American Taxes 101 (an analogy)
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I though you would find the following interesting. How Taxes Work.... Keep in mind that 10% of the population pays ~69% of the taxes, ie: those "rich" people making over 92k per year (like a firefighter in Marin county). 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, and 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 (in tax language-- a tax cut). "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 $80.00. 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, but he, pointing 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. T
This reminds me of a cartoon I read once. (Not much of a fan of Tom Tomorrow, but...) http://www.salon.com/comics/tomo/2002/12/09/tomo/story.jpg[^] ------------------------------------------ "Isn't it funny how people say they'll never grow up to be their parents, then one day they look in the mirror and they're moving aircraft carriers into the Gulf region?" - The Onion
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And usually multiple times. A good rule of thumb is that any time money changes hands, it is taxed. Tim Smith I'm going to patent thought. I have yet to see any prior art.
Unless you are rich enough to pay someone to find the loopholes that help you avoid taxes The tigress is here :-D
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Richard Melton wrote: As a Marine I earned ~13k a year with free room and board (If you call frequenting sleeping bag and eating cold MRE room and board). As a voulenteer for AmeriCorps I earned about the same wihout the room and board. Now I earn six figures, and during everyone of those periods I never felt like the rich owed me anything. Although I wasn't in the armed forces I too started in the shit money and through hard work got it up to six figures. Then the arse fell out of the economy, I had no job but I still had dependant wife and 2 kids plus all the debts and expenses that go with them. Now after 13 months I have a job again though it only pays 52% of what I was on. My debt is now pretty much unsustainable on my income due to my extended unemployment after 15 years constant work. While I don't feel anyone owes me anything, come and talk to if your ever in my situation. Hard work ethics and I'll look after myself attiutudes aren't working. All the companies are either going bust, letting people go, looking for skill sets that don't exist in one person and in the case of shit shovelling jobs wanting experience and umpteen certificates to prove I can to it safely to government standards. Life isn't as rosey or easy as you and Stan (no I haven't seen him in this particular discussion yet) seem to think it is if only you want it. Michael Martin Australia mjm68@tpg.com.au "I personally love it because I can get as down and dirty as I want on the backend, while also being able to dabble with fun scripting and presentation games on the front end." - Chris Maunder 15/07/2002
You're not the only one. I lost a company to a lawsuit, a wife and what was left to a divorce, all at age 44, and had to start back a < 0. But I had a blast building the company, stayed friends with my ex, rebuilt my career, paid-off lawsuit settlements - blame no one but myself for the problems and keep going forward appreciating the past and enjoying each new morning. Mike
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Government is who you elected so that civil society can function smoothly. When there is a section of society that starves and have no home, they should not be dependent on the "charity" of others. In other words, humans decides that we deem life as precious; and is willing to chip in to make that better for all our fellow humans. Governments came in as a way to make society work by enforcing law and order, and providing a safety net. The taxation laws are what the society as a whole agrees to - to generate revenue for the causes. You do not believe that government should do welfare actions, and probably be left to non-governmental organizations. The problem with that is there is no accountability. I cannot tell a private organization that I am eligible according to teir norms and therefore, they *have* to aid me, and that they cannot deny me help. But, that accountability is possible in the case of the government, which is handling public funds. My article on a reference-counted smart pointer that supports polymorphic objects and raw pointers
One problem with your statement is that the current state of democracy in not very indicative of society. Our beauracracy tends to leave old laws in place without needed change and new laws become inane and inneffective. Our welfare system was created during the great depression at a time of great need, and has been managed to the point of collapse. The people who need help do not get it while others who are just lazy ruin the system. And even those who need help are not totally without blame, like a single mother with multiple kids, she need to take responsibility for her actions and stop having children. Many people who are wealthy would have no problem giving money to a program that works but our current system doesnt. I had no vote into how our current system works, it was setup way before me, and changing the system takes a long time. Just look at social security, I guarantee you if I took the same money and invested it I would make way more than what social security will give me when I retire(if it still exists at all). But I am forced to put money into this hole because most people arent smart enough to save their money. Cleve Littlefield Senior Developer Visual Office
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Thomas George wrote: When you earn more (working more or less - should it matter), you are placed with more responsibility towards your society - and it means taking care of the people, who are down and out. That is a well thought out and good response. Be prepared for the capitalistic short sighted Americans to start calling you a Communist. I think I am more forgiving on this subject than I have been in the past. 13 months out of work after 15 years in the work force will do that to you. Combine that with the fact I am now earning 52% of what I was previously gross and now no technical employer wants to know me as I am out of the technoly curve (that's what they say) I'm not a happy chappy. Michael Martin Australia mjm68@tpg.com.au "I personally love it because I can get as down and dirty as I want on the backend, while also being able to dabble with fun scripting and presentation games on the front end." - Chris Maunder 15/07/2002
> Be prepared for the capitalistic short sighted Americans Robert Owen came here in 1825 and managed to destroy a thriving community. Babeuf, of course, never managed to put his ideology into play. I won't even go into Lennin's flavor of the world. Once again, I'm not against helping some one out. I am against robbing someone because of their class. I can only go quid pro quo here, but show me a capitalistic socitety (that started out that way) that has gone socialist. Now show me a socialist (in the original and new senses of the word) society that has gone capitalist. Fundamentally, it comes down to if you believe people are the same as they have been for thousands of years, or you believe that mankind has evolved past some sort of "predatory" phase of human development. So far believing the former has done better than the latter. Perfection may be somewhere in between the two.
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KaЯl wrote: With these criteria even the Prince Charles is a communist :eek: I've just been in a few of these types of conversation on CP over the past couple of months. Many from the US seem to think the government should pull it's head in and let the people handle everything. They say that a community will see one of their own having problems, pull together and help that individual/family out. And with this happening all over and people helping cause they want too not because the government has taken their money and said they had too, all would be well. They then go on to say how this is how it happend back in their parents and grandparents day. Forgetting that back then the population was much smaller and people actually gave a fuck about one another. Now I see the US as, fuck you buddy, I'm all right jack, every man for himself and walking over the top of everyone else to get to where you want to be. If you don't believe in this method, then you are communist who wants to live in Europe and be over governed and have you freedom removed. I know it's all horseshit, but that is what I have seen expressed. Michael Martin Australia mjm68@tpg.com.au "I personally love it because I can get as down and dirty as I want on the backend, while also being able to dabble with fun scripting and presentation games on the front end." - Chris Maunder 15/07/2002
Michael Martin wrote: Now I see the US as, f*** you buddy, I'm all right jack, every man for himself and walking over the top of everyone else to get to where you want to be. I am not sure how the system works where you are but in the USA 50% of the eaarning population pay no income taxes and there's a political party that operates on the premise that if you'll only elect me, I'll give you (pick something). We literally have generations that have not worked and live on welfare. I personally have known, and this is 40 years ago before it got worse, individuals who gave their children to other families so those families could qualify for higher benefits. For what it is worth, I believe in a safety net. Yes, financed by taxes. But not a life financed by taxes. Mike
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Richard Melton wrote: As a Marine I earned ~13k a year with free room and board (If you call frequenting sleeping bag and eating cold MRE room and board). As a voulenteer for AmeriCorps I earned about the same wihout the room and board. Now I earn six figures, and during everyone of those periods I never felt like the rich owed me anything. Although I wasn't in the armed forces I too started in the shit money and through hard work got it up to six figures. Then the arse fell out of the economy, I had no job but I still had dependant wife and 2 kids plus all the debts and expenses that go with them. Now after 13 months I have a job again though it only pays 52% of what I was on. My debt is now pretty much unsustainable on my income due to my extended unemployment after 15 years constant work. While I don't feel anyone owes me anything, come and talk to if your ever in my situation. Hard work ethics and I'll look after myself attiutudes aren't working. All the companies are either going bust, letting people go, looking for skill sets that don't exist in one person and in the case of shit shovelling jobs wanting experience and umpteen certificates to prove I can to it safely to government standards. Life isn't as rosey or easy as you and Stan (no I haven't seen him in this particular discussion yet) seem to think it is if only you want it. Michael Martin Australia mjm68@tpg.com.au "I personally love it because I can get as down and dirty as I want on the backend, while also being able to dabble with fun scripting and presentation games on the front end." - Chris Maunder 15/07/2002
I don't have children, thats a choice I made. You do. Thats a choice you made. You make your own choices. If you couldn't afford to clothe and feed your children, I would be fore helping you out. I would give you money to fix your car, to pay your past due bills and perhaps to atttend additional training. Rest assured, your life would still suck in some regards, I wouldn't pay your way completely, and you would end up working very very hard what you got.
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Wouldn't that be more like communism? What is wrong with communism (or socialism), except for the fact that it's been abused by a few people because human nature is basically greedy? created equal does not mean they are equal throughout their lives. In my opinion, yes they are. Personally, I wish we had a flat tax system. But of course the gov't wouldn't go for that because, among other reasons, a gazzillion tax accountants, lawyers, and auditors would lose their jobs. Marc Help! I'm an AI running around in someone's f*cked up universe simulator.
Sensitivity and ethnic diversity means celebrating difference, not hiding from it. - Christian Graus
Every line of code is a liability - Taka MuraokaMarc Clifton wrote: Personally, I wish we had a flat tax system. But of course the gov't wouldn't go for that because, among other reasons, a gazzillion tax accountants, lawyers, and auditors would lose their jobs. Yes. Elect conservatives. But you hear screams from those who then have to pay taxes. Mike
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Richard Melton wrote: As a Marine I earned ~13k a year You lucky guy. I earned 1100€ during my year of military period. ;)
Angels banished from heaven have no choice but to become demons Cowboy Bebop
"I realise many of you men have never opened chardonnay under fire before..." -Robin Williams What did you guys do all day? Practice surrendering? I'M KIDDING!
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Marc Clifton wrote: Class warfare exists because few people have, and most don't--- Class warfare exists because: 1) envy 2) Democrats who turned it into an industry, promising someone else what you have if only you'll elect them.
Yup.
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Government is who you elected so that civil society can function smoothly. When there is a section of society that starves and have no home, they should not be dependent on the "charity" of others. In other words, humans decides that we deem life as precious; and is willing to chip in to make that better for all our fellow humans. Governments came in as a way to make society work by enforcing law and order, and providing a safety net. The taxation laws are what the society as a whole agrees to - to generate revenue for the causes. You do not believe that government should do welfare actions, and probably be left to non-governmental organizations. The problem with that is there is no accountability. I cannot tell a private organization that I am eligible according to teir norms and therefore, they *have* to aid me, and that they cannot deny me help. But, that accountability is possible in the case of the government, which is handling public funds. My article on a reference-counted smart pointer that supports polymorphic objects and raw pointers
Well, I believe that the Government should keep people from preying upon eachother and should only tax to support itself. I believe that tax should be flat and capped. You present ideas as fact, but they are philosiphy or ideology. The last book I read on socailism was the best (know thy enemy kind of thing). http://www.amazon.com/exec/obidos/tg/detail/-/1893554457/qid=1043281192/sr=8-1/ref=sr\_8\_1/002-6927750-1452039?v=glance&s=books&n=507846 Got any that go to your way of thinking that prove your ideas work and I'd be happy to read it/them.
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brianwelsch wrote: created equal does not mean they are equal throughout their lives. It simply means that the law should not treat them differently when justice is being served. Agreed, except the "simply". Anyone should also have the same possibilities (for example about the access to education).
Angels banished from heaven have no choice but to become demons Cowboy Bebop
KaЯl wrote: Agreed, except the "simply". Anyone should also have the same possibilities (for example about the access to education). That is the way it works. Public schools available for grades 1 - 12 (no charge), state colleges available to all for the same tuition charge. Scholarships available to the mentally endowed. Private schools are a different matter. That doesn't solve the problem though, attendees actually have to learn something or they're unemployable. Schools (pick a grade, any grade) no longer have the ability to realy fail or discipline a student - parent(s) will cry "foul!" and sure. Mike
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One problem with your statement is that the current state of democracy in not very indicative of society. Our beauracracy tends to leave old laws in place without needed change and new laws become inane and inneffective. Our welfare system was created during the great depression at a time of great need, and has been managed to the point of collapse. The people who need help do not get it while others who are just lazy ruin the system. And even those who need help are not totally without blame, like a single mother with multiple kids, she need to take responsibility for her actions and stop having children. Many people who are wealthy would have no problem giving money to a program that works but our current system doesnt. I had no vote into how our current system works, it was setup way before me, and changing the system takes a long time. Just look at social security, I guarantee you if I took the same money and invested it I would make way more than what social security will give me when I retire(if it still exists at all). But I am forced to put money into this hole because most people arent smart enough to save their money. Cleve Littlefield Senior Developer Visual Office
I think that ineffectiveness of bureaucracy is indicative of the nature of politics and the pettiness of politicians. If there is a political will to change things, bureaucracy will follow the laws. The old laws are kept because people keep old time politicians on a pedestal. Could Jefferson or Lincoln or Kennedy have done nothing wrong? The law is currently like security hot-fixes. You find a bug and you fix it. No one looks comprehensively at the problem at hand, and the solution to the problem. Take for example, tax cuts. The tax cuts happened because Bush had the will to carry it through. Social Security is like an insurance, AFAIK. The amount of money the government should take for that is left to debate. I would prefer a very very small amount, which I will never get back - say upto 1% of my income. Government investing for people is a dumb idea. People should rather invest in some pension funds, if they do not want to lose money :-). But, that is not changing because enough people in the country believe that it is the way to go. It is not because of bureaucratic bottlenecks. I do not agree with republicans or democrats in that sense. Government should not have collected money as investment. They should collect only tax, which they will sepnd on public well-being - police, military, courts, senate, postal service, helping homeless etc... Look at where it is now, government collected a lot of money and spent it. Now, they cannot give anything back without incurring huge deficits. Making a system work is a collective responsibility. You cannot ever have a perfect system. People should stop complaining and come out with comprehensive solutions - talk to the people they elected regarding the solutions that they think are appropriate. Complaining has never solved any problems ever. My article on a reference-counted smart pointer that supports polymorphic objects and raw pointers
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This reminds me of a cartoon I read once. (Not much of a fan of Tom Tomorrow, but...) http://www.salon.com/comics/tomo/2002/12/09/tomo/story.jpg[^] ------------------------------------------ "Isn't it funny how people say they'll never grow up to be their parents, then one day they look in the mirror and they're moving aircraft carriers into the Gulf region?" - The Onion
Chuckle. Pretty fatalistic.
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Well, I believe that the Government should keep people from preying upon eachother and should only tax to support itself. I believe that tax should be flat and capped. You present ideas as fact, but they are philosiphy or ideology. The last book I read on socailism was the best (know thy enemy kind of thing). http://www.amazon.com/exec/obidos/tg/detail/-/1893554457/qid=1043281192/sr=8-1/ref=sr\_8\_1/002-6927750-1452039?v=glance&s=books&n=507846 Got any that go to your way of thinking that prove your ideas work and I'd be happy to read it/them.
All I am saying is: Things are the way they are because the majority wants it that way. That is democracy. It is not necessary that the ideas of the majority work. It never may. The only thing that is guaranteed to work is the "survival of the fittest". All social reform is contrary to that. My article on a reference-counted smart pointer that supports polymorphic objects and raw pointers
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"I realise many of you men have never opened chardonnay under fire before..." -Robin Williams What did you guys do all day? Practice surrendering? I'M KIDDING!
So funny. A friend of mine, chasseur alpin, made a combat training with mountain forces from different countries, a nice week of combat in the charming Alps. He was very impressed by the Bundeswehr, because of the quality of the german equipment (the french one was pitiful, but it obliged them to apply the système D, resourcefulness). 1 year after he was still laughing about the performance of the US troops. I'M KIDDING TOO! (even if my story is true, nananere)
Angels banished from heaven have no choice but to become demons Cowboy Bebop
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KaЯl wrote: Agreed, except the "simply". Anyone should also have the same possibilities (for example about the access to education). That is the way it works. Public schools available for grades 1 - 12 (no charge), state colleges available to all for the same tuition charge. Scholarships available to the mentally endowed. Private schools are a different matter. That doesn't solve the problem though, attendees actually have to learn something or they're unemployable. Schools (pick a grade, any grade) no longer have the ability to realy fail or discipline a student - parent(s) will cry "foul!" and sure. Mike
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You do realize how much harder this would hit the poor, don't you? Afterall, a guy working at McDonalds for $10k a year pays no taxes right now. A guy making $1 million probably pays about 40% ($400,000) in income tax. If you switch to a national sales tax (say 20%), then you'll have the guy at McDonalds paying $2k a year in taxes and the guy making $1 million paying $200,000. ------------------------------------------ "Isn't it funny how people say they'll never grow up to be their parents, then one day they look in the mirror and they're moving aircraft carriers into the Gulf region?" - The Onion
They'd only be taxed on what they spend on non-essential items, not what they earn. Yep I do realize that but it's a good place to start. There are other problems like tax incentives for donations to charitable organizations also. I just don't buy into the sentiment that the more you make the higher the rate you should be taxed. I have a fundamental dislike of that concept, partly because I grew up POOR and have an extreme problem with people taking money that I EARNED. It's also why I get off my ass and donate time and money to organizations that I think are deserving. As an aside, I challenge everyone who thinks that rich people should shoulder most of the burden to quit exercising their gluteus so much and intelligently donate time and/or money to needy and worthy causes. The world will become a better place. -Sean ---- Shag a Lizard
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Yes, ultimately it comes down to the original question of "how much should each person pay?" In the case of the latest tax cuts (which mostly affect the rich), Bush is essentially saying, "the current situation asks the rich to pay too much". It all depends on that calculation. Relative to other countries, the US does seem to favor the rich, but "what other countries do" is not an objective measure of anything. A great deal of the ideas of "what is a fair tax system" revolves around people's perceptions of wealth and how it is aquired. Some people will say that wealth comes from hard work and determination -- in other words the rich have earned every penny. If this is your perception, you might think the rich get taxed too much. On the other hand, if you think the rich are rich because they didn't have to deal with racism, they inherited it, they won it in a lottery, or they were lucky enough to have access to education -- then you probably see wealth as something which isn't earned (and therefore, isn't completely deserved). Instead, wealth just falls into your lap by accident of birth. In this view, the rich should be heavily taxed (because they didn't do anything to earn it) and the poor should be given healthy sums of free money. The situation is varies from person to person (some really did earn it and others had it fall into their lap). But, quite a few people will emphasize one side or the other and then use this to justify their ideas about taxes. (Unsurprisingly, the rich are likely to say they earned it and the poor are likely to say it was all an accident of birth.) I'm not quite sure what you mean by "Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore." It's not like the rich can just opt-out of the tax system. If they moved from the US to another developed country, they would most likely end up paying more in taxes. The people who pay the highest taxes get the most benefit from a tax reduction. There's an awful lot of space in this quote. The important thing the the quantitative benefit. IMO, you can't really talk about any particular tax cut very intelligently without a graph because words are inadequate to describe the effects of any given tax cut -- a fact which republicans and democrats are eager to use for their own benefit. I also wanted to point out that your analogy misses another point which might affect people's opinion about taxes: how much money people have. If the first four men were
Brit wrote: It's not like the rich can just opt-out of the tax system. In small ways they can. Think about the marriage penalty, where two incomes are stacked with the bulk of one of the incomes taxed at the highest rate - an annual penalty of say, 5k, for being married legally. How many couple would you imagine are living together instead of being married. Brit wrote: The people who pay the highest taxes get the most benefit from a tax reduction. There's an awful lot of space in this quote. The fact is, you have to pay income taxes before those taxes can be reduced. The noise you hear "benefits the rich" is the start of a pitch to eliminate social secutity taxes, for the "poor". Social Security was established to provide a way to make sure that "you" saved something for your retirement. A fall out of the depression era. Now that 50% of the USA does not pay income taxes the Democrats have to buy votes somehow - so, now they're pushing to hand the same 50% a free retirement, funded by those rich people. But in general, is it correct to: Tax wealth when someone dies, before it can get to the heirs? Even if it sounds like a good idea, what would you do for farmers and small business men/women who only have that farm or business to pass on down to the family? Those farms and those businesses are considered taxable wealth and the land (in the case of a farm) is valued at whatever the governing body deems appropriate. On to dividends: A dividend paid to stockholders represents: 1) money that has survived taxation at the corporate level, 2) is not being held onto as retained earnings. So, it has been taxed once already, what is the logic (except legalized theft) that allows the same money to be taxed a second time? Mike
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One problem with your statement is that the current state of democracy in not very indicative of society. Our beauracracy tends to leave old laws in place without needed change and new laws become inane and inneffective. Our welfare system was created during the great depression at a time of great need, and has been managed to the point of collapse. The people who need help do not get it while others who are just lazy ruin the system. And even those who need help are not totally without blame, like a single mother with multiple kids, she need to take responsibility for her actions and stop having children. Many people who are wealthy would have no problem giving money to a program that works but our current system doesnt. I had no vote into how our current system works, it was setup way before me, and changing the system takes a long time. Just look at social security, I guarantee you if I took the same money and invested it I would make way more than what social security will give me when I retire(if it still exists at all). But I am forced to put money into this hole because most people arent smart enough to save their money. Cleve Littlefield Senior Developer Visual Office
>. Our welfare system was created during the great depression at a time of great need The federal welfare system did not exist until the 60s. I believe there were several state systems before that, but I do not know when they started. > But I am forced to put money into this hole because most people arent smart enough to save their money. Thats misleading, Social Security was enacted during the Great Depression after the Industrial Revolution. It was the IR that created a large group of people that were to old to work, but too young to die. The Government's idea was to help suppliment pensions and somehow this would stave off another depression. It didn't occur to the Econimists that educating people on the need to save could do the same thing. Even though Social Security supposed to be bankrupt by 2020, you are forced to pay it because the government uses the funds to spend more money from the general fund and keep it off budget (Plus the large voting baby boomer segment is still collecting it). Also at the time that this program was conceived, Socialism, Social Democracy and/or Communism were popular ideas here and abroad. I think that had some effect on its passage.
