triangulation

[driveby]

December 9, 2010 12:00 A.M.

 

Why Not Soak the Rich?

Not all of them are that wealthy, and hurting them won’t help the rest of us.

 

For the last two years, $250,000 in annual income has been an arbitrary line in the sand of a renewed class war. Those above it must have their income taxes raised. Those below it are deemed more virtuous and so deserving of a tax cut.

 

But who exactly are the “rich”? Zillionaires such as Warren Buffett, Bill Gates, and George Soros surely are. But these wealthiest individuals have so much money at their disposal that they don’t care much about income-tax rates. Their tax lawyers have found ingenious ways to divert millions of what would be owed to Uncle Sam by funding tax-free pet causes, private foundations, and favored charities – in a way not available to those who make far less than a million dollars a year.

 

Is annual income a good gauge of wealth? Who is richer — the architect in Monterey, Calif., who makes $250,000 a year and who paid $700,000 for a modest house while picking up the full tab of $50,000 a year for his daughter at a private liberal-arts college, or the engineer in Salt Lake City, Utah, making $100,000 a year who has a house twice as large at half the cost, and whose son is on a need-based scholarship at the university? Should annual income alone trump all other considerations when the costs of living vary widely by region, and eligibility for billions of dollars in federal and state subsidies is predicated on income levels?

 

By the same token, what exactly is “poor” in a globalized world of cheap imported TVs, cell phones, and high-tech gadgetry available to most Americans at Walmart and Target? The middle class today has better access to what were once called luxury items than did the super-wealthy just two decades ago.

 

How do we define tax “cuts”? Were the George W. Bush income-tax rates really “cuts” for the rich? Or were they across-the-board cuts only in comparison with the higher Clinton rates? In turn, were the Clinton rates actually “hikes” on top of the George H. W. Bush “hikes”? Both upped the lower Reagan rates, which in turn had been “cuts” from the higher Carter rates. In fact, every president’s newly adjusted income-tax rate is derided mostly on partisan political grounds as either a counterproductive hike that “kills small business” or an unfair “trickle-down” cut.

 

Income taxes don’t operate in a vacuum. That the “rich” should pay 39.5 percent on their income might seem justified in isolation. But what about property, state income, payroll, and other taxes that, combined with federal income taxes, can take up to 65 percent of some incomes in high-tax states?

 

In addition, income taxes are already graduated, so one pays a higher percentage of one’s income the more one makes. Yet 50 percent of Americans pay no income taxes at all, while 5 percent of taxpayers pay nearly 60 percent of the total collected. The result is that half of Americans are likely to favor both higher entitlements, which they may well receive, and higher income taxes, which they most certainly will not pay.

 

Did the staggering annual national deficit arise from a lack of revenue or out-of-control spending? California manages to have the highest income, sales, and gas taxes and the largest deficits. Over the last decade, federal income-tax revenue — and budget deficits — have increased almost every year.

 

Income levels are not static. Belonging to the upper brackets is not always a matter of privilege or inheritance. Some Americans go in and out of the top tax brackets depending on the economy. Others are “rich” for only a few years in their 50s and 60s — making far less before and after.

 

If we prefer high rates, we will see either more tax avoidance or a certain reluctance to work an extra day, buy new equipment, or hire a new employee — given that any additional income will be mostly eaten up in taxes. Those who make over $250,000 are those who would be more likely to hire new employees, and they usually can do it far more efficiently than the federal government.

 

Finally, if the goal is to increase federal revenue, then it is wisest to keep taxes as they are. That encourages Americans to make as much as they can and to hire and buy, thereby enriching the nation at large. But if the aim is instead to ensure that we mostly end up about the same, then raising taxes on the already highly taxed might make us more equal — and collectively all poorer as well.

[Ursa Majoris]

Interestingly, individuals earning less than $20k and families earning less than $40k will actually be worse off under the new tax agreement because the SS reduction at their level is not enough to make up for Obama's Making Work Pay program.

 

I imagine that was the Republicans' desired result.

[TimC]

I don't get it at all.

 

You've got 2 sons. One son gets up at 5 AM and works til sunset until his hands bleed. Then he goes to his night job getting home around midnight to make a decent living for him and his family. He's making it, but barely and hopes one day to move up in the world. He has one child and pays health insurance for her.

 

The other son lies around taking whatever job he can until he gets fired for not showing up. He's constantly on unemployment and food stamps and just sits around playing PS3 and XBox all day long with no goals in life. He has one child and uses state-run healthcare for her.

 

And we end punishing the first son? I love how no one looks at the poor and why they are poor. Most poor people I know aren't poor because of mental disabilities or other factors they can't control. My brother-in-laws are the two "sons" above. One is going to make it and the other never will. You guys are so quick to write off the poor as pitiful creatures that the world has simply conspired against. There is no good reason one person should pay more to someone else simply because he worked hard for everything he has. Absolutely none.

[Perchoutofwater]

all he was doing was making noise and parroting somebody who said 250k wasn't wealthy - otherwise he'd have an answer as clear as his broad and definitive declairation that 250k isn't wealthy.

 

eta: size of household is very relevant in this argument.

 

You say I'm parroting someone, when I say it depends on location (cost of living) and what one does (whether they are an employee or employer) but then you even say and rightly so it depends on size of household. There are three different variables there and I'm sure if we gave it some more thought we could come up with a few more. My point was I don't agree with the class warfare of the left so I wasn't going to play his game. Even if I was inclined to play the game, there are so many variables there is no real answer, which is why we should all pay the same percentage in taxes if we are going to tax income. A $250,000 salary is wealthy in some areas under some conditions, in other areas under other conditions it is not.

[Azazello1313]

whether we define $250K as "rich" seems stupid and beside the point to me. I mean, for one thing, if we had any sort of sense of context and history whatsoever, we'd realize that hell even $100K is pretty rich by national standards, $50K is ridiculously wealthy by world standards, and even life at our currently defined "poverty level" is absurdly wealthy compared to what most people in this history of this planet have experienced.

 

but at the same time, $250K doesn't make one daddy warbucks either. this article is a little eye-rolling in its tendentiousness, but the chart on the second page is kind of interesting. add up all the tax burden of a family making $250K, it comes out to over $77K in some places.

 

in any case, the point I would make is that the top 1% already carry 40% of the tax burden, and the top 5% carry something like 80% of the burden. I can see a good case for either putting all the tax rates back where they were under clinton, or leaving them all where they're at now, but using class warfare arguments to steepen the progressivity of the tax code way past what it has ever been before, and thus further increase the implicit marginal tax rates across the board, is just lame.

[bpwallace49]

$589,457.76

 

So you cowardly make up a number?

 

Then dont throw out talking points of how 250K a year "isnt wealthy" if you cant back it up Perch.

[Perchoutofwater]

So you cowardly make up a number?

 

Then dont throw out talking points of how 250K a year "isnt wealthy" if you cant back it up Perch.

 

You wanted me to throw out a number. I was just trying to satisfy your dumb ass. I've said all along that I think there are other factors in determining if someone is "rich" or not. I've also stated I think someone making more than me shouldn't have a higher tax bracket than me just like someone making less than me over the poverty line shouldn't have a lower tax bracket than me. You wanted a number I gave you a number, and if you weren't such a coward and ignore people you'd realize I didn't make up the number.

[caddyman]

You wanted me to throw out a number. I was just trying to satisfy your dumb ass. I've said all along that I think there are other factors in determining if someone is "rich" or not. I've also stated I think someone making more than me shouldn't have a higher tax bracket than me just like someone making less than me over the poverty line shouldn't have a lower tax bracket than me. You wanted a number I gave you a number, and if you weren't such a coward and ignore people you'd realize I didn't make up the number.

Another embarasing moment for BP. This used to be a weekly occurrence. Now it has become a daily routine. He has officially exceeded bushwacko as most embarrassing hudler.

 

He knows damn well wealthy is a relative term. I know people that make 250k and don't have a damn thing to show for it. There are so many factors that determine wealth. Family size and cost of living are the two most important factors. There is a huge difference between doing well and being wealthy. I always look at wealthy as people with large or multiple homes and fancy cars. I know a bunch of guys making 250k and they are not looked at as wealthy. They live in nice but not elaborate homes and drive your normal vehicles.

[bpwallace49]

You wanted me to throw out a number. I was just trying to satisfy your dumb ass. I've said all along that I think there are other factors in determining if someone is "rich" or not. I've also stated I think someone making more than me shouldn't have a higher tax bracket than me just like someone making less than me over the poverty line shouldn't have a lower tax bracket than me. You wanted a number I gave you a number, and if you weren't such a coward and ignore people you'd realize I didn't make up the number.

 

Then dont be dumb enough to confidently state that "250K a year in annual wages isnt wealthy" THAT makes you look very very dumb. The whole point of this that it IS too arbitrary to define and that it IS silly to have a catch-all definition. Yet you can definitely say that 250K a year "isnt wealthy". But then cant define what is . . .

 

Wealthy is completely arbitrary term . . . or is this an example where you cant define it, but you know what shouldnt be in that definition based on your own personal W-2 forms?

[gbpfan1231]

So you cowardly make up a number?

 

Then dont throw out talking points of how 250K a year "isnt wealthy" if you cant back it up Perch.

This made my day.

[Duchess Jack]

You say I'm parroting someone, when I say it depends on location (cost of living) and what one does (whether they are an employee or employer) but then you even say and rightly so it depends on size of household.

 

There are clearly variables. I agree with that. I live in a very inflated area and know that what my household makes might look very different in another part of the country - but you stated with hard Zues like authority that $250 wasn't rich like you some how were the guy with the answer. I am sorry for taking the bait.

Edited December 9, 2010 by Duchess Jack

[driveby]

Then dont be dumb enough to confidently state that "250K a year in annual wages isnt wealthy" THAT makes you look very very dumb. The whole point of this that it IS too arbitrary to define and that it IS silly to have a catch-all definition. Yet you can definitely say that 250K a year "isnt wealthy". But then cant define what is . . .

 

Wealthy is completely arbitrary term . . . or is this an example where you cant define it, but you know what shouldnt be in that definition based on your own personal W-2 forms?

Somewhere bushwacked is just shaking his head.

[caddyman]

There are clearly variables. I agree with that. I live in a very inflated and know that what my household makes might look very different in another part of the country - but you stated with hard Zues like authority that $250 wasn't rich like you some how were the guy with the answer. I am sorry for taking the bait.

250 k may make someone richer than you, but is does not make you wealthy. That is the whole class warfare issue. Just because someone makes more than you does not mean that they are rich. Using that logic, the guy that makes 80k is rich compared to the guy milking the unemployment entitlement program.

[evil_gop_liars]

. I know people that make 250k and don't have a damn thing to show for it. T

 

You're a buffoon. You feel sorry for these people that live beyond their means but the poor should be shot.

[TimC]

Define poor?

[bpwallace49]

250 k may make someone richer than you, but is does not make you wealthy. That is the whole class warfare issue. Just because someone makes more than you does not mean that they are rich. Using that logic, the guy that makes 80k is rich compared to the guy milking the unemployment entitlement program.

 

Maybe you are finally starting to get it. . . . . . I still have hope for you yet Zeke!

 

However until the entire tax system of the US is under a flat tax, and the progressive taxation mathod is still in effect, there will always be discrepencies. That is the accepted law of the land, so your "class warfare" comment is just a right wing talking point that ignores that the teax system was set up in that very manner quite some time ago . . .

[gbpfan1231]

Define poor?

Well Played.

[evil_gop_liars]

Define poor?

 

<$249,999

[Yukon Cornelius]

Define poor?

 

 

<$249,999

[caddyman]

You're a buffoon. You feel sorry for these people that live beyond their means but the poor should be shot.

Name calling not necessary. I never said I feel sorry for them. Not sure how you gained that. I was making a factual statement. Neither did I say they were living beyond their means. All I said was they did not have extravagant lifestyles.

[Clubfoothead]

Despite inheriting a deficit of nearly 500 billion, 43 reduced federal revenues to their lowest levels since 1950. Despite a two front war. Despite a free market about to collapse on top of its freedom and profiteering that would require a federal bailout or world collapse.

 

I'm going to argue that a country that is broke needs a compelling reason to lower taxes. What is teh compelling reason for the tax cuts? Jobs? Record profits have not done that so why would tax breaks?

 

These tax breaks have been in-place since 43 first got his grubby little hands into the White House. First thing he did was start cutting taxes. What have we netted since we started cutting taxes in 2000? A record deficit, continued wars, unemployment around 10% and a promise that if we simply extend the tax cuts everything will come around and a country too broke to afford any social program or serious energy reform, a country too broke to help it's citizenry address anything in Avernus' post that may be true.

 

Foregt anything concerning people earning less than 250k per house. What is the compelling reason for extending a tax cut right now? Please spare us all the argument that "While I'm not hiring right now, I'd REALLY be not hiring right now if my taxes where higher."

[bushwacked]

I know people that make 250k and don't have a damn thing to show for it.

 

You know idiots.

[bushwacked]

<$249,999

 

[Yukon Cornelius]

Despite inheriting a deficit of nearly 500 billion, 43 reduced federal revenues to their lowest levels since 1950. Despite a two front war. Despite a free market about to collapse on top of its freedom and profiteering that would require a federal bailout or world collapse.

 

I'm going to argue that a country that is broke needs a compelling reason to lower taxes. What is teh compelling reason for the tax cuts? Jobs? Record profits have not done that so why would tax breaks?

 

These tax breaks have been in-place since 43 first got his grubby little hands into the White House. First thing he did was start cutting taxes. What have we netted since we started cutting taxes in 2000? A record deficit, continued wars, unemployment around 10% and a promise that if we simply extend the tax cuts everything will come around and a country too broke to afford any social program or serious energy reform, a country too broke to help it's citizenry address anything in Avernus' post that may be true.

 

Foregt anything concerning people earning less than 250k per house. What is the compelling reason for extending a tax cut right now? Please spare us all the argument that "While I'm not hiring right now, I'd REALLY be not hiring right now if my taxes where higher."

trickel down really does work. they told me that in the 80's

[Duchess Jack]

trickel down really does work. they told me that in the 80's

'twas the age of leg-warmers and asbestos baby bibs.

Edited December 9, 2010 by Duchess Jack