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Tipping Point


Marksmu

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Fair is subjective. I don't think a flat tax is in the least bit fair. The value of a dollar is relative to the amount of dollars you have available to spend. Not only that, but in order to fund a government at current levels, the flat tax would have to be set so high as to price poor people out of their homes and make it impossible to feed their families. Plus, and again to maintain government funding at current levels, the wealthy would receive little to no tax breaks. Poor people do not now, nor will they ever be able to, contribute much to the general tax base. The poor and middle-class are best left being taxed less than the wealthy, which allows them to outflow their cash into the general economy - thereby stimulating the economy. It's pretty simple. If you tax the poor and middle-class more, they'll spend less, and it provides little substantial value to the government coffers. Close to half of our country's budget is funded from income taxes, and if you were to set those as a flat tax, you'd either inherently cut that portion of income in half or raise the tax burden on the poor and middle class to unmanageable levels. Consider if you will that roughly 80% of the nation's wealth is controlled by 10% of the population. If you put a flat tax on income, you'd have to raise the tax level for the remaining 90% of the population in order to give any cuts to the top 10%. And if you aren't willing to do that, then what's the point of changing from our regressive system? Personally, I think I already pay plenty in taxes considering what I get in return, but it looks to me like you want me and the other 90% of the nation's population who control the bottom 20% of the nation's wealth to pay more. That doesn't sound too fair to me, but what do I know?*

It would still be more fair than what we have now. At one time it was estimated a flat tax of 17% would be adequate but that was before the war and Obama's Health Care plan.  

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It would still be more fair than what we have now. At one time it was estimated a flat tax of 17% would be adequate but that was before the war and Obama's Health Care plan.

How? Even if we could fund our government on 17% of all individual income, it still doesn't negate the point that 17% of $20,000 is far more negatively impactful than 17% of $2,000,000. A flat tax, no matter how low you set it, is less fair to the poor and middle-class than a regressive tax. I readily admit the regressive tax is less fair to the rich, but being as they've benefitted the most from our free enterprise system, I consider it a wash.

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How? Even if we could fund our government on 17% of all individual income, it still doesn't negate the point that 17% of $20,000 is far more negatively impactful than 17% of $2,000,000. A flat tax, no matter how low you set it, is less fair to the poor and middle-class than a regressive tax. I readily admit the regressive tax is less fair to the rich, but being as they've benefitted the most from our free enterprise system, I consider it a wash.

I think you meant to say 'progressive tax' on the rich is less fair. The flat tax is regressive and harms the poor.

I should restate that. Income tax is progressive. Flat tax is proportional, but has a regressive effect in that the poor spend virtually all of their income, whereas the rich save much of theirs.

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I readily admit the regressive tax is less fair to the rich, but being as they've benefitted the most from our free enterprise system, I consider it a wash.

As compared to poor people in countries without a stable government or adequately regulated markets, our poor are vastly better off. According to the UN's 2005 Human Development Report, abstracted here, 40% of the world's population live on less than $2 per day (or $730 per year), a level of income that is nearly unfathomable in the United States. The difference between that and what the Census establishes as the poverty line ($9,570 for a single-person household, plus $3,260 for each additional person) is a tremendous one. In addition to being materially better off in very important ways (such as having essentially guaranteed access to food and clean water and typically having access to some form of motorized transportation and some level of professional healthcare), our poor don't have to concern themselves with the same kinds of instability, violence, corruption, or disregard for civil rights that are rampant in many third world countries.

The chronic poverty and recent turmoil in Mexico serves as a very relatable example, yet Mexico also has to deal with veritable chasms between socioeconomic classes that make our issues seem like merely hairline fractures, easily and frequently bridged. But that illustrates another point, that with or without a strong and stable government or adequately-regulated free enterprise system, wealthy individuals will find ways to fortify their position in society. They can, after all, afford to buy their own 'law and order'...however they desire to interpret it. The bottom line gets to be that the wealthy in any country will have an enviable existence (whether their absolute material wealth stacks up with their overseas counterparts or not) but that it is the poor that derive the greatest utility from the stability, effectiveness, and efficiency of governments and accompanying economic systems.

So coming full circle, there's no denying that poor people get the most benefit out of our system of government and our market regulations as they've evolved. All the same, it's obviously impractical to tax the different social classes according to the utility that they have derived from our effective system of government as compared to alternate ineffective systems (or the lack of one altogether, such as in a place like Somalia). Moreover, there is something to be said for the notion that there is a diminishing marginal utility of wealth; the more someone makes, the less each additional dollar matters to them. And that means that a pareto-efficient approach is to effectively implement a tax that is effectively progressive...without being so draconian, of course, that it has the effect of discouraging economic participation by society's most productive individuals.

^ Note that this is the optimized perspective of a fair-minded and level-headed socialist. If you care more about economic efficiency or growth as opposed to equitability, everything changes. It all depends on your priorities and goals...and hey, who says that our superpower status isn't also important for our poor?

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I think you meant to say 'progressive tax' on the rich is less fair. The flat tax is regressive and harms the poor.

I should restate that. Income tax is progressive. Flat tax is proportional, but has a regressive effect in that the poor spend virtually all of their income, whereas the rich save much of theirs.

In a global economy with highly developed financial institutions, savings very efficiently becomes investment. And investment is what allows for the expansion of our capital stock and even for the education that increases our the productivity of labor...all of which feed back into higher per capita wealth the world over. No doubt you'll counter that a disproportionate amount of the new wealth ends up in the hands of the wealthy. But by baking a bigger pie, it matters less how many slices are cut from it...which is to say, we can more easily afford to pay for more entitlements or transfer payments. This is why I like consumption taxes rather than income taxes or capital gains taxes.

I'd also like to point out that the United States is an investment of first resort for governments and wealthy individuals in unstable parts of the world and that by eliminating income taxes, corporate income taxes, and capital gains taxes (or otherwise addressing these issues by way of tax treaties with various countries) we make ourselves an even more attractive target for foreign direct investment...and that's always a good thing!

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And I am sick of the argument that its the elites who reap all the advantages....I dont think a family of 3 with 2 working parents making $200,000 by any way qualifies a person as an elite...

I don't know what your definition of "elite" is, but a family of 3 making $200k/year is pretty damn well off. They have more than enough to cover all the necessities of life and lots and lots of their desires. If all they have to complain about is taxes, then they're in waaay better shape than most of the rest of the US and the world.

Again, I don't know where the cutoff for "elite" status is, but only 4.2% of US households bring in more than $200k/year. They're better off than 96% of their fellow Americans. If that's not "elite", then it's definitely well into the "upper class".

US Census Data on Household Income

Maybe these upper class families should quit their whining and realize how good they have it.

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I think you meant to say 'progressive tax' on the rich is less fair.

I verified my terminology with the Wall Street Journal. It stands to reason I got it backwards.

So coming full circle, there's no denying that poor people get the most benefit out of our system of government and our market regulations as they've evolved. All the same, it's obviously impractical to tax the different social classes according to the utility that they have derived from our effective system of government as compared to alternate ineffective systems (or the lack of one altogether, such as in a place like Somalia). Moreover, there is something to be said for the notion that there is a diminishing marginal utility of wealth; the more someone makes, the less each additional dollar matters to them. And that means that a pareto-efficient approach is to effectively implement a tax that is effectively progressive...without being so draconian, of course, that it has the effect of discouraging economic participation by society's most productive individuals.

In other words, we agree on this. Your prose was just... less prosaic.

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Maybe these upper class families should quit their whining and realize how good they have it.

But how well off do they have it, really? Surely most of them aren't getting their money for nothing and their kicks for free. They've probably invested a great deal more in their career and are subject to greater financial volatility than the working classes could ever fathom. I'm not about to say that luck has nothing to do with it; but luck can be an ally as a foe.

And of course, we've already discussed the diminishing marginal utility of material income/wealth.

Oh, and if you're going to talk about upper class families, bear in mind that money acts as an industrial-strength solvent. Managing familial entropy gets to be a much more difficult process, also fraught with drama. Witnessing that kind of stuff almost makes me think that humans are somehow programmed to create their own stressors and find ways to limit their happiness, regardless of their material circumstances.

Bottom line, I'm not convinced that wealthier people are necessarily all that much happier. And I think that that gets to be especially true if you start adjusting for factors like age, intelligence, and household composition.

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Bottom line, I'm not convinced that wealthier people are necessarily all that much happier. And I think that that gets to be especially true if you start adjusting for factors like age, intelligence, and household composition.

I definitely agree that money does not equal happiness.

That said, I don't think there's any doubt that raising a family of 3 is easier done on an annual income of $200k than it is on an annual income of $20k...even when you account for the fact that the wealthier family has to give up around $40k in income taxes.

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I disagree with both of your posts, though I decline to type the reasons again (longtime posters may remember my lengthy retort to these issues).

I forgot as well. :)

You should do a cut and paste and keep them on file. It would save you quite a bit of typing.

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I definitely agree that money does not equal happiness.

That said, I don't think there's any doubt that raising a family of 3 is easier done on an annual income of $200k than it is on an annual income of $20k...even when you account for the fact that the wealthier family has to give up around $40k in income taxes.

I don't know about that. Adjusted for demographic factors, intelligence of the parents, etc., I'd almost suspect that rich kids are harder to handle, have more personality disorders, and get into more trouble.

Bear in mind, I grew up in a border town that had the highest unemployment rates and lowest wages in the nation and went to school with folks whose large families survived rather easily on less than that. It's really easy, actually, if that family has reasonable expectations of what they can afford or think that they are entitled to. Bankruptcies and bad credit were endemic, but those kinds of things don't matter so much to people who have no repossessable assets or expectations of having repossessable assets.

Then there's my own personal experience from a few years back when I tried to get serious with a girlfriend. She started laying out her long-term vision, which involved living in a farm house on lots of acreage about two hours outside of Houston most days out of the week, but with a crash pad somewhere in town that was sufficiently large for the family (and her parents, if necessary). She wanted 1.3 kids, to be enrolled at Kinkaid, and a servant to ferry them around when it was inconvenient for us. And the kid(s) couldn't come along until we could secure that lifestyle, because of course they'd know if they'd been raised in an apartment when they were very small and would hold it against us for all the neuroses that they'd ever have later in life. ...I know it sounds like a joke, but she wasn't joking. Needless to say, she and her picky ovaries are long gone. I wouldn't want that lifestyle, and I certainly wouldn't want to pay for it. Living hand-to-mouth would be easier.

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Then there's my own personal experience from a few years back when I tried to get serious with a girlfriend. She started laying out her long-term vision, which involved living in a farm house on lots of acreage about two hours outside of Houston most days out of the week, but with a crash pad somewhere in town that was sufficiently large for the family (and her parents, if necessary). She wanted 1.3 kids, to be enrolled at Kinkaid, and a servant to ferry them around when it was inconvenient for us. And the kid(s) couldn't come along until we could secure that lifestyle, because of course they'd know if they'd been raised in an apartment when they were very small and would hold it against us for all the neuroses that they'd ever have later in life. ...I know it sounds like a joke, but she wasn't joking. Needless to say, she and her picky ovaries are long gone. I wouldn't want that lifestyle, and I certainly wouldn't want to pay for it. Living hand-to-mouth would be easier.

I dated her too... to the same effect.

I don't understand how some people can be so unpragmatic. Don't get me wrong, I like nice things as much as the next guy. I just can't find myself being driven by the attainment of nice things. They're a nice ancillary in this journey we call life, but they're hardly worth living for. Why anyone would be so concerned with crap that truly doesn't matter is beyond me, and being reminded of people like this never fails to make me grateful for the upbringing I had.

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  • 2 weeks later...

So then, our call to rally against the British was "no taxation without representation", so shouldn't there be "no representation without taxation"? Seems there should be.

Do you know anyone who is not taxed? There are the income taxes, of course, though some low wage earners and unemployed do not pay them. However, every wage earner must pay Social Security and Medicare taxes, as do the self-employed. Anyone who owns a home or land pays property taxes. Even the homeless pay sales taxes on their booze and cigarettes. Do you not think those taxes are sufficient to entitle one to be a citizen and represented?

But, to answer your question, no, I do not believe in no representation without taxation. I do, however, believe that some people in this country are far too selfish and greedy, and that they should spend more time appreciating what they have and less time trying to make everyone else pay for it.

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Anyone who owns a home or land pays property taxes.

I would add that even renters pay property taxes, although they are manifested as a component of their rent without which the return on investment would be insufficient to justify its existence.

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 I do, however, believe that some people in this country are far too selfish and greedy, and that they should spend more time appreciating what they have and less time trying to make everyone else pay for it.

I agree but there seems to be far more people that are lazy and think they are entitled to what others have worked so hard to get then the small percentage you are referring to. Thus the unhappiness with our present government and taxes. 

Already wary of the federal government, Americans have grown even more critical, less trusting and even fearful of Uncle Sam since President Barack Obama took office, according to an exhaustive new study being released Monday.

poll

I'm unhappy also but unlike some I blame it on all politicians, not just Democrats. In 2012 we need to clean house with both parties.

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I agree but there seems to be far more people that are lazy and think they are entitled to what others have worked so hard to get then the small percentage you are referring to. Thus the unhappiness with our present government and taxes.

Call it whatever you want, but you really ought to stop using the entitlement label - if only for semantic accuracy. If anyone thinks the bottom of the food chain is a glamorous position to be in, then perhaps we can resurrect the term, but until we find that person, let's retire it.

I'm unhappy also but unlike some I blame it on all politicians, not just Democrats. In 2012 we need to clean house with both parties.

I blame it all on political pundits. Making mountains out of molehills and getting the populace whipped into a frenzy about misrepresented positions may make for good ratings, but it's hell on the morale of the country. Replacing everybody in a position of authority won't do anything but give the commentators someone new to bjtch and moan about. I say we all vote to reform this country by turning off Fox News and MSNBC and turn our radio dials back to music stations. Who's with me?!

Edit: HAIF has now perfected the English language by turning a female dog into a delicate flower.

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Call it whatever you want, but you really ought to stop using the entitlement label - if only for semantic accuracy. If anyone thinks the bottom of the food chain is a glamorous position to be in, then perhaps we can resurrect the term, but until we find that person, let's retire it.

I'm "entitled" to my opinion. 

I say we all vote to reform this country by turning off Fox News and MSNBC and turn our radio dials back to music stations. Who's with me?!

Music stations here suck. How about sports talk radio? Seems to be the only thing I turn on anymore while driving. 

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I'm "entitled" to my opinion.

That's just another opinion redistribution program designed to hand out opinions to people who haven't worked hard enough to develop their own. Ever notice how Obama and opinion both start with the letter O? Is it a coincidence? O think not!

Come to think of it, isn't that exactly what channels like Fox and MSNBC are? Opinion redistribution centers? They take other people's big ideas, grind 'em up and dole them out to people who don't want to think critically on their own. These channels are the outlet stores in the socialism of ideas movement! Don't want to think? Well let ol' Fox News and MSNBC do your thinkin' for you.

Music stations here suck. How about sports talk radio? Seems to be the only thing I turn on anymore while driving.

You may disagree with the politics of the stations, but when you catch them playing music, there's no better stations in town than 90.1 KPFT and (on Fridays) 90.9 KTSU. Also, 89.7 KACC is great so long as you're not in the far northwest portions of the metro. I even like the old-time country on 97.1, but they occasionally get too modern/pop country for my tastes. And if you have the stomach to wade through one or two experimental "songs", then you can find some real gems on 91.7 KTRU.

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You may disagree with the politics of the stations, but when you catch them playing music, there's no better stations in town than 90.1 KPFT and (on Fridays) 90.9 KTSU. Also, 89.7 KACC is great so long as you're not in the far northwest portions of the metro. I even like the old-time country on 97.1, but they occasionally get too modern/pop country for my tastes. And if you have the stomach to wade through one or two experimental "songs", then you can find some real gems on 91.7 KTRU.

Aside from KUHF and KKRW, that about covers my radio presets. And yeah, KTRU can get really annoying when they aren't playing Nelson, Cash, Orbison, or the like...I particularly hate that song about a woman who reminisces positively about being beaten as a child by her daddy's hands.

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You may disagree with the politics of the stations, but when you catch them playing music, there's no better stations in town than 90.1 KPFT and (on Fridays) 90.9 KTSU. Also, 89.7 KACC is great so long as you're not in the far northwest portions of the metro. I even like the old-time country on 97.1, but they occasionally get too modern/pop country for my tastes. And if you have the stomach to wade through one or two experimental "songs", then you can find some real gems on 91.7 KTRU.

I do listen to KPFT and KUHF at times. When I'm home on Saturday nights I love listening to "Pulling Strings" and the "Thistle and Shamrock" show on KUHF. I would listen to KPFT a lot more if they would play more music and do less talking. Years ago I used to love Rice's KTRU but even Rice students don't listen to it now. I'm not into country except for a little bluegrass and "outlaws" like Willie and Waylan. 

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Years ago I used to love Rice's KTRU but even Rice students don't listen to it now.

They never did. At least, not in any appreciable numbers - students that were regular listeners were in a distinct minority even when I was an undergrad back in the 80s. KTRU's evolved over time, and I may not care for everything they play, but one man's meat is another's poison and I'd still take it over any other local radio station out there. If only their signal were stronger.

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Aside from KUHF and KKRW, that about covers my radio presets.

I gave up on The Arrow when the got rid of Dean and Rog in the morning. I loathe their current morning show.

And yeah, KTRU can get really annoying when they aren't playing Nelson, Cash, Orbison, or the like...I particularly hate that song about a woman who reminisces positively about being beaten as a child by her daddy's hands.

KTRU is 91.7. It's Rice radio. The annoying experimental stuff will be something ridiculous like eight minutes of a single tone beep or people shouting or some other weird crap. I don't know the call letters for 97.1 but that's what you're describing. I was driving home last Thursday or Friday, and there was some sappy song about a woman who was thinking of positive ways to explain divorce to her five year old son, and how she currently had to spell out the word with her estranged husband as she wasn't yet ready to make that explanation. Needless to say, I made it about halfway through the song before I couldn't take it anymore and switched over to Democracy Now.

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Do you know anyone who is not taxed? There are the income taxes, of course, though some low wage earners and unemployed do not pay them. However, every wage earner must pay Social Security and Medicare taxes, as do the self-employed. Anyone who owns a home or land pays property taxes. Even the homeless pay sales taxes on their booze and cigarettes. Do you not think those taxes are sufficient to entitle one to be a citizen and represented?

But, to answer your question, no, I do not believe in no representation without taxation. I do, however, believe that some people in this country are far too selfish and greedy, and that they should spend more time appreciating what they have and less time trying to make everyone else pay for it.

Greed is not necessarily a bad thing...it drives people to be successful. Without greed, there is no incentive to do anything. Changing tax rates and fleecing the rich, will not make people less greedy, it will just make poor people more greedy. They never say that enough is enough. The more you give, the more they want...the more you shift the blame to the rich, the happier they are to vote in people who promise to take more from the rich....eventually everyone is poor.

I think many Americans would complain significantly less if they felt that everyone was paying. The flat tax does just that. Everyone pays the same amount, regardless of their income. 10% of X is always 10%. Even if that amount is negligible, at the very least they are invested in becoming successful.

Greed is not necessarily a bad thing...it drives people to be successful. Without greed, there is no incentive to do anything. Changing tax rates and fleecing the rich, will not make people less greedy, it will just make poor people more greedy. They never say that enough is enough. The more you give, the more they want...the more you shift the blame to the rich, the happier they are to vote in people who promise to take more from the rich....eventually everyone is poor.

I think many Americans would complain significantly less if they felt that everyone was paying. The flat tax does just that. Everyone pays the same amount, regardless of their income. 10% of X is always 10%. Even if that amount is negligible, at the very least they are invested in becoming successful.

Edit - 97.1 is a fantastic station. My radio seldom moves from it....even the old songs about daddy beating his daughter.

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Greed is not necessarily a bad thing...it drives people to be successful. Without greed, there is no incentive to do anything.

That's an awfully bleak outlook. There are many motivators to succeed, and greed is only one of them. It certainly doesn't motivate me. I like having food on the table, but not at the expense of other people's ability to put food on their tables. You really don't know what drives other people to succeed, just yourself. So when you say greed motivates people, you're really only saying greed motivates you.

I think many Americans would complain significantly less if they felt that everyone was paying. The flat tax does just that. Everyone pays the same amount, regardless of their income. 10% of X is always 10%. Even if that amount is negligible, at the very least they are invested in becoming successful.

Well... good. Considering everyone pays into the system with sales taxes at the very least, that means everyone is motivated to succeed and no one uses welfare programs as entitlement programs. Glad that's settled. Now we can leave that other silly point-of-view behind.
Edit - 97.1 is a fantastic station. My radio seldom moves from it....even the old songs about daddy beating his daughter.
I love it when we can find some common ground.
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Greed is not necessarily a bad thing...it drives people to be successful. Without greed, there is no incentive to do anything. Changing tax rates and fleecing the rich, will not make people less greedy, it will just make poor people more greedy. They never say that enough is enough. The more you give, the more they want...the more you shift the blame to the rich, the happier they are to vote in people who promise to take more from the rich....eventually everyone is poor.

http://www.youtube.com/watch?v=7upG01-XWbY

Ahhh, yes. Greed is good. God, I love that clip.

...and nothing is more satisfying to your greedy instincts than selling out of the money put options.

Money just appears in your account. For doing no real work...

...Come on Black 17...

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That's an awfully bleak outlook. There are many motivators to succeed, and greed is only one of them. It certainly doesn't motivate me. I like having food on the table, but not at the expense of other people's ability to put food on their tables. You really don't know what drives other people to succeed, just yourself. So when you say greed motivates people, you're really only saying greed motivates you.

Feeding oneself is exceedingly easy in this country. I can direct you to a half dozen soup kitchens if you're aware of anybody who complains for lack of sustinence.

I'm guessing that you don't drive a jalopy or live in a shotgun shack, that you value air conditioning, and that you appreciate the ability to eat out once in a while. And I'm guessing that you'd go to extreme lengths to ensure that your family didn't have to endure even the sorts of conditions that your great grandparents lived in...or even that you may have lived in when you were younger.

As George Carlin once said, "The poor are there just to scare the ____ out of the middle class. Keep 'em showing up at those...jobs." If it isn't greed that I'm talking about, it's fear--a fear that most people have that they might at some point have to redefine so many aspects of their lifestyle as luxury goods. Which is to say, they're greedy. They want something unnecessary, even though their claims to resources might be more equitably distributed if they were to sacrifice air conditioning and contribute the savings to charity.

At the end of the day, the only person who can claim not to have deprived someone of something is a working pauper. You don't strike me as that sort, and so perhaps you ought to re-evaluate your outlook on greed, broadly defined.

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