(bolding mine)
This is not true. Rarely is one’s income tied to where one lives. Often, most people make around $50k a year. Even in places like Manhattan, median household income is $64,000. For most of the country, income hits a cap of less than 1/2 of $200k, regardless of where one lives.
Yes, the big salaries are in the big cities, but most people don’t make those big salaries.
There are really two arguments in this thread. The first is about the nature of taxation. On that we probably agree - taxation ought to be progressive, meaning tax increases ought to hit the upper percentiles more, percentage-wise. This is true regardless of the terms used to define those upper percentiles.
The second is about who is “rich”. This is a term that, for political and emotive reasons, is I think being twisted out of its original meaning to support a taxation policy I happen to agree with.
The fact I agree with the policy does not mean I agree with what I see as a misuse of the term. I’m with Orwell on this–language ought not to be manipulated this way, even if I happen to agree with the people doing the manipulation.
Huh? You are agreeing with my point (“Yes, the big salaries are in the big cities …”) but your post reads like you are somehow disagreeing with it.
My point was that you can’t get the 200K outside of the big city, not that everyone in the big city earns 200K. I never said the latter.
Our economy is structured so that those with more income spend or waste more money than those with less income. More expensive apartments in better or higher class neighborhoods and of course the expensive new cars. The higher priced restaurants and more expensive entertainment. This keeps the buck rotating through our society and creates and supports many jobs. If these people quit their frivilous spending our economy collapses. This conditioning to train people is a part of capitalism that is taught somehow to us. I see much evidence and have seen documentories by economists stating how it works but am still confused how our society got so entwined in it that most don’t realize it’s happening. If we believe in the economy the economy thrives but if more than about ten percent of the people start questioning it’s validity the whole thing is in jeopardy.
Yes you have. The answer is “Because that’s where the money is.” This was stated already multiple times, so try re-reading through the thread and it will sink in maybe?
It’s sweet of you not to think of your business as big, but for purposes of this discussion it’s big.
Why is that, you ask. What makes it ‘big’ for purposes of this discussion?
Remember our formula: profits = revenues - expenses. And let’s assume that taxes are some arbitrary percentage of profits, it doesn’t really matter what.
If you’re self-employed, ‘profit’ may effectively be another name for your salary; it’s what you live off of. An increase in the tax rate on your profits may actually take your profit, i.e. your salary, from a level where your business is worth doing to a level where it makes more sense to find a ‘real’ job, i.e. working for someone else. In a real sense, though not in a technical, bookkeeping sense, the tax moves the business from profitable to unprofitable, because it’s no longer a very good use of your time and abilities.
If you’ve got 200 employees, chances are your business is incorporated, and you pay yourself a salary so you can deduct that salary as an expense before taxes. The tax isn’t going to give you a reason to shut down the business, though you may be less than happy when it reduces the amount of dividends you can pay out to yourself over and above your salary. Your business is still profitable to you - it’s still the highest and best use of your time and abilities. It’s just a little bit less good than before, but you’re still well in the black by this measure.
‘Small’ for purposes of this discussion is small enough that you’re at risk of being in the first category, that the real bottom line and the bottom line for bookkeeping purposes are very different, and the former isn’t very far at all into the black. You don’t have to be a one-man show to be in this category, but by the time you’re anywhere near 50 employees, the two bottom lines have effectively converged: you’re going to pay yourself enough to make it worthwhile, unless that would put you in the red in the standard bookkeeping way.
The question was asked, "WHY do we want to tax the wealthy (Higher yearly income earners).
To me it is because we can’t legislate the moral responsibility of corporations to the workers.
I worked for a large corporation. For 5 years I tracked my yearly earnings and the earinigs of my CEO. Face value adjusted for inflation, I had a 3% increase over 5 years, while my CEO had upwards of 450%. I worked hard, had good results, good reviews, but like every other worker bee, had to justify my existance to get that 2.5-4% piece of the raise pool. CEO puts his pants on the same way the rest do, but can claim “We pay competitive wages and do not give COLAs.” when questioned about raises. Sure, tax the guys who works in the top hallways, and the board members who serve on each others networked boards that vote themselves higher pay.
That’s why I’d like to see the top earners pay more. ymmv.
I don’t see it as irrelevant.
If I make $200k and live (in a single household) drive a single car and have a couple of kids who don’t go to prep schools somewhere, I don’t and wouldn’t see myself as rich. Luckily I don’t make $200k/Year but I have that much upward mobility that I may see that pretty soon. I wouldn’t define that person above as “rich”. Yes he is well off, doing fine, paying bills and maybe even putting some money away (retirement, kids college, kids cars whatever)
Rich, to me, is someone making enough to be able to afford all of those things above without actually relying on a paycheck to pay a bill, car payment or college tuition. If someone has all their cash (net worth) tied up in assets then I’d consider them rich if they had assets exceeding say $2M. Why 2M, why it’s just some arbitrary number made up by me (ten years salary) similar to what I would expect life insurance to cover (in case of death for my family)
When we start talking about how much money people make and the median incomes, it strikes me as disingenuous to have only 3 classifications. Poor, middle class, and rich
But for the tax code, you’d have a hard time being able to distinguish even more than those we have. A progressive rate seems fine to me (kind of like what has been proposed) but to maximize the tax dollars that low end number has to fall (and will ultimately keep falling if we keep spending)
No, a middle class life, by definition, is one that can be lived by person with a middle income. If only wealthiest can afford it, then it ain’t middle class!
The term “middle class” doesn’t mean “average salary” and never has. It is perfectly possible to say things like “in a third world country, only a small minority of the population is middle class” or “in America today, the middle class is disappearing”. If your definition were true, these would be meaningless statements.
Then why doesn’t the tax code change every year to re-define those terms?
Is the sentence, “Wilt Chamberlain, the pro basketball player, was tall” a meaningful statement? If so, is it true?
Saying that anyone over 7 feet in height is “tall” is not false or meaningless simply because “7” is an apparently arbitrary number. It does not mean we need a supposedly “objective” measurement such as “has to duck to enter Building X” for the term “tall” to have meaning.
We could say that anyone over 6 feet in height is tall. This, too, has meaning. Is it true? Well, it’s less true than the statement about “7 feet in height” and more true than “anyone over 5 feet in height is tall”. Of course, this assumes we’re talking about human beings, and not redwood trees - or bonsai trees.
The point I’m trying to make is that “rich” is not a binary value. It is an inherently relative term, just like “tall”. Sometimes a term fits in such a wide variety of contexts that it makes sense to treat it provisionally as a binary value; it is a useful fiction. Hence, “Bill Gates is rich” is true unless we’re talking about a very strange grouping, possibly including cartoon ducks. Therefore, I have no problem with saying “Bill Gates is rich”, even though it might be more technically correct to use the word “richer” and give a comparison group.
On the flip side, I wouldn’t normally say that someone making $25,000 a year in modern America is rich. However, if someone were to say, “Compared to a large number of people in [some thirdworld country], someone making $25,000 in modern America is rich” I wouldn’t disagree.
Since “rich” and “tall” are inherently relative terms, context is vital. In order for, say, the top 3% of people with the highest incomes in one of richest countries in the history of the world to be considered to not be rich, you have to contort the context to a great degree. For example, you can compare them to the the top two percent, or maybe the top 0.001 percent.
AFAIK, the tax code does not, nor is in the business of defining vague categories such as “working class”, “middle class” or “rich fucking basterd”.
This, to me, is the crux of the argument about people defining rich. From the posters in this thread who make 200K+ to Howard Stern, no one wants to admit they are rich. Everybody who isn’t poor considers themselves middle class. Furthermore, I think the term income-elite beats job creators when it comes to effective euphemisms.
How can you be rich except in comparison to others?
If “rich” is objectively something beyond 250k a year, then statistically nobody in the world has ever been rich. The number of people who have made that much on this planet is so minute that it’s not worth counting them. It’d only be in the last few decades in a tiny corner of the world that a miniature sprinkling of people have become “rich.” Other than that, there’d be a few rich oil barons and industrial tycoons and maybe some kings back in the day and that’s pretty much it.
It’s just an absurd idea. The “rich” are always the upper echelons of whatever society they are in.
As for owning a home…
The spacious single-family home with a yard and all that is an innovation that was made possible by the creation of suburbs. They are not something you “lose” by going in to the city, but something you “gain” by going in to the suburbs. Pretty much nobody has ever had the luxury of living in a freestanding home in a dense part of a big city. Even the British royal family lives in apartments in Buckingham palace. It’s just not a thing anyone can expect, rich or not. A handful of people have really nice apartments in Manhattan, but next to nobody is living a suburban lifestyle in Manhattan.
Luckily for everyone, large dense cities are surrounded by these nice things called “suburbs.” That’s where people live if they want a big house. Someone making $200,00k in San Francisco, for instance, can afford a new house in the Sunset- and that’s even in city limits. Yeah, you have to commute. Guess what? People commute! Not commuting is a huge luxury, and requires some sacrifices for pretty much everyone.
Reminds me of a French joke. In France, Northerners are universally agreed to be snooty bastards without a sense of humour and who just don’t know how to enjoy themselves because they live in such a frigid, miserable place.
You ask a Marsellais where the North begins, he’ll confidently tell you “Lyon”. Ask a Lyonnais, he’ll say the North begins in the Massif Central or thereabouts. Ask someone from Tours, he’ll say “Paris”. Ask a Parisian where the North begins, he’ll say Lilles. Ask a Lillois where the North begins, he’ll say the North is not so bad…from what he’s heard 
Define is such a loose term, I would put forth that they do indeed put caps on “the rich” and give other benefits on those they deem “poor”
It might not merit Webster but it is there.
I think the semantic debate over ‘rich’ is pretty silly. My definition involves (a) living better than > 95% of Americans, while (b) not having to work. So only a very small slice of the population, well under 1% I’m sure, is rich by my definition.
But we’re talking about taxation here. Saying that the most affluent 4% of the population isn’t rich enough to afford a higher marginal tax rate on just the portion of their income that puts them into that lofty stratum is pretty silly. If you can’t tax the top 4% of your population at a somewhat higher rate, then who can you raise taxes on?
That’s the heart of the matter, people object to having “their” taxes raised and if you do it to a large sub set of the population you won’t be re-elected.
The tax code, in my estimation, squeezes the middle class by the biggest margin. As has been stated here previously, the “rich” get away with paying less and the poor don’t pay much at all. To get the most money in you need to grow the economy as a whole (while keeping the taxes relatively safe)
Safe being some obscure number that people feel ok paying (for what they view the government needing to do)
You are conflating two uses of the word “rich”. One is as a comparative term - clearly, most Americans are “richer” than most third worlders just as a six-footer is “taller” than the world average.
But that’s not how the term is being used here. It is being used as a group identifier. There already exists a perfectly good sociological definition for this group: those who “earn” much or all of their pay from such things as investments and money-management, contrasting with those who earn their pay from, well, pay. With of course some notable exceptions.
This meaning is better than the alternatives proposed exactly because it isn’t dependant on totally arbitrary cut-off points. Being part of the group known as “the rich” isn’t merely being on an income continuum, like being tall. The rich are qualitatively different from middle-class income-earners, because they are typically not simply income-earners–they contrast with people in the upper-middle class, because they tend to not earn their bread by dint of their personal labour. Their concerns are, therefore, going to be quite different.
Wilt Chamberlin is taller than I, but he’s not really qualitatively different. Think of it the other way - saying that “everyone under 4’ 10” is a dwarf" isn’t really a useful definition, because being a dwarf is a medical condition, not simply a height; though it is true that dwarves tend to be under 4’10".