I don’t make that much. I know a handful of people who do, and I know a *lot *of married couples with combined income that’s over that. Then again, I live in an area where a four-bedroom house on an 1/5 acre lot goes for $850K.
Witness the Alternative Minimum Tax.
Obama keeps talking about “millionaires” but there this image of a millionaire being an oil or railroad baron like Rockefeller or Vanderbilt. A million dollars in 2011 isn’t what it was in 1900.
Did you find the refutation of this point too hard to cope with such that you decided to just ignore it and carry on?
Actually you can only deduct 50% of your income for most charitable contributions for tax purposes (the limit is 20% or 30% for some types of charities).
I looked at the post that was quoted on down, and never saw a refutation. What are you referring to?
#96, #104
I disagree. Yes, luck plays a part. But people don’t graduate law school by “chance”. They don’t spend years tinkering around with computers learning how they work by accident. People don’t “accidently” start companies.
When you believe most success comes from luck or chance, it gives people an excuse to minimalize the hard work and success of other. If you can portray wealthy people as if they don’t deserve their wealth, it makes it easier to take it away.
I’d also say that the most sucessful people I’ve met were willing to make more ethically questionable decisions than I was.
While that mid-level manager may work nights and weekends, they don’t work DOUBLE the hours the waitress does. And from the decisions they appear to make, they don’t seem to be particularly more talented either. Frequently, the leadership I’ve seen has gotten there through luck and networking…very few of THEM appear to have had the qualities to STAY there. The successful ones were often the ones that Got in, Got the Rep, then moved on to the next gig before things caught up with them.
I think there’s a LOT of truth to Dunbar’s Number
I see. This is not a failure of “basic logic.” It is not a matter of logic at all but of human behavior. It is true that to be effective, such behavior would have to be widespread. But if someone truly believed this position, they would provide leadership and lead by example. That’s how a lot of movements get legs. It is ridiculous for the greatest proponent of an idea to say, “Everyone should do this. But I’ll be damned if I’m going to go first.”
This is a bit Marxist. Carried to an extreme one could say that one’s genes or environment growing up give you the desire to work hard and so those without it shouldn’t suffer unfairly.
There are two books that offer very interesting discussions of this point and they both have something valuable to say.
The first is Malcolm Gladwell’s Outliers. Although not a scholarly work, he offers food for thought. He starts out by noting that a preponderance of professional hockey players have birthdays clustered around a certain time of year, much more so that would be dictated by random chance. He determined that players born in this time get earlier eligibility for certain levels of play in youth leagues, therefore get better coaching earlier and more challenging play earlier. However, he later goes on to offer the “rule” that you have to spend 10,000 hours practicing something to get really good at it. But then he points out the advantages that Bill Gates had that were not available to other people. So he seems to waffle on his basic point.
Then there is Drunkard’s Walk by Leonard Mlodinow. The statistician makes the case that humans have an irresistible need to believe that they can control outcomes that in fact have so many random factors that you could not possibly control it. He points to successful investment fund managers as one example. People praise a couple of top fund managers for their market-beating results. But if you look at fund performance long term, it looks more and more like the results are random and the successful managers are really just lucky, and don’t sustain that performance.
In short, not everybody who succeeds deserves all the credit nor everybody who fails deserves all the blame, but on average if you pursue an education and then work hard you are going to do better than someone who drops out of high school and does whatever falls in his lap.
We don’t make that kind of money, no. He’s a doctor, yes, but a primary care doc working in academia in rural Appalachia. We have a handful of friends who are in private practice or other specialties or who have spouses with professional jobs who make that much, or at least are in that neighborhood.
And then there’s my uncle, who’s been profiled in Forbes. For the financial year 2010, his base salary was just over $750K, and that was less than a third of his total compensation package. I’ve never asked him what he thinks about paying more taxes, but based on how he’s screaming about his soon-to-be-ex wife spending “his” money (she’s from a monied family and was no slouch in the income department herself before she retired a few years ago), I can guess.
I’m not sure what sort of rep one builds as a restaurant manager, but I’ve seen the same exact thing in the business world. Once you get in the door in a particular industry like investment banking or management consulting, you are now “in the club”. All you need is that 2 years of Deloitte, McKinsey, Accenture, Goldman Sachs, whatever (plus the top 25 school diploma to get that job). After that, people just switch firms every 1 to 4 years before anyone realizes how badly they fucked up their projects. I’ve had the good fortune of having to come in and taking over a lot of these fucked up projects so I can see why they left.
His point was that the oportunities to gain the 10,000 hours needed to become “world class” are not evenly distributed. Canadian hockey players born before the cutoff get more coaching and more playing opportunity so they build that 10k quicker. Gates had access to computers that few people had or wanted so he was building his 10k while other people were grabassing. Gates also happened to build his 10k at a point in his life when he was starting to think about a profession while at the same time personal computers were ready to take off as an industry.
You really think that government workers get higher pay than their private counterparts? Not in my industry. If I hung a shingle and took cases for the appointment list (mind you, still paid by the government, just not a government employee), I would make approximately three times as much as I make now for the same amount of work. So sure, you can cut my pension and benefits, as soon as you pay me $150,000 a year instead of $50,000. I take a significant salary cut compared to the private sector in order to give my family good benefits and a stable pension. And I’m lucky–I have minimal student loans and am in a financial position to take this job–a lot of people would love to take public service jobs but they just can’t afford to work here and pay back their loans too.
I’m not even going to talk about defense attorneys, because I know you’d get rid of that part of the Constitution if you could, but let me put it this way. Do you like good prosecutors? Because I guarantee you if you cut the benefits of government workers, nobody who can get hired anywhere else will want to be one.
How does willingly paying more in taxes help convert people to your position? It’s not like people just need to be shown someone willingly paying more taxes in order to agree to pay higher taxes themselves. It would be much more effective to stump for pro-tax candidates, start a ballot initiative, send out flyers, make a website, etc. You can do all these things effectively regardless of whether you pay a higher tax rate (in fact, you could argue that paying fewer taxes gives you more disposable income to pursue these avenues).
Paying more money to the same broken government doesn’t seem like the answer to the problem. It’d be awesome if you could take a portion of your taxes and devote them to specific things that must get voter approval. You find defense isn’t getting enough tax income and perhaps they WOULD have to have a bake sale. You legislate a good idea that has lots of unacceptable riders? Doesn’t pass.
Now, if we could just for for 20% republican, 60% libertarian, and the rest Democrat and have a triumvirate president, now we’re getting somewhere! 
Again, you won’t find many conservatives resisting high upper tax rates because they think they’ll be rich themselves someday. That’s a lie made up by the left. The real reason, like Starving Artist and I have already said, is that we’re not jealous of the rich and we want to treat them (and others) fairly. Letting people keep what they earned is fair, while taking it is not fair. And giving to others that don’t deserve it is not fair.
So please quit saying we’re against rich taxes because we think we’ll be rich some day. It’s just not true.
Secondly, the American Dream is true if you have a low bar for “lazy”. If you don’t want to work on Saturdays, you won’t get rich. If you don’t want to go to night school, you won’t get rich. If you’re not willing to chance bankruptcy, you won’t get rich.
We have very strong indicators of what makes people rich. It’s education and delay/omission of parenthood. And we know what makes people poor. It’s lack of education, early pregnancy, and lack of delayed financial gratification (i.e buying knock-off brands, saving).
So, yes, if you’re too lazy to work 70 hrs/week, to too lazy to stay up all night practicing your programming skills or studying, or too lazy to resist unprotected sex, then yes, you’re too lazy to be rich. And if you are rich, then you obviously must have done something to earn it from the people who gave you your fortune.
He’s not waffling on his basic point. He’s saying that 10,000 hours is 417 days of nonstop practice, or 2 hours and 44 minutes of practice every single day for ten years straight. So he then has to explain how Bill Joy, Bill Gates, and the Beatles could’ve possibly racked up that time by such a young age.
It’s important to realize, when reading that book, that just because Gladwell is pointing out the things that these superstars did that others couldn’t, it doesn’t mean he’s diminishing their accomplishments. Just because Gates had access to the University of Washington’s mainframe when others didn’t doesn’t mean it was easy to rack up 10,000 hours of practice. After all, none of his classmates did.
Also, I wish people would quit saying “tax the rich” and instead say what they really mean - “tax ONLY the rich”. I mean, you could tax the rich by raising the bottom two bracket rates by 2% each. The rich’s income must pass through this bracket, after all, so they’d be taxed more…just like everyone else.
And yet no one wants to propose this. I wonder why.
Because that’s not where the money is?
What are you talking about? That’s certainly where the money is. If you raise the rate on the lowest bracket, you tax 100% of the people. If you tax the higher brackets, you tax <100% of the people. So there’s more money in the lower brackets.
The only difference, mathematically, is the size of the bracket. Not size as in number of people or the wealth it encompasses, but size as in the bottom and top amounts in the bracket. If the bottom bracket is smaller than the top bracket (and it is), then you just need to tax the bottom and the one above that in lieu of the top bracket.
Try this exercise:
Given brackets of $10,000 increments and a progressive tax rate that rises 1% per bracket starting at 5% for {0-10,000}, calculate the tax that a $60,000 earner pays.
Answer: $4,500 in tax
No do the same question, except raise the top tax rate from 10% to 11%, and keep the rest the same. Now how much does he pay?
Answer: $4,600.
Now do the same question, except boost the bottom bracket (and only that bracket) up to 6%, such that the bottom two brackets are effectively the same. Now how much does he pay?
Answer: Well…I’ll let you figure that out for yourself. Then perhaps you’ll see why it makes more sense to raise the bottom bracket because that’s certainly “where the money is”.
We went through this last year. The state workers who do better than private sector ones are the ones in the lowest positions, where the lack of unionization in the private sector has caused these wages to stagnate. Higher level jobs, not so much, with the few exceptions of those who somehow get tons of overtime. That is a function of not enough cops or firemen for the work. I suspect that all the overtime saves the cities and states money compared to hiring all those needed.
You think there is no genetic component to the desire to work hard? Do you think there is no luck involved in your home environment? When I grew up it was assumed I’d work hard and go to college. My kids got the same boost. Lots of their friends were discouraged by their parents from applying to good colleges, and not for true financial reasons. No one is proposing we all make equal amounts of money, just that people (like me) who have had a lot of advantages shouldn’t be so full of ourselves and so disdainful of others. Being born with bad genes or bad parents doesn’t mean you deserve to starve.
And how is the hockey player example not one of luck? If they moved the eligibility date, don’t you think the clustering of birthdays would move also?
Thoroughbred horses have birthdays clustering around the beginning of the year, because the eligibility for a year class begins Jan 1, like hockey players. Since breeding is more controlled, horses are bred to foal then. Clearly the older the horse is when it runs the Kentucky Derby the better he will do.
As for Mr. Gates, I was at MIT the same time he was at Harvard, but even if I had a great idea for a new company, my daddy wasn’t as rich has his and dropping out to start a company wouldn’t have gone over very well. The rich have these nice safety nets that let them take greater risks.
Perhaps because they are not innumerate?
Here are the current tax brackets. Let’s take the single one, and the lowest one. That is 10% up to $8,350. Raise that to 12%, and we get an incremental of $167. That will sure help the deficit.
If we only raise this rate, that is all we get from Mr. Moneybags.
The second highest bracket is $171,551 – $372,950. Raise this rate 2%, and we get
$4,027.98 (computed on the incremental revenue, of course, not the full $372,950.)
Over 20x the revenue, and, because of marginal utility, probably less pain for the average person in it. If we increase the rate on the highest bracket even better, but I didn’t do that computation since I don’t know what the mean income within it is.