Welfare email string from years ago

Several years ago I had the following email conversation with my dear friend and brother-in-law, Mike Gavin. I respect and value his opinion very much. I did take the liberty of editing out several of our pop culture sidebar conversations.

The string (keep in mind you must read the last email first):

Mike,

Thanks for the comments. The BD's commentary on Ecclesiastes is very helpful. Perhaps I am guilty of "wresting" the scriptures, and, if so, I apologize to all. My intent in using the verse (Jed and I have done this before) is to simply say that there are circumstances beyond our control that factor into our lives. Whether it be from a material standpoint or any other standpoint. This life is fleeting, and I think the Preacher captures it beautifully in this scripture.

None of the above colors my thoughts about the perfect society. We should all be doing more to help those who cannot help themselves. I don't believe the government--whether it be Liberal, Conservative or Alien-led--will ever get us to that perfect society. Therefore, we must do what we can in our individual spheres and look forward to the time when the Lord institutes His perfect society.

I believe that can fit in with your idea of doing things that never were (or were only once). We can each make a tremendous difference--if we have the stomach for it.

To have Enoch's society today would require leadership and a general populace that turns to God in all circumstances. All would have to be humble and willing to bend their will to God's will. Clearly, the US is nowhere near there, nor is it currently heading in the right direction.

I think it's up to individuals to fight the fight.

I hope I'm making sense. These are just some of my random musings.

Incidentally, I believe Bobby Kennedy borrowed that phrase from George Bernard Shaw--we used it all the time on my mission.

Thanks for the thoughts. They're great ones. Again, how do we get there from here?

Jesse




Jesse,

I found myself pondering your last email while sitting in sacrament meeting on Sunday. You quoted a verse from Ecclesiastes:

"I returned, and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favour to men of skill; but time and chance happeneth to them all." Ecc. 9:11

While reading that, I decided to turn to the Bible dictionary to try to place more context around this fascinating book in the scriptures. Here's what I found (you may already know this):

"The book of Ecclesiastes seems permeated with a pessimistic flavor, but must be read in the light of one of its key phrases: 'under the sun,' meaning 'from a worldly point-of-view.'... Thus, the Preacher laments that as things appear from the point of view of the world, everything is temporary and soon gone - nothing is permanent..."

Then I turned to the book of Moses... to one of those scriptures that puts me in a deep and pensive mood:

Moses 7:18 - "And the Lord called his people Zion, because they were of one heart and one mind, and dwelt in righteousness; and there was no poor among them."

Both scriptures, of course, are true. But the Preacher refers to the world as it is right now, while Moses speaks of the ideal society found among the people of Enoch. This dichotomy brings to mind a wonderful quote from one of my favorite liberals, Bobby Kennedy:

"There are those who look at things the way they are, and ask 'why'... I dream of things that never were and ask 'why not?'"

I would amend this slightly, of course, to reflect the reality that was Enoch and his people... thus, I dream of things that once were and ask "why not again"?

Of course, there are a million reasons "why not," and the question we're still left with is "how do we get from here to there?" I've no idea, but wanted to share this group of muddled thoughts anyway.

Hope you're well.
MG




So, more government = more taxes; less government = fewer taxes. That makes sense. It's probably about as black and white as you can make the issue of taxes. However, the overriding question is still supporting those who do not (for whatever reason) support themselves at this point. State/philanthropic support for those who are incapable; teaching to fish for those who lack
opportunity/knowledge. In my perfect world, the government would not need to be directly involved in either. Philanthropy for the former, independent business ventures (as discussed) for the latter. I know the needs of both groups will not be met in the current system without government intervention. So, how does the government distinguish between the incapable and the capable but uninformed? I know of no good way to do that. And so we have an inflated system of social
welfare. People have seen that it's offered, so they avail themselves of it. And when you're down and out--why not? But then it seems it becomes a crutch. The ideal in the current system is temporary assistance, but even that is loaded with pitfalls. As you've said, Mike, round and round we go...

Back to the tax issue and the interesting thought string of taxes as a cost of doing business related to success or opportunity. There is no such thing as equal success or equal opportunity on a nation-wide scale (thus a flat tax rate because we're all blessed with the same opportunities is ludicrous. A flat tax rate for other reasons is palatable--tithing seems pretty reasonable as does the
fast offerings model for welfare. But people have to believe and want to contribute first). Therefore, any tax system based on opportunity or success will be inherently questionable. It seems, then, that taxes based on success (defined as material wealth in this conversation) is the more logical because it is quantifiable while opportunity is not.

Besides, Gates' billions are not necessarily a direct result of all his hard work, etc. Much of it is due to simple chance/fortune/luck (choose your terminology). I know of many smart, ambitious, hardworking individuals who are not as materially successful as the far less deserving--based on credentials alone. Too many variables are in play.

To take the discussion to the extreme, we can compare it to the atonement. We can work as hard as we want, but without at least some level of good luck, our efforts may not lead to incredible material wealth--even if that is our goal. With salvation, we can work as hard as possible, but qualifying on our own merits will ever elude us. Something has to be there to make up the difference. In the case of the atonement, the difference maker is Christ. In the case of material wealth, the difference maker is luck/fortune/being in the right place at the right time. Many would say that God plays a hand in that as well.

In short, regardless of what we do in our lives, there will always be factors at play that we cannot control. We do all that we can to get to where we want to be and trust to God for the rest.


Ecclesiastes 9:11

I returned, and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favour to men of skill; but time and chance happeneth to them all.


Don't get me wrong. I believe we get where our efforts take us, but I don't believe that everything a person receives is strictly due to him/herself. There are larger factors at work, and I hope Bill Gates is not too self-congratulatory with his wealth. He has probably worked harder for it than most people in the world would have worked for it, but I'm sure he's not the smartest/hardest working/most capable person going.

Time and chance were on his side in the case of material success. In the case of salvation, "it is by grace that we are saved after all we can do."

Jesse



Jesse,

I knew what you meant.

I read this last night in Newsweek and figured I would pass it along to the two of you. Samuelson frames our recent conversation quite well. Enjoy.

MG

The Rich and Everyone Else
Robert J. Samuelson

IT'S TRUE that the wealthy would receive a huge part of President George W. Bush's proposed tax cut. The top 1 percent would get more than a quarter of the cuts. But it's also true that overtaxing the rich poses dangers. It encourages self-serving and cynical politics. Government is tempted to tax the few and distribute to the many without considering the long-term consequences.
Here are the facts of today's system:

(1) Federal taxes come increasingly from the rich and upper middle class. In 2001, the richest 1 percent of taxpayers (incomes starting at $373,000) paid 25 percent of all taxes, including income and payroll taxes, says the Center for Tax Justice, a liberal group. The share paid by the richest 20 percent (incomes starting at $72,000) was 68 percent. In 1979, these figures were 16 percent and 57 percent. The concentration of taxes mainly reflects a concentration of income. In 2001, the richest 1 percent received 18 percent of income, up from 9 percent in 1979; the share of the richest fifth went from 46 percent to 58 percent. But tax cuts have also favored people in lower brackets. In 2001, the poorest 60 percent of Americans (incomes up to $44,000) paid 14 percent of taxes, down from 22 percent in 1979.

(2) Federal spending has shifted from defense to payments for individuals (Social Security, unemployment insurance, food stamps, Medicare). In 1955, military spending represented 62 percent of the federal budget. Payments for individuals were 21 percent. By 2001, the figures were reversed: defense, 17 percent; payments for individuals, 61 percent.

(3) Not surprisingly, these transfers go heavily to the bottom half of the income spectrum. In 2001, about 60 percent of federal cash payments (retirement, disability, unemployment benefits) went to the poorest 40 percent of Americans, reports the Census Bureau. Noncash programs (food stamps, Medicaid, Medicare, public housing) are similarly skewed. Conventional wisdom holds that the wealthy rule politics through hefty campaign contributions. Not so. If the rich are so powerful, why are they taxed so heavily? Even after Bush's tax cuts, they would still pay most of the taxes. In our democracy, votes count for more--much more--than dollars. Rightly so.

This raises another question: if the rich are so outnumbered, why aren't they taxed even more? The common answer is that Americans don't loathe the rich. People want to become wealthy. They don't want success punished. Wealth is--if legally and ethically earned--seen as a reward for hard work, talent or risk-taking. True. But again, votes count. These values resonate politically because the rich and near-rich vote more than everyone else. In 2000, half of those with incomes under $35,000 voted compared with three quarters of those with incomes exceeding $75,000. The electorate has an upper-middle-class bias.

There is now a consensus that the rich should pay more than the poor and middle class?but not a consensus on how much more. In 1906, Teddy Roosevelt said: "The man of great wealth owes a peculiar obligation to the State, because he derives special advantage from the mere existence of
government." This is the classic case for the progressive income tax?higher rates on higher incomes. Government promotes social stability and protects property; it enables the rich to get rich. Why should the rich get tax relief, ask Bush's critics, when their higher taxes mainly reflect higher incomes? Government should narrow the gap between rich and poor. (There's also an issue of timing. In the boom, some of the rich profited unethically.) Here are competing ideals of tax justice. One says that taxes shouldn't penalize success; the other says people should pay their "fair"
share. The argument is endless, because there is no obvious dividing line between a legitimate levy and confiscation. If redistribution is the government's main purpose, then none of this is a problem. The rich should pay more; the poor should receive more; tax breaks?if affordable?should go to the middle of the middle class. But there is a problem if (as this writer worries) too much redistribution
becomes politically corrupting and economically destructive. Under the guise of "meeting national needs," politics becomes an exercise in buying votes because burdens (mainly taxes) fall narrowly and benefits are spread widely. The economic danger is suffocation under an excess of taxes,
government subsidies and welfare programs. It's insidious because it creeps up slowly over time. Think Europe.

The case for spreading the tax burden more evenly is not to reward or punish. It is to restore political discipline. Politicians and citizens ought to weigh the promised gains of government against the costs. They won't if the direct costs are borne only by a tiny minority. No one then needs to make hard choices. It becomes easy to forget that taxes are the price of government. If people want more (less) of one, they ought to want more (less) of the other. This is an exacting standard that politicians of both parties would gladly evade.

------------------------------

When I wrote "The poverty level here is much higher than it is there," I meant, of course, that the demarkation line for determining who is living in poverty is much higher here than it is there.

Sorry for the seemingly inane statement.

Jesse




Mike,

I actually remember reading an article or hearing on NPR or gaining the info through some other medium about the small business loans in developing countries. I had forgotten all about it until you mentioned it. I am happy to be proved at least anecdotally wrong that the material rewards are not
available. It's a very encouraging sign, and the prospect of bringing that type of program to urban America is tantalizing if somewhat dubious. In the US, many of the folks in Urbania (?) receive the oft-discussed governmental support. I hazard a guess that similar individuals in developing countries do not receive the same level of support from their government. The poverty level here
is much higher than it is there. I suppose I'm saying that I worry about the number of individuals in Urbania who will go for the program when there is a perpetual "free lunch" available. I'm sure my wording there is extremely unfair, but you get the idea.

Does that mean I think the idea is no good? No. I hope there are many, many people out there who are able to take the opportunity and run with it. I just wonder...

So, I guess I also will be watching the proceedings with interest.

Jesse



Jesse,

Your friend actually copied me on his original email back to you (I was honored to be looped in with such company and have done him the service of copying him on this).

Cost of doing business? Sounds logical... though the point of the "10 guys go out to dinner" anecdote was to highlight that, in our society, the cost of doing business is a function of success, not opportunity. Should the cost of doing business for Gates be higher (on a percentage basis)
than, say, my own cost of doing business? If his tax rate is higher than my own, isn't he essentially being penalized for being smarter / more aggressive / (choose your own adjective) than I am? (That is vintage Rand, by the way).

If we were taxed as a function of opportunity, on the other hand, Bill Gates and I might be looking at paying the same flat tax rate (enter Steve Forbes, stage left). I say that we "might" be taxed at the same rate because taxing citizens as a function of opportunity must surely imply that we all have similar opportunities, similar brain power, similar access to education, etc.. And there's the rub, in its most basic, boiled down, foundational form. I don't know anyone that espouses to the naive
notion that we all come into this world facing the same odds, though many conservatives appear to hold fast to the "pull yourself up by the boot straps" philosophy that does not recognize the plight of the "underpriveleged." And around and around we go...

You made an interesting comment in your last email... "Unfortunately, there's precious little material reward in teaching others to fish..." That got me thinking... I wonder if that's true. Two examples
that call that assumption into question:

1) I can't recall specific data off the top of my head, but there are financial services entities out there in the world that specialize in micro-loans to small businesses in developing nations (it's somewhat
reminiscent of the Perpetual Education Fund, though its focused on commercial loans and operates as a for-profit company). The default rate is shockingly low, the money-lenders are profitable, and small businesses in third world countries are beginning to prosper (slowly). Could that
idea be transplanted to, say, urban communities in the U.S.?

2) That brings me to example #2. Chris Gabrielli is a Boston venture-capitalist whose name you might recognize: he was Shannon O'Brien's running mate in the gubernatorial election here in MA (and now,consequently, a hated foe of Mr. Mitt Romney). Anyway, Chris is doing something really interesting now... he's just started a venture capital firm focused exclusively on early stage companies that promise to employ and educate urban workers. The implicit goal, of course, is to get people off of welfare and into paying, productive jobs. I don't know if the idea has legs, but this is a guy trying to make money off of teaching people to fish... I'll be watching closely.

Food for thought.

MG



So, a person not capable of learning to fish? Definitely state/independent philanthropic support. But, where is the line drawn between incapapble, unwilling and slow learner? I guess that becomes the real issue. And so I suppose we err on the side of conservatism (meaning we completely support a lot of people who fall into the unwilling category, so as to avoid cutting off the incapable). Some might think we should err even more to the side of conservatism, others might think we should cut back on our support.

But the issue for me still remains that we do too little to teach people to fish (those who can learn, anyway). Instead, we've mostly decided to lump the whole into the category of incapable of learning.

Unfortunately, there's precious little material reward in teaching others to fish--whether through state sponsored programs or your own individual efforts. There's limitless satisfaction and pleasure from a personal standpoint, but that doesn't put bread on the table for your own family.

Sticky, sticky stuff.

Jesse




Jesse,

On the economic policy front: You made mention of the old "teach a man to fish" aphorism. It reminded me of a conversation I had recently with a friend of mine here in Boston. We were discussing a topic similar to this one and we reached a point in our conversation where he thought it was necessary to whip that out and share it with me as if I had never heard it before (high UIC rating on that one). At any rate, I left him with the following question: "Are there people in this world that, for one reason or another, cannot learn to fish?" Of course, there are. And then the question becomes, as you and I have pointed out, who takes care of them? And how?

And around and around we go... I just thought carrying the "teach a man to fish" analogy one step further was interesting way to highlight the issue.

MG



Mike,

Your statement below is exactly where I see the issue:

On the flip side, is it really government we want taking care of those who cannot take care of themselves? Who else will? Who else can?

I am not a heartless conservative. I believe the scriptures, and I believe it is up to us to "lift up the hands that hang down." Unfortunately, that is not easy to do. I try to give a fair amount of money to the Church, and I know they do good with it, but beyond that--helping the poor becomes extremely
tough.

It's the whole issue of wanting to teach someone to fish rather than giving that person a fish. How does a person do that? I don't think being a financial analyst at Sun is the best way. However, being a financial analyst at Sun does give me some of the material means to help in a "third-party" type of
way. But providing up-front face time is difficult, indeed.

I don't like the government dictating who gets help and how much, but I'm not sure there is a better way at this point. If we could put the prophet and the might of the Church (and God) behind it, that would certainly be the best solution. But I'm supposing that's not going to happen anytime soon
(though not even the angels in heaven know when the Millennium will arrive). So for now, I try to do what I can in my corner of the world, and settle for getting irritated when the government dictates to me that I should be doing more or less.

I know that's not offering a solution, but it's only because I don't have one.

Jesse



Jesse,

Essentially, that is the premise of Ayn Rand's Atlas Shrugged (which I've just learned from your latest email that you've ordered). What if the proverbial 10th man decided to not show up for dinner? What would the world look like? How long would our economic system persist? How
long would be survive? The answer, of course, is not very long. And Rand proceeds to take simple economics and turn it into a 1200 page moral manifesto about the power of man's mind and his right to all the bounty of his creations.

Back to the tax story... Compelling stuff, actually. The Wall Street Journal's editorial page makes that argument on a weekly basis (literally... they have at least one editorial every week that makes
mention of flaws of the progressive tax system... it's like clockwork).

As a quasi-liberal, I'm left asking the eternal economic questions: What is it that makes the poor... poor? Are they lazy? Some probably are.

But might there be inherent flaws in the system that prevent some people from ever being able to achieve that which they are capable of? Does the progressive tax system penalize the rich? Or does it provide for those who cannot provide for themselves? On the flip side, is it really government we want taking care of those who cannot take care of themselves? Who else will? Who else can?

I'm still trying to sort all of this out myself.... I wonder if its possible, sometimes. Bottom line (for now): I recognize the flaws of the current system.... but all I see in the anecdote below is criticism.

What I'd like to hear is proposals for alternate solutions.


MG



All,

I'm asking for your forgiveness in advance, but I'm in a terribly mischievous mood today. You all are likely too busy to respond anyway. I have no data to backup whether the info is correct, so I guess I'm somewhat irresponsible, but I found it an interesting way to look at the tax cuts other than the ways that are normally presented.

We must need to look at it both ways, because looking at it either way in isolation lends to the "lies, damned lies and statistics..." rathole.

Anyway, good times!

Jesse

------------- Begin Forwarded Message -------------

The Income Tax Story:

Let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for dinner.

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 $7;
The eighth $12;
The ninth $18.
The tenth man-the richest-would pay $59.

That's what they decided to do. The ten men ate dinner 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 daily meal by $20." So now dinner for the ten only cost $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-the paying customers?

How could they divvy up the $20 windfall so that everyone would get his "fair share?"

The six men 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 end up being PAID to eat their meal.

So the restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of his earlier $59.

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. "But he got $7!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got seven times more than me!"

"That's true!" shouted the seventh man.

"Why should he get $7 back when I got only $2? 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 nine men surrounded the tenth and beat him up.

The next night he 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 were $52 short!

And that, is how the 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 at the table anymore.