Taking it to the limit

Here and abroad, governments frighteningly test what citizens can stand

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A robber steals your money. A government taxes it.

The effect is the same. It’s gone.

Of course, in the case of taxation, you hope something good comes of it. Taxing is a necessary evil that produces communal good – roads, sewers, the protection of police and courts, and more.

In addition, taxation is a societal contract: In most cases, you are agreeing to it.

But there are limits to everything, and when you reach the limits of taxation, society’s contract frays.

Eurozone leaders, for example, recently decided to bail out Cyprus in part by requiring the island nation to tax bank accounts there up to 9.9 percent.

A man walks into a bank and pulls out a gun and demands money. Another man walks into a bank and pulls out a government order to hand over money. The effect is the same.

Well, except for the amount of fear they instill. In the case of the robber, employees and visitors in that bank are temporarily frightened. In the case of government taxation of bank accounts, the entirety of Cyprus is rightly afraid, and a tidal wave of fear is possible across various nations in the eurozone.

If their leaders can confiscate bank customers’ money in Cyprus, where can’t they take it?

It also makes you wonder if such government-approved larceny could spread beyond Europe.

Conservatives here, for instance, worry that a voracious government might, like the eurozone, eye the easy money in our 401(k) retirement funds. Sounds maybe a little paranoid – but ask the folks in Cyprus if it is.

“Many in Washington,” Investors Business Daily wrote in November, “see our investment accounts not as the expressions of well-planned, disciplined decisions but as untapped reservoirs of wealth they can drain to fix the problems that they caused.”

A starving animal will look for food anywhere.

Hopefully, even America’s far-left has its limits. Even rabid liberal commentator Bill Maher – who once wrote that “The next rich person who publicly complains about being vilified by the Obama administration (should) be publicly vilified by the Obama administration” – may have seen the light. Complaining about taxes on the wealthy, particularly in California, Maher recently changed his tune:

“You know what? Rich people ... actually do pay the freight in this country. ... I just saw these statistics. I mean, (top earners pay) something like 70 percent (of federal income taxes). And here in California, I just want to say liberals – you could actually lose me. It’s outrageous what we’re paying – over 50 percent. I’m willing to pay my share, but yeah, it’s ridiculous.”

Well, one supposes it depends on whose Oxnard is being gored. Little by little, even liberals in California are waking up to the audacity of government confiscation of wealth.

We hope that awakening isn’t coming so late that Washington or other liberal strongholds will have already hatched plans to seize more of our money. They’ve already pilfered our Social Security savings.

We also hope the people of Cyprus make themselves a human firewall against the spread of naked confiscation of families’ savings – in time to protect the crackling dry and tender financial reeds on the continent.

Indeed, a run on banks forced Cyprus to close them at least until Thursday. Reuters also reported that analysts feared the attack on Cypriots’ savings “could spark contagion across peripheral regions with the potential for widespread outflows of deposits.

“‘If I were a saver, certainly in Spain or maybe Italy, I think I’d be looking askance at these measures and think this could yet happen to me,’” Reuters quoted one global economist as saying.

Have they just run up against the limit of what even civilized people will accept?

Comments (28) Add comment
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KSL
139473
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KSL 03/19/13 - 05:31 pm
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Burn, dah, rhetor

Any of you self employed or own businesses? Just curious.

burninater
9785
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burninater 03/19/13 - 05:46 pm
1
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When Pres Bush was talking

When Pres Bush was talking about privatizing a portion of SS in a way that the individual could have control over their own investments, there were people interviewed who said, "Oh, I don't want that. I don't want to have to think about what to do with my retirement money. It's best for the government to make those decision."
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I don't think that accurately reflects the misgivings about privatization. Social Security is an insurance program, not a retirement vehicle. That some seniors rely on SS for their primary source of income is a reflection of those individuals' abilities to save for retirement -- it does not make Social Security a retirement vehicle.

It is not the gov't fund management people care about, it's the income insurance. Most people actively planning for retirement save and invest far more privately than they contribute to SS. They plan on assumed returns of private investment for a comfortable retirement. However, if those investments tank, as private funds have done before, the insurance aspect of SS operates. They may not be retiring with the income they planned on, but at least they're not eating dented cans of dog food.

It is the concern that SS woud be REPLACED by private investment that people are worried about, as the guaranteed minimum income of an insurance-style program would disappear. That being said, the media did a disservice by implying that the Bush partial-privatization was an attempt to dismantle SS, as it was really an exceptionally modest reform.

burninater
9785
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burninater 03/19/13 - 06:07 pm
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Any of you self employed or

Any of you self employed or own businesses? Just curious.
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KSL, I'm a consultant to both private sector and public sector clients, contracted primarily to a private multinational consortium. I am only paid for billable time, and I finance my healthcare individually. My contract rate includes payment of the employer share of payroll taxes. The employed/self-employed line is a bit blurred in my case.

KSL
139473
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KSL 03/19/13 - 08:14 pm
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burn, good for you. This comment is for you

Then you know exactly where my husband and I come from.

I wonder how we arrived at differing opinions on things. John Randolph Harrison Cain and I had numerous email exchanges discussing why we two of similar age, environment, etc. arrived at different philosophies.

It is a subject that has always fascinated me. My parents taught us values, but they never tried to influence us politically. I don't think they talked about how they were going to vote with each other.

KSL
139473
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KSL 03/19/13 - 08:17 pm
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And Burn

Thanks for your answer to my question. You have my respect.

Young Fred
19328
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Young Fred 03/19/13 - 08:19 pm
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“It is the concern that SS

“It is the concern that SS woud be REPLACED by private investment that people are worried about, as the guaranteed minimum income of an insurance-style program would disappear”

I suspect what you've been seeing is people worrying about the “insurance-style program” disappearing if they aren't given a little more control of their own taxes paid into the government supplemental retirement plan. A very real concern considering the fiscal malfeasance of our federal government in the last decade or so.

There is nothing wrong with allowing people to invest as they see fit within certain guidelines. Those guidelines being dictated by the taxpayers age, with some portion always being invested in “guaranteed returns”.

Of course if our “betters” continue on their current course, NOTHING will be “guaranteed.”

KSL
139473
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KSL 03/19/13 - 08:40 pm
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Young Fred, you are

Young Fred, you are absolutely right. I paid thousands of dollars more into SS as a wife knowing that I would not ever get benefit from it short of being disabled. Disability insurance would have been so much cheaper.

Darby
28257
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Darby 03/19/13 - 09:26 pm
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"That being said, the media....

did a disservice by implying that the Bush partial-privatization was an attempt to dismantle SS, as it was really an exceptionally modest reform."

Burn - Amazingly enough, I agree with you. However, no plan I have seen, by anyone, would be a complete elimination of SS, at least not in the foreseeable future. They've all been of the "toe in the water" variety, allowing people to move away from SS at their own pace, or often, not at all.

Irrespective of that, how could any plan be worse that the current system? If not for the Ponzi scheme tactics of the federal government, the system would have already crashed. It can't be propped up forever and its death is inevitable.

That's the reason that caring people have been desperately trying to come up with a workable solution while fighting fierce opposition of the type you mentioned above.

You can argue that some folks might fall through the cracks with a private system. On the other hand, it doesn't take Nostradamus to tell us for certain that if we keep our heads buried in the sand, even more will lose it all under the current system.

Either way, Darwin will have the last laugh.

Young Fred
19328
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Young Fred 03/19/13 - 09:49 pm
2
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Darby - “Either way, Darwin

Darby -

“Either way, Darwin will have the last laugh.”
One would be hard pressed to make a more prophetic statement!

Young Fred
19328
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Young Fred 03/19/13 - 09:51 pm
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Rely on your “betters” to

Rely on your “betters” to make your decisions, or, rely on yourself.

It's weird, I feel for those that have total faith in a statist government that views them as a number, while feeling contempt at the same time.

I wish hardship on nobody, but come on, if you can't read the writing on the wall, and you rely on someone else to care for you, aren't you just assigning responsibility? Aren't you part of the problem?

Sad, sad, sad, that our society has “pushed” this idea that big brother will provide. They may provide for a while, but the “house of cards built on sand” will crash, it's just a matter of when.

chascushman
6653
Points
chascushman 03/20/13 - 07:56 am
3
1
“Once again, some elitist
Unpublished

“Once again, some elitist government agency shows that it thinks the American people are stupid.”
After the results from the last election why would they not?

dahreese
4858
Points
dahreese 03/20/13 - 01:06 pm
0
0
The idea to allow individuals
Unpublished

The idea to allow individuals to invest up to 2% of their social security contributions with Wall Street was/is nothing but a scam to get fresh cash for Wall Street that Wall Street could/can not get from banks for high risk investments in foreign countries, not this country.

If those investments were so safe, banks would be more than willing to lend money to Wall Street.

2% from one individual doesn't sound like much, and it isn't except over a long period of time of doing so.

Still, 2% isn't going to make it worth the individual's investment over the long haul.

At least one of you who posts regularly on here, claims to work for government in law enforcement and you should be aware (but I doubt that you are) that under your current governor (Deal) laws were passed to allow the state government to take some of your investment money away from conservative investments and invest it in high risk investments (Venture Capital), which hasn't made any real money in over twelve years.

And if that doesn't pay off, it's you/your retirement that will be the loser, not the state legislature members who voted for this thing.

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