Socialism - oh my!

It drives me absolutely up the wall when people say that Obama, or Democrats in general, or progressive economic policies, are socialist. I can only guess that people say this because of one of the following three reasons:

1) They don't know what the actual policies of Obama/Dems, etc. are.
2) They don't know what socialism actually is.
3) They know socialism is a dirty word, just like liberal has been made into a dirty word, and they are attempting to discredit a policy/philosophy they disagree with via ad hominem attack because they are either lazy or they know mud-slinging is really effective.

Socialism is a "social and economic doctrine that calls for public rather than private ownership or control of property and natural resources." What does that mean? Let's take an example.

In our economy (a mixed economy), I can open a small business. For the sake of example, let's say it's a convenience store. Most likely, I would take out a loan, rent a store, buy inventory, hire staff, sell goods, pay taxes, and hopefully, have some profit to enjoy. I would need to comply with government regulations on things like minimum wages, anti-discrimination, obtaining sales licenses, etc.

In a socialist economy, convenience stores (and everything else) are owned by the state. I may work at a convenience store, but I could not own one. The state would decide what inventory I should buy, at what price I should buy it, exactly how much staff are to be paid, and how much the goods would sell for.

As a little extra bonus in the example, in a communist economy, the convenience store would be owned by all the people. Decisions on inventory, pricing, wages, etc., would be made by the population at large.

At this point, I think it's important to note that the examples are simplified. That's what happens when you're trying to describe an economic system in a few sentences.

Anyhow, now let's look examine progressive policies, and see if they are socialist. In order for progressive policies to be socialist, the state would need to own the means of production.

Does anyone think that the Democrats are trying to nationalize all industry? Has anyone heard a proposal to end private ownership of businesses? No. Has anyone heard a single call from a Democrat, and in particular, Obama, that says everyone should make exactly the same amount of money? That no one should be wealthy? That regardless of personal merit, everyone should have the same standard of living?

No.

Believing in progressive taxation is NOT the same as socialism. Progressive taxation is the idea that the more you make, the more in taxes you should pay. It is not the same as the idea that you should not make any more than anyone else. It is not an attempt to enforce income equality through taxation.

There are many reasons that progressives favor the idea of progressive taxation. In my view, some of the benefits of progressive taxation are:

1) After a certain level of income, the propensity to consume decreases. No matter how rich you are, there is some limit to how much you can eat, how much gas you can burn, how many purses or cars or whatever you are likely to buy. Lower tax rates on lower-income families allow those families to buy more, which stimulates demand, and thus, stimulates the economy. Lower tax rates for the wealthy do not tend to stimulate demand in the same way, because whether their tax rates are low or high, they pretty much have enough money to buy whatever they want to anyway.

2) Higher income people tend to have more disposable income, and therefore, can afford a higher tax burden. Is this fair? I guess it depends on what your definition of fair is. I say that if someone is earning just enough to eat and pay for basic housing, it is less fair to tax them (driving them into starvation or the poorhouse) than it is to tax someone who's basic survival will not be imperiled by the tax.

3) The wealthy benefit more from societal goods, and therefore, should pay more. For example - the police investigate robberies. A low income person may lose $500 of goods due to a robbery. A wealthy person may lose $50,000 of goods due to a robbery. The wealthy person has more to lose, and thus, more to gain by paying taxes for police. The same idea can be applied to infrastructure. Fed Ex makes more based on the roadways than I do. If there are no roads, I lose my salary of $X. If there are no roads, Fed Ex loses its profits of $Y (which is far greater than my $X). It makes sense that Fed Ex should pay more for roads.

Now, you may or may not agree with these reasons. For example, some people feel that progressive taxation discourages work and innovation. (The old "why should I work harder to earn money if it's going to be taxed away?" argument. I say this is bunk - if I had the opportunity to make $100,000 more this year than last year, I would do it in a heartbeat. Yes, my tax rate would go up. So? I'd still be ahead. ) But in any event, let's say you disagree with progressive taxation.

Still doesn't make it socialism. Or communism. And if you keep calling it that, you're either ignorant, lazy, or deliberately deceptive.