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Republicans for taxing the poor

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TheEgoist
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http://www.nytimes.com/2011/08/31/opinion/the-new-resentment-of-the-poor.html?_r=1&hp

Leave it to the Republicans, including the head of the moronic Tea Party Caucus to not support taxation of the rich but to be fine with taking some money from the poor. Because taking the last pennies people have will do a lot, but taxing the rich more would never help the country!

This is just reverse class warfare.

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The is bad marketing, to say the least. We have to push for the right sort of principles to move government in the right direction, but its important to do this as skillfully as possible.

In a proper government, most taxes would be use-based (and voluntary). Given that, it would follow that "rich" people would generally pay a lot more for services than poor people since they have a lot more to protect. One could also imagine that "rich" people, having a lot more expendable income, would choose to spend a lot more on less tactical things like security and safety, would generally engage in more complex transactions that required more government work, and so forth. Poor people wouldn't pay much since they wouldn't use much. For instance, they might choose to buy a car without paying the sales "tax", with the understanding that if the transaction is disputed, they would have no recourse. A rich person would generally make the opposite choice.

So instead of "tax the poor" the t-party dorks should be pushing for flat taxes, more use fees (increased prices at parks, post-office, etc.) and so forth.

Now why wouldn't they be pushing for a flat tax? Let me see... could it have something to do with the fact that a zillion special interests support every one of those special tax breaks, and that the t-party, operating without any clear principle, is really just another form of politics-as-usual? You don't hear the t-party dorks calling for the end of the interest deduction on homes, or the end of Prop 13 in California--two tax "breaks" that benefit a single special-interest and generally distort the free market for housing. You don't hear them calling for the end of income taxes in favor of transaction use-taxes. For that matter, I personally don't even hear the word "flat tax" these days as even the t-party people know that is politically untenable within their own ranks.

This sort of rhetoric exposes the t-party for what they are, which is a bunch of unprincipled children screaming for their own taxes to be lowered without regard to any of the "hard" issues like how we're going to continue to pay for the welfare state they all live off of (I think the average age of t-party ding dongs is about 70) and how we're going to continue to be the police of the whole world. This was exposed in vivid color in August when they injected needless panic into the markets by threatening to blow up everything in the short run if they didn't get what they want, which is to have their cake and eat it too.

I never expected the t-party to live very long. I give them about one more election cycle. After that, reality will catch up with them, and they will return to supporting fatter social security checks regardless of what "other people" need to pay in taxes.

(The only POSITIVE thing that's happened in the last couple of years is the death of Keynesianism, which had nothing do with the t-party, but more to do with a simple miscalculation of the necessary size of the original stimulus and good ole' government corruption that watered what little was there down to almost nothing. For the foreseeable future, "stimulus" is going to have a bad name).

OP

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In a proper government, most taxes would be use-based (and voluntary). Given that, it would follow that "rich" people would generally pay a lot more for services than poor people since they have a lot more to protect. One could also imagine that "rich" people, having a lot more expendable income, would choose to spend a lot more on less tactical things like security and safety, would generally engage in more complex transactions that required more government work, and so forth. Poor people wouldn't pay much since they wouldn't use much. For instance, they might choose to buy a car without paying the sales "tax", with the understanding that if the transaction is disputed, they would have no recourse. A rich person would generally make the opposite choice.

The bolded part - what exactly do you mean? Are you saying that people would have to pay a tax for the government to enforce their contracts? Wouldn't that go against the principle of voluntary taxation?

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To what does the bold refer?

The debt ceiling fiasco. Regardless of one's view of the principles involved, blowing up the country is never necessary or justified, and it underscores the t-party's status of a bunch of idiots who don't understand anything more complicated than 3rd grade math.

Insofar as these morons occupy the concept of liberty in the population's minds, the long term cause is damaged. While it's true that other sorts of revolutions operated without regard to human life and suffering, they only did so because they were actually being true to their ultimate principles. You might as well being talking astrophysics to the average t-party member though.

The correct first principles to operate from would have us implement a peaceful and fair move to a free society, not trade-off Armageddon and/or wide-spread inequity and displacement for a slightly faster transition.

The bolded part - what exactly do you mean? Are you saying that people would have to pay a tax for the government to enforce their contracts? Wouldn't that go against the principle of voluntary taxation?

No not at all. You are free to make a choice between a contract that is protected by the government and one that is not. Insofar as you benefit from this sort if service, you should pay for it.

OP

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The debt ceiling fiasco. Regardless of one's view of the principles involved, blowing up the country...

So, if the debt ceiling was not raised and the government had to make hard choices right now to pay the debt, instead of borrowing more to pay it (thus digging a deeper hole), that means the country was just blown up?

Edit: more to the point of my question, which probably should be in a different thread, do you believe that a failure to raise the debt ceiling necessarily means a refusal to make debt payments?

Edit 2: Do you think the Tea Party was advocating that the US default on its debt?

Edited by FeatherFall
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From the tone of this (sarcasm) it sounds as if you believe taxing the rich more is the right thing to do? Or do I misunderstand you?

You have it wrong. It just makes lees sense to tax the lower class, because so little will be achieved and it will inflict more damage. I'm not for taxing anyone ever for anything.

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No not at all. You are free to make a choice between a contract that is protected by the government and one that is not. Insofar as you benefit from this sort if service, you should pay for it.

So, in an Objectivist state, if one doesn't pay a tax his contract is not legally binding?

What happens if he's cheated or if there's a contract dispute? What options does he have?

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So, if the debt ceiling was not raised and the government had to make hard choices right now to pay the debt, instead of borrowing more to pay it (thus digging a deeper hole), that means the country was just blown up?

Yes. The immediate halting of all federal operations would be catastrophic. I think that's pretty obvious to anybody who has thought the matter through.

Edit: more to the point of my question, which probably should be in a different thread, do you believe that a failure to raise the debt ceiling necessarily means a refusal to make debt payments?

The two issues are unrelated.

Edit 2: Do you think the Tea Party was advocating that the US default on its debt?

They were apparently advocating an enormous and sudden change in fiscal spending, and a temporary all-out halt. Beyond that I have no idea what was going through their heads, if anything.

For what it's worth, interest on the debt amounts to 6% of the budget, so defaulting wouldn't really help much.

OP

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So, in an Objectivist state, if one doesn't pay a tax his contract is not legally binding?

What happens if he's cheated or if there's a contract dispute? What options does he have?

If he didn't pay the tax, he can't take it to court, that's the idea.

Ayn Rand included this as one of her suggestions for how government could be financed by voluntary means. It’s basically the same as the Stamp Tax that inspired (partly) the American Revolution. Nowadays you pay one at the State level when you buy Real Estate. The trouble with it, in principle, is how does Government enforce a monopoly on enforcement of contracts? Disputes often go to private arbitration, it's cheaper (no wonder). Think of how you dispute a charge to your credit card.

Beyond that, there’s the implication that, to be enforceable, a contract would have to be provided to the Government when executed. Imagine the privacy nightmare. I think we could get around that with encryption, but that wasn’t around in Rand’s day.

Edited by Ninth Doctor
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... even private arbitration ultimately is backed by the government. (What do you suppose happens when someone agrees to binding arbitration, has the decision come down in a way he doesn't like, and gives the (figurative and/or literal) finger to the result of the arbitration and refuses to abide by it?)

As for modeling contract insurance on a stamp-like tax: Even without encryption, a contract could be sealed into an envelope and the tax stamp applied across the seal, or some such. Or some company could buy a bunch of the stamps in advance and affix them to the contracts themselves when signed, in which case the contents of the contract can remain secret until it goes to court. All the government needs to know is that the tax was paid and the stamp makes it impossible to pay for one contract and then have the company decide later which one (the stamp should come in serial-numbered pairs, one for each copy of the contract). They've paid the tax and could make half of the cost of the stamp part of the price. The customer should be free to decline it and not have to pay. Of course this only works if either the tax is single-rate or the stamp indicates how much was paid for it, and the correct denomination stamp(s) have to be affixed to the contract.

I would want to talk to cryptography experts before actually designing such a system, even if it's dead-tree based, because they have a good sense of how protocols like this could be broken. (The protocol for doing the encryption and distributing the key is just as important and just as much of a security hassle as the actual encryption algorithm--after all what good is an unbreakable code if the bad guy can get his hands on the key--so cryptographers make a study of this as well.)

Edited by Steve D'Ippolito
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... even private arbitration ultimately is backed by the government.

It doesn’t have to be, not in principle. You could have something like the current system of competing credit agencies, and getting a bad mark with them would put you out of business. Assuming it’s cheaper to go with the agency that doesn’t render unto Caesar, who’s going to win?

I know of a case (the son of someone I worked for) who cannot get a bank account, because he was once involved in check fraud on a big scale. It’s not the Government keeping him from getting one.

I don’t have anything to add about encryption, but one other point is that Rand’s suggestion was a tax based on the value of the contract. So, whatever that means, sounds like a nightmare of legalese to define (think VAT), but it’s not single rate in her conception.

Interesting implication of the splitting the cost idea, you could have a contract that’s only enforceable by one side.

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... even private arbitration ultimately is backed by the government. (What do you suppose happens when someone agrees to binding arbitration, has the decision come down in a way he doesn't like, and gives the (figurative and/or literal) finger to the result of the arbitration and refuses to abide by it?)

Yes, but this fact alone doesn't earn the government any revenue. Presumably, so long as the government was always in the background, private arbitration would have to actually go to the government very rarely. Thus, such agencies could conceivably cut into the government's profits, perhaps quite substantially.

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Well, no, I don't see arbitration ever getting shut of government. Who, ultimately, is the enforcer of the binding private arbitration? Eventually, it will be the government. Sorry, I don't buy "anarchocapitalism," which it sounds like 9th Doctor is advocating. If ND isn't actually advocating anarchocapitalism, he's suggesting that the final authority for one of the three core jobs of government, doesn't have to be the government. I happen to agree with AR on that list, and though a _lot_ of police and court functions can be contracted out or spun off, ultimately the final authority must be the government. So the contract tax (however it is imposed) would still be paid, probably at the insistence of the arbitrators! They will, after all, want a government to back them up, or their binding arbitration won't actually be enforceably binding.

I maintain that the government has to back up private arbitration, because someone unhappy with supposedly binding arbitration's result could basically refuse to comply and without a government to _enforce_ the ruling... to compel him to comply... arbitration is ultimately toothless. One can claim that rational people would abide by the arbitration, but government is _also_ there for the case where you are dealing with an irrational mo-fo wanker who won't give up. (I could tell you stories of property disputes here that would raise your hair.) All that private arbitration is, is someone using a non-government employee for the first couple of levels of judiciary, but you can bet that if someone proves truly intransigent they will talk to a "real" judge eventually.

Dante, I don't see it as a problem, really. If most people go off to private arbitration, that's less work for the government to do, so fewer government people on the payroll. Now it's true that those actually using the government for arbitration will, if this is the only source of government revenue, have to subsidize the military and the criminal legal system. But for reasons I mentioned above, I expect private arbitrators to shy away from non-taxed contracts anyway.

But this whole thing is a digression, anyway, and a very hazardous one as we don't actually know what an Objectivist government would look like. Contract insurance was a very hypothetical suggestion (not a mandate) by AR and I doubt she considered it the last word on how to fund a proper government.

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Yes. The immediate halting of all federal operations would be catastrophic. I think that's pretty obvious to anybody who has thought the matter through.

First off it's not obvious that, had the debt limit not been raised, _all_ federal operations would have been halted. So while I agree with you that a _complete_ cessation of Federal activity would be catastrophic, that was simply never at issue here, despite all the hype from the Keynesian party.

The government is taking in about 50% (give or take ten percent) of the money it is spending; it would have to cut 50 percent of what it's doing if it is not allowed to borrow any more, and the rest could and would run on current revenues.

Would it cut entitlement payments (utterly immoral)? Enforcement of Regulations (utterly immoral)? Pork barrel (utterly immoral)? Discretionary spending (almost all of which is stuff the government should not be doing, but it does include the things government should be doing)? Frankly they could cut almost any arbitrarily selected 50 percent of federal government spending and we'd be better off. Completely shutting down the military would be bad, and refusing to pay interest on the outstanding federal debt would also be really bad. The rest, we could live without for a while.

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Sorry, I don't buy "anarchocapitalism," which it sounds like 9th Doctor is advocating.

I’m not advocating anything, I’m pointing out a flaw in Rand’s suggestion. The same basic problem applies to lotteries, it doesn’t work unless private lotteries are outlawed. Government financing is the glaring gap in Rand’s political theory, and I don’t have the answer to it.

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I’m not advocating anything, I’m pointing out a flaw in Rand’s suggestion. The same basic problem applies to lotteries, it doesn’t work unless private lotteries are outlawed. Government financing is the glaring gap in Rand’s political theory, and I don’t have the answer to it.

OK--given where the conversation was heading it looked like AC might have been in the future. Glad to see it wasn't.

Nobody really has the answer here (as I pointed out). I suspect it will be a combo of various things, some of them have been suggested already, some will be invented by clever government fundraisers (presumably the government would be free to try to raise money in any non-forcing, non-fraudulent way).

I could see lotteries working, somewhat, even with private gambling allowed. People who buy the lottery tickets would presumably give up some percentage of chance of winning (or expected value of prize) because it's for a "good cause". People do manage to make money for charity by holding raffles, running bingo games with hideous odds, etc. (NB: I don't know how common charity raffles, bingo, et. al. ( where winning a pile is not the sole consideration) is in Nevada, so it's possible someone can demonstrate to my satisfaction that the psychology of even "bad odds for charity" changes with fully legalized gambling, with people refusing to buy raffle tickets for Jerry's Kids or what-have-you.)

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Leave it to the Republicans, including the head of the moronic Tea Party Caucus to not support taxation of the rich but to be fine with taking some money from the poor. Because taking the last pennies people have will do a lot, but taxing the rich more would never help the country!

This is just reverse class warfare.

It seems mean and politically suicidal, but... what would you have the GOP do in terms of economic policy? Raise taxes? If so, where to focus? Cut spending? If so, where to focus?
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First off it's not obvious that, had the debt limit not been raised, _all_ federal operations would have been halted. So while I agree with you that a _complete_ cessation of Federal activity would be catastrophic, that was simply never at issue here, despite all the hype from the Keynesian party.

The government was scheduled to run out of money completely within a week give or take, within the confines of the law, provided the president didn't exert certain statutory powers (e.g. the $1T coin etc.). Clearly had the deal not been reached, the president would have been duty-bound to override congress' attempt at ending our democracy.

The government is taking in about 50% (give or take ten percent) of the money it is spending; it would have to cut 50 percent of what it's doing if it is not allowed to borrow any more, and the rest could and would run on current revenues.

Would it cut entitlement payments (utterly immoral)? Enforcement of Regulations (utterly immoral)? Pork barrel (utterly immoral)? Discretionary spending (almost all of which is stuff the government should not be doing, but it does include the things government should be doing)? Frankly they could cut almost any arbitrarily selected 50 percent of federal government spending and we'd be better off. Completely shutting down the military would be bad, and refusing to pay interest on the outstanding federal debt would also be really bad. The rest, we could live without for a while.

Yeah, instantly removing the livelihood of tens of millions of people with no prior warning wouldn't have any bad effects at all. We should totally do that.

***

Ayn Rand once called Objectivism, "a philosophy for living on Earth". I guess people are free to use it however they want, and some are perfectly happy using it as a mental exercise, or a puzzle, or a way to win meaningless arguments at cocktail parties.

What a waste.

OP

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http://www.nytimes.com/2011/08/31/opinion/the-new-resentment-of-the-poor.html?_r=1&hp

Leave it to the Republicans, including the head of the moronic Tea Party Caucus to not support taxation of the rich but to be fine with taking some money from the poor. Because taking the last pennies people have will do a lot, but taxing the rich more would never help the country!

This is just reverse class warfare.

I'm a little surprised at your knee-jerk reaction Egoist.

This is a very hard left bias opinion piece and as such contains mostly the (anti-wealth) writer's slanted hate toward the successful.

The fact of this so-called "tax raise on the poor" is this- when these negotiations were going on btween the demns & gop the Dems wanted to focus on raising taxes, the gop on cutting spending and lowering taxes. The Dems mocked the gop for claiming to be serious about a balanced budget while wanting to lower taxes. The gop stated that it was their intent to lower taxes in such ways that encourage hiring.

Now to this "payroll" tax.

In employment generally the payroll taxes are split between employer and employee. Some states and municipalities add extra things that only the employer pays-increasing the proportion of the employer burden. (For instance, as a digression, where my business is I have to pay a special payroll tax on each employee that funds free bus fare for handicapped, low income and homeless people).

Now, the Dems postured, saying they would agree to tax cuts that focused on job creation. The gop pointed out that an employee-side only payroll tax break does not create an incentive to hire- only an employer side payroll tax break would do that.

Makes sense doesn't it?

If my employee gets a tax break that does nothing for my bottom line.

However, spread out over enough employees an employer side tax break could stimulate hiring.

Again, using my own business as an example, what keeps me from hiring more staff is not the lack of demand, or my inability to pay them a wage- it is the fact that I have no idea what govt expenses are going to be tacked on next.

So, "reverse class-war" is sensationalistic and completely inaccurate.

One thing I will agree on though is that this is a pr nightmare for the gop.

I'm not a fan of the gop but I will be voting for them primarily if I must in the next election because Dems no longer even attempt to hide their plan to turn this country into some strange Frankenstein's monster patchwork of collectivist ideas.

The Dmes have gotten very clever in their carrying out of the agenda. One of the modern Marxist strategies is to "overload the system". They've accomplished that in many states. The other is, as Rand pointed out, to cripple capialism and then claim it has been tried and doesn't work.

By allowing only tax breaks that by their nature can never stimulate hiring the Dems can eventually hold out proof that lowering taxes down't work.

I hate their ideals, yet they have perfected their strategy for implementation.

Edited by SapereAude
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The debt ceiling fiasco. Regardless of one's view of the principles involved, blowing up the country is never necessary or justified, and it underscores the t-party's status of a bunch of idiots who don't understand anything more complicated than 3rd grade math.

Insofar as these morons occupy the concept of liberty in the population's minds, the long term cause is damaged. While it's true that other sorts of revolutions operated without regard to human life and suffering, they only did so because they were actually being true to their ultimate principles. You might as well being talking astrophysics to the average t-party member though.

The correct first principles to operate from would have us implement a peaceful and fair move to a free society, not trade-off Armageddon and/or wide-spread inequity and displacement for a slightly faster transition.

OP

Perhaps a bit of 5th grade math (exponents as applied to the idea of compound interest) would lead you, as it has many "Tea Party"-types, to understand that raising the debt ceiling is merely kicking the can down the road. Every additional dollar of debt adds to the pain that this economy will face when the chickens inevitably come home to roost.

Just as A is A, debt will need to be repaid or cleared. This will always entail some pain, but it does not have to mean the collapse of the entire system. Adding to the debt pile increases the odds of that happening.

Edited by utabintarbo
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The gop pointed out that an employee-side only payroll tax break does not create an incentive to hire- only an employer side payroll tax break would do that.

Actually, standard economic theory would say that there is no long-term difference between taking the tax from the employee's paycheck versus taking it from the employer (if it is based on the amount of employee-pay). The argument is that shifting the tax from the employer to the employee will cause employees to want higher wages to compensate, thus cutting back into your bottom line, until everyone is back to square one. It is actually a pretty strong argument if one is looking at long-term market conditions.

However, in the short to medium term, moving the tax to the employee's paycheck will help the economy. The government ought to reduce the employer's component to ZERO, and take all such taxes out of the employee's component (as mentioned here). Other than the short-term impact, this is a more visible and honest way of taxing people.

One thing I will agree on though is that this is a pr nightmare for the gop.
Only a few (ineffective) options are palatable to a broad set of voters. The American voter has only himself to blame (mostly for his ignorance).
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(...)

By allowing only tax breaks that by their nature can never stimulate hiring the Dems can eventually hold out proof that lowering taxes down't work.

I hate their ideals, yet they have perfected their strategy for implementation.

I don't think the demos need to be that clever. Tax cuts are not some magic fairy dust that will stimulate the economy in short order, no matter what form they take.

The Repub's calls for fiscal cutbacks will actually make the economy much worse in the short run because it would simply cause lots of unemployment and thus lower aggregate consumer demand.

But ah, good ole politics: none of this matters since voters just vote out whatever party is in power when things aren't good regardless of the truth of the matter. This is why Obama's capitulation to the Repub's framing of the debate is political suicide. The Repub's calls for austerity will make things nice and miserable for the 2012 presidential election, paving the way for the Bachman/Palin ticket to win by a landslide.

So my prediction is this:

1. The economy sucks now, and the answer given is austerity (driven by the Repubs, but accepted by the Demos).

2. This makes the economy suck a lot for 2012 and the Repubs win big next November, taking both houses and the WH.

3. The economy will then suck a lot more as austerity will kick into high gear. The badness of this sort of situation (deflation) is heavily skewed towards lower-income, less skilled, and retired people.

4. Come about 2014 or so, we'll have a flat-lining economy and much bigger disparities between the haves/have nots.

What happens after that will depend on ideology. Now before you get too cynical and depressed, witness the recent collapse of Keynsianism. Everybody in the USA now "knows" that stimulus doesn't work because we tried that $700b thing and we're still in the shitter. This was a very positive development for our cause.

Certainly what the country will turn to after both sides of the argument are thoroughly discredited is anybody's guess. This has certainly not gone well in other countries in other times. The USA is, however, different. We might, God Forbid, find ourselves actually making a difference for once.

OP

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Actually, standard economic theory would say that there is no long-term difference between taking the tax from the employee's paycheck versus taking it from the employer (if it is based on the amount of employee-pay). The argument is that shifting the tax from the employer to the employee will cause employees to want higher wages to compensate, thus cutting back into your bottom line, until everyone is back to square one. It is actually a pretty strong argument if one is looking at long-term market conditions.

However, in the short to medium term, moving the tax to the employee's paycheck will help the economy. The government ought to reduce the employer's component to ZERO, and take all such taxes out of the employee's component (as mentioned here). Other than the short-term impact, this is a more visible and honest way of taxing people.

Only a few (ineffective) options are palatable to a broad set of voters. The American voter has only himself to blame (mostly for his ignorance).

I agree with you about neither being a long term solution. I don't know that the current political and social state of the US can even allow for long term solutions.

However, you do seem to be agreeing with what the GOP is saying about hiring >>right now<<< (am I correct in that?) and while the short term solution isn't usually the wisest one it seems right now that it is bread and cirsuses that the voting mob demands- as you said- the American voter is to blame.

I of course agree with you 100% that the employer contribution should be zero. I don't see that happening though.

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