This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Did Elizabeth Warren Miss the Point on Taxes?

NEW YORK ( TheStreet) -- In American capitalism, are we born into a social contract that binds us to a greater good?

Elizabeth Warren's recent comments on taxation and America's "underlying social contract" have launched an inspired debate.

Elizabeth Warren

"There is nobody in this country who got rich on his own. Nobody.

You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.

Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along."

Comments from Warren's supporters and detractors were spirited; some were downright thought-provoking. One commenter -- [name withheld] -- emailed TheStreet with this counterpoint to Ms. Warren's quote:

Elizabeth Warren's perceptions miss the point. Without the entrepreneur there would be no roads. Without the profits they generate there would be no one interested in helping or protecting them, because there would be no one to pay them. How many communities and countries languish for lack of an idea -- for lack of someone who has the capacity to make something happen?

If what Ms. Warren said were true in the overall, roads and police would have to be in place before the entrepreneur could function. History tells us differently. Many an entrepreneur has provided their own roads and security forces to achieve their success. The existence of roads places no additional obligation on the successful entrepreneur. Quite the contrary. We should thank him or her for providing the wherewithal to pay us to build his roads.

As the commenter observes, ideas come from the individual. Ideas aren't created because of government, and in some cases, might be created in spite of government.

The essential functions of government -- and the costs associated thereof -- are open to debate. But most can agree that government should exist to provide a framework that allows capital ideas to flourish.

So -- the question to you, reader: What functions of government exist, or should exist, for the long-term success of our capitalistic system? And where should the government get out of the way (or be dismantled)?

Share your thoughts in the comments below.

-- Written by John DeFeo in New York City

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.18 1.64%
FB $117.43 -0.96%
GOOG $692.36 -0.84%
TSLA $232.32 -3.92%
YHOO $36.01 -1.42%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs