Subscribe to this BlogTaxing the rich: There are limits
The 2010 fiscal year for most states began July 1. Facing severe budget shortfalls, some states have used the new year to introduce higher income tax rates. In Delaware, for example, the highest tax rate went from 5.95% to 6.95% on earnings over $60,000. In Hawaii, the maximum tax rate jumps from 8.25% to 11% for earnings above $200,000. And in New Jersey, the tax on earnings above $500,000 jumps to 10.25%, up from 8.97%; for a new bracket above $1 million, the rate is 10.75%.
As you can see, most of the tax increases are limited to high earners, the same tactic President Obama has proposed to help pay for expanded health-care coverage and other government spending measures.
But as Mark Robyn points out in his post for Tax Policy, a blog for the non-partisan Tax Foundation, raising taxes on the wealthy doesn't always have the desired effect. As some states have discovered, high earners have the means to move. The well-off also can afford to hire smart accountants to lower their tax bill.
That's not to say that wealthy folks shouldn't be taxed at a higher marginal rate. But the strategy seems like a shortsighted way for the federal government to raise the funding needed to fix health care. Howard Gleckman makes the point in his post for the non-partisan Tax Policy Center's blog, TaxVox.
What's the alternative? Len Burman, director of TPC, offers one option in this May editorial in The Washington Times. In the meantime, Obama can witness firsthand just how well targeted tax hikes work: While higher state tax rates were introduced this month, the rates are retroactive to January 1, 2009.
How many calls do you think accountants are getting right now?
When Americans stop demanding more and more from our government and start demanding fiscal responsibility from our politicians and demand we pay down our National debt now and not put the burden on the kids of tomorrow, I start supporting tax cuts. Until then tax the people who caused all the problems. Us, all of us.
To anyone foolish enough to have voted for Obama. You have sealed your own pathetic fate for letting the rant of Socialist scum sway you. America is screwed. He is turning a disaster into catastrophe. I’m not an economist but when Clinton passed the “Home For Everyone Act in 1998 and GWBush did nothing to crush it our fate was sealed.
I saw what was coming and saw how 20 year old piles of termite infested wood and brick would sell for 6 figure numbers in crime infested neighborhoods
I bought a mobile home a paid it off in a few years. I bought two late model economy cars and don’t have credit card debt. I also saved a pile of cash that I am turning into gold, silver, guns and ammo. I don’t owe money to anyone and take responsibility for my actions. Soon the reaper will harvest what debt ridden Americans have sown. Look at Detroit. Good Luck and God Bless, your gonna need it.
Wow. I can't believe people who think taxes are good. What is good about the taxes? Do we need the taxes? And most importantly, I think we should only tax those who thinks taxes are good. After all, if they want to do good, let them pay for it. Stop trying to do good with other people's money. Thank you.
No tax area under poverty levels, and then a flat tax (20/25%) for everybody, with absolutely no deduction. And immediate jail for who doesn't declare a penny of his/her income.
That's fair.
I live in NYC and on top of the same federal tax that a guy in Atlanta pays when he makes the same money (but lives much better), I have the highest state and city taxes.
It's ridicolous, it's becoming like Western Europe (I'm from there) and believe me, it will be awful.
What I find fascinating is this whole argument. Isn't Obama the one who sais that he wasn't going to take special interest money – etc – that he was going to raise money by taking a little bit from everyone (i.e., he raised SO MUCH MONEY by getting $5 or $10 or whatever from so many people). So he was able to break records with the amount of money he raised.
So…why does he think the complete opposite (oh, we'll just take a little more from the top earners…) – will get this country anywhere?
Why not go with the first model? Start having EVERYONE who earns income pay taxes (well, I'm against the income tax to begin with, let's go with the fairtax, but I digress) – so that everyone pays SOMETHING.
I believe more in the flat tax…well, if it really STAYED a flat tax (i..e, without these deductions, without all these extra rules, like what reagan tried to do oh so many years ago). With a caveat – and a small deduction ($10k or something? Pay 10% of your income over 10 or 20k or whatever, to make it a little more progressive).
So, why not do that? Why not ask everyone to pay something (even if it's something like $100)?
Well, um, then your voting base would be angry?
While it is true working hard does not always equal getting ahead, working hard, investing smartly and living a frugal lifestyle can. I know a woman who worked in a low-income job for many years, but through her incredible frugality and smart investing, now has a few millions of dollars in investments which she smartly invests to learn a large yearly income. It took her a long time to save this much and she certainly earned it by living a completely no-frills lifestyle. So would it make sense to tax these types of people more? Does it make sense to punish people for doing well by limiting themselves for so long in life? I also agree with Joe's post that the cost of living also plays a large role. I have certainly notice discrepancies in the cost of living even within my own state. A friend of mine who lives and works out in Boston at the same salary I am making here in the western part of the state, was astonished that I was able to afford the lifestyle I am living on the same salary she is making. What is considered "rich" really depends on where you live.
I guess Nixon was a "socialist" by the standards of some…tax rates
on the wealthy and corporations were much higher then. In Europe only
ultra-extreme call it "theft" to pay taxes that provide for our roads,
bridges, schools, etc. Truth is, the lower and middle class are
screwed, so there is some reality there. The wealthy twist this
reality into pretending *they* are over-taxes. No, the rest of us are
over-taxes, the wealthy are far too under-taxes, let's go back to
Nixon on this one. "Boo Hoo! I make only $300,000 per year whild other
families survive on $60,000 or $50,000 or less! I don't wanna pay a
few percent more, I'm quitting, boo hoo!" Well if you don't enjoy your
job, quit, if you were doing it only or mostly for the
money…quit. Find a job you enjoy intrinsicly, and would be happy
"even" with "only"$200,000 instead of $250,000 left after taxes.
Why "Flat" Tax is actually regressive in practice (until and unless
you have much higher deduction and Exemptions)
Numbers are for illustration only but make the point powerfully
enough:
The Jones Family total income might be $50,000, and might have only $10,000 in
excemptions plus deductions. That leaves $40,000, say 25% "flat" tax,
they pay $10,000 in taxes. But their expenses for basic, basic
necessities like food and roof over your head might be $30,000 which
means they only have $20,000 left over after basic, basic food and
"roof over our head" type necessities.
Result? Their effective tax rate on money they have after basic food
and "roof over our head" (non-survival rate or NSR) is $10,000 out of $20,000, or 50%
That's their effective tax rate on "What we have left over after we
spend what we need to, to feed ourselves and so our children don't go
hungry" plus basic-level roof over head type expenses.
Elsewhere in the exclusive district, the Scrooge household has an
annual incomeof $1,000,000 per year. Their pricey lawyers find a a lot
of tricks so for starters, they decude a lot more than $50,000. Let's
say it's only $100,000 in practice it's much more.
Basic food plus basic shelter costs $30,000 per year but the Scrooge
household *chooses* to spend far, far above what they need for "Basic"
shelter and food, which is fine, it's a free country and that is their
right… Fine. Ok! But as a result, what is their effective tax on
money they have left over after the $30,000 needed to
avoid-starvation, have a basic roof over your head, etc, is deducted?
They pay the 25% "flat" tax on $900,000 so they pay $225,000.
How much money did they have left over after the $30,000 needed to
avoid-starvation, have a basic roof over your head, etc, is deducted?
Well, They had $1,000,000 minus $30,000 or $970,000
On that $970,000 they had available to them for spending (as they see
fit, as is right right, it's their choice, it's a free country, etc)
they paid $225,000.
Their NSR rate? 23.2%
While the Jones family paid an NSR rate of 50% .
No wonder (almost) the only countries that have a flat tax are poor, desperate Eastern Europe and similar countries…
To Fed Up ..
7 times out of 10, working hard DOES NOT equate to getting ahead. Especially in this day in age. There are soo many people that are working hard, but are not getting ahead. Example, the middle class.
Now that doesn't mean that I agree with increasing the taxes only for the rich because being rich is relative based on where you live. Making $300,000 dollars is not the same as from making $300,000 in Atlanta. You're purchasing power is more in Atlanta because the cost of living is lower than the cost of living in New York.
I agree with Mike, a flat tax is the ONLY way to resolve this issue. This insures that EVERYONE pays their fair share.
A Flat tax is the only way for everyone to give their fair share! Cutting out loop holes that let the rich get out of paying their fair share.
The United States has always been a capitalist society. Capitalism means those that work hard get AHEAD. How is taxing those who work hard to give to those that do not going to bail out the economy? That just means that NO ONE will have money to spend! Obama wants socialism.
When are policy makers going to realize that taxing upwards of 50% of the pay of the business owners that actually provide the jobs to everyone else will just cause people to stop being entrepreneurs and just live off the government handouts? What happens when this group of people decides they no longer want to be a part of the 5% of the population that pays over 45% of the tax revenues collected? Where is the incentive for innovative thinkers and dreamers to become successful? Is it fair that the President and Government get to decide what you make and how you run your business? This is certainly not a free market society any longer. It is not just the rich being taxed it is the higher earning middle income people that are getting hit. Tax laws are not always indexed for inflation or where incomes are higher simply because cost of living is higher. We are in desperate need of a new tax system, I believe that a consumption tax is a viable possibility, people who buy the most, pay the most. Wow could it be that simple??
The wealthy in this country can not be held responsible for paying for governmental social programs! That is just insane to expect the top 5% of the population to pay for the remaining 95% of the population. It is another easy out for both government and the other 95% of the country to expect others to pay for their wants and needs. The only way to have more affordable healthcare in this country is to get the government out of it, remove the insurance companies ability to refuse treatment, and CAP malpractice payments! We have the best healthcare in the world because of the free market system but it is under attack with Obama's healthcare reform plans.
The truly wealthy can afford not to work. They need to organize themselves and choose to collectively take a couple years off. I think that the legislators would soon see how valuable and important these people are to funding government services, which disproportionately benefit the most needy. For the poor people that like to bash the rich it might be a real eye opener.
Daniel in DC:
Right on. Any more taxes, or lifting the OASDI annual cap, and I stay at home. No sense working to make $350K when I can stay at home and we can make $200K.
Interesting, the rich, this the rich that the rich the other.
With unemployment officially at 9.5% – 25% depending on the source how come the rich are not creating jobs anymore? So if the rich are really responsible for creating jobs then, Tax them to hell and back until they decide to either create more jobs or bring the jobs back home.
If they leave then thats one less burden we have to deal with. Of course their is one alternative left either tax or have some desperate fool break into our homes.
"John in Jackson: absolutely brilliant post!"
Didn't Warren Buffet claim that his tax rate was less than that of his secretary? Please reconcile.
If I were wealthy I would donate to charitable organizations that I valued and give as little to the government as possible. Government is inefficient and wasteful in its use of money. Over taxing the “rich” removes money used to build the wealth of American and will at the very least stunt economic growth. Well off business owners only owe their fellow Americans one thing and that is to use their influence and abilities to stand up for what is right.
It doesn't matter how much you tax the rich and give to the poor – the free-market system inevitably siphons that money back up the food chain to the wealthiest.
The wealthy are the ones who benefit most from our free-market system and democratic society – that's why they stay, regardless of tax rates.
Health Reform -articles <not sufficient fund, not the American way, happy with what we have, why tax the rich, budget deficit, let's take care of the financial system for now, will raise taxes for millions of middle-income families, and Blue Dogs coaltion-the reform does not meet the goal of substantially bringing downs costs ,Ben Nelson-not hearing a lot support for a surtax on wealthy America<People in his state don't like the millionare tax because they are looking someday to get there themselves – the American way, leaders trying to reach a bipartisan compromise, Cantor-simply put people are beginning to question Obama policies, Senator's can't reach consesus, not enough time!
A> Let's first look at what the House of Representatives and Senate have available for health care:
They get their insurance through the Federal Employees Health benefits Program, the largest employee-sponsored health insurance program in the country. The program offers federal workers dozens of health plans to chose from, instead of two or three that individuals or limited to and corporations and businesses typically offer their workers. On the average, the federal government pays 72 percent of the total premium. This premium is no costs to them(a bonus at taxpayer expense) and not taxed. The House of Representatives and Senate plan is more generous than coverage most people have in their private sector. It's the creme de la creme. Lawmakers also receive perks such as: (1) for an annual fee of $503, they can receive health services from the Office of the Attending Physician, a fully staffed $2.5 million medical office located in the Capital; (2) Lawmakers can also get medical treatment at military hospitals.
McClellan says that it would cost nearly $2 trillion to get Americans up to congressional-level care. That's not going to happened!!!
B>Let me cite what has happened to this country tax system since 1981!
Prior to 1981, this country has a progressive tax system- income was taxed. After 1981, the 1981 tax cut championed by Jack Kemp and Bill Roth (Republicans) featured a 25% percent reduction in individual tax brackets(phased in over 3 year), and indexed for inflation. This brought the top bracket down to 50 percent. The 1981 Act also featured a dramatic departure in the treatment of business outlays for plant equipment and instituting instead the Accelerated Cost recovery System. And a 10 percent investment Tax credit. We changed the tax system to neoclassical economic perspective. By reducing marginal tax rates it was believed the natural forces of economic growth would be less restrained. Simultaneously with the enactment of the tax cuts in 1981 the Federal Reserve altered monetary policy to bring inflation under control. The Federal reserve actions brought inflation down faster and further than was anticipated at the time, and the recovery fell into a deep recession in 1982.
Another consequences of the tax cuts., the recession, , and one-time increase in inflation-adjusted federal spending produced historically high budget deficits. Then in 1986 Tax Reform, which brought the top statutory rate down from 50 percent to 28 percent while the corporate tax was reduced from 50 to 35percent. The number of tax brackets was reduced and the personal exemption and standard deduction amounts was increased and indexed for inflation, thereby relieving million of taxpayers of any Federal income tax burden. However, the Act created new personal and corporate Alternative Minimum Taxes, which proved to be complicated, unnecessary, and economically harmful. Some of the over-reaching provisions of the Act also led to downturn in the real estate markets which played a role in the collapse of the Savings and Loan industry.
With the 1986 tax act, the top individual tax rate reduced from 91 to 28 percent and also represented a temporary reversal in the evolution of the tax system. Between n1986 and 1990 the Federal tax burden rose as share of GDP from 17.5 to 18 percent. Despite this increase, persistent budget deficits due to increase levels of government spending created near constant pressure to increase taxes. President Clinton insisted on and the Congress enacted a second major tax increase in 1993 in which the top rate was raised to 36 percent and a 10 percent surcharge was added, leaving the top effective rate at 39.6 percent.
By 2001, the total tax take had produced a projected unified budget surplus of $281 billion, with a cumulative 10 year projected surplus of $5.6 trillion. Much of this surplus reflected a rising tax burden as a share of GDP due to the interaction of rising real incomes and a progressive tax rate structure. Consequently, under President George W. Bush's leadership the Congress halted the projected future increases in the tax burden by passing the Economic Growth and Tax Relief and Reconciliation Act of 2001. Though the rate reductions are to be phased in over many years, ultimately the top tax rate will fall from 39.6 percent to 33 percent.
Sufficient funds are available from yearly income generated, we just have to modify the tax system to make it more fair for everyone! Go back to the Progressive system we had, which ensured that all shared in the future of this country and not the system we have had for the last 25+ years which puts the burden on the 99% percent of income earners and allows the top 1% income earners(*Welfare Queens-House Of Representatives, Senate-top 1% percent ) not to pay their fair share which has allowed the largest transfer of wealth since the tax system was first introduced!
Since the Economic Recovery Tax Act of 1981, recessions and worse are a constant threat every six years, each of the recessions have made life miserable and painful for those affected(which is not for the TOP 1% of income WELFARE Queen recipients-Senate and House of Representatives), in the Country and the States as they got through a painful reductions in services.
*The term "welfare queen" is most often associated with Ronald Reagan who brought the idea to a national audience. During his 1976 presidential campaign, Reagan would tell the story of a woman from Chicago's South Side who was arrested for welfare fraud: "She has eighty names, thirty addresses, twelve Social Security With regard to how do we pay for health care reform, cuts are not necessary as there are plenty of income which is not taxed. cards and is collecting veteran's benefits on four non-existing deceased husbands. And she is collecting Social Security on her cards. She's got Medicaid, getting food stamps, and she is collecting welfare under each of her names."
Reagan’s use of the term was related to a growing unease among New Right politicians about the perceived expansion of the welfare apparatus. Touching on the cornerstones of American political philosophy (i.e., individualism and egalitarianism), the New Right sought to form a top-down coalition with big business and white working-class voters to undo the popular Great Society programs of the 1960s.
B in Manhattan.
You may want to rethink that US citizenship thing. As a tax attorney, I am counseling those with means to get passports from other countries, sell US real estate holdings, and if you are not a US citizen, send your wealth offshore now. The new "exit tax" applies to resident aliens, but not to the same extent as citizens. Your future expatriate status is one of your most valuable assets right now, even if it is western European.
I am tired of everyone bashing the rich. All the poor want to make more money so why doesn't anyone call them greedy? Yes, 5% of Americans are considered wealthy. A whooping 5%. If 25% were wealthy, the poor would still complain. There will always be lazy people that aren't willing to work and to just get by.
I don't know maybe it is just me, but who gets the bail out money the rich. So in the long run, the rich are just paying for there future bail outs through higher taxes as well. You don't see the government doing much to bailout the poor and middle class.
Taxing the rich articles….
The term "welfare queen" is most often associated with Ronald Reagan who brought the idea to a national audience. During his 1976 presidential campaign, Reagan would tell the story of a woman from Chicago's South Side who was arrested for welfare fraud: "She has eighty names, thirty addresses, twelve Social Security cards and is collecting veteran's benefits on four non-existing deceased husbands. And she is collecting Social Security on her cards. She's got Medicaid, getting food stamps, and she is collecting welfare under each of her names."
Reagan’s use of the term was related to a growing unease among New Right politicians about the perceived expansion of the welfare apparatus. Touching on the cornerstones of American political philosophy (i.e., individualism and egalitarianism), the New Right sought to form a top-down coalition with big business and white working-class voters to undo the popular Great Society programs of the 1960s.
In response to Reagan's use of the term, Susan Douglas, a professor of communication studies at the University of Michigan, writes: "He specialized in the exaggerated, outrageous tale that was almost always unsubstantiated, usually false, yet so sensational that it merited repeated recounting… And because his ‘examples’ of welfare queens drew on existing stereotypes of welfare cheats and resonated with news stories about welfare fraud, they did indeed gain real traction."
In regard to how do we pay for health care reform, cuts are not necessary as there are plenty of income which is not taxed. Let me cite what has happened to this country tax system since 1981! Prior to 1981, this country has a progressive tax system- income was taxed. After 1981, the 1981 tax cut championed by Jack Kemp and Bill Roth (Republicans) featured a 25% percent reduction in individual tax brackets(phased in over 3 year), and indexed for inflation. This brought the top bracket down to 50 percent. The 1981 Act also featured a dramatic departure in the treatment of business outlays for plant equipment and instituting instead the Accelerated Cost recovery System. And a 10 percent investment Tax credit. We changed the tax system to neoclassical economic perspective. By reducing marginal tax rates it was believed the natural forces of economic growth would be less restrained. Simultaneously with the enactment of the tax cuts in 1981 the Federal Reserve altered monetary policy to bring inflation under control. The Federal reserve actions brought inflation down faster and further than was anticipated at the time, and the recovery fell into a deep recession in 1982.
Another consequences of the tax cuts., the recession, , and one-time increase in inflation-adjusted federal spending produced historically high budget deficits. Then in 1986 Tax Reform, which brought the top statutory rate down from 50 percent to 28 percent while the corporate tax was reduced from 50 to 35percent. The number of tax brackets was reduced and the personal exemption and standard deduction amounts was increased and indexed for inflation, thereby relieving million of taxpayers of any Federal income tax burden. However, the Act created new personal and corporate Alternative Minimum Taxes, which proved to be complicated, unnecessary, and economically harmful. Some of the over-reaching provisions of the Act also led to downturn in the real estate markets which played a role in the collapse of the Savings and Loan industry.
With the 1986 tax act, the top individual tax rate reduced from 91 to 28 percent and also represented a temporary reversal in the evolution of the tax system. Between n1986 and 1990 the Federal tax burden rose as share of GDP from 17.5 to 18 percent. Despite this increase, persistent budget deficits due to increase levels of government spending created near constant pressure to increase taxes. President Clinton insisted on and the Congress enacted a second major tax increase in 1993 in which the top rate was raised to 36 percent and a 10 percent surcharge was added, leaving the top effective rate at 39.6 percent.
By 2001, the total tax take had produced a projected unified budget surplus of $281 billion, with a cumulative 10 year projected surplus of $5.6 trillion. Much of this surplus reflected a rising tax burden as a share of GDP due to the interaction of rising real incomes and a progressive tax rate structure. Consequently, under President George W. Bush's leadership the Congress halted the projected future increases in the tax burden by passing the Economic Growth and Tax Relief and Reconciliation Act of 2001. Though the rate reductions are to be phased in over many years, ultimately the top tax rate will fall from 39.6 percent to 33 percent.
Sufficient funds are available from yearly income generated, we just have to modify the tax system to make it more fair for everyone! Go back to the Progressive system we had, which ensured that all shared in the future of this country and not the system we have had for the last 25+ years which puts the burden on the middle class(those making less than $200K) and allows the top income earners not pay their fair share and allows them to be the biggest WELFARE Queen recipient of wealth that is probably ever occurred since the tax system was first introduced!
Since the Economic Recovery Tax Act of 1981, recessions and worse are a constant threat every six years, each of the recessions have made life miserable and painful for those affected(which is not the TOP income WELFARE Queen recipients), the country and the States go through a painful and miserable time!!
Tax the bloody rich until the scream!!!!!!!! They screwed us now lets screw them! Anyone making over $500,000 per year should be paying anything over that in taxes. Yes ANY AND ALL AMOUNTS OVER THAT! There is no good reason to have people making a mil a year, give their money to the poor!
Right on Dan in Nashville. After years of paying over 100K in federal taxes, the people pushed my former employer to stop bonus payments which was the majority of my income, so I quit. This year I will pay less than 10k to the feds and live off of savings until they are depleted to the level where I can be on the public dole. The free time has been great. I didn't realize the toll the 80 hour weeks took on me and how I don't need to make all that money in the first place. Sorry to drop a couple hundred k off the tax revenues everyone – I am not the first and won't be the last.
"For too long the wealthy have have got away with all the money and left the poor to pay now time for them to pay for some stuff too.Fair is Fair"
Another collectivist parasite abdicating the politics of envy and the "world owes me a living mentality". About the only thing your kind is owed is the oxygen your wasting. Most of you don't pay any taxes and want all the benefits. Your unworthy of your citizenship.
Who Pays The Most Individual Income Taxes?
The individual income tax is highly progressive – a small group of higher-income taxpayers pay most of the individual income taxes each year.
In 2001, the latest year of available data, the top 5 percent of taxpayers paid more than one-half (53.3 percent) of all individual income taxes, but reported roughly one-third (32.0 percent) of income.
Taxpayers who rank in the top 50 percent of taxpayers by income pay virtually all individual income taxes. In all years since 1990, taxpayers in this group have paid over 90 percent of all individual income taxes. In 2000 and 2001, this group paid over 96 percent of the total.
The share of taxes paid by the bottom 50 percent of taxpayers will fall from 4.1 percent to 3.6 percent.
It is truly amusing to look at the comments of the "rich" people on this forum. Flat Tax??? Russia has a flat tax system (13% I believe) and look at Russians. Majority or people live in horrible poverty, very small middle class but Russia is second to US by the number of billionaires. Sounds great to you?
Yes, my dear rich people, we live in the Democratic state and that means that your vote is exactly the same as the vote of a guy on welfare. Since there are so many poor, your taxes will go up until the life of poor people will be tolerable. You want to build a fortune in this country then you will pay. You don't like it? then move to China or Russia.
The rich people sent the jobs off shore – so they could get richer. The majority of unemployed do work hard, and do want to work.
The country has a big deficit, first thing to do cut the salary and benefit for all the government employees, including the president and all the crooks in Washington. They should get the same health care as all the tax payers,if they pass that health care bill.Also they suppose to work for the tax payers, why they vote for their own pay increase that is ridiculous and outrageous.
Remember people; If you vote for a Democrat, you lose your right to complain about the taxes you pay.
John in Jackson: absolutely brilliant post!
Given the penchant of most tax-and-spend Democrats, though (Nancy Pelosi comes to mind) you may need to change the beverage from "beer," to "Champagne." Most limousine liberals would absolutely shun the "Republican," drink.
By the way, I note Nancy Pelosi's new mink coat. Even Pat Nixon had just a simple "respectable cloth coat."
The problem with Washington representatives is that they have no fur in this game. They make short term decisions with long term impact, but when they're out of office – it's somebody else's problem – and they sit happily making their salary (with cost of living increases) + healthcare FOR LIFE.
The deficit for this year alone is costing us $100 million per day in interest. That's roughly $30/day for EVERY AMERICAN!! Tax dollars doing NOTHING.
You want me to pay more taxes – how about STOP WASTING THE TAX DOLLARS YOU HAVE FIRST!!!
"nobody is born equal thats just the way the world is, the government is just trying to even things out"
It is not the government's mandate to "even things out". Ugh… Nobody is born equal, however everyone is born with choice. You can CHOOSE to work hard. You can CHOOSE to save money and spend on priorities only. I could buy a new car every couple years, but then I might not have the money in reserve to pay for (thats right I said PAY FOR) a medical treatment for my wife.
"even things out" <— *UGH*
Move to China or Cuba or North Korea if you want things evened out.
How about not taxing rich people at all? Wouldn't that be incentive enough for everyone to work hard and act smart? The rich are the ones who create jobs by creating or buying businesses. The rich provide us consumers with great products by taking risks and introducing them. The rich already help the less fortunate by donating disproportionate shares of their income to charitable programs. Tax the rich – and they'll go to the countries with more favorable environments, followed by jobs and innovation and charitable programs.
I am sick and tired of this attitude.
"so that the rich start paying their fair share"
What the hell does that mean anyways? This country's spending is supported by the "rich" already. Maybe the folks in the bottom half need to pay their fair share instead of constantly asking what the government can do for them.
And just for the record, I am squarely in the middle of society. I am not rich, but at the same time I pay taxes: about 20% after it is all said and done. I work hard every day (including trying to start a business) and save as much as possible to try and elevate myself to "rich" and the financial freedom and piece of mind it provides.
It irritates me that the "rich" are so often characterized as the "evil not pulling their own weight" side of society. The independent business owners and the wealthy in this country (PRODUCERS) are what makes everything work. If you want an example of a slow growth stagnating economy where producers are punished for their efforts, just look at France. Wake up people, that is where we are headed.
Make no mistake. The fabric of our country is being torn apart regardless of which views you hold. The end result there is a quiet rumble in the underbelly of state legislatures around the word succession. You can choose to believe or not.
I don't understand why government believes they should be immune to the economic pain that we all are feeling? Why they feel that they can "increase margins" by raising tax rates, while giving no benefit to those they tax.
It is the differences from other countries that make America great, not the similarities. That is the reason we have the greatest health care, develop the best drugs and medical devices. Socialize medicine and we lose all of this. It is all about incentives and when there is little incentive to provide this then few companies will take the risk.
Also, it is naive think that a government run program will be successful. Government has no incentive to be efficient; therefore, you get programs like Medicare and Social Security that are on the verge of failure.
What makes the previous poster think he is entiled to keep *his* money by his own logic? The poorest person in America is quite wealthy by comparison to international poverty standards. His wealth should benefit the 5+ billion people who live in squalor all around the globe, right?
Wrong. What we need is a respect for property rights. Barring that respect, capital flight is the only practical, and moral, course for a rich person and his money.
THe rich should pay more, but not for everything. Its ridiculous for the rich to foot the entire cost of health care when they will not benefit from it in the slightest.
Bob Murphy from FL – "What makes rich people think they deserve to keep their money?"
MAYBE BECAUSE THE VAST MAJORITY OF THEM EARNED IT! How would YOU like to be taxed at 90% when you worked hard your ENTIRE life like say Warren Buffet did?
Everyone uses the public services in some form or another, hence EVERYONE should pay taxes.
Also Bob, we need more social programs? When are people going to stop depending on the government like mommy and daddy coming to the rescue all the time???
WOW. Simply WOW…
Givers and takers….the Givers are some of the biggest takers in the first place. Alot of you rich ppl need to stfu. Im not in a bad position but there are many out there who are. Who cares if you dont make 10 million dollars but now only 6 million a year. Nobody needs that much money. LOL ….givers and takers my ass…There are alot of people who are just born unfortunate….nobody is born equal thats just the way the world is, the government is just trying to even things out.
Maybe I'm a little off today, but please tell me Bob Murphy's comment are sarchasm. He implies only taxing the rich at a 90% rate to pay for pretty much everything. Let's assume that is Federal and State (let's say HI's 11%) income tax together (including all the others Social Security, etc.). Now let's say Joey Bagadonuts has a family run business in Oahu and earnes about $250K/yr (so he's well into President Obama's and HI's "rich" category. Now Joey takes home $25K. Not really a lot to survive on for his family. Let's not forget HI has a nasty little sales tax which they call an Excise (4% staewide, but 4.5% in Oahu). That excise covers almost EVERYTHING (purchases, rent, groceries, etc. all have this excise priced in). Joey has no real ability to save now despite having an income of $250K because HI isn't exactly a low cost of living area. So, now Joey has to provide for his family on what is essentially less than $24K of purchasing power (now, that's less than $2K a month to survive in HI). Ah, the "rich" have it so great. But at least he'd have access to free government funded inadequate healthcare which he'd be forced to use after losing the ability to afford his private insurance. Fair?
Amazing discourse.
What I find so frightening at the moment is three things:
1) The government's reckless handling of spending and the lack of public outcry over it. Sure "saving" the economy makes sense at this moment in time. But disguising the spending…calling it "job creation"…when most is merely transfer payments anyway we are just kidding ourselves. Additionally…pursuing an expensive social agenda of unversal healthcare and forced conversion to more ecologically friendly energy use during a recession is just plain stupid. Tax receipts down minus higher spending equals huge deficit….DUH! This is an agenda to pursue in prosperity not now.
2) Second….this "get the rich bastards" mentality. It is implird by amany here that the rich were "thieves" an somehow made their money illegally or unfairly. Here is a different thought….most rich people got that way through hardwork and saving a lot of what they earned. Yet we want to punish prudence! What has our country turned into????
Lastly….I hope my Australian residency comes through….I am tired of being an American and afraid to be one in the future!
I do agree that the wealthy should have to pay a much higher tax but it's up to the government both federal and state to make sure there are no loop holes no tax credits or anything that could lower there tax so if someone making over in it what so ever.So if someone making $100,000 a year gets no credits they cant deduct anything no child credit no credits on anything because they don't need it.someone making $8.00 a hour does need tax credits and should get it.For too long the wealthy have have got away with all the money and left the poor to pay now time for them to pay for some stuff too.Fair is Fair
We are planning to lay off more employees if these new taxes go through. Working these long hours just isn't worth it any more. We can make do with less people and have less headaches and more leisure time in return.
The middle class is the only people who have the cash that is easy to get, think low hanging fruit. If you make 200K a year, you can use every deduction to reduce your tax rate from 34% to 24%, plus put everything into non taxable commodities, (gold,silver,IRA's, college endowements) or move to a state with a much lower taxrate. If the richest 5% are taxed in such a way(90% taxrate), they will move to Canada. You have to tax the big bonuses paid by corporations, (65 million golden parachutes) (1 million dollar performance bonus while your company is falling apart) you have to tax imports better, and you have to tax options better. If I pay taxes on capital gains at a fair price, that's fine, if I am in options, I have 1 dollar, I levereage 10 percent, so it seems that I can buy 10x what I really have, and I pay little taxes on it, when it should be taxed (1 dollar = 10 dollars leveraged, I buy the options and make 10 percent, so i now have 11 dolalrs, when i put in one. I should be taxed for making 10 dollars.
Financially responsible people deserve to keep inherited wealth, and deserve a fair tax rate, why should I pay 32 people's fair taxshare? why should the money I make go to pay for a welfare program that I don't need. so people who have no clue how to take care of themselves can rely on me to pay for their livlyhood?
Flat tax at the counter works, flat tax on all purchased goods is a great plan, but then, if you make 20K a year and buy goods or services, then I make 120K a year, I buy the same goods or services, we just paid the same. Does it hurt the 20K or the 120K person the same?
The AMT was a good plan, 50 years ago, but a family that makes 70K a year is subject to it.
Why are the Big Banks showing so much profit now? Just last year they were bleeding billions, and then the governemnt shores them up, they pay most of the funding back and write off billions of dollars of problems they caused and now they are paying bonuses to the executives! They should have to pay a 10.99% APR, and then have it jump to 18.99% the next month.
Bob Murphy – Are you kidding me? "what makes rich people think they deserve to keep their money, it should benefir everyone else" How about the fact that they earned it. What give you the right to dictate how they spend their money. It blows my mind that you think you have a right to what they have earned.
Why don't we tax the 40% of Americans who don't pay any taxes at all, isn't that fair? After all, "all men are created equal", shouldn't we all pay the same?
Bob Murphy, great plan! No one else pays taxes except the top 5%. As a physician, we rack up close to $300,000 in loans and when we get our first job, we need to given back 90% in taxes? How many physicians do you think would go through medical school just to make $15,000-$30,000? Why not just go to nursing school and make $40,000-$80,000 and not pay any taxes! I'm glad you're not running the country.
If only those that make over $250,000 continue to be the only ones who pay for all these new programs, I can promise you there will be no incentive to work hard. Not everyone who makes over $250,000 was handed that money. Some of use have and continue to work very hard for that income often working close to 80 hours per week. Some of us paid dearly with our personal lives and in loans to get us to the point where we are earning that type of money. I'm not talking about just physicians here. Frankly, I can guarantee you that many people will just cut down their hours to decrease their revenue. Why work an extra 20-30 hours more per week if most of that extra work is going towards taxes?
Just some figures from the taxation country Sweden…
http://en.wikipedia.org/wiki/Taxation_in_Sweden
at least 35% income tax and 50% on everything above $40000.
Our VAT is 25%…..
Bob Murphy, I am in the lower middle bracket, but please explain to me why anyone who EARNED THEIR WAY TO THE TOP (I am not talking Paris Hilton trust fund kids) should have to pay 90% of their money so others pay nothing. If I built a business from NOTHING and made 10 million a year and have to work 80 hours a week, and manage and employee 1000 people, why should the government take 90%. I may as well fire half the people and make less and get into a LOWER tax bracket… The MORE you penalize people who succeed the less people will be inclined to work hard. I wish I could just sit back, get money for nothing like some people do.
PS.. People talk about why capital gains tax is only 15-20%, where INCOME tax can be in the 25-35%. Its simple. Capital gains in on money already earned. Meaning, you had to have made the money to invest it, so you already paid some taxes in it AND unlike income, where you do not have any risk, some people lose money in the stock market. So their needs to be incentive to invest rather then just put it in the bank.
Also, do not for one second think anything is FREE, someone pays for it one way of the other. The government hides most of the income tax you paid. You may think, I only pay 25% income tax and my employer pays the rest.. WRONG you pay all of it. If the government did not make your employer pay it to them, they would be paying it to you. But it is easy to pass it on to the business and say the business is paying it. Businesses do not pay anything, its the customers, YOU, who do
Your ignorance is apparent in your grammar as well as your argument. If you tax all the doctors and business owners at 90% who've worked extremely hard and spent endless hours of school just to end up paying most or their income so the uneducated and lazy can live off government programs, you'll slow the economy and the amazing pace of progress our country has made. We're on thin ice already and can't afford to do anything stupid like raise taxes on anyone. "Creating" jobs in the gov't just to have jobs is ludicrous and has been happening for decades.
People think 2 steps ahead please … first off you're not taxing wealth, you're taxing income. Who makes over $100K a year? people who have the skills in demand that can negotiate a salary like that. So what happens when you tax these people, they demand a raise … then people say, "well not in a recession" when you do it across the entire state at the same time all the doctors, executives, director, lawyers are going to asking for raises at the same time. That what we call common sense, but Americans dont believe in it anymore.
If all you libs want to tax the people that work hard, go to college AND pay for most of the social programs in this country then please offer up more of your paycheck or move to Russia, I hope that all Dems get voted out of congress for this, we need to stop this socialism/communism
Mike from Redwood City CA—your comments remind of a dog chasing it's tail. You live in a state that is broke, yet you want to raise state income tax which you state "worked well in past downturns". When was that? When the "downturn" ended, did the tax go back down? A "One Day workweek"? You are going to cut state pay by 80%? Are governemnt workers so overpaid they can take an 80% pay cut? The Bush Tax Cuts were one of the few things he did right. Also, if you remove the salary cap for for rich people paying social security, do you also raise the cap they collect when they retire. Remember, Social Security is a trust fund; technically what you put in, you get to take out. Rich people usually make more than the minimum in retirement anyway and have to pay tax on their Social Security!!! I agree most accountants follow the law, but they also follow legal loopholes to avoid tax!! Ignorant.
You're kidding, right Bob? 90%? What happens when that 5% suddenly disappears, because they leave the country in search of a more reasonable tax rate, then what? Do that to enough "rich" people, and the only one's left will be the low and middle class people. And since when did it become a crime to be prosperous? While I can assure you that I'm not rich, I sure as heck deserve to keep my money. Have you considered moving to Belgium or Germany, where more than 50% of your income is taken in tax? Maybe you'd feel better… or at least fit in…
Here's a catch 22. Do producers exist because of consumers or do consumers exist because of producers? In either case, in order for producers to make $$$ consumers must have $$$ to begin with. And if you don't know by now, wages for most people working under "producers" (example small business, Wal-Mart, etc.). So the next option to get consumers $$$ quickly, would be to allow consumers (often with no job/credit) to use a house as an ATM and thus consuming far more than they can pay back. If you're a "producer" and you say, "well those people should have been more responsible and shouldn't have been getting into so much debt by borrowing against the house." If you believe this, then perhaps the economic boom wouldn't have taken place. Everyone would have saved (being responsible) and perhaps a lot of "producers" wouldn't have made off well in the last 8 years when the housing boom happened. So you can see the catch-22 between consumers/producers. If there wasn't a period of "irrational exuberance", everyone would save and there would be no transactions taking place allow "producers" to aggregate money. Now, the "producers" think they "work hard" for their money. Well ask yourself this, where does all the money come from in circulation in America? The banks/credit card companies! And the banks aren't smart enough to know what's a good loan whether it be a home loan or business loan. The banks basically act as a credit giver for all of America's ponzi schemes whether it's a good investment or not. Bank losses are someone else's gain. The money is somewhere in the economic system. A lot of which are trapped by "producers".
If you only tax the higher earners there is no incentive for the other 98%. If they put a 1% National Sales Tax on the $ 15 trillion GNP, they would have the money they want and everyone pays their fair share. The current plan is flawed and grossly unfair. If MacDonald's operated this way, the fist 1,000 customers pay nothing and then the guy at the back of the line pays $ 1,000.00 for a cheesburger. I wonder how the Founding Father's would like that. OH…Jefferson & Hancock…we want a revolution but you two guys have to pay for it. I think the Union Jack would still be the flag of the day.
I'm tired of everyone telling me I should pay more because I make more.
Why is it becoming acceptable to bash the upper middle and upper class. Simply b/c they've worked harder and smarter than most. If they're smart enough to make it, they'll be smart engough to to keep.
It's class warefare and has to end.
What will happen is that Obama will tax people making > $250k at 100%. When that doesn't provide enough funds, they'll gradually move the bar down to under $25k. Eventually, the US will become a communist nation, and there will be no incentive for anyone to work for a living!
Why don't we cut expenses and freeloaders. I was at a conveinece store the other day and saw a lady with a 500 Coach purse driving a brand new car who was emloyed in medicine since she was wearing scrubs using food stamps. This is a waste of money. If the argument is she cannot afford food how does she have enough for a coach purse. This is the problem with the system. too much waste.
Also I gaurantee if we started drug testing in order to recieve public aid we would probably save billions.
The real problem with all this is printing money. If you give people money to spend, over time the money will be channel to the rich. So, all these tax brackets are meaningless and what people should be taxed are meaningless. The rich will find ways to aggregate more wealth and avoid paying taxes. As long as a bank charges interest on money deposits or issues treasure bonds, the money supply will get larger. Unfortunately, that money supply doesn't get even distributed. So you have a large bubble divide between low/middle earners and millionaries.
Philly Joe, or more accurately, Foolish Joe, where do you get off calling Repub's racist? Talk about a knee-jerk reaction.
You get a clearly frustrated and overtaxed (as is anyone making more than $100k) opinion from someone who has simply had it, and you respond with…that?
Check out how many people are moving from the most highly taxed states to the lowest taxed states, and see if there aren't repercussions for this line of 'reasoning'. Some misguided types think that since these will be Federal taxes, folks won't relocate because they can't get away. Sure they can. Up my Federal taxes and I'll move to a state where some is offset by lower State taxes, and I'll get pretty aggressive with my accountant on the rest. Who loses? High tax states.
Congrats NY, NJ, CA (joke of the nation), CT, Mass, IL, and OH. The latest billionaire just moved out of NY, saving himself "$14k per DAY" (my caps)). Democrats only know spend and tax, and Repubs can't keep a lid on the deficit. Time to get into militias, folks.
Bob,
Rich people think they deserve to keep their money because they earned it. It's really that simple.
I'm not going to pay more tax percentage than anyone else…so, I just laid off half my workers to cut my income so as to keep me under the 200k. If you want to keep a society fair, then allow hard work to reap just rewards and allow those who don't work hard to reap their appropriate rewards. Fair is fair…see you in the bread line.
Bob Murphy's comment makes me absolutely sick to my stomache. What makes you think it's even remotely acceptable to take 90% of someones income just because you want it and they earn in the top 5% of the population. Let the government take 90% of my income, and I'll be the first person to make sure I don't earn a dime and stand in the welfare line.
Taxing high income earners at 90%;and their incentive to go to work would be what?
EVERYONE should pay something!
See if this sounds familiar:
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. They could all just pay $10 since they all drank beer or if they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest of the 10) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed OK with the arrangement, until one day, the owner threw them a curve. "Since you are all such good and faithful customers," he said, "I'm going to reduce the cost of your daily beer bill by $20. Drinks for the ten now cost just $80."
The group still wanted to pay their bill the way we pay our taxes, so the first four men were unaffected. They would still drink for free.
But what about the other six men – the paying customers? How could they divide the $20 windfall so that everyone would get his "fair share?"
They realized if they divided the $20 savings by six they could each reduce the amount they were paying by $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill the same way Tax Savings are disbursed, and he proceeded to work out the amounts each should pay –
And so:
The fifth man, like the first four, now paid nothing (100% savings) – so
5 men are drinking for free..
The sixth now paid only $2 instead of $3 (33% savings).
The seventh now pay $5 instead of $7 (28% savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth (the wealthiest) now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free, now along with the 5th too. But once outside the restaurant, the men began to compare their total dollar savings.
"I only got a dollar out of the $20" declared the sixth man. He pointed to the tenth man : "but he got $10!'"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"
"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!”
"Wait a minute," yelled the first four men in unison. "$20 was given back and we didn't get anything at all. This system exploits the poor!"
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that, ladies and gentlemen, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
Arguments both for and against progressive taxes often miss the obvious: EVERY American household IS a small business that makes financial decisions on who in the household it can afford to "hire."
We all know someone who stays home to raise their children because the cost of child care exceeds what they can earn. In effect, this person has "hired" him/herself to care for the kids.
The same thing holds true for most of us. As our joint income rises, we evaluate our situation and think, "Is my job worth the after-tax income?" The higher the joint income, the higher the tax bracket, and the lower the net income for one of the earners.
As tax brackets are increased, "second" incomes may be taxed out of the workforce. A teacher may love his job, but does he really want to do it for 40 cents on the dollar? How about a nurse? Police officer?
With higher and higher tax brackets being imposed on lower and lower joint incomes, we may all have this decision to make. Certainly not a good way to get MORE people employed.
K. Hunter Since you want to pay more for health care so others don't, you can send the government money. I'll keep mine, thanks. PS Please make Nobama look like a fool and don't buy GM. PPS Income taxes are not constitutional. Send more more to your Swiss bank accounts. Sink the dollar and buy guns, ammo, gold and silver.
Maybe we should tax any registered Democrat at a 95% tax rate. They all seem to think spreading the wealth is such a great idea. How about we see how well it works by spreading their wealth around.
I also realized that it doesn't pay to work hard and long hours. I now work only 25 hrs/wk and stopped investing and expanding my business as a protest for being punished for being successful and creating jobs for others. I am now down to 3 employees and taking a lot of time off. Imagine a US President with the same philosophy on business as the deadbeats of our country. How ignorant!!!
That's a great idea Bob from Miami, let's let the wealthy pay all the taxes. Hey, why does Bob even have to work at all, maybe the wealthy could pay his bills too. How about raise your children and clean your house? Anybody ever consider that the wealthy work hard, save their money and make smart decisions? Personally, I don't know how you could look another man in the face and not be ashamed for your thinking. Would America be the greatest nation on Earth if everybody looked at their neigbor to pay your bills? How do the wealthy become wealthy? Luck? How about a little respect and appreciation for the tax payers that pay clearly more than their share in the future Bob.
Bob Murphy – Oh my God, please tell me your an internet troll just trying to start a riot. If we taxed the rich at 90% of their income – tell me why again they would bother to operate their businesses or do their jobs for YOUR benefit? Oh yeah. They wouldn't. It's called risk and reward – read a book.
I do not think taxing the so-called rich is a well-thought out idea. I will soon be entering a "high income" tax bracket (after I graduate from college) and I will have tons of student loans to pay off. Why should I be penalized because I worked hard to gain higher education for 7 years after high school? Also, although my gross income will be high, after taxes and student loan payments, I will take home much less – almost to the point that it doesn't justify the higher education. So, if we keep raising taxes for those who earn a little more, I say, where is the financial incentive of gaining that education? We would be better off not becoming educated and further falling behind the rest of the world.
In response to Bob from Miami's comment. Your plan sounds great, except that if you tax the rich at a 90% rate and no one else, the rich will simply stop working. There's a reason most of the rich are rich….they work their butts off. Go read Atlas Shrugged by Ayn Rand once and see what would happen if the government used your plan. Taxing people at that high a rate for being succesful is just a huge disincentive to succeed. There would be no reason to go to college, work hard, and become successful. then we would all suffer.
in response to bob murphy's 'idea' to tax the 'rich' at 90%, i say go for it.
as one of the 'rich' who has 14 years of higher education and works about 20 weekends a year providing health care to my community, i would be a fool to make a single dollar that was taxed at 90%.
as i am not a fool, i look forward to working only 25% of the year rather than work more and give 90% of my earned income to the government and then on to the bob murphy's of the world.
most of my colleagues feel the same way. i wonder how the community is going to manage with only half of it's current physician coverage?
Perhaps it's because they earn it? Whether through drive, luck, or skill they earn it. Why punish the people who are actually doing something and reward those who are not? It's not nice, but it does keep things advancing. If you're not willing to take risks and have sleepless nights due to those risks, if you're not willing to fight for your own success why should you be rewarded for that?
RE: Bob Murphy
You are the perfect example of a socialist who is clueless.
Of course you and others deserve the hard work of those people that earn it. (irony)
Nothing is free in life. You have to earn it and you have to pay taxes like everyone else (and everyone should be taxes equally at the same %).
you make 20k a year, you pay 2000 in taxes, you make 50K you pay $5000 in taxes, you make 100K and you pay 10000 a year in taxes and so one. It's ALL RELATIVE.
Everyone should be taxes equally. Just because you work hard, earn more shouldn't mean you should be DISCRIMINATED against, which is exactly what taxing the middle/rich is.
BTW, keep taxing the middle, upper class more…sooner or later they'll leave and then you'll be stuck with a bunch of freeloaders that can't pay anything and the country will be in ruins.
Right now both my wife and I work and we make a lot using normal standard, above middle class. Our life quality is terrible considering the work stress, and time spent. But we pay so much tax along the way. It does not worth it.
Our plan is to retire in a few years, as soon as we payoff mortgage, and save enough for basic living. We will switch camp, stop producing. If the whole nation move to this direction, the only solution is to PRINT more dollar. Let's do it.
Why should we benefit from our higher income? How about because we earn it. People seem to forget that people earning the higher incomes do so because they made the effort to get an education and work hard. I'm in the upper levels of income because I work 70 + hours per week, often 7 days a week. I love people who like to coast through life then expect others to pay their bills.
taxing the rich is really "stealing from the rich". Any well off person with half a brain will figure out how to shelter as much of his or her earnings and that'll be the end of Obama's grandiose scheme to steal from the accomplished people out there to give to the losers.
For those of you who don't "get" why the "rich" get upset about paying disproportionate taxes, the following is a very interesting article:
http://money.cnn.com/2008/10/24/magazines/fortune/tully_henrys.fortune/index.htm
It basically clarifies the difference between those who everyone thinks are rich (because they earn more than most) and those who truly are independently wealthy.
My husband's last job change moved us into a significantly higher cost-of-living area, with higher state taxes, real estate taxes and more – and since it came with an almost 20% higher income, it also moved us into the AMT tax bracket for the first time.
I can honestly say we have less disposable income then we have ever had despite his higher salary – and as a result we save less, and spend less on things that stimulate the economy (like landscaping, home renovations, kids' activities and vacations).
When are we going to realize that our notions of who is "rich" are entirely outdated? NJ actually places a "mansion tax" on real estate sales over $1,000,000. In northern NJ, that's about 2,200 square feet on 1/4 acre (or it was before the market tanked). A mansion? I think not!
Taxing those who earn over $250,000 as being "wealthy" means taxing what used to be "upper middle class."
The only fair way to assess taxes is to make the first $2 million in earned income non taxable for Federal and State Income Taxes. After this amount has been earned the taxes should be progressive, and less on earned income than on investment income, say:
Earned Income
$ 0K – $60K 5.0%
$ 60K – $100K 10.0%
$100K – $150K 15.0%
$150K – $200K 20.0%
$200K – $250K 25.0%
$250K – $500K 30.0%
$500K – $up 35.0%
Investment Income
$ 0K – $60K 15.0%
$ 60K – $100K 20.0%
$100K – $150K 25.0%
$150K – $200K 30.0%
$200K – $250K 35.0%
$250K – $500K 40.0%
$500K – $1M 45.0%
$1M – $2M 47.5%
$2M – $up 50.0%
This way all the people out there working and contributing to the GDP of our Nation will be motivated to keep working, and those who benefit most from the military spending, those who own the most, pay their fair share.
How about only the rich work and everyone else sit home on the duffs waiting for their welfare distribution checks to show up? Let's tax lottery winnings at 110%, cigarettes at $1,000 per pack, $100 tax per bottle of beer and family fun at $1,000 a day. Idiots!!! When tax and spend failed, they changed it to borrow and spend. Creative idiots. I can't wait for Spector to tell my doctor when I'm entitled to an MRI or CT Scan.
My wife and I (me in my lower 30s, her in her upper 20s) are on the edge of $250k. We live in NYC, we are no rich. We're middle class.
This is becoming absurd. I came from Western Europe to avoid high tax and here I find them again. I'll become a US citizen in a few months and I hope my vote will help.
I agree with Nashville Dave! There was a time when taking from the government unheard of, now the notion of working to get ahead is dying and being taxed into the ground. My wife and I pay for everything; my kid’s college, while 22 percent of the kids in each of the schools they attend go free. Schools my kids didn’t go to when they were in high school, and yes I pay for the idiot politicians in Illinois who rip us off and play as for fools.
The answer is indeed a straight tax, but it would mean everyone paying a fair share; I think the number right now is 51 percent of taxpayers pay nothing, so truthfully, those 51 percent should have no voice in it, but the truth is they will keep yapping because they see their gravy train threatened.
For me, I indeed will take the last train out to an island I can afford to move to. Where people work for 5-6 dollars an hour and die happy with lovely family’s houses they own, not expecting a soul to give them something for nothing. Hmm seemed this country was that way once.
What is the old expression "don't tax you, don't tax me, tax the guy behind the tree" Once we approach the point where more than 50% of the population pay no Federal inome tax…the end will not be far off and we are now approaching that situation….it is said you could take all the wealth in the world and divide it evenly among everyone and within a short period of time those that now have would again have and those who have not would again have not…this is all very sickening…
@Pete: the problem is that it can be difficult to determine the difference between someone who actually studied hard and thus deserves the score of 100, and someone who made a few lucky guesses to end up with 100 instead of say 90/100.
That would be OK, if there wasn't so much riding on this test and the disparity between those who scored 90/100 and 100/100 was really about 10%.
But that's not the case. The disparity between those who have had a few lucky breaks and those who haven't can be very dramatic.
Now, at the same time, "luck" can be what you make of the situation, and also having done sufficient preparation to be able to capitialize on an opportunity.
If real life were as simple as your tests, it would be easy to determine those who "deserve" to be rich. But it's not really that simple.
I agree with doing what we must with fiscal policy to make us competitive. Our health system is degrading to the segment that can't afford an essential protection for families. And not to say how much productivity we lose due to the ridiculous cost of health care and a rising % of uninsured.
Flat tax, higher tax on the higher earners and a progressive death tax are all needed.
I don't see why the middle or lower class should have to pay any taxes at all. If we only taxed the top 5% of the population at a 90% tax rate, and didn't tax anyone else, we'd probably have more than enough money, and could add even more social programs for the benefit of everyone. What makes rich people think they deserver to keep their money, it shodul benefit everyone else
Lets see.Federal Marginal rates are the lowest they’ve ever been.Corp Gains tax / Div Tax were slashed by up to 15% ( where the rich make most their money )
And everybody is whining about a 1% rise on marginal income in the worst economy in 70 years?
EXCERPTS FROM ALEX IN DENVER – Alex, you don't have a clue as to what people really pay in taxes. Under the AMT, I pay federal income tax on earnings that are paid out in state income taxes, and I get no credit on my federal income tax for 2 children. The marginal rate is irrelevant; it's the effective rate that is disheartening. Re: dividends, those funds have already been taxed as corporate earnings. Increase the rate of double taxation, and reduce the incentive for companies to distribute earnings, and the market will deteriorate further. Go ahead and retire with that 401k balance. Maybe that doesn't concern you; you'll just raise my taxes again to cover your retirement shortfall.
Carolyn and those that read this article. You all missed the real mistake in the article and you seem to think that it is just the way things should be. The third paragraph from the end starts with " not to say that wealthy folks shouldn't be taxed at a higher marginal rate."
This is the misguided premise that has led us to the situation we are in at the present time. It's OK to take from some more than others.. so long as the ones getting taken from is not you.
All I ever hear is "they" should pay more because "they" make more. Penalties on success are not a way to prosperity. Eventually you remove the benefits of keeping what you make and you remove the incentive to achieve.
To put it into simple terms.. Every time you studied for a test and got 100 out of 100 on the test in school you had to give 30 points to the person who did nothing so that their test score was brought up to 70. This happens because you have "plenty" of points so you can afford it. You still pass the class with a 70. In fact, the whole class gets 70. That is until you stop studying since you never get any more than a 70 on the test.
Who wins in this situation… NOBODY.
However, when you get rewarded for getting 100 on the test you will continue to strive to achieve.
Very seldom have I heard someone say "I don't pay enough in taxes." And whenever I do hear that I tell them to simply write a check and send it to the Government. How many write that check?? NONE.
Wow, you guys have it all "wrong"? I cannot believe you are "misinformed"
from the facts, you are losing touch. Let me refresh your memories from social studies class. It takes a village to invest in itself to succeed. all through out history, great nations and tribes took care of it's people. I am one of the wealthy people and are willing to pay additional tax for health care reform and Cap and Trade. I will save monies for all of us.. and provide the care that some people sorely need. By the way, MLK was not "Republican" "Stupid",
He was a community organizer and pastor of all people of color. Please educate yourselves about the facts and not the "media"..
Can they really justify some "Greater Good" program by stealing from the wealthy? This when they've had numerous unacceptable errors in appropriating funds from the stimulus; I guess the greater good required the government spend over a million dollars on two pounds of frozen ham.
Programs to cut? How about boarder control, replace it with moving current military in Europe and Asia on to our boarder.
Completely eliminate the Earned Income Credit as well. There's two huge cuts.
Atlas Shrugged anyone?
I retired young also. After 31 years of working long hours, traveling to remote areas, introducing cost saving methods, I ended up making some CEO very rich! Talk about on the dole!
I too own a business and have chosen to keep it small to prevent owing even more in taxes. I intentionally work less to reduce paying taxes. The people on here that criticise business and not the politicians for raising there living expenses are dumb. This article thinks it's a given that people who make more should pay a greater tax rate. Idiots. Punish me for working hard. I will not pay for your health care and mine. Nor will I pay for illegals healthcare any more than I already do.
At the state level, a surtax on high incomes is probably a good idea. It worked well in past downturns. The rich make a disproportionate share of the income, and they can afford to pay a little more tax.
States that have deficits need to take spending reduction steps, such as going to a 4 (or 3, 2, or 1)-day work-week for all state employees, immediately. Cities and counties, too. They also need to look at longer term spending, such as teachers (we have a lot), police (we have too many killings by the police), and firefighters (we have more than enough); government workers usually currently have fat pensions and health care, which cause future budget problems, so you don't want to hire too many of them. There's a lot of waste here.
At the federal level, we need to roll back all of the Bush tax cuts as soon as possible. And, we should remove the salary cap for Social Security and MediCare so that the rich start paying their fair share. But, we don't need a national sales tax. It's just another new tax that postpones the hard decisions that we should be making now.
I'm always in favor of cutting waste, but it's hard to do it when it's not your money that's being spent.
Most of the accountants will follow the laws, so we shouldn't worry.
The estate tax is the stealth "tax the rich" program. Sorry folks, but you've already spent your pound of flesh.
P.S.: I agree with the op-ed cited and others (e.g., Krugman in the NYT) that a VAT may be the way to go … replace the Medicare portion of FICA with a federal sales tax of 1% to 3% (n.b., sales tax in LA is already 9.75%, and 10.25% in Chicago already so that limits what can be added since sales tax in Canada is about 12% to 14%, depending on province).
I'm all for spending cuts but when friends bring that up in a political discussion (usually a Republican but sometimes a centrist Democrat), I ask them for an example of a program to cut. And then … silence. That's why we are stuck raising taxes to pay for what we spend … otherwise, cuts always end up with teachers, cops and firefighters.
Really the problem is not the people so much as the expectations of our government. Every time we vote to have our government provide more services taxes (hidden or not) have to go up. This is the only way the govt can possible provide more is if it takes in more.
The purpose of the govt is supposed to be quite limited if anyone reads the Constitution, but of course we haven't used that "outdated" document in many many years.
People and corporations (legally a person) are supposed to be able to succeed and fail by their own merits with the govt involved only enough to ensure the stability of the society. Obviously we have gone down a road much different than the Founding Fathers envisioned.
Phillyjoe is an idiot- Republicans are far from racist you realize the MLK was Republican right?
What the producers will do is not stop producing but raise your prices to cover the increase ergo you collect the tax increase from the consumers-This is why Obama is just not thinking-again.
Make the people who are rich that over charged people on their basic needs pay the taxes. They need to learn that they can kill people by over charging for basic needs. It's white collar murder for victims that can't afford to pay for the things they need to survive. I read a comment n this subject from another poster and it really makes sense when you think about what is really happening. Some people dying who cannot afford while others who over charge and live lavishly on the victims faith.
Philly Joe – surely you jest. Classically, you have missed Nashville Dave’s entire point.
Let’s dissect you poorly crafted counter-argument directed at ND’s post.
Why does ND have to address the other side of the accounting column? He didn’t once say anything about how the money was being spent (thought I’m sure he has great opinions about the issue), rather, he stated that he was paying more than his fare share. He is a PRODUCER, not a government worker or someone on the DOLE.
Why would you expand on Tea-baggers? ND stated that he is not one, instead he thought their mission to be fruitless, and he even calls them SUCKERS! And as far as paying for “those Blackwater perks and tanks” see above, where he is not addressing how the money is spent. I will add my opinion, if you think Blackwater perks and tank is even a fraction of how we got where we are you a STUPID!
RACIST REPUBLICAN??? What are you talking about? ND never once mentioned race. Funny, when I read ND’s post I visualized a business man, you visualized a racist. You are too stupid to have an opinion or a vote – I want you to turn in your voting, thinking, and raising children privileges, immediately.
So that you can’t misunderstand ND’s and my position, I will summarize:
We are tired of PRODUCING something for society and being rewarded with additional taxes for doing so.
We are tired of paying a disproportionate amount of taxed
We are protesting, by cutting our production, the people that don’t produce will feel it in their pocket books – and hopefully learn a lesson.
GREETINGS Fellow PRODUCERS:
Have you noticed the People making all of the Noise and CRYING the blues in California are the TAKERS!
For the most part they live on some type of Government dole
You will note the PRODUCERS are not CRYING
at all…. they are shivering and waiting for the EVEN MORE TAX hammer to drop on them.
Fret not….. you would be SHOCKED at how many PRODUCERS are moving out of California!
GO EAST TAX SLAVES is the new mantra in California!
In closing :
Their are ONLY two types of people in AmeriKA:
ONLY TWO…….
The GIVERS and the TAKERS!
One time in AMERICA our nation was loaded with GIVERS and out nation prospered……
Now AmeriKA is overrun with TAKERS and we are tanking fast!
GOD help YOU if YOU are a GIVER and get tangled up with a TAKER……. they take and take and TAKE till their is nothing left!
This AmeriKA in a nut shell
And now you know WHY AmeriKA is TANKING
It's CRAWLING with TAKERS!
Lets see.
Federal Marginal rates are the lowest they've ever been.
Corp Gains tax / Div Tax were slashed by up to 15% ( where the rich make most their money )
Businesses were just given huge tax breaks.
And everybody is whining about a 1% rise on marginal income in the worst economy in 70 years?
I find it interesting, of course, that the population can now vote itself bread and ciruses at the expense of the few.
47% of Americans pay ZERO Federal tax (and thus, likely, ZERO state taxes).
Half of these – or 25% of the total – "pay," negative taxes – receiving more back from the government than they payed in.
In aggregate, even living in Texas where there are no state income taxes, I pay:
~25% of my income to the Feds (top bracket, but this the marginal rate)
~5% of my income to Texas and cities – general sales
~5% of my income to Texas and counties – property taxes
~3.5% of my income to the geezers – Social Security
~2% of my income for fines and levies (a form of taxation)
~2% of my income (or more) for taxes against items taxed twice or three times (beer, wine, liquor, cigars, tires, gasoline, and so on and on
~2% of my income to Geezer's Light – Medicare
~2% of my income to pay for accountants and lawyers, so that the first enty (above) does not go to 45%
Total: about 46.5% (this % is so low as I earn about the SS limit…it would be 57% or even more if I earned AT the limit – property taxes, in particular, are not R=1.0 income dependent).
NO ONE should pay zero taxes. NO ONE should "pay," negative taxes. Everyone should pay something if they earn money. Period.
As the first respondent alluded to, it is just about time for Atlas to shrug. I bear the burdens of at least (4) poor, downtrodden, beat up human beings….who watch color TV and eat steak at my expense.
We all remember "no taxation without representation." It is now time for "NO Representation without Taxation!"
You read it here first.
Tax, tax, tax.
I am in 30s and have reduced my business from about a dozen employees to just me and my wife, we make a little less but pay a whole lot less in taxes, fees, and insurance. I don't even have the commercial sites I used to.
So now I hang out with kids, take vacations and get to spend time with my wife.
It's great. Thanks Mr. Tax Man. I live much healthier now.
Nashville Dave, I'm wondering why your rant doesn't address the other side of the accounting column. Funny how the tea-baggers were dismayed at Obama's tax cuts for middle class, but were dead silent on Bush's colossally expensive failure of a 'war on terror'. Somebody's got to pay for those Blackwater perks and tanks. Sounds like more racist republican erroneous thinking to me. I have to wonder what you were producing, other than misdirected complaints against progressives.
Dave Nashville – do you mind sharing what kind of business you have/had? It's unfortunate that people like you had are being taxed a lot.
nashvilledave,
I am with you and am planning the same thing.
This is exactly why socalisim/communism doesn't work for long. People who produce are no longer are incented to do so. So they stop.
I could agree more with the first comment. I am a 34 year-old lawyer and have spent the past 9 years slaving away at a large law firm. I am most certainly rich under the Obama/Pelosi deinition, but not in the real world. If Obama/Pelosi are successful in raising my taxes to Sweden-levels, I too will stop producing and start enjoying life with my wife and baby. Here's a handkerchief, IRS.
I own my own business and have had ENOUGH of being made a fool of working my rear off only to be rewarded with MORE than half of what I make STOLEN from me at the end of the year in TAXES both direct and hidden.
So at age 54 I am out of total debt, I am now semi retired I take it real easy now!
I went from paying WELL over 100 grand a year in Federal taxes to PEANUTS.
I relocated my Home & business from a state with a state income tax ( Georgia) to a state that does not have one (Tennessee)
I no longer Invest or purchase assets for my business and no longer purchase any new cars and no longer provide JOBS.
I am ENJOYING my life now!
So TAX on Tax man….. keep taking and taking and taking and watch more & MORE people like me stop PRODUCING
Then we can sit back and watch AmeriKA collapse in on itself like California
You can protest and tea bag all you want fellow PRODUCERS but MORE than HALF of the people in our nation is on some type of Government, Federal, State ,local Payroll as 'employees' or Government Retirement / entitlement programs.
So ANOTHER producer CALLS IT quits! that is MY protest and it is VERY effective!
The 'powers that be' LAUGH at you 'tea bagers and 'protesters' they KNOW you will be working & PRODUCING the next day after you blow off some steam
SUCKERS
Not me….. I am DONE JOIN ME! cut back STOP PRODUCING
That will bring CHANGE! FAST!
I want to start a ballot initiative to dramatically raise the income tax rate for wealthy individuals and corporations in California. I think the additional funds raised should be distributed to the counties and ear marked to subsidize small businesses and non-profits that promote sustainable economic activities. Any ideas on how I would write the initiative so it is legal. I figure the state tax rate combined with the federal rate should be over 50%.
Do you know if it would be legal for voters to vote for raising state taxes that high?
Thanks