

Website: Proportional Representation Library

WSJ Editorial: The Non-Taxpaying Class

E.J. Dionne, Tim Noah and Josh Marshall are making fun of the Wall Street Journal editorial last week which basically says:

[A]s fewer and fewer people are responsible for paying more and more of all taxes, the constituency for tax cutting, much less for tax reform, is eroding. Workers who pay little or no taxes can hardly be expected to care about tax relief for everybody else. They are also that much more detached from recognizing the costs of government.

And WSJ’s example: people earning $12,000 a year! The quotes from the above sites make the editorial look like it was published by The Onion. I couldn’t find the editorial online as I don’t subscribe to the Wall Street Journal, so I can’t say if these characterisations are correct.

UPDATE: Matthew Yglesias has some ideas from the Dead Kennedys to accomplish what WSJ wants.

UPDATE II: The editorial can be found here. (Via CalPundit who has a good post on this topic.)

Bush Tax Cut

Very interesting table from the Tax Policy Center about how the Bush tax cut of last year would affect the rich and the poor after it is all phased in. Overall, the change in after-tax income will be 1.8%. The richest 1% get 4.5% however. The worst-off: those in the bottom 20% as well as the top 10% minus the top 1%. That’s curious indeed. (Courtesy of Max Sawicky)