November 18, 2012
A Nation Divided
Two Americas? The idea is nothing new. We learn that almost 23% of Americans are open to the idea of seceding given the recent election results. And we've heard reports that 37 Chicago precincts, 59 Philadelphia precincts and multiple others in urban areas gave President Obama 99% support--some with 0 votes for Romney.*
Mark Hendrickson of Forbes notes that the largest divide is between city-dwellers and the rest of America:
Basically, the urban metropolises are Democratic blue and the vast expanse of most of the rest of the country is overwhelmingly red. If presidents were elected by acreage rather than by head count, Republicans would win national elections by landslides.Hendrickson puts some stock in the so-called "Curley Effect", named after the former Boston Mayor. Basically, it has two parts: first, that politicians provide enough incentives to their own voters to ensure continued support; second provide enough disincentives such that their political opponents decide to move out, thereby increasing said politicians vote share, etc. (Seems to be working in RI, too).Look at it another way: take Philly out of Pennsylvania, the Big Apple out of New York, the Motor City out of Michigan, the Windy City out of Illinois, Cleveland out of Ohio, Milwaukee out of Wisconsin, St. Louis out of Missouri, etc., and a lot of blue states would instantly be red. What explains this pronounced and hugely significant partisan divide between urban and nonurban areas?
Yet, while that may explain continuing support for Democrats amongst those receiving government assistance and public unions, Hendrickson asks, "Why do affluent, white-collar, highly educated citizens in these cities tend to be liberal and vote Democratic?" In a word, insularity:
[P]eople who live in cities are relatively insulated from how difficult and challenging it can be to produce the food, energy, equipment, devices, etc., that comprise the affluence that urbanites enjoy. In their urban cocoons, city-dwellers take for granted the abundance and availability of the economic goods that they consume. For instance, many well-to-do, educated urbanites see no downside to supporting stricter regulations and higher taxes on energy producers, because to them, energy is something that is always there at the flip of a switch (except during the occasional hurricane, as some New Yorkers recently discovered). Life in the city for affluent Americans creates the illusion that all they have to do is demand something and—presto!—it will be there when they want it.Yes, we see it in urbanite political ideas and how they view such things as the estate tax:Affluent denizens of our metropolises see no inconsistency in supporting the Democratic jihad against “greedy corporations” and “the rich” while also expecting their every whim to be supplied, often by those same corporations and successful entrepreneurs. This is because they are removed from some of the harsher daily realities of life that confront those who are on the front lines of mankind’s ongoing economic struggle. They have forgotten that mankind’s natural state is poverty and that strenuous, heroic efforts are required to produce the astounding affluence and abundant paraphernalia of our modern, affluent lifestyles. To use Marxian terminology, urbanites have become alienated from economic reality.
Rancher Kevin Kester works dawn to dusk, drives a 12-year-old pick-up truck and earns less than a typical bureaucrat in Washington D.C., yet the federal government considers him rich enough to pay the estate tax -- also known as the "death tax."They think they're going after Paris Hilton, but it is actually Old MacDonald and his kids--land rich and cash poor--who bear the brunt of the estate tax. But they know all about Paris Hilton (and so do the suburban and urban youth voters, incidentally) and don't know much about farmers--unless of course they're buying organic at the Whole Foods. It's all about personal experience and it won't change any time soon.And with that tax set to soar at the beginning of 2013 without some kind of intervention from Congress, farmers and ranchers like Kester are waiting anxiously.
"There is no way financially my kids can pay what the IRS is going to demand from them nine months after death and keep this ranch intact for their generation and future generations," said Kester, of the Bear Valley Ranch in Central California.
Two decades ago, Kester paid the IRS $2 million when he inherited a 22,000-acre cattle ranch from his grandfather. Come January, the tax burden on his children will be more than $13 million.
For supporters of a high estate tax, which is imposed on somebody's estate after death, Kester is the kind of person they rarely mention. He doesn't own a mansion. He's not the CEO of a multi-national. But because of his line of work, he owns a lot of property that would be subject to a lot of tax....
"The idea behind the estate tax is to prevent the very wealthy among us from accumulating vast fortunes that they can pass along to the next generation," said Patrick Lester, director of Federal Fiscal Policy with the progressive think tank -- OMB Watch. "The poster child for the estate tax is Paris Hilton -- the celebrity and hotel heiress. That's who this is targeted at, not ordinary Americans."
But according to the American Farm Bureau, up to 97 percent of American farms and ranches will be subject to an estate tax where the exemption is set at $1 million. At that rate, the federal government will pocket $40 billion in 2013 and up to $86 billion in 2021. That contrasts with just $12 billion this year.
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* Check out these results from Cuyhoga County in Ohio, for instance. There do seem to be some statistical anomalies amongst those results.
I truly think that Texas and all states west of the Mississippi (with the exception of Hawaii and the western halves of CA, WA, and OR) will someday link up with Alaska and western Canada to form a right-wing country which, unencumbered by the US Constitution will have the power to deal with anchor babies, school choice, baby killing, welfare, public employee unions and SOOOO much more.
Call it New Columbia-not to be confused with the cocaine ColOmbia.
and the military of New Columbia will have exactly ONE mission-guard the f****** borders.
Posted by: Tommy Cranston at November 18, 2012 12:41 PMPresident Barack Obama beat Mitt Scissorhands RomneyCare in 8 of the nation's 10 wealthiest counties
The job creators have spoken
Posted by: Sammy in Arizona at November 18, 2012 3:41 PMThis Old McDonald vs. Paris Hilton thing should be easy to determine. If the money has been in a business for a period of time (at least 10 years?) before the passing, do something more reasonable. If it's cash, sure, tax it.
If the Paris Hilton types are going to get $500M cash, tax it. If she's going to get the Hilton hotels, who cares? Treat that the same way as the farms. It's a business, the cash is tied up in the business, so leave it there. If she wants to sell the Hilton hotels for cash, then collect all the sales and capital gains taxes. The same as the farmer if his kids end up selling the farm. If or when they sell, then collect the sales and capital gains taxes.
But at the same time, we don't want someone dodging this stuff by multi-millionaires getting sick, putting all their cash into a business holding so it bypasses the estate tax. If it's a family business, like the farm or Hilton hotels, let it pass.
Posted by: Patrick at November 18, 2012 3:59 PMThe GOP is the food stamp party, 70 percent of counties with the fastest growth in food-stamp aid during the last four years vote for the Republican presidential candidate every 4 years.
The 10 highest tax-producing states have all been "blue states" over the last few presidential elections. Of the 10 lowest, eight are "red states
Some Americans, would be happy to say sayonara to the red states that want to secede A burden would be off them and U.S. Treasury
"There is no way financially my kids can pay what the IRS is going to demand from them nine months after death and keep this ranch intact for their generation and future generations,"
Sorry, pal. Harry Reed, David Cicilline, Nancy Pelosi and the president consider you filthy rich. So you have to pay (even if you are in actuality poor).
By the way, most of these politicians presumably support preservation of open space. How ironic that their tax policy is going to destroy much of it.
Posted by: Monique at November 18, 2012 8:12 PM"Two Americas? The idea is nothing new."
True, but it did not go down well. While we persist in calling it the Civil War, or the War Between the States, it was neither. The states which had seceded were a separate county. It was a war of conquest.
"Forbes notes that the largest divide is between city-dwellers and the rest of America" True, on Election Night I took the map of Florida down to County level. The entire state was red except for Broward County, Dade County and a small county in the panhandle.
Futurists have long predicted an America divided along racial lines, the mid west white, the east coast black and the west coast hispanic. Prior to our curent economic crisis, things were working that way. I think population shifts have stalled.
Patrick is right on the money. Don't toss the whole estate tax because 'there are cash-poor people with lots of property' mixed in with the trust-funders. Come up with a formula that takes certain kinds of situations like this into account. It's that easy.
As for the rest of the stuff... My blood is boiling.
"Oh how nice America would be if it wasn't for those pesky city slickers ruining it!"
No problem. We'll just raze things until we hit the same density of the suburbs. We'll close the elderly towers, the urban schools, the veterans' homes, the homeless shelters, soup kitchens, methadone clinics, hospitals, mental institutions, etc. and ship all those people out to the Tivertons of the world.
While you castigate the urban folks for 'just expecting things to be there at the flip of a switch', just by the nature of living in higher density, we use a LOT less of that stuff (per capita) than you do out in the 'burbs. We're the ones being responsible. We pay taxes where we work. We don't scurry-off to a nearby bucolic hamlet after 5PM with a paycheck from work in the city and declare that that 'the city is on its own' when it comes to paying for all the crap that you escape from.
Also, you have to consider that in the city, 'the government' is always big. We live back to back, with the city taking up 20-30% of the total real estate (in roads and sidewalks, mostly). I call the police a few times a year for various reasons. Things catch on fire somewhat frequently and need to be extinguished. There are schools every few blocks instead of one or two in the town (because we have higher density). There's no pretending that government doesn't exist. The Republican platform seems almost entirely centered on keeping suburban voters 'insulated' from the realities of the world. Basically, it's clear that 'getting government out of the way' in a place like Pawtucket is not going to lead to anything good, just more deterioration.
I'm not saying the Dems do a good job, but the Republicans' ideas would destroy quality of life in the cities -even if they work-. Crime is down to 1970s levels because of food stamps, heating assistance, methadone clinics, abortion, and truancy policing. You might feel safe at home with a gun, but I feel safe knowing that my neighbors aren't facing the kinds of tough choices that inspire them to kick my door in and sell my television.
And the idea that all the urban evils will go away if the economy was gangbusters in some low-tax small-government wonderland... Well let's just say that no matter how good the economy is, there are still addicts and mentally ill folks walking down my street all day, and they aren't exactly looking for work.
Posted by: mangeek at November 19, 2012 11:10 AMMangeek,
I wonder if you'd mind providing some cursory support for some of your assertions. Significantly:
* That city dwellers "use a LOT less of that stuff (per capita) than you do out in the 'burbs." (First, obviously, you'll have to define "stuff.")
* How does that reconcile with your simultaneous assertion that "in the city, 'the government' is always big"? (Also interesting to note your reliance on per-capita measures at the same time that you mention density as a reason for needing closer schools.)
* If killing unborn children is a valid anti-poverty and anti-crime method, how about mandatory abortions for drug addicts and babies screened for undesirable qualities like mental problems?
I'm also interested in your thoughts about why Pawtucket can't decide to keep government in the way, while the suburbs and state get it out of the way. Is it because you pine after tax revenue from the suburbs? Is it a money grab to which you which you feel entitled because you see city life as a charitable decision of itself?
I'd also be curious about your spending some time on the assertion that a booming economy wouldn't keep the addicts and mentally unstable off your street. Do food stamps have some calming power on these populations? Wouldn't a wealthier society produce other avenues for helping such people? And even with government involvement, wouldn't a booming economy make it easier to extract taxes to pay for these very small groups of people with very serious problems?
Posted by: Justin Katz at November 19, 2012 4:36 PMAnd by the way (this one's for Patrick, too), on what grounds is it self-evidently moral to tax an inheritance just because it's cash? Why shouldn't a family be permitted to elevate itself over time? Shouldn't we be encouraging that sort of trans-generational investment?
Perhaps of more immediate importance: What makes you think that the government will put that found money to better use than the people who inherit it? After all, they have to make their way somehow; why not let them invest it, if that's what they do, or turn it to a more-productive use?
Posted by: Justin Katz at November 19, 2012 4:45 PM"* That city dwellers "use a LOT less of that stuff (per capita) than you do out in the 'burbs." (First, obviously, you'll have to define "stuff.")"
www.eia.gov/emeu/rtecs/nhts_survey/2001/tablefiles/page_a02.html
and
www.eia.gov/emeu/recs/recs2005/c&e/summary/pdf/tableus1part1.pdf
It's a fact: People in cities use LESS energy in all forms than those in any other kind of area. They also pollute less. They obviously take up less space and encroach less on places that ought to be left alone.
"* How does that reconcile with your simultaneous assertion that "in the city, 'the government' is always big"? (Also interesting to note your reliance on per-capita measures at the same time that you mention density as a reason for needing closer schools.)"
I don't see how any of these things need to be 'reconciled'. What I'm saying is that in the city, one gets a sense that they are living on top of a grid that is owned and operated by 'government'. Government roads, government sidewalks, government utilities flowing above and below the streets, government workers coming on to your property to trim trees that overhang the street, government schools in every neighborhood, government vehicles rolling by on the way to crimes, injured people, and fires.
"* If killing unborn children is a valid anti-poverty and anti-crime method, how about mandatory abortions for drug addicts and babies screened for undesirable qualities like mental problems?"
I think that's way too far of a leap. It -is- possible to support the ideas of light-touch economic planning while also putting personal liberties first. I would never say "you must get an abortion", but I might support the idea of saying "Well, you're mentally disabled, never worked, have an IQ of 80, and your last three kids were taken away by the state... You can have a free abortion and birth control, but you cannot get additional cash assistance, family housing, or food aid if you choose to keep the kid". There -is- a difference between that and 'mandated abortions', and it jives with fiscal conservatism.
Posted by: mangeek at November 20, 2012 10:07 AM"What makes you think that the government will put that found money to better use than the people who inherit it?"
You misunderstand my intention...
The point isn't to 'tax the rich' or 'tax the dead', it's to admit that governance costs money, and then determine what types of transactions can be taxed in order to provide enough of it.
If you need $1M and your choices are to tax 1,000 working people $1,000 or to tax $1M from the $5M estate that's transferring from a dead person to a person who will never have to work... Then the choice is clear to me, and the economic harm of the latter is probably less than the former.
Posted by: mangeek at November 20, 2012 10:14 AM"Crime is down to 1970s levels because of food stamps, heating assistance, methadone clinics, abortion, and truancy policing. "
Mangeek really? Record food stamp use (and fraud) is calming the masses? Methinks the suburban people are contributing to the temporary anesthetic. All these other govt. programs, drugs, baby killings, stopgaps,etc. are paid for by people like me (working taxpayer). They will work until they run out. Kind of like taking Aleve for a broken leg.
Posted by: ANTHONY at November 20, 2012 11:38 PM