# Tax the rich and save the poor. **URL:** \ **Category:** Great Debates\ **Created:** [May 16, 2017, 9:33pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790 "2017-05-16T21:33:22Z")\ **Posts on this page:** 20\ **Page:** 7
**Author:** ![Rick\_Sanchez](https://avatars.discourse-cdn.com/v4/letter/r/e19adc/32.png) [@Rick\_Sanchez](https://boards.straightdope.com/u/Rick_Sanchez)\ **Post date:** [May 18, 2017, 2:11pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/121 "2017-05-18T14:11:52Z")
> [@Hocus\_Pocus](#): > > First off, lots of Olympic athletes do it for even less. A lot of Olympic athletes don’t face one tenth of one percent of the scrutiny of someone like LeBron James or Tom Brady. > [@Hocus Pocus](#): > > And $100k is “measley?” Unless one lives in NYC, SF, or Orange County, CA $100k will go a long ways, and would be upper middle class to rich in many parts of the country. The statement above sounds extremely silver spoonish! It’s measly return for the amount of effort and dedication it takes to become, for instance, a top-flight pro-footballer. Let me ask you, would you be willing to devote the best years of your life to exhausting training regimes, constant practise and marathon gym sessions, all the while maintaining a religious adherence to inflexible diet protocols just so that you could maybe, perhaps, _possibly_ get a shot at playing a hugely demanding sport which carries a very real risk of serious injury and even long-term brain damage, all for a hundred grand a year? I certainly wouldn’t. Nor would most people. There are easier ways to make that kind of money. In my line of work, I meet successful small business owners every day who make that kind of money. They run restaurants, plumbing firms, software companies, all occupations which, though demanding in their own right, are nowhere near as masochistically punishing as what pro-footballers put themselves through. Pro-footballers do what they do, not only because they love the game, but because the money is so damn good. If a 100% tax on income over 100 grand were ever to be implemented, the effect on pro-sports would be this: The pool of potential players would shrink dramatically. This would cause the standard of competition to fall. If the standard of competition falls, fans will be less willing to pay high ticket prices. The teams would thus bring in less money, and the government would consequently lose taxable income. If the plunge in ticket revenue is deep enough, this loop might repeat itself several times before the market value of a professional sportsperson settled on a figure somewhere under 100 grand a year, possibly considerably under 100 grand a year. This is, of course, assuming that other countries not burdened by such an exorbitant tax levy don’t just snap up all the best American players, which they obviously would. The end result: A drastic drop in the quality of professional sports, and a drastic drop in tax revenue. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [May 18, 2017, 4:39pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/122 "2017-05-18T16:39:19Z")
> [@k9bfriender](#): > > I take it that you two would not consider that people buying gas pay gas taxes for the same reasons then? > > The cost of the tax is built in to the price you pay at the pump. If the gas tax goes up by 10 cents, do you think that the price of gas will go up by 10 cents? The price of gas is often much much more elastic than the taxes, so the price could fluctuate much much more than gas taxes, so passing those costs to gasoline buyers may not be possilbe. This analogy is not on point for a few reasons. First, the payer of the gas tax is the consumer directly as the gas station that collects the tax is simply a pass through. Second, the amount of the gas tax is a specific dollar amount or percentage levied against the underlying purchase price of the fuel, similar to a sales tax. In the case of property, the property tax is a function of the underlying value of the property and is divorced from the market rent (price of gas in your example). Third, gas tax is a consumption based tax, it’s only levied against gas actually purchased. This is in contrast to property tax which is paid by the property owner regardless if the property is rented or not. ---
**Author:** ![spifflog](https://avatars.discourse-cdn.com/v4/letter/s/c5a1d2/32.png) [@spifflog](https://boards.straightdope.com/u/spifflog)\ **Post date:** [May 18, 2017, 4:42pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/123 "2017-05-18T16:42:26Z")
> [@Hocus\_Pocus](#): > > First off, lots of Olympic athletes do it for even less. > > And $100k is “measley?” Unless one lives in NYC, SF, or Orange County, CA $100k will go a long ways, and would be upper middle class to rich in many parts of the country. The statement above sounds extremely silver spoonish! Additionally, the average NBA career is less than 5 years. So while $100k may be a lot to someone, at 26 when he’s out of a job, he isn’t making even his $100k anymore. I know that was just an example of yours, but it makes a point: in these arguments, “the rich” are whoever makes 10% that you make right now. Put another way, the rich take advantage of tax loopholes. That mortgage deduction you’re taking? That a legitimate tax deduction!! But to the guy that can’t afford a house, that’s a loop hole. “Rich” is determined on where you sit. ---
**Author:** ![Fenris](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fenris/32/498_2.png) [@Fenris](https://boards.straightdope.com/u/Fenris)\ **Post date:** [May 18, 2017, 5:36pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/124 "2017-05-18T17:36:22Z")
> [@D\_Anconia](#): > > Apparently, the difference between revenue and expense is confusing to some people. > > The $5 dry cleaning fee is revenue, and postage is an expense. Do you understand that? Your…uh…“theories” of economics are so bizarre that Ayn Rand and Karl Marx are closer to each other than either of them are to you. Expenses are paid out of gross revenue to get net revenue/profit\*. So the $5.00 dry cleaning fee is gross revenue, you subtract .50c for postage, $1.00 for employee salaries, another $1.00 for supplies, $1.50 for taxes/rent/overhead and you have $4.00 in expenses, leaving you with $1.00 in net revenue (aka profit, for our purposes here). Do you now see how the $5.00 dry cleaning fee pays for expenses? \*It’s more complicated than that, but give where we’re apparently starting, this is close enough. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [May 18, 2017, 6:01pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/125 "2017-05-18T18:01:39Z")
You guys can go back and forth with your terrible accounting practices and make believe business models all day long. Ultimately what it comes down to is that poor people are not “owed” money from rich people simply because we have “more” (regardless if it’s billionaires or people like myself struggling to survive in New York on hundreds of thousands a year.) What they are “owed” are reasonable level of government services and social safety nets paid for by a progressive and fair system of taxation. But these extreme leftist proposals for confiscatory tax plans do nothing but scare honest hard-working people into voting for the Donald Trumps of the world. ---
**Author:** ![D\_Anconia](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@D\_Anconia](https://boards.straightdope.com/u/D_Anconia)\ **Post date:** [May 18, 2017, 6:11pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/126 "2017-05-18T18:11:10Z")
> [@Fenris](#): > > Your…uh…“theories” of economics are so bizarre that Ayn Rand and Karl Marx are closer to each other than either of them are to you. They’re not bizarre, at all. Why do companies report EBIT (or EBITDA)? ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [May 18, 2017, 7:03pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/127 "2017-05-18T19:03:19Z")
> [@msmith537](#): > > You guys can go back and forth with your terrible accounting practices and make believe business models all day long. Ultimately what it comes down to is that poor people are not “owed” money from rich people simply because we have “more” (regardless if it’s billionaires or people like myself struggling to survive in New York on hundreds of thousands a year.) I would disagree with this in that the wealthy have control over the means of production in a way that the poor, or even the not so well off, cannot. And as the owners of that production profit from the surplus that comes from the labor of others, it is needed to return that wealth to the classes that are actually performing the labor. If nothing else, for the practical consideration of maintaining a healthy labor force. > [@](#): > > What they are “owed” are reasonable level of government services and social safety nets paid for by a progressive and fair system of taxation. At the least. > [@](#): > > But these extreme leftist proposals for confiscatory tax plans do nothing but scare honest hard-working people into voting for the Donald Trumps of the world. I see beren’s fairly radical and confiscatory tax plan. I think such a thing is a bit silly, but it’s the only one I see that way, but you indicated plural. What other plans proposed seem radical and confiscatory? Do you think that any plans to raise your taxes are extreme proposals for confiscation? Where do you draw that line? > [@D\_Anconia](#): > > They’re not bizarre, at all. Why do companies report EBIT (or EBITDA)? I have no idea where you are going with this, but they publish their earnings reports with those number to give investors an idea as to the fiscal health of the company. The T in EBIT stands for income taxes, not property taxes. Property taxes would always be under operating expenses. ---
**Author:** ![D\_Anconia](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@D\_Anconia](https://boards.straightdope.com/u/D_Anconia)\ **Post date:** [May 18, 2017, 7:10pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/128 "2017-05-18T19:10:10Z")
John Stephens, the CFO of AT&T, testified today before the House Ways and Means Committee that AT&T pays the equivalent of $2/share to the shareholders, and $4/ share to various governments in taxes. That situation doesn’t make a lick of economic sense. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [May 18, 2017, 7:36pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/129 "2017-05-18T19:36:53Z")
> [@D\_Anconia](#): > > John Stephens, the CFO of AT&T, testified today before the House Ways and Means Committee that AT&T pays the equivalent of $2/share to the shareholders, and $4/ share to various governments in taxes. > > That situation doesn’t make a lick of economic sense. Got a link? Google isn’t coming up with either a transcript or a video. I don’t see why that doesn’t make sense. If he is including all his taxes, including property taxes on the company property, registration taxes on the company’s vehicles, payroll taxes on his employees, any excise or tariff taxes on importing or exporting goods, fees for H1B1 visas, sales taxes, those are all taxes that are part of the cost of doing business. People often times informally even consider actual costs of doing business, like maintenance on property and equipment to be a “tax” as well, though I do not know if, and so I do not think that he was using that colloquialism for a tax. Point is, you are going to pay quite a number of taxes as a cost of doing business before you get to income tax, which is the only one that actually cares how much you actually make. ---
**Author:** ![Whack-a-Mole](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/whack-a-mole/32/141_2.png) [@Whack-a-Mole](https://boards.straightdope.com/u/Whack-a-Mole)\ **Post date:** [May 18, 2017, 7:37pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/130 "2017-05-18T19:37:53Z")
> [@D\_Anconia](#): > > John Stephens, the CFO of AT&T, testified today before the House Ways and Means Committee that AT&T pays the equivalent of $2/share to the shareholders, and $4/ share to various governments in taxes. > > That situation doesn’t make a lick of economic sense. Why doesn’t that make sense? They can set the dividend to be whatever they want it to be. They have chosen for themselves that $2/year/share is reasonable. Bully for them. Many stocks do not pay dividends at all which makes sense too…use the dividend money to grow the company and by extension share value instead. As someone who buys stocks you can decide for yourself what the best deal for you is. No one is getting ripped off. ---
**Author:** ![D\_Anconia](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@D\_Anconia](https://boards.straightdope.com/u/D_Anconia)\ **Post date:** [May 18, 2017, 7:44pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/131 "2017-05-18T19:44:01Z")
> [@Whack-a-Mole](#): > > Why doesn’t that make sense? > > They can set the dividend to be whatever they want it to be. They have chosen for themselves that $2/year/share is reasonable. Bully for them. Yes, the board can set the dividend. What doesn’t make sense is that the government at various levels takes twice as much in taxes. Who provides the capital? The shareholders. They should get most of the profit. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [May 18, 2017, 7:44pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/132 "2017-05-18T19:44:41Z")
> [@Whack-a-Mole](#): > > Why doesn’t that make sense? > > They can set the dividend to be whatever they want it to be. They have chosen for themselves that $2/year/share is reasonable. Bully for them. > > Many stocks do not pay dividends at all which makes sense too…use the dividend money to grow the company and by extension share value instead. As someone who buys stocks you can decide for yourself what the best deal for you is. No one is getting ripped off. to be fair,m their dividend is close to their profit. Their EPS is 2.05, and their dividend is 1.96, so they aren’t holding much back in profit. But, a 5% yield is pretty hefty, so there really shouldn’t be complaining about the fact that they are _only_ paying 5%. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [May 18, 2017, 7:53pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/133 "2017-05-18T19:53:40Z")
> [@D\_Anconia](#): > > Yes, the board can set the dividend. What doesn’t make sense is that the government at various levels takes twice as much in taxes. > > Who provides the capital? The shareholders. They should get most of the profit. On a total revenue of 163,786,000,000 leaving a gross of 86,902,000,000 they paid 6,479,000,000 in income taxes, leaving 12,976,000,000 as net income, which mostly gets paid out in dividends. That’s not all the much, really. That’s 2 dollars a share to shareholders, and only 1 per share to income tax. The only way I can see that he comes up with the other 3 dollars a share is if he is counting payroll taxes, which is not invalid, but is absolutely disingenuous if you are using these numbers to complain about tax policy. ---
**Author:** ![D\_Anconia](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@D\_Anconia](https://boards.straightdope.com/u/D_Anconia)\ **Post date:** [May 18, 2017, 8:01pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/134 "2017-05-18T20:01:00Z")
> [@k9bfriender](#): > > But, a 5% yield is pretty hefty, so there really shouldn’t be complaining about the fact that they are _only_ paying 5%. That’s an inaccurate description of his comment. The point wasn’t that they are only paying a 5% yield, it’s that they’re paying twice as much in taxes. ---
**Author:** ![Whack-a-Mole](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/whack-a-mole/32/141_2.png) [@Whack-a-Mole](https://boards.straightdope.com/u/Whack-a-Mole)\ **Post date:** [May 18, 2017, 8:01pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/135 "2017-05-18T20:01:25Z")
> [@D\_Anconia](#): > > Who provides the capital? The shareholders. They should get most of the profit. You realize that taxes are not just money thrown into a hole right? AT&T gets a lot for their tax dollar and it is right that they pay taxes. And there’s this: > [@](#): > > In an example of corporate welfare at its finest, AT&T effectively paid no federal taxes in 2011. In fact, thanks to lucrative incentives and corporate subsidies, the telecommunications company walked away with a giant taxpayer-subsidized $420 million refund. > > CEO Randall Stephenson was paid a higher salary — $18.7 million — than AT&T paid in taxes last year, and thanks to the Bush era tax cuts, Stephenson kept $1,137,456 more of that money for himself in 2011, according to a new report from the Institute for Policy Studies. > > SOURCE: [Stop the Cap! » AT&T Paid No Federal Taxes in 2011; Achieved a $420 Million Taxpayer-Subsidized Refund](http://stopthecap.com/2012/08/16/at-achieved-a-420-million-taxpayer-subsidized-refund/) And other companies get things like this: > [@](#): > > \*\*Americans are spending $153 billion a year to subsidize McDonald’s and Wal-Mart’s low wage workers \*\* > > After decades of wage cuts and health benefit rollbacks, more than half of all state and federal spending on public assistance programs goes to working families who need food stamps, Medicaid, or other support to meet basic needs. Let that sink in — American taxpayers are subsidizing people who work — most of them full-time (in some case more than full-time) because businesses do not pay a living wage. > > SOURCE: [https://www.washingtonpost.com/posteverything/wp/2015/04/15/we-are-spending-153-billion-a-year-to-subsidize-mcdonalds-and-walmarts-low-wage-workers/](https://www.washingtonpost.com/posteverything/wp/2015/04/15/we-are-spending-153-billion-a-year-to-subsidize-mcdonalds-and-walmarts-low-wage-workers/) ---
**Author:** ![Steve\_MB](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/steve_mb/32/5339_2.png) [@Steve\_MB](https://boards.straightdope.com/u/Steve_MB)\ **Post date:** [May 18, 2017, 8:03pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/136 "2017-05-18T20:03:46Z")
> [@D\_Anconia](#): > > If I go to the dry cleaners, and pay $5 a shirt, am I “paying for” their postage costs?. Yes, unless they have a counterfeit stamp printer hidden amongst the shirt-pressing irons or something. ---
**Author:** ![Steve\_MB](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/steve_mb/32/5339_2.png) [@Steve\_MB](https://boards.straightdope.com/u/Steve_MB)\ **Post date:** [May 18, 2017, 8:05pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/137 "2017-05-18T20:05:56Z")
> [@D\_Anconia](#): > > The point is that tenants don’t pay property tax. Since this “point” has already been exposed as absurd (presuming that the tenants’ landlord hasn’t come up with some scheme to avoid paying property taxes), I’m not sure what you hope to gain by repeating it. ---
**Author:** ![D\_Anconia](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@D\_Anconia](https://boards.straightdope.com/u/D_Anconia)\ **Post date:** [May 18, 2017, 8:09pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/138 "2017-05-18T20:09:04Z")
> [@Whack-a-Mole](#): > > You realize that taxes are not just money thrown into a hole right? AT&T gets a lot for their tax dollar and it is right that they pay taxes. Yes, they get national defense, education, roads, etc. But not enough to justify one of the highest corporate tax rates in the industrialized world. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [May 18, 2017, 8:09pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/139 "2017-05-18T20:09:50Z")
> [@D\_Anconia](#): > > That’s an inaccurate description of his comment. The point wasn’t that they are only paying a 5% yield, it’s that they’re paying twice as much in taxes. I never actually heard his comment, as you haven’t provided a link, and I haven’t found this hearing yet, and so I was not attempting to describe it either accurately or inaccurately. I was just saying that 5% yield is a pretty good yield, and I was just pointing out that there shouldn’t be complaining about it only being 5%, I did not claim that that was his complaint, my claim is that the numbers on T’s fiscal sheet don’t back up his numbers if he is trying to imply that these are income taxes on his company, rather than payroll taxes on his employees and other incidental taxes like property taxes on buildings and equipment. It did sound like you were complaining though, that the yield is so low, so if you were, let me assure you, T’s paying out just fine. ---
**Author:** ![Whack-a-Mole](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/whack-a-mole/32/141_2.png) [@Whack-a-Mole](https://boards.straightdope.com/u/Whack-a-Mole)\ **Post date:** [May 18, 2017, 8:20pm UTC](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790/140 "2017-05-18T20:20:39Z")
> [@D\_Anconia](#): > > Yes, they get national defense, education, roads, etc. But not enough to justify one of the highest corporate tax rates in the industrialized world. Highest statutory tax rate. The effective tax rate, what they actually pay, is much, much lower. > [@](#): > > In each year from 2006 to 2012, at least two-thirds of all active corporations had no federal income tax liability. Larger corporations were more likely to owe tax. Among large corporations (generally those with at least $10 million in assets) less than half—42.3 percent—paid no federal income tax in 2012. Of those large corporations whose financial statements reported a profit, 19.5 percent paid no federal income tax that year. > > \ > > For tax years 2008 to 2012, profitable large U.S. corporations paid, on average, U.S. federal income taxes amounting to about 14 percent of the pretax net income that they reported in their financial statements (for those entities included in their tax returns). > > SOURCE: [Corporate Income Tax: Most Large Profitable U.S. Corporations Paid Tax but Effective Tax Rates Differed Significantly from the Statutory Rate | U.S. GAO](https://www.gao.gov/products/GAO-16-363) Taxes paid by corporations used to account for [33% of federal revenue. Now it is 9%.](http://www.politifact.com/truth-o-meter/statements/2014/aug/28/bernie-s/bernie-sanders-says-tax-share-paid-corporations-ha/) So, corporations’ taxes are better now than ever. Not a lot of room to complain. [Previous page](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790.md?page=6) [Next page](https://boards.straightdope.com/t/tax-the-rich-and-save-the-poor/786790.md?page=8)