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Old 04-07-2010, 02:15 PM   #81
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"Fairness" and "equity" are two different things. Just because something is "equitable" or treats everyone the same doesn't automatically make it fair. Your example is equitable, but not necessarily fair -- "fairness" is in the eye of whoever is getting the better deal out of it, typically.
Equity or fairness is NOT treating everyone the same. Fairness is not a "rule". It is a reaction against certain types of rules. It is a social judgment as to what kind of society we want to live in. It is in part a reaction to what Anatole france described as:
"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread" .

I fully accept that out individual sense of what is fair varies from one person to another. That is why we have politics.
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Old 04-07-2010, 02:34 PM   #82
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I suspect I lost you when I said that Fairness is a "process" not a rule. Your post tries to define or impute a "fairness" rule. IMHO that is a waste of time.
OK, so we both agree that I'm lost. That might be progress.

So can you elaborate on fairness as a 'process' versus fairness as a 'rule'? I'm just not getting the distinction based on your examples, and I am truly interested, not just trying to yank your chain in any way.

-ERD50
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Old 04-07-2010, 02:38 PM   #83
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The real problem we have with the SS fund today is it is both fair (need) and equitable (everybody),instead of just fair (or just equitable). Corporate pensions are mostly equitable but far from fair, and I assume that most public employee retirement plans are equitable and generous (fair?).
In my experience, corporate pensions are rare now, and actually people in government service are more likely to get a liveable pension (if they've been there quite a while).

I've been at a company 12 years and there is some defined benefit money coming my way... but barely noticeable in terms of my retirement needs. I picked up some at another company (6 years) and rolled it into a self-directed IRA when I left. Again, a small amount of money.

I think SS is fair and equitable (if insufficient) since we all paid into it if we are receiving a benefit. And I am very much hoping to get that money! It's by far the biggest chunk outside of my savings.
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Old 04-07-2010, 03:50 PM   #84
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So can you elaborate on fairness as a 'process' versus fairness as a 'rule'? I'm just not getting the distinction based on your examples, and I am truly interested, not just trying to yank your chain in any way.
Yup, I am enjoying this one too. I normally pop in with an opinion before I have given the issue much thought but I will just observe this time
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Old 04-07-2010, 04:13 PM   #85
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I fully accept that out individual sense of what is fair varies from one person to another. That is why we have politics.
I accept that individual views of "fairness" vary from person to person and that individual views bear little on the laws that govern our lives. But it's a shame that "fairness" winds up being defined and mandated in smokey back rooms where professional politicians barter votes, payola, gov't benefits, pension formulas, tax code and most everything they can control for power and money.

Planning for FIRE really becomes a crapshoot when the rules of the game don't follow commonly accepted visions of "fairness," "equity," or even "logic," but rather are based on political expediency. Staying ahead of those rascals, FIRE'd and out of the harness takes a lot of agility. I guess that's why we discuss it so much here...........
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Old 04-08-2010, 06:07 AM   #86
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OK, so we both agree that I'm lost. That might be progress.

So can you elaborate on fairness as a 'process' versus fairness as a 'rule'? I'm just not getting the distinction based on your examples, and I am truly interested, not just trying to yank your chain in any way.

-ERD50
I will use an imperfect analogy. A jury verdict may find someone "guilty"or (not guilty). The Jury is a "process". The verdict is an outcome of a process.
You have no obligation to "agree" with the verdict, however we as a community agree to abide by such verdicts because that is the process we use.

Similarly, the political and sometimes judicial systems routinely determine fairness. In each case you do not have to agree with the output, the question is whether the proper process is used.
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Old 04-08-2010, 09:46 AM   #87
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I will use an imperfect analogy. A jury verdict may find someone "guilty"or (not guilty). The Jury is a "process". The verdict is an outcome of a process.
You have no obligation to "agree" with the verdict, ...
OK, so jury trials and representative govt are a 'process' (designed to be fair over-all), and an individual won't always agree with a specific outcome. I follow you there.

However, sometimes those processes fail to work as intended. A jury gets bought off, or simply fails to act responsibly (I think the judge can invalidate their decision?). Politicians respond to powerful lobbyists, or blocks of voters with more power than their numbers represent. So sometimes, the process itself is flawed.

At that point, I think we need to look for some over-arching guide to the 'fairness' of the 'process' that was created by the Founding Fathers. I would suggest we look to their writings for a guide, the Declaration of Independence and the Constitution, which include the phrases 'Life, Liberty and the pursuit of Happiness.' and 'establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,'.

I don't see anything there that infers that everyone should have the same 'stuff'. They should all expect 'Justice', 'defense', freedoms for ourselves and future generations, and our pursuit of Happiness should not be unduly restricted (we do need to comply with laws so as not to hurt others in our pursuits - that goes back to 'Justice').

So when politicians veer from those over-arching guides, I think it is time to point out that the process is flawed (unfair). And I think there is far too much emphasis on defining 'fair' as everyone getting the same thing, rather than everyone having the same opportunity to earn those things for themselves. And the real shame in that is that there are barriers for some people, but the focus on breaking down those barriers is diluted by the efforts to give people stuff, so some of us can pretend the barriers do not exist, or maybe just make some people feel better. I do not think anyone is well served by that.

-ERD50
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Old 04-08-2010, 09:52 AM   #88
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A jury gets bought off, or simply fails to act responsibly (I think the judge can invalidate their decision?).
As I recall, the so-called "nanny trial" of the English au pair in Massachusetts a decade or so ago bears this out. In that case the judge threw out the jury's murder verdict and substituted it with an involuntary manslaughter conviction. Though that was complicated by the fact that the defense (stupidly in hindsight) refused to allow the jury to consider the lesser included offense of manslaughter -- so they were faced with either a murder conviction or acquittal and they didn't want her to "walk."

But I digress. Yeah, processes aren't always something we agree with, but we at least hope they are handled properly and with the maximum benefit to society in mind (keeping in mind that personal/economic liberty and property rights factor into that).
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Old 04-08-2010, 10:03 AM   #89
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The parable of the Workers in the Vineyard is about different concepts of fairness.
I'll comment on this one also. I re-read it to re-familiarize myself with the details. Yes, there are many interpretations, but if we look at the more literal view (reading it, rather than reading into it), here is what I take away that I feel is relevant to the discussion:

The landowner and the all-day workers agreed to a contract. I agree that the all-day workers have no legitimate complaint about the landowner deciding to pay the part-day workers the same amount. They thought it was fair when they accepted it, so that is that.

The landowner paid the part-day workers with his own money. It was his money, it was up to him to decide what to do with it.


Here is the important distinction, IMO: When the govt decides to be 'fair' by being 'equal', they are doing it with my (collectively, our) money. So I (we) should have a say in it, well actually, taxpayers should have a say in it.

I think only an extremely small minority of taxpayers would act this way in their own lives with their own money. Would the majority of business owners pay the same to their part time workers as their full-time workers? I doubt it, so why should the govt (charged to represent us), act in these kinds of ways? I don't think they should.

There are times when the only pragmatic way to be as fair as possible is to just be equal. But wherever feasibility, I think our govt should charge for services based on usage.

-ERD50
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Old 04-08-2010, 10:25 AM   #90
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OK, so jury trials and representative govt are a 'process' (designed to be fair over-all), and an individual won't always agree with a specific outcome. I follow you there.

However, sometimes those processes fail to work as intended. A jury gets bought off, or simply fails to act responsibly (I think the judge can invalidate their decision?). Politicians respond to powerful lobbyists, or blocks of voters with more power than their numbers represent. So sometimes, the process itself is flawed.

At that point, I think we need to look for some over-arching guide to the 'fairness' of the 'process' that was created by the Founding Fathers. I would suggest we look to their writings for a guide, the Declaration of Independence and the Constitution, which include the phrases 'Life, Liberty and the pursuit of Happiness.' and 'establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,'.

I don't see anything there that infers that everyone should have the same 'stuff'. They should all expect 'Justice', 'defense', freedoms for ourselves and future generations, and our pursuit of Happiness should not be unduly restricted (we do need to comply with laws so as not to hurt others in our pursuits - that goes back to 'Justice').

So when politicians veer from those over-arching guides, I think it is time to point out that the process is flawed (unfair). And I think there is far too much emphasis on defining 'fair' as everyone getting the same thing, rather than everyone having the same opportunity to earn those things for themselves. And the real shame in that is that there are barriers for some people, but the focus on breaking down those barriers is diluted by the efforts to give people stuff, so some of us can pretend the barriers do not exist, or maybe just make some people feel better. I do not think anyone is well served by that.

-ERD50
Actually the founding fathers were very aware of the role of the government in dealing with both opportunities and outcomes. cf "general welfare" Farmers whose harvests failed were a special object of concern. What did you do for people who worked hard and followed the rules but still had misfortune? In a world of inherited land what was equal opportunity? The sympathy for the whiskey rebellion reflected the people's concern with outcome fairness. Later the homestead act gave away free land. But I digress...

Sticking just to retirement issues fairness issues are common in dealing with life expectancy, illness, non working spouses and many other issues. The efficiency/equity trade off is difficult but both appeals are legitimate.
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Old 04-08-2010, 10:42 AM   #91
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Here is the important distinction, IMO: When the govt decides to be 'fair' by being 'equal', they are doing it with my (collectively, our) money. So I (we) should have a say in it, well actually, taxpayers should have a say in it.

I think only an extremely small minority of taxpayers would act this way in their own lives with their own money. Would the majority of business owners pay the same to their part time workers as their full-time workers? I doubt it, so why should the govt (charged to represent us), act in these kinds of ways? I don't think they should.

There are times when the only pragmatic way to be as fair as possible is to just be equal. But wherever feasibility, I think our govt should charge for services based on usage.

-ERD50

I agree with you and especially your point about taxpayers having a say in how the money is spent. Ironically enough I heard on the radio yesterday that only roughly 50% of US hsouseholds actually had to file and pay federal income taxes this year. The rest paid $0 in income tax. How is that possible How is that fair How is that equitable? I'm getting killed on taxes. And they certainly don't spend it in ways I approve.

I get the prgressive nature of the income tax. But 50% paying $0. What is going on in this country?
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Old 04-08-2010, 11:39 AM   #92
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I agree with you and especially your point about taxpayers having a say in how the money is spent. Ironically enough I heard on the radio yesterday that only roughly 50% of US hsouseholds actually had to file and pay federal income taxes this year. The rest paid $0 in income tax. How is that possible How is that fair How is that equitable? I'm getting killed on taxes. And they certainly don't spend it in ways I approve.

I get the prgressive nature of the income tax. But 50% paying $0. What is going on in this country?
The top 10 percent in the USA get 50 % of all the income. Since the income tax system is progressive they pay much more than 50 % of the income tax. By the time you get down to the 50th percentile you are talking about 80-90 percent of the income The USA has one of the highest gini coefficients in the world, so the top half of the population gets the vast majority of all income. .
http://csis.org/files/publication/issues201001.pdf

Poor people pay sales and social seecurity and other expenditure taxes.
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Old 04-08-2010, 11:47 AM   #93
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Poor people pay sales and social seecurity and other expenditure taxes.
True, but in my ideal world *everyone* who has a vote would pay some income tax, even if only one dollar. As much as the American Revolution was largely about "taxation without representation," I don't believe that the converse -- "representation without taxation" if you will -- is a good thing either. Everyone with a vote should have some skin in the game, even if very little. I think that would help reduce the amount of "tax the other guys" thinking that goes on today. I don't really think it's a good thing when we have a system that encourages the "give me the goodies and tax other people for it" mentality. I believe anyone advocating a general tax increase should be first in line to accept it on themselves.
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Old 04-08-2010, 12:00 PM   #94
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True, but in my ideal world *everyone* who has a vote would pay some income tax, even if only one dollar. As much as the American Revolution was largely about "taxation without representation," I don't believe that the converse -- "representation without taxation" if you will -- is a good thing either. Everyone with a vote should have some skin in the game, even if very little. I think that would help reduce the amount of "tax the other guys" thinking that goes on today. I don't really think it's a good thing when we have a system that encourages the "give me the goodies and tax other people for it" mentality. I believe anyone advocating a general tax increase should be first in line to accept it on themselves.

Well said Ziggy. +1

You stated my point much better. 50% paying $0 is a crazy way to run a country. Even if they pay some amount at least then they have a right to representation. Otherwise why should they have a right to representation. Instead these days it seems the 50% paying $0 have all the representation and those paying the bills are not being represented (or represented quite poorly).

It's stick it to the other guy and give me the money. And why not, it does not impact them since they pay no taxes. It violates common sense to set up a system in this manner.
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Old 04-08-2010, 12:44 PM   #95
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The top 10 percent in the USA get 50 % of all the income. . . so the top half of the population gets the vast majority of all income.
That's an interesting way of putting it, though at variance with our common American usage. Most people, rich or poor, believe that they have earned their income.

"Bill, how much did you get last year?"
"What the hell are you asking? I didn't "get" anything. Are you asking how much I "earned"?" Maybe how much I made? "
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Old 04-08-2010, 12:53 PM   #96
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Everyone with a vote should have some skin in the game, even if very little. I think that would help reduce the amount of "tax the other guys" thinking that goes on today.
And this is also a great reason to standardize and reduce deductions and other means to avoid subjecting earnings to taxation. It's not just about simplicity and fairness, it's also about assuring that everyone pays some of the bills (or gets some of the benefits) resulting from their votes.
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Old 04-08-2010, 12:56 PM   #97
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Bold added:

That's an interesting way of putting it, though at variance with our common American usage. Most people, rich or poor, believe that they have earned their income.

"Bill, how much did you get last year?"
"What the hell are you asking? I didn't "get" anything. Are you asking how much I "earned"?" Maybe how much I made? "
I disagree that that is the usage
"Get" is neutral
get (gt)v. got (gt), got·ten (gtn) or got, get·ting, gets
v.tr.1. a. To come into possession or use of; receive: got a cat for her birthday.
b. To meet with or incur: got nothing but trouble for her efforts.

2. a. To go after and obtain: got a book at the library; got breakfast in town.
b. To go after and bring: Get me a pillow.
c. To purchase; buy: get groceries.

3.
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Old 04-08-2010, 12:57 PM   #98
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Bold added:

That's an interesting way of putting it, though at variance with our common American usage. Most people, rich or poor, believe that they have earned their income.

"Bill, how much did you get last year?"
"What the hell are you asking? I didn't "get" anything. Are you asking how much I "earned"?" Maybe how much I made? "
Beautiful response samclem!

But let's not forget that more and more people today are 'getting' income. It's called the 'Refundable Tax Credit'. Those earning higher incomes need not apply.

edit - just saw your response Emeritus - OK, but maybe there is something to the fact that you chose 'get' over 'earned'?


-ERD50
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Old 04-08-2010, 03:16 PM   #99
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Beautiful response samclem!

But let's not forget that more and more people today are 'getting' income. It's called the 'Refundable Tax Credit'. Those earning higher incomes need not apply.

edit - just saw your response Emeritus - OK, but maybe there is something to the fact that you chose 'get' over 'earned'?


-ERD50
because among very high income people earned income is a small fraction of the income they get. Some studies show that the same is true for low income people
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Old 04-08-2010, 03:32 PM   #100
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because among very high income people earned income is a small fraction of the income they get.
What definition of "earned income" are you using? And again they are "getting" the income. I'm expecting we'll hear about "winners of life's lottery" next.

I think it's charming that the writers of our tax laws and the IRS apparently believe that someone who puts his money at risk in an investment or who buys, fixes up, and sells a property didn't "earn" the resultant gains.
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