I think that would be . . . politically impossible. As a lawyer I can tell you: Even to a lawyer (even to a tax lawyer, I shouldn’t wonder), the U.S. income tax code is dauntingly complicated. It is not complicated for the sake of confusing the taxpayer. It is complicated because so much money is at stake. Any provision in there that you think you understand, but still can’t see the sense of in terms of either fairness or public-policy goals, probably was put in at the behest of some lobbyist or interest group that devoted a lot of money and effort to getting it there, and could easily spend more to keep it there, which still would cost them far less than its deletion would cost them in taxes.
The difference is that, unless something fairly disastrous happens, neither Bill Gates nor Paris Hilton will ever have to work again in their lives. The key is in the choice…Voyager is, by his own admissions, rich…that means that it’s his choice whether he works or not. My dad…he still works, but he does so because he chooses to do so. He could stop working tomorrow and retire for the rest of his life, living on his investments. Me? When the dot com bust hit and my company folded I had to go find another job…fast. If I didn’t then my family wouldn’t eat, we’d lose the house and the car, and we’d all be out on the street in fairly short order. If I lost my job tomorrow I’d be in the same boat…I’d have maybe a couple months before we hit the wall.
-XT
I said that was my definition, as ridiculous as you may find it.
I also think you’re wrong. I could have, say, $100K in assets, and the average American $10K. $100K is significantly more wealth than $10K. Would I be rich? No.
IMO that’s a uselessly high threshold for “rich” when considering public policy, particularly when considering income tax rates. The reason obviously being if you are wealthy enough to not have to work for your income then income tax rates are meaningless to you.
There just aren’t enough people that can forgo work because of their personal or family wealth to make considering them when discussing public policy worthwhile.
I would agree with The Hamster King that additional bracket(s) would be helpful, since an income of $1 million or more is significantly different than $250k with respect to the marginal utility of the last dollar.
I don’t think “rich” and “independently wealthy” are synonymous. Anyone with a sufficiently high salary can be rich, but that would change if they lost their job. Not so for the independently wealthy, who are rich enough to generate their own income. There’s “rich”, and there’s “fuck you rich”.
[QUOTE=Jas09]
IMO that’s a uselessly high threshold for “rich” when considering public policy, particularly when considering income tax rates. The reason obviously being if you are wealthy enough to not have to work for your income then income tax rates are meaningless to you.
[/QUOTE]
I didn’t say anything about public policy. For the purposes of public policy, my recommendation is to revoke all of the Bush tax cuts completely, for all income levels…instead of attempting to arbitrarily define what is or isn’t ‘rich’, or who should or shouldn’t pay more.
I don’t believe that anyone, even someone like Bill Gates, every believes that income tax rates are meaningless…if they did, they wouldn’t bother hiring tax people to find them loopholes and shelters for their money. Granted, I don’t move in the Bill Gates or Hilton circles, but I know people I consider ‘rich’, and universally they worry about taxes, and they hire folks to help them pay the least they can while staying legal.
-XT
Except the most recent data I could find (2004) says that the average net worth of an American household is ~$93k. So, if you had 10x that ($930k) then you could probably be considered rich.
For me, the word “rich” means two things that often go together - household income well above the median and household net worth well above the median.
There are obviously outliers (those with high incomes and low net worth and vice versa), but I think the correlation between these two metrics is very high.
[QUOTE=Fear Itself]
I don’t think “rich” and “independently wealthy” are synonymous. Anyone with a sufficiently high salary can be rich, but that would change if they lost their job. Not so for the independently wealthy, who are rich enough to generate their own income. There’s “rich”, and there’s “fuck you rich”.
[/QUOTE]
I think that this, as well as the rest of this side discussion, merely acts as a way to underscore how meaningless and arbitrary the term ‘rich’ actually is. It’s so fluid, and varies so greatly, that there is no way to precisely pin down what it is or means. Which, to get back to the original point I made that seem to spark all of this (apologies to the OP for hijacking the thread), is most likely why John Mace originally put it in quotes.
-XT
Compared to the average guy? Yeah, you would be.
So if I cannot tell you exactly how many whiskers it takes to become a beard, it is impossible to point out who is or isn’t bearded?
Well, the thread seemed to be primarily about personal income tax rates (not capital gains, interest or dividend rates). Obviously he cares about investment income taxation and estate taxation.
My point was simply that a person wealthy enough to no longer have to work wouldn’t even notice a 3% increase in the top marginal income tax rate. And even if they did, it’s a ludicrously small number of people anyways, so designing tax policy around them would be meaningless.
I guess my main point is that if you define “rich” to be such a small number of people then there is no point to the word at all. Also that, IMO, people that make high salaries and then call themselves “middle class” have very little understanding of what the true lifestyle of someone making the median is. People with salaries five times the median that buy huge houses, new cars every 3 years, and leverage themselves to ridiculous levels and then say they’re not rich because they barely have enough left to save make me angry.
(NOTE: This is not a comment on anybody in this thread - just a personal reflection on people I have spoken with in the past that get very angry if I point out that their salary makes them rich.)
Seriously SB…you don’t believe that ‘the average guy’ has $100k in ASSETS?? And THAT is seriously the bar you want to set for what is or isn’t ‘rich’ in the US??
-XT
They should have said they would get rid of the tax breaks for those over 250 thou a year ,without saying it was taxing the rich. That allows people to argue about what is rich instead discussing whether taxing those who got great tax breaks during the Repubs, should continue to get them in the future.
I guess we all be pleased for all the jobs, the tax breaks for the “job creators” created.
Not to speak for Bo, but he’s saying that if the average wealth were $10k then a person with $100k is rich.
The reality in the US is that the median net worth is more like $100k, so someone with around $1 million in personal net worth would be “rich” under this metric. IMO that’s a reasonable claim, especially if that net worth is coupled with an income significantly higher than the median.
[QUOTE=Fear Itself]
So if I cannot tell you exactly how many whiskers it takes to become a beard, it is impossible to point out who is or isn’t bearded?
[/QUOTE]
And if every (male) has whiskers to one degree or another, how do you define who id bearded or who isn’t? By what arbitrary measure?
[QUOTE=Jas09]
Well, the thread seemed to be primarily about personal income tax rates (not capital gains, interest or dividend rates). Obviously he cares about investment income taxation and estate taxation.
[/QUOTE]
Well, essentially he’s retired, so he probably doesn’t HAVE personal income tax anymore. But when he did, I’m sure he spared a few synapses about it.
Again, I wasn’t talking about making policy based on some ill defined and tortured definition of the word ‘rich’.
Well, leaving aside that, again, my own point had nothing to do with where to set the bar for allowing the Bush tax cuts to expire, I think that you have a highly skewed view of the people who actually make the money in the ranges you are talking about. It’s like saying that all poor people are welfare queens, or food stamp moguls. Yeah…it happens, but it’s hardly the norm. Someone making 5 times the median income in the US (about 200k by my back of the envelop calculation) aren’t generally going to be buying a big new house every 3 years, or tons of new cars…someone making 50 times the median perhaps could get away with that, but I think some of you have a very over inflated view of what things cost, or how far $200k could actually go. I have friends who live in California (or used too) who made double that and basically lived in a 3 bedroom (fairly crappy) house and drove beaters to work. Same with folks I know who live(d) in New York…$450k/year and they live in a 2 bedroom apartment.
-XT
-XT
The housing crisis was the main cause of the current recession.
Or you live in some places in California where $250K is equivalent to maybea third of that in Nebraska.
[QUOTE=Jas09]
Not to speak for Bo, but he’s saying that if the average wealth were $10k then a person with $100k is rich.
[/QUOTE]
Ok…why? Is an order of magnitude difference significant? What about someone who has $20k in assets? $50k? $99k? $99.9k?
(Thank for pointing out that I misread what was being discussed there, though. I really need to stop trying to read and post from this damn iPad on the go, as I seem to be doing this a lot lately)
-XT
Well, I guess we’ll just have to disagree with each other then. My net worth is higher than your $930K number, **Jas09, and that’s just counting my shore property, which is no mansion, let me tell ya, and my primary home, **butI don’t consider myself rich at all, and neither do my colleagues and peers, some of whom make double my salary…and don’t consider themselves rich. I think of myself as financially advantaged, and yes, upper middle class, but no more than that.
Anyway, I think we’ve exhausted this matter. I apologize to the OP for helping to send this thread careening into Sidetrackville. Sorry BG.
How the heck do you type comfortably on the thing? I still haven’t figured out how to scroll up within the text box when I want to go back and change something that’s scrolled beyond the upper edge in a long post…frustrating.
ETA: Um…sorry again. 