Early Retirement Extreme Forums

Person A is not receiving a subsidy, but simply being allowed to keep a little more of their own money. Person B is receiving money that was taken from someone else.

IlliniDave wrote:Person A is not receiving a subsidy, but simply being allowed to keep a little more of their own money. Person B is receiving money that was taken from someone else.

+1

Person A is also using the program as it was intended. Person B isn't if they're ERE.

@jennypenny - I believe you are right, and your ethical values are timeless and necessary for a healthy society - but the current program isn't structured or enforced to actually encompass these truths. Also, with the growing repeal of asset testing, and the expansion of other socialist programs that don't asset-test like the changes to Medicaid and ACA, government programs seem to be headed more towards a "minimum guaranteed income" socialist-state ideology.

WRT to Social Security, I think it is the perfect example. It started as a "to help those who'll need it" program, but morphed into a government-managed pension plan where everyone expects to get "what they paid for" even though the money never actually went towards a Social Security investment scheme but was spent on other things.

I agree with workathome, the problem is with the programs themselves... If I qualify I want to to show off how freaking stupid that is. /checks 'foodstampmillionaire.com' for availability -dam!

I think SNAP is just another federal train wreck that would be much better handled by the states.

IlliniDave wrote:Person A is not receiving a subsidy, but simply being allowed to keep a little more of their own money. Person B is receiving money that was taken from someone else.

Isn't this thread about being both Person A & B?... So it can be moral, but only if it falls in the correct fiscal year?

JohnnyH wrote:

IlliniDave wrote:Person A is not receiving a subsidy, but simply being allowed to keep a little more of their own money. Person B is receiving money that was taken from someone else.

Isn't this thread about being both Person A & B?... So it can be moral, but only if it falls in the correct fiscal year?

I'm not sure what exactly you mean. I was responding to a specific post. Person A earns money and is allowed to keep it. Via their personal exemptions, standard deductions, they are also allowed to keep money to buy food. But in both cases it is their money that they earned.

Person B is taking money the government seized from other people. Nothing in the Person A/Person B example gives insight into whether person B has ever paid a dime in tax.

I made no comment regarding morality, just pointed out the obvious difference in the two situations. It's a pet peeve of mine when people infer that money a worker earns that is not taken by the IRS is somehow a subsidy from the government to that person.

I don't know how much you pay in taxes, but it's unlikely a large fraction of it is going for these specific food programs, probably not close to enough to feed you for the rest of your life. Maybe if you never again used a road, or a bridge, or a bank, or participated in investment markets, took medication, counted on law enforcement and court systems, expected clean air and water, visited parks, fly on airplanes, purchased food, cared if car bombs go off on your street, and the myriad other things people expect the government to do for them, you could make some sort of quid pro quo argument that you're entitled to food money the rest of your life because you paid income tax for a time in the past.

Nevertheless, if you fit within the rules and want the handouts, then fine. But I think the argument that doing so is somehow a just restitution for having paid income tax in the past is a little specious. Unless, of course you're paying many tens or hundreds of $K per year FICA.

Might it help to take this discussion away from food as a handout? How about some other form of subsidy which is available because you are adopting an ERE lifestyle and for which you would not otherwise qualify?

I've been trying to get my head around the idea that its probably going to be fine (with my inner moral sense as well as the rules) for DS to apply for a student grant. Most students don't get any grant but can take out loans (a novel idea in the UK where until a few years ago students paid no fees and further back also usually had a maintenance grant so no need for loans/debt. The current grant is not so lavish (just over a third of the costs of the annual fee) but it is based on a sliding scale of up to £3,354 grant paid to households with less than £42,611 income. Yes, that is a relatively high income. the max grant is paid to households with less than £25,000 income which could well be us.

This is not a benefit which has been created with an ERE household in mind. But we will qualify and we (or he) would need to cut into savings more deeply without this. Perhaps I am fine with this as its close to the Person A example (DS will be paying quite a lot for the education so some sort of discount is good to know about and use).

jennypenny wrote:Keep in mind that I'm a small government libertarian making this argument...

If the argument is that you 'paid into the system' so you're entitled to take your fair share back, then it comes down to a difference in how we view the federal government. I pay income taxes that provide a military that helps to guarantee that I live most of my life in peacetime. I pay income taxes to provide a stable government that guarantees that our currency is still the go-to currency in the world. I pay taxes that support a host of agencies that improve my life including the FDA, CDC, FAA, and many others.

Very little of my taxes go towards programs like SNAP or FEMA. I feel like I'm a lucky, lucky girl if I never have to use those services. I'm also glad they exist because I don't want to live in a country where people who need those services (short or long term) can't get them. It's in my best interest to make sure that the government provides a 'floor' on poverty to help maintain the country we've built.

I still see paying into FICA as different because it's intended for everyone, but I would support it even if they instituted a means test and we were disqualified. It has supported people we know who haven't saved enough for retirement. Judging from our relative's finances, it will support the bulk of them in retirement. Without that, they'd be knocking on my door. It's so much easier for us to pay into FICA knowing that we won't have to deal with that headache.

I like this.

IlliniDave wrote:Person B is taking money the government seized from other people. Nothing in the Person A/Person B example gives insight into whether person B has ever paid a dime in tax.

Almost all ERE pursuants will start as Person A, having a significant amount of their income taxed. Once retired, ERE Person A can become Person B, qualifying and accepting benefits. Does Person B only have a valid claim on their paid in money until December 31 of the last year they are Person A?

IlliniDave wrote:I don't know how much you pay in taxes, but it's unlikely a large fraction of it is going for these specific food programs, probably not close to enough to feed you for the rest of your life. Maybe if you never again used a road, or a bridge, or a bank, or participated in investment markets, took medication, counted on law enforcement and court systems, expected clean air and water, visited parks, fly on airplanes, purchased food, cared if car bombs go off on your street, and the myriad other things people expect the government to do for them, you could make some sort of quid pro quo argument that you're entitled to food money the rest of your life because you paid income tax for a time in the past.

If we can exclude the car bomb part (I'd argue they're making it more likely, not less) all of that is probably under 5% of the federal budget... 80-90% is war, disease, debt, entitlements. Most of what they spend on is morally abhorrent to me but I agree, a few percent of the budget is spent on worthwhile things.

JohnnyH wrote: Almost all ERE pursuants will start as Person A, having a significant amount of their income taxed. Once retired, ERE Person A can become Person B, qualifying and accepting benefits. Does Person B only have a valid claim on their paid in money until December 31 of the last year they are Person A?

You're trying to make an argument that's completely different from the post I initially responded to. Person A had mortgage interest on a McMansion (my home is far smaller than a McMansion). Person B received food assistance. That's all. I've never been person A. I will probably never be person B. I'll be well over any subsistence subsidies and probably continuing to pay taxes for as long as I'm alive.

If you wind up qualified for subsidies someday, that's fine, go ahead and take them if you want. But I and the other taxpayers do not owe the subsidies to you, no matter what your opinion of the government and it's use of taxpayer money is.

IlliniDave wrote:If you wind up qualified for subsidies someday, that's fine, go ahead and take them if you want. But I and the other taxpayers do not owe the subsidies to you, no matter what your opinion of the government and it's use of taxpayer money is.

We're in 100% agreement there, I just want my money back. I do want to starve the beast and deny them every dollar possible but I absolutely would not accept any other tax payers' money re-distributed to "poor" old me.

Do you think it's ethical for the government to redistribute wealth so people can get a discount on 100k electric cars? If so, why not take that redistribution in other, far more helpful forms?

JohnnyH wrote: We're in 100% agreement there, I just want my money back. I do want to starve the beast and deny them every dollar possible but I absolutely would not accept any other tax payers' money re-distributed to "poor" old me.

Understand, but the rub is, that's exactly how it would work. Whatever money they took from us in the past is long gone. The only way the government could give us our money back is to take it out of someone else's paycheck in the future.

One can take the "liberal" view that your personal exemptions, standard deduction, lower capital goins and dividend tax rates, and the 0% bracket are all gifts to you from the government, and so get your money back that way .

IlliniDave wrote: Understand, but the rub is, that's exactly how it would work. Whatever money they took from us in the past is long gone. The only way the government could give us our money back is to take it out of someone else's paycheck in the future.

Yet that's exactly how Social Security functions now. You're not getting your money back if you take it, that money is long gone. You're getting someone else's redistributions.

"Understand, but the rub is, that's exactly how it would work. Whatever money they took from us in the past is long gone. The only way the government could give us our money back is to take it out of someone else's paycheck in the future."

So, by this logic, if a mugger robbed you of 100$, spent it, and then at a later date you took 100$ back from the mugger you would somehow be in the wrong since you were not regaining your original 100$?

That's absurd.

Dollars are fungible. The idea that since the particular dollar the government took from you has been spent that you have not been wronged or are somehow not entitled to repayment is ridiculous.

Why is anyone entitled to 'repayment' from the government? It's not a bank. Taxes aren't a deposit.

If you must, look at taxes like a fee you pay to be a member of Club America and enjoy all of the perks that come with membership.

"If you must, look at taxes like a fee you pay to be a member of Club America and enjoy all of the perks that come with membership."

The membership fee parallel is deeply flawed in that club fees are voluntary, taxes not as much.

Muggings on the other hands are less voluntary and so are a much better metaphor.

gerry_b wrote:The membership fee parallel is deeply flawed in that club fees are voluntary, taxes not as much.

Sure, they're voluntary. There are a number of countries that will let you 'buy' citizenship. If you can find a better value for your tax dollar in one of those, it's always an option. If a person stays here because it offers the best opportunities, then they have to pay taxes to support the system that preserves those opportunities.

I always find this topic amusing when it comes up here. In theory, EREs will pay less in taxes over the course of their lives than most Americans. And before someone points out that only 1/2 of Americans actually pay income tax, I'm not just talking about those taxes. Our low-consumption lifestyles mean less tax on consumables as well.

Jennypenny is the type definitely the type of person I'd like to have as a neighbor.

It seems we're sort of left with two positions on this forum:

1) It's unethical in principle (full stop)
or
2) Agreeing to the above basic principle, but arguing that these circumstances (victimization, degrees of corruption, greater good) change things so that the principle no longer applies or may be violated.

I'm not sure additional back-and-forth will resolve things further, but it has been very interesting to read.

gerry_b wrote:"Understand, but the rub is, that's exactly how it would work. Whatever money they took from us in the past is long gone. The only way the government could give us our money back is to take it out of someone else's paycheck in the future."

So, by this logic, if a mugger robbed you of 100$, spent it, and then at a later date you took 100$ back from the mugger you would somehow be in the wrong since you were not regaining your original 100$?

That's absurd.

Dollars are fungible. The idea that since the particular dollar the government took from you has been spent that you have not been wronged or are somehow not entitled to repayment is ridiculous.

Where did I say anything about right/wrong? If the mugger's only source of money was mugging people, and the original money was gone, the only source for the $100 I recovered would be money that the mugger gained by mugging someone else. That's just how it is.

In general, no one is legally "entitled" to "repayment" of their income tax provided they did not erroneously overpay initially.

gerry_b wrote:
The membership fee parallel is deeply flawed in that club fees are voluntary, taxes not as much.

Not really, people do renounce US citizenship/residency to avoid paying the "dues".

http://www.npr.org/blogs/parallels/2014 ... itizenship

I don't know of any clubs where you can fully participate while the dues remain optional.