Tuesday, February 8, 2011

Grandpa's Coins

When I was five years old I thought I understood coins and I was convinced that Grandpa did not. He once gave my sister two dimes and a nickel, and to be fair, he gave me a quarter. My protest, as one might expect, was immediate.
Rather than admit to the crooked transaction, he made up a story about how it was the same amount of money and I was not cheated out of my implied fair share. I am a little embarrassed to admit it, but the little boy I was believed him on faith, despite the troubling coin count, and I never questioned it again until yesterday. Because of my conniving Grandpa, I have misunderstood coins for decades.
Yesterday’s breakthrough in my understanding came in the form of new conservative connection. Conservatives are good to have around, as they understand all fiscal matters better than liberals, and even better than Grandpa, who solved simple puzzles of coinage, but never cracked more complex issues, like the tax code. Liberals like me think with compassion, forsaking reason. Our sense of fairness is skewed by our belief that people are entitled to republicans’ money, just because they need it. Conservatives realize that fairness is a question of equality, not who needs someone else’s stuff. I will call my conservative mentor Dooh Nibor, which is an alias I use to deny him the honorable mention that is his due.
As a liberal, the tax code confuses me. Mr. Nibor taught me that liberals like myself believe that 70% of a portion of a republican’s wealth should be purloined by the government through taxation. I had never articulated this idea, and because it is so non-intuitive, I didn’t even realize I championed it. When he put that way, it seemed quite an absurd revelation that embarrassed me to no end.
He also corrected my definitions of flat vs. progressive taxation. It would seem that some of us on the left think flat tax means that Larry David gets taxed 100.00 per paycheck and so do we impoverished liberals. Nope, not right. Flat tax means that everyone gets taxed 10 percent, for example. A progressive tax means that Larry David may get taxed 10.1 percent on a portion of his earnings while I am only taxed 10 percent on all of mine, since I do not earn the portion that would be taxed higher. As you can see, this is quite unfair. The injustice is hidden from the liberal by his misunderstanding of the terms.
He not only corrected my definition of flat tax, but he also explained that I am mistaken about my idea that some of Larry David’s income should be taxed at a higher percentage than I and my impoverished liberal band of idiots have to pay. I didn’t really grasp what a flat tax was and I also disagreed with what it really is. I am becoming a fiscal conservative precisely to avoid this lack of clarity in my thinking.
Mr. Nibor explained that just taxation, which means flat taxation, does not have to be controversial. It is the only fair system and the controversy would end if liberals would stop creating it by disagreeing with Mr. Nibor.
Dooh Nibor asked a very astute question: “when did affordability become a measure of fairness?” The question is proof of his position that it is not the tax burden that should be distributed equally, but the tax itself. I think in an effort to make me look foolish, he failed to recant his previous argument in support of flat taxation, meaning everyone pays 10 percent, which means that the wealthy pay more, which he just implied was unfair. He well knew that this approach would further befuddle my little mind, and yet, he used it anyway.
Like Grandpa, Mr. Nibor clearly understands the basic principles of equality. I and my sister did not shop when we were five years old. We just liked money. We played with it. We collected it. I don’t remember what happened to our coins, but the coins were the thing that mattered to us, not what we could buy with them. We had the same philosophy that Mr. Nibor has. Poor folk like Grandpa, however, use currency only to acquire something else. They have no inherent use for dollars, 6.1 x 2.6 inch paper with ones printed on them, or for coins.
To explain this point, I will use the example of a single mother working as a waitress who has a young boy to support. Let us assume she earns 400.00 per week and uses all of it on necessities. It could be that she suddenly has a large payment due. I will use tax as my example of the payment, since we are talking about taxes. Because she has to pay her taxes, perhaps she will be unable to buy the beans she intended to feed her son on Friday. In other words, she does not give up coins to pay her taxes. With or without the tax invoice, she would have ended up with no coins. She gives up beans.
If you are a liberal, and so instinctively confused in fiscal matters, I know what you are thinking: “Why would the government tax her in beans?” Liberals don’t understand transactions. In tax transactions, there is a payer and a recipient. So far as she knows, the government actually receives 6.1 x 2.6 inch pieces of paper with ones printed on them. It is just paper, but can serve as currency for the purchase of beans. Unlike the five year old boy I was, the waitress has no affinity for coins or for paper currency. She wants beans because her son requires them. She forfeits his beans so the government can receive payment.
That the government deprives her of beans through taxation is observable. Look what happens when she does not pay her taxes. She still has no currency, but she does have beans. However, Mr. Nibor already has all the beans his children can eat. When the government takes a 6.1 x 2.6 inch paper with a one printed on it from him, he has one fewer pieces of such paper. The paper itself is as inherently useless to him as it was to the waitress, but he has need of nothing to exchange for it, so the paper itself is the thing the government denies him. The waitress pays taxes in the form of her son’s dinner and Mr. Nibor pays taxes in paper. Paper and beans are not the same thing, so they do not seem equal to the childish liberal observer.

The mistake in the liberal’s thinking is clear now that Mr. Nibor explained things. Previously, I thought if the task was for us to move a 500 pound rock, we should divide the work each person does based on his ability to do it. Mr. Nibor teaches that this perspective violates our constitutional concept of equality, and is akin to racism, in that it makes the same mistake in assuming inequality where none exists. Dividing contributions based on the ability to lift or based on the ability to pay is discriminatory. In reality, if there were two people tasked with moving the rock, one a 20 year old body builder and the other a frail 95 year old elderly woman, each should be required to lift 250 pounds. It takes a true socialist’s mind to blind itself to this obvious formula.
With flat taxes, the waitress and Mr. Nibor are technically taxed equal percentages at the moment the tax is levied; but in reality, what each has to give up in tax, is not equal. This fact can trick the liberal into thinking nonsense. If the waitress has to give the 20,000.00 per year she earns to the government and Mr. Nibor also gives 20,000.00, nothing could be more equal, as a simple calculation will reveal. Flat taxes based on percentages are supposed to solve any objection the waitress may have, as the generous republicans are now offering to pay even more than she pays; yet, she is still not satisfied because the same issue remains: her ten percent is far more valuable and needed than the ten percent Mr. Nibor pays.
Some liberals say the waitress gave up all she had and Mr. Nibor gave up relatively little. They lack basic math skills. Remember the value of the thing the citizen gives up in payment is irrelevant. It is the value of the thing the government receives as payment that matters. We defend the republican’s right to not pay more by showing that the government receives the same percentage whether it comes from the republican or the impoverished liberal. We cannot look at the value of the payment to Mr. Nibor vs. the value to the waitress, even though it is Mr. Nibor vs. the waitress’ rights we are discussing. If we think of things that way, it breaks an equation that is pivotal in our quest for the specific truth we seek.
Mr. Nibor informs me that my idea that those who “win life’s lottery” must pay their fair share is mistaken. Before he educated me, I would have foolishly considered that the winner of life’s muscle, the body builder, should also have to lift his fair share. That notion is equally silly. It is not Mr. Nibor’s fault granny is puny and poor and he should not be penalized for it. The question of who must bear the burden of taxation and rock-lifting is all about Mr. Nibor’s rights. Since when did granny’s deficiencies have anything to do with Mr. Nibor? She must carry 250 pounds of rock and pay her fair share in taxes, which is whatever percent Mr. Nibor feels he can spare.

I used to think that currency was worth nothing more than the value of the things you could buy with it. If you need 100.00 worth of medicine to save your life, your 100.00 is worth a human life. If Mr. Nibor needs 100.00 to buy a gourmet pizza, his 100.00 is worth an edible treat.  Before Mr. Nibor corrected my thinking, I actually believed that the waitress’ 20,000.00 was somehow more relevant since it would be traded for far more relevant things, than Mr. Nibor’s 20,000.00. My thinking was backwards. Never, never, never forget that it’s the value to the recipient of a payment, not the value to the payer, that determines its worth. We cannot say that both values are real and both should be considered because that unjustly penalizes long suffering republicans. It is only fair to ignore this mismatched perception and look only at the side of the transaction that we need to be equal: in both cases the government receives 20,000.00. Have we learned nothing from the civil rights movement?
Twenty thousand dollars paid is equal to twenty thousand dollars received, regardless of who pays it or how the recipient spends it. It is a simple concept for those indoctrinated with the core conservative values we all should have. For me it wasn’t easy. I keep returning to the mistake of my childhood when I invented a relationship between the value of something and the potential use of it. It is a false correlation.
My lying grandpa was not the scoundrel I perceived him to be. He did pay my sister three coins and me only one, and I still resent it, because the coins were toys we never intended to spend, so I ended up with only one toy to her three; but things have intrinsic value, regardless of how they could be used. A dollar is worth a dollar, no matter who gets it or where, no matter who spends it or how. A dollar given to a dolphin in the ocean is the same gift as a dollar given to a child, or a dollar a waitress was allowed to keep. It is confusing for a liberal, but as Mr. Nibor, Grandpa, and any dolphin will tell you, it is really quite simple and there is no need to for us to complicate the math with real life: a dollar is a dollar, ten percent is ten percent and two dimes and a nickel are the same thing as a quarter.