+1 Wish I had something to add, but this is precisely it. Way back in Post 41 even sven put it in simple, real world terms:
I’ve been poor enough to know what scraped icebox and dishrag soup taste like. Right now I’m comfortable with a household income (wife and I) half the figure under discussion. We struggle, but it’s because of choices we’ve made (horses, not kids; small farm, not rented townhouse; etc.). If we gave up some of those things, lived more like I did as a kid, we’d be cash-rich beyond the wildest dreams of my childhood. (Well, maybe not quite that rich – I had a pretty good imagination!)
Like so many things today, the debate over “rich” only demonstrates the Republican skill at re-defining reality to their own benefit. Like “giant corporations working fewer employees longer and harder for less (adjusted) compensation, making enormous profits, screaming for additional tax relief, while hoarding more cash than ever before in history” are now inviolable “job creators”.
I’ll give my answer to why a person in a higher income bracket (rich, glargelflargel, job creator, whatever). Its actually very simple.
Without the clear benefit of living in the society in which they live, they would have never reached that higher income bracket, therefore, they receive a higher benefit to living in society, and therefore should pay a higher rate (on the marginal income). Is there some component of hard work - yes there is, but there is a whole lot of luck operational in the world of business. Anyone else know an utterly incompetent jackass in a high ranking position in a corporation? I sure do, and they sure as hell didn’t get where they were as a result of hard work.
See a lot of innovation and corporations coming out of Somalia? Nope. No intellectual property rights, no protection for property through police, no decent roads to transport anything, no infrastructure that makes business and wealth possible. Society makes business and financial success possible. Society makes it all possible, those who reap the biggest rewards from living in that society should be HAPPY to support that society.
There is no way this is true. Sure, there are going to be more $200k+ salaries in the big cities where the cost of living is such that living on that salary makes you feel middle class. But there are hundreds of medium and small cities and towns where plenty of people earn that salary and where the reasonable cost of living lets it go much further.
You make it sounds like everyone making $200k+ has no choice but to live in places where the COL is so high that they can’t afford to chip in a little more and while that might hold true for some, it certainly isn’t for all.
On the contrary. It is those on the other side of the debate who are attempting to redefine the already-established sociological definition, for emotive and political reasons - presumably because it is easier to justify a tax on the “rich”.
I say that, and I am neither Republican nor do I disagree with progressive taxation. Though my reasons for doing so are different from those stated by otternell. In my opinion, progressive taxation is justified because, at the lower end of the income spectrum, taking money leads to a sharp increase in real hardship on average - simply put, the higher one goes on the income scale, the purportionally easier it is to bear an increase in taxation.
Excuse a little hyperbole. Yes, it is not literally true that one cannot earn $200,000 outside of the big cities. But such opportunities are vanishingly small set against the number of $200K earners in the big cities - as the occupations that earn in that range (lawyer, manager, specialty physician) are overwhelmingly concentrated there.
How many times must I say that I agree with progressive taxation?
I will say it again: I agree with progressive taxation.
gurujulp is absolutely right though. I know people who make upwards of 200k, and I’ve been to a party at a person’s home who had Ross Perot as a neighbor, invited him to the party, and he showed up (I actually met him).
There’s no comparison; we’re talking 3500-4000 sq ft. houses vs. 18,000 sq ft houses with private tennis courts, pools and separate 5 car garages.
That’s rich. Having live-in nannies and servants is rich.
Recently, more than once, I’ve heard financial talking heads like Buffet or someone saying that if a business opportunity seems good, business will move forward on it taxes or not. That is, taxes alone isn’t a deal breaker. Also, businesses who can bluff their employees and unions with a threat to move to Mexico or China or lay everyone off and slash benefits, have already played that hand. If they could move to Mexico or China, they probably already have.
If Ma & Pa business owner have made their salaries, the employees salaries, expenses, etc. and they’re saying, “I refuse to pay taxes like everyone else who mad $200K last year and if you make me I’ll slash my employees wages and benefits, lay half of them off, and move to Mexico” well, go for it. Don’t let the door smack you in the ass on the way out. See how much you like making zero income in Mexico or China vs. making $140K after taxes just like everyone else who makes $200K.
Ooh, ooh! Make me pay taxes I’ll quit job-creating! Ha! Nice try but you’ve already quit job-creating and you’re perfectly happy squeezing your current level of productivity out of your employees, and your customers are already paying what you can squeeze out of them, so by all means go out of business or move to China if you can. Lay off half your employees and jack up your prices and see how that works out for you.
I think it is totally meaningless to say that a middle class lifestyle is affordable only by the top 5% of wage earners. That is stretching the definition of middle class in a way to make it unrecognizable.
What does a middle-class life-style mean if someone in the middle of income brackets can’t afford it? How do you define a ‘middle-class life-style’?
Now let’s look at reasonable monthly expenses for an upper middle class family - husband, wife, one kid. Not “rich” - just upper middle class. Somewhere like California or NYC.
$4K mortgage payment
$1.2K groceries
$1.5K school tuition for kid (if in private school)
$1K real estate taxes
$800 utilities/internet/cable
$400 gas/car insurance
$400 entertainment
$9.3K total. Multiply by 12 = 111K - basically there is your 120K. And I really just took basics into account. Left out all kinds of expenses. I am sure you can think of quite a few.
The “middle” in “middle class” does not refer to the middle of the income spectrum, but rather to the fact that it is the “middle” class between “working class” and “upper class” or “the rich”.
There is nothing inherent in this term as to how large each class has to be. The fact that there are, very broadly, three classes doesn’t imply that 1/3 are working class, 1/3 are middle class, and 1/3 are upper class/rich.
The size of the social classes is a reflection of the type of society a particular country happens to have. For example, in some third-world countries, only a small fraction of the population could be described as “middle class” or “upper class”.
While I agree with you somewhat I found his claim that their household makes 200k but it would take “planning” to fly a friend to visit them spurious. Either they spend all their money on crap and don’t have any cash, or he was dishonestly saying “plan” for it to mean time-wise, because the implication was that someone making 200k would have to plan to host some guests and that is VERY hard to believe.
I’m a 200lb male and I don’t spend 400 a month on groceries for myself, and families that can buy in bulk without worrying about spoilage like a single guy should be able to manage less per person than I do.
What kind of house/loan has a mortgage for 4k/mo? That seems awfully high to me. Their take-home is 10k a month, that seems like they are spending beyond their means. Which is not a good reason to not raise their taxes.
I am not making $150K. I am making just over $60K in a good year, and this is not a good year. Together, my family is making about $100K and we will likely hit $200K eventually.
Real estate taxes on a new house here in Berkeley are more along the lines of about $15K per year for a house with a $4K mortgage, and that IS a reasonable mortgage.
Wouldn’t have to be long term plans- but wouldn’t be able to afford same-week fares, either- short term tickets are in the $1000’s…
That mortgage is totally reasonable. Many people took 50 year mortgages, as it just takes that to own a home… the kids will be paying off the house.
The kind with “$1K/mo real estate taxes”? Is that meant to say property tax? If so, that’s some house, based on my property taxes that scales up well over $2 million.
If you are making 200k a year and you don’t have 1% of your yearly income in cash on hand that you can host guests, why is that not an indicator that you are doing something wrong as opposed to “they cannot afford more taxation”?
He said 3 people (one of which is a KID and doesn’t eat that much) for 1200 dollars. How does the price per person scale UP with a family and not down, you’re not making any sense. Dollar per pound it is cheaper when you can buy larger containers that won’t spoil, families with any common sense should be able to eat cheaper per person than a single person.
Forgive me if I don’t think that we should increase taxes on the poor before someone who lives in a 700k home.
Depends on the state. In MD, a $800K house easily pays $12K/year in property taxes. In Austin, TX, a $400K house pays around $12K/year in property taxes.
