I’m not sure how to do that. But I don’t view those taxes as the same. If gas taxes are two high, you can use public transportation, or carpool, or get a bike. Lots of people here in San Francisco do all those things. You can opt out of those taxes, at least to a large degree.
I said “the owners of UPS”, they’re individuals. I could extend that to the executives as well.
Instead of roads, how about ports? The Army Corps of Engineers dredges Long Beach harbor. That will allow importation of more goods made by cheaper overseas labor. That will depress wages for manufacturing jobs in the U.S. (lower- and middle-class earners) and allow the CEO of Nike to cut costs, increase profits, and ask for a million-dollar raise.
It is much more complicated than that. I don’t claim that all blessings come from the government. I don’t think commerce would grind to a halt if the Secretary of Labor missed a cabinet meeting. But I can’t think of a business that doesn’t take advantage, in large ways and small, by operating within the framework that the government maintains and enforces. And the people who are lucky enough to make fortunes running those businesses should pony up more of the cost to keep it going (and they still get to keep a slightly smaller fortune).
Income distribution has been shifting for the last few decades; upward. The richest people in the country have a larger share of the national wealth than they did a generation ago. Everybody is working harder. Everybody is more productive. The people receiving the benefits of the productivity are the rich. The way things are now is rewarding them more than it’s rewarding the poor and middle class, and disproportionately more. I can’t say that that was a deliberate outcome, or what role government policy played in causing it. (I can’t think of anything else in the last 30 years that would explain it, either.)
Does that answer your question?
What question? I didn’t ask one. You seem intent on muddying the discussion. We can agree to treat corporations differently. Fine. Let’s agree to that. Now go back to the guy making $50k and the guy making $500k. Let’s say that they both own restaurants. Or both are lawyers. Or writers. Or inventors. The 500k guy would be paying 10 times more than the 50k guy. Why should his contribution be even more than that?* More to the point, why should the lower earner work a day and a half for the government and the higher earner work 2 or 3 days for the government?* Especially since he’s already contributing 10 times more to the public coffers?*
*Questions indicated by those little squiggly marks.
Post #2. The money has to come from somewhere, and it hurts him the least.
The wealthy pay more and in return they avoid the rest of us showing up at their door with pitchforks and torches.
I’m only half joking.
If they want police protection of their property and belongings then they need to pay for it. Since they have larger properties and more belongings they need to pay more.
If they want a functioning society that makes it possible for them to retain their wealth and benefit from it, then they need to pay for it.
If they want a government and a society that gives meaning and value to the concept “dollar”, and provides an infrastructure for keeping track of their “dollars”, then they need to pay it.
If they want enough of the peons to be satisfied enough with their lot in life that they don’t show up at the front door with the aforementioned pitchforks and torches,
then
they
need
to
pay
for
it!
Huh?
So, should we tax Bill Gates and other multi-billionaires 80, 90%. If not, why not? They barely feel it. And why should Bill Gates be forced to pay to provide for someone else. What is the moral justification for doing so/ I’m not asking what the moral justification is for him helping as many people as he wants, but the moral justification for the government taking it from him and giving it to someone else?
And I ask you this: if we are all equal under the law, why should one citizen be asked to work a day and a half for the government and another citizen—who, by definition, is more productive, not less—be mandated to work 2 or 3 days for the government?
I agree. The question is how much more. Look at the example I’ve been giving, one guy is paying 10 times more than the other. That seems to be a simple, transparent and fair way to handle things. No? If not why not, and what would you propose in it’s place?
Your logic only applies to those putting product on the marketplace. A guy with $5.00 cannot afford an investment adviser. He can put his $5.00 into a money-market account and make less interest than the rate of inflation. Wealth begets wealth. It’s a basic fact. But even in the case of the guy with the better mousetrap, you are still wrong. With $5.00 he is going to have a hard time competing fairly against an established corporation with a large advertisement budget and good credit. He’s going to have a hard to greasing wheels and making connections with suppliers, manufacturers, and storefronts, many of whom are either owned by, or do a lot of more important business with, the $5.00 guy’s competition.
We can’t really say that they are by definition more productive. Many of them were born into it, others won the lottery or tricked the public into buying lots of worthless crap, some played games with mortgage securities and actually caused a lot of damage rather than being productive.
Yes, some got wealthy by being very productive, but not all, possibly not even most.
Reductio ad absurdum fallacy. We keep the tax on Bill Gates below 95% for incentive purposes. If incentives did not apply, then a “From each according to his ability, to each according to his means” argument might obtain. More specifically, we’d allocate goodies to maximize happiness. Since Bill Gates receives less pleasure from the last $10 that he makes than a middle class person does, we tax his last dollar higher than we do of Joe Average. The tradeoffs come in when we realize that Bill might withdraw some of his effort if he faced a marginal tax of 95% on all income above, say, $300,000.
Anyway that’s the argument: it’s straight utilitarianism.
Look at Steve Jobs, the guys who started Google, Tony Robbins (if he’s still around), Famous Amos, Dave Thomas of Wendy’s, Colonel Sanders, ex-tie salesman Ralph Lauren. Need I go on?
Yes, it’s easier to make money of you already have some, but the fact remains that you can make it big in this country. Probably more easily than anywhere else.
I was answering the OP’s request for justifications for a progressive income tax. Amounts are something someone more knowledgeable than I would have to figure out, and marginal utility should be part of that. It’s easier for someone to give up a second or third car than to give up a second or third daily meal.
People who benefit more from a system should pay more into that system and should realize that they need to pay what it takes to keep that system functioning, even if it means sometimes doing things that look like shudder redistribution or gasp socialism.
Sometimes the costs of maintaining the system have to fall more heavily on those who can carry that burden more easily and won’t starve or be thrown into the street by the extra burden.
Sometimes, trying to allocate that burden “fairly” will destabilize the very system we’re trying to save.
We’re not looking at them from a measure of the man standpoint, but from a tax standpoint. And from that standpoint a person who makes 500k is more productive than someone who makes 50k.
I understand that argument, I’ve been asking about the underlying fairness of it. Again, I ask about working a day and a half for the government versus 2 or 3 days. Why should one citizen’s time be usurped by the government more than another?
That’s an honest answer. Basically the utilitarian argument Measure for Measure shared. Personally, I think that fairness MUST be part of it. And anything beyond a flat tax is unfair. At least I haven’t heard a fairness argument supporting it. You’re mandating one person work twice as much for the government than another. And you’re asking this of the MORE productive one. I can give a much fairer argument why he should work less. Not that that is my position.
What, why? Just to be punitive? The question itself isn’t even valid - people get taxed on marginal rates, not on who they are - so your question would be better phrased at “should we tax, say, over $10,000,000 in income per year at 80% or 90%?”
Anyway, no, we shouldn’t tax people just to be punitive. It’s counterproductive as they shift more of their income away from actual productive work and more into gaming the system types of stuff. And I don’t doubt 90% is at the wrong side of the laffer curve.
The reality is that we’ve got bills due. You supposed fiscal conservatives seem to forget that there’s a link between taxing and spending and just think tax cuts are the answer to everything. We have a certain amount of money we’re spending through the government - you can advocate to lower or it whatever but that’s irrelevant to the point at hand. So where we go from there is - we’ve got this bill to pay, so how are we going to pay it? Well, the people with the most money hurt the least footing the same bill. So they pay the most.
But even so, that’s not actually how it works in the US. They get capital gains, various types of investment returns, etc. They get stock options and mountains of interest on their bank accounts. They have lots of ways of making money other than straight income. They also have different ways of being taxed. It turns out, as was linked up thread, that all brackets pay somewhere between 15-19% when you account for all types of income and all taxes. The system, as is, is remarkably flat. If we were to make income tax flat, then total taxation would become regressive. Do you advocate regressive taxation?
This is irrelevant to this thread. This is an argument about whether we should tax people at all, or whether we should provide government services, not about the progresivity of the taxes.
That’s kind of arbitrary. I mean - it’s meaningless in the real world. It’s not as if someone’s pay, broken down into percentage of time spent, really matters - either way the richer person is taking way more home at the end of the week.
Anyway, what you advocate already is pretty much the case - averaged across all types of income and taxes, we already all do work 15-19% of the time for the government. Your desire for equality is matched better by the current system than by a flat (payroll) tax system.
True, but my point is that by and large the taxable population does not consist of inventors/entrepreneurs like you mention, but rather consists of wage earners or small business owners for which a high tax rate is generally highly correlated with previous wealth. Furthermore, for those like Dave Thomas etc, once their wealth has been generated once (and taxed), unless they continue to innovate in ways that would again allow them to go from rags to riches (Steve Jobs is a candidate, but most I think do not fall into this category), they are enabled by their wealth to continue making money well above inflation purely by virtue of their previous wealth. Any discussion of the fairness of a progressive tax system needs to include above considerations rather than myopically focusing on the ‘fairness’ of taking a higher percentage of money away from higher earners.
I don’t see a problem with people who have generated enough wealth to be able to coast on it, coasting. Or making money investing what they’ve generated. Just because they hit one home run doesn’t mean they need to continue to hit them. Nor is it likely people can do so. Beyond that, your argument seems to point to capital gains taxes and estate taxes. Personally I think that estate taxes are the ones that people have the least claim to, as it was not generated by their own labor.
Okay, not strictly a question, but it does strike me as a request for more information.
So, we’re looking for government services that a large restauranteur receives (and could be expected to pay for) that a small restauranteur doesn’t. Well, that would depend on the difference between the two businesses.
Does the large restaurant generate a lot of extra traffic flow? That might require widening the street to four lanes, maybe even put in a traffic light. The small restaurant can probably get enough customers on a two-lane street.
How did this large restauranteur build up his business, did he advertise? Now we’ve got the FCC involved, licensing and regulating TV and radio broadcasters. No government involvement in the word-of-mouth campaign that the small restauranter used.
Does the large restaurant have a liquor license? I’m told that’s very profitable for a restaurant. That means the Bureau of Alcohol, Tobacco, Firearms, and Explosives is involved. And that doesn’t just permit one business to sell alcohol, it prohibits the other. That protects the large restauranteur from competition, and keeps the small restaurant small.
Does the large restauranteur have enough buying power to justify importing from foreign suppliers? Now the FDA has to send inspectors to those countries to make sure they meet U.S. standards for food handling. It’s a lot cheaper to inspect places closer to home.
Does the large restaurant sell seafood? A large business will have enough clout to get the government to go to bat for them enforcing fishing quotas with Canada. Think they’d risk a trade war for a guy making $50,000 a year?
For a place making $500,000 a year, think somebody would like to copy their name and logo to steal a piece of their business? We’ve got judges and courts to keep that sort of thing from happening. Just the threat of legal action probably keeps most people from trying it. That’s not something the small restaurant has to worry about.
Does the large restaurant have multiple locations? It would probably help his accountant to have all the financial figures available in one place. That means networking and telecommunications infrastructure and regulations, over and above what a small business would have.
Are the multiple locations in different states? Now we’ve got interstate commerce rules and enforcement coming into play.
Now, not all of those are funded out of the progressive, federal income tax. But as I said, it’s complicated.
This is kinda fun, actually. Can anybody think of any more?
Drop the attitude, sport.
Well, does anyone have any statistics handy? How is the majority of wealth generated, say, in the top 10% of gross income earners? Wages? Capital gains?