Taxing the "rich"

The BBQ Pit
1

This isn’t a generic thread about taxing people with a high income. This is a pitting of the fact that no one can say the word rich anymore without putting it in quotes. As if there were no rich people, or that the idea that someone making 500k+ a year isn’t rich by a reasonable standard.

I don’t even feel it necesary to link to examples of this, because every single person who’s on the boards to shill for the rich uses the quotes around the term rich.

Now you could argue, the top tax bracket being $250k, that someone that makes $250k isn’t rich. I think this depends on your personal definition of the word. I can see you making a case that if you aren’t set for life and have to work, you’re rich. On the other hand, I could see the idea that someone is making about 8 times the median income as rich. At the very least, it’s a debatable point, not something to scoff at. But it’s not even relevant here.

You see, someone who makes $250k a year won’t be impacted by a tax increase in the top tax bracket. People seem to misunderstand a very simple, fundamental part of our tax system. Income is taxed marginally depending on what bracket it’s in. If (making up numbers) 0-30k is taxed at 5%, 30-50k is taxed at 15%, and 50-100k is taxed at 30%, that doesn’t mean that when you make $99,999 a year you pay 15% on it, and when you make that extra dollar to move up to 100k a year you suddenly double your tax burden. No, the income is taxed marginally for each bracket - for that first 30k, everyone is going to pay $1500. For that 20k in the middle bracket, everyone will pay $3000. So that top tax rate only applies to income that starts at the top tax bracket, everything else is taxed at the lower rate.

Which means two things. One, the rich benefit from the tax cuts in lower margins. If the $0-30k rate is reduced, everyone benefits. It affects people who pay less relatively more, but it’s still relevant because it’s often presented as a false dichotomy between “tax cuts for the rich” and “tax cuts for the middle class/poor”. And the other thing, and one of the main points of this thread, is that you cannot make this argument:

“You think someone that makes $250k a year is rich? My uncle/boss/me makes that much and we’re not rich.” - Well, if you make $250k a year, then a tax increase in the 250k+ bracket does not affect you one bit. If you make $300k a year, you’re only paying the extra tax on the last $50k. Is paying 3% extra on that extra 50k going to make you stop going to work and become a squatter in a hippie commune because the disincentives to make money are just too strong?

So to actually really feel an increase in the 250k+ tax rate, you need to be making significantly more than 250k per year. For instance, for half of your total tax burden to be increased by 3%, you’d have to be making 500k. And I think a reasonable case can be made that the people making 500k a year are rich, not “rich”. The people most affected, the one who see the greatest portion of their income fall into this tax bracket, are the people making millions of dollars a year. At what point do they go from “rich” to rich?

Again, the purpose of this thread isn’t to start a generic tax debate. It’s to pit people for using … what should we call them, incredulity quotation marks? to imply that the person who says rich is unreasonable for using the term.

2

Didn’t you get the memo? They’re not RICH anymore. They’re JOB CREATORS

3

Ha, that’s true. Only the people on this board even use the air quotes term “rich” anymore. I’ve heard the term “job creators” about a billion times more than rich/wealthy/etc recently. That’s just more Orwellian shit designed to change the way you think about the issue by controlling the language.

4

I posted this in another thread, The rich are not being taxed. They and corporations are having their taxes slashed. They are just winning the battle of the press. Few realize or understand how bad it is becoming. They want more tax breaks and some people are too dumb to understand .

5

Could you provide at least one link? I just can’t believe that anyone would say that $250K a year isn’t rich - even here in the land of milk, honey and high prices, that’s a lot of money!

6

To be ruthlessly fair, rich can fairly be said to be a somewhat debased coinage, since the term has attracted so much argument. It is not unreasonable to defer slightly to opposing views by acknowledging that, especially if the actual definition of rich isn’t central to your point.

Which, of course, is usually the case, but at least this sort of usage signals a disinclination to a parsing contest.

7

The message I want to push going forward, every time I hear this, is;

SHOW ME THE JOBS.

Every motherfucking time they cry about how we can’t raise taxes on companies or rich people and they cry about how they are the job creators, we need to start asking where the jobs are that our previous tax cuts allegedly paid for.

8

Ooops. Dupe derp.

9

It’s not a huge amount of money in particular places, like, say, New York City or Silicon Valley. You wouldn’t be living hand to mouth by any means, but $250K in San Jose is nothing like that kind of money in El Paso.

10

Actually, the top tax bracket starts at about $380,000 right now for singles or those who are married filing separately. I don’t know/care if that counts as rich or not, but any tax change that only affects this group, obviously has no impact on an incredibly large chunk of people.

If you have a 2 high income household and you have people who are married filing jointly, then the highest tax bracket is at around $190,000 (all the jointly brackets are half of the married filing filed separately, which in turn is the same as single at the highest bracket but not at the lower brackets). You could see how individuals may be a little more likely into the highest bracket in a 2 income family.

Plus, people obviously have deductions, including state income tax, property tax, interest, etc. So, in order to actually get taxed at the maximum rate, you need to make quite a bit more than the stated income. High income people do get ‘phased out’ of many deductions that are available to others, however.

My personal opinion is that, when referring to laws that affect the highest bracket, it’s easiest to just say so, rather than entering a potentially vague or loaded term into the conversation.

11

That’s just a quick and dirty search, so maybe not the most prime examples.

But that’s besides my point. Even if you’re making 250k a year, your tax burden wouldn’t go up a cent. If you’re making 300k, you’d pay a little extra tax on that extra 50k. If you’re making 500k, then half your taxed dollars would go up by 3%, meaning that your total taxes go up by 1.5%. So even at the 500k level, they only see half the effect of the tax increase, and I’d say 500k is very much getting into “rich” territory.

Btw, in the part you replied to, I was saying I wasn’t going to post examples of the use of the term “rich”, with the scare quotes, because it’s so ubiquitous. I didn’t mean that people declaring 250k wasn’t rich didn’t need examples. But there some are, since you asked.

12

Given how often we at the lower end are told that we can just pick up and move to where the jobs are, I see no reason why we cannot just tell them that they are not being forced to live in San Jose and they should consider moving to El Paso where their money buys more.

13

And yes, that’s a point I forgot to make. There are all sorts of deductions that skew your taxable income downward. If you’re making $250k from your job, your actual taxable income is going to be significantly below 250k after deductions. So in order to even have one dollar taxed at the higher rate, you’d have to be making significantly more than $250k. If you were to have half your income taxed at the highest rate, you’d have to be making significantly more than $500k for your post-deductions taxable income to be $500k. So we’re talking about people having to make maybe $700k before they start seeing half their taxable income increase in rate. I’d say that’s very well into rich and not “rich” territory.

14

“Rich” is a subjective term and can not be quantified. The reason some people put it in quotes is that certain politicians - almost always of the Democrat variety - keep defining it down in terms of rhetoric so as to make more people subject to exaggerated tax rates.

$250,000 a year in income is hardly rich, especially when you subtract taxes from it (and I’d wager that the vast majority of $250,000 a year income earners pay a significant amount in tax). “Affluent” would be a more correct term, and in my opinion $250,000 a year gross wouldn’t be near the top of that classification.

Another factor is that the Democrats of late have been seeking to define rich by income rather than net worth, yet a person’s financial standing has traditionally and more accurately been expressed in terms of their net worth. A person can make a lot of money, but if he owes more than he has, he is not rich. This tactic by the Democrats is also intended to bring more people under the exaggerated tax rate umbrella.

Personally, I don’t tend to think of people as rich unless they have a net worth or ten million or more.

15

Can I ask where the $250K number comes from? I’m just curious.

16

Well, I’ve heard “those making over 250k a year” in reference to being the top tax bracket about a million times in tax threads and in the news. But Darth Panda points out that 380k is the top tax bracket. This site supports that. Where am I getting the 250k number from then? It’s constantly in the media.

Anyway, if we’re talking about increasing the top marginal tax rate, and it’s 380k rather than 250k, then my point is even more relevant.

17

But if they’re talking about raising taxes on those making over $250K, then it’s not the top bracket - it’s more like the top 2-ish.

Which doesn’t really change the overall point of the OP - but it does bring up the point that if someone wants to be serious about debating economics, it might help if they had a basic grasp of the facts (I’m mostly referring to the media, but I guess it goes for anyone). That’s why approaching items with specificity is generally helpful, rather than using broad terms (hah!). Eh, I’ll get over it.

For the record, 700 is definitely rich - I don’t give a shit what anyone says. I don’t know that I’d put 180 in that bucket.

18

No, I welcome your corrections. The 250k number I’ve seen so many times that I was convinced that it was essentially what the 380k number actually is. Is there some sort of circumstance in which 250k is the top bracket? Other people have heard the 250k number over and over, right? I’m not crazy and making it up?

19

Really that much more than S Cal huh? Well, good to know some places cost more but now I’m really confused at the Dopers who thought we are rich making less than half of that.

Some of those don’t say what you seem to think they do.

OK. Hadn’t seen all that much of that either.

:rolleyes:

For the most part, in order to be making a nice salary, one needs to be where those sorts of jobs are, and jobs that pay well tend to be in places where the prices rise to match. Also, for example, there are no jobs for Mr Coat in El Paso - I imagine that is true of most anyone you think is (wait for it SenorBeef) “rich”.

I can’t agree with this - if someone is making, say, a million a year but makes such awful choices that he can’t cover his bills, I’d say he is just rich and stupid.

20

IIRC, $250,000 is the income level that Barack Obama has put forth for increasing the amount of Social Security tax on the “wealthiest” 3% of Americans.

IIRC, that was the same speech in which he said “There comes a time when, uh, you’ve made enough money.”

And I disagree with this. A person is not rich if he has no net worth and his income cannot meet his bills. He can certainly live an affluent or even rich lifestyle until it all comes crashing down, but he is nevertheless not rich by any definition I’m aware of.