# Taxing the "rich" **URL:** \ **Category:** The BBQ Pit\ **Created:** [July 24, 2011, 9:14pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209 "2011-07-24T21:14:54Z")\ **Posts on this page:** 20\ **Page:** 17
**Author:** ![interface2x](https://avatars.discourse-cdn.com/v4/letter/i/c0e974/32.png) [@interface2x](https://boards.straightdope.com/u/interface2x)\ **Post date:** [August 2, 2011, 1:45pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/321 "2011-08-02T13:45:35Z")
> [@emacknight](#): > > your duel income will have increased. To be fair, I would expect that the more duels you win, the higher your pay would be over time. Like a really popular gladiator. Or Aaron Burr. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [August 2, 2011, 2:30pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/322 "2011-08-02T14:30:24Z")
> [@The\_Other\_Waldo\_Pepper](#): > > Ah, but I’m not the one making the claim. You made the claim – tongue in cheek, but repeatedly – that if the disparity is based on decision-making, then the poor must be making more and more stupid decisions, such that people are much stupider today than they were in 1967. Given the possibility of the alternate hypothesis – that it’s good decision-making by the poor and better decision-making by the rich – it’s on you to provide evidence that it’s bad decision-making by the poor, as you claimed. I think your misunderstanding. I manifestly **do not** think that it is bad decision-making that drives this wealth and income gap. That was **DragonAsh** ’s claim. I believe that it is largely systemic effects that keep the poor poor, and reward the rich with more riches. I have also claimed that these effects have been exacerbated by recent (~20 years) policy changes. My _evidence_ is the increase of the gap combined with the lack of real wage growth at the bottom. I believe poor decision-making cannot account for this increase unless folks are getting worse at making decisions, or there are systemic pressures either (a) making their decision-making irrelevant, (b) punishing them more harshly for the poor decisions they do make, of (c) failing to reward them for good decisions. In my opinion, all three of these possibilities reflect a _systemic_ problem with US policy (taxation, finance, criminal justice, education, anti-poverty, and community development). ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 2, 2011, 2:35pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/323 "2011-08-02T14:35:30Z")
> [@Jas09](#): > > That’s not what the data in the chart shows. Do you have some other data source that shows that the lower, say, 40% did better in inflation-adjusted terms from 1980 to 2000? The periods from 1983-1989 and 1993-2000 was certainly the best for the lowest group, but they were partially offset by 1989-1993. > > And even during that period the top quartiles did much, much better in terms of real income growth. > > There is really no way to look at the data and conclude that both the income and wealth disparities have been growing in the US from quite some time, and show no sign of decreasing. I think even your charts show that families (not really sure how that differs from households) did better from 1980 to 1988 and 1992 to 2000. This gain was only partially offset by the recession in the early 90’s. The top quartile certainly did better but I don’t really care how well the top qaurtile does as long as the bottom quartile does better, Economic justice does not require that the poor become rich, it requires that the poor steadily becomes less poor and the poor have an opportunity to improve their lot in life. Disparity in and of itself does not bother me (I’d rather be unequally rich than equally poor), but a lot of the things that are causing this increase in disparity do bother me. Gutting of organized labor. Exporting jobs that create a shortage of jobs and income relative to the level of consumption our economy needs to grow. It also suppresses wages which as people chase fewer and fewer jobs. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 2, 2011, 2:36pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/324 "2011-08-02T14:36:48Z")
> [@gonzomax](#): > > No whoa. I would comp[are a 40 hour check with an overtime check and discover the take home change was equiv. to straight time for the OT. the post you were responding to was directed at curlcoat. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 2, 2011, 2:41pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/325 "2011-08-02T14:41:19Z")
> [@elucidator](#): > > The top earners and job creators made one excellent decision: they bought a government. To be fair it was on sale. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 2, 2011, 2:44pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/326 "2011-08-02T14:44:58Z")
> [@Jas09](#): > > Dear God, is this thing stuck in a loop??? Someone already raised that objection. And I already addressed it. Since 1967 the bottom 40% has seen a 20% increase in real income while the top 80% has seen a 55% increase. It’s not a rising tide lifting all boats. > Possibly - sounds like something “inherent in the system” to me. > > Myself, I think (part of) the problem is we removed our one means of taxing wealth, thus allowing it to accumulate through generations at levels previously impossible. The estate tax is alive and well. The exclusion amount is sorta high ($5,000,000 is exempt) but $5,000,000 is hardly a dynastic accumulation of wealth. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 2, 2011, 2:56pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/327 "2011-08-02T14:56:28Z")
> [@curlcoat](#): > > Since you say rarely there, it appears that you agree that it is possible. You are clutching at straws. I was being polite. I can’t think of a single situation where your tax rate exceeds 100% (which is what I believe you need to have your after-tax income increase after your pre-tax income has decreased. > [@](#): > > I am talking about the fact that I can still pay all of our bills, which did not change after I quit working, and still have what appears to be the same amount of disposable income left. We haven’t changed our lifestyle one bit and actually I travel more now because I can. As for math, as I’ve said several times, I cannot provide numbers because I don’t have any records from before I quit working. Then you are missing something. > [@](#): > > I imagine I actually said something along the lines that it _appears_ that we haven’t felt any effect of the loss of my income because it dropped our taxes. I don’t think I stated anything as fact, if for no other reason than I rarely if ever do that, but also because I flat don’t know why this is true. All I know is I haven’t worked in four years, our income dropped about $20K as a result, and yet there has been zero noticeable change. We still go on vacation, I still travel around the west, we are still doing home improvements, and for the first time in my life I am visiting Hawai’i. We are not living our same “lifestyle” on credit because I don’t do that, so that isn’t the reason. Its not because of taxes and you implied that it was. > [@](#): > > Why is it that the fall back assumption to something that a person cannot explain has to be that someone is making shit up? 😕 Because when no other explanation is plausible, it looks like you are making shit up. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 2, 2011, 2:58pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/328 "2011-08-02T14:58:56Z")
[Tent cities spring up in LA - YouTube](http://www.youtube.com/watch?v=CnnOOo6tRs8) There has to be a way to get more out of these people. ---
**Author:** ![The\_Other\_Waldo\_Pepper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/the_other_waldo_pepper/32/12370_2.png) [@The\_Other\_Waldo\_Pepper](https://boards.straightdope.com/u/The_Other_Waldo_Pepper)\ **Post date:** [August 2, 2011, 3:03pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/329 "2011-08-02T15:03:13Z")
> [@Jas09](#): > > My _evidence_ is the increase of the gap combined with the lack of real wage growth at the bottom. **I believe poor decision-making cannot account for this increase unless folks are getting worse at making decisions, or there are systemic pressures** either (a) making their decision-making irrelevant, (b) punishing them more harshly for the poor decisions they do make, of (c) failing to reward them for good decisions. And, again, why can’t it account for that increase if folks at the bottom are getting no worse at making decisions while folks at the top are getting better at it? ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 2, 2011, 3:08pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/330 "2011-08-02T15:08:29Z")
> [@Jas09](#): > > I think your misunderstanding. I manifestly **do not** think that it is bad decision-making that drives this wealth and income gap. That was **DragonAsh** ’s claim. I believe that it is largely systemic effects that keep the poor poor, and reward the rich with more riches. I have also claimed that these effects have been exacerbated by recent (~20 years) policy changes. > > My _evidence_ is the increase of the gap combined with the lack of real wage growth at the bottom. I believe poor decision-making cannot account for this increase unless folks are getting worse at making decisions, or there are systemic pressures either (a) making their decision-making irrelevant, (b) punishing them more harshly for the poor decisions they do make, of (c) failing to reward them for good decisions. > > In my opinion, all three of these possibilities reflect a _systemic_ problem with US policy (taxation, finance, criminal justice, education, anti-poverty, and community development). Our “system” rewards specific behaviour and traits. The most important trait is STILL having rich parents but in this country you can overcome having poor parents if you have other traits. If you want to become RICH, then you need at least a little luck. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [August 2, 2011, 3:12pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/331 "2011-08-02T15:12:16Z")
> [@The\_Other\_Waldo\_Pepper](#): > > And, again, why can’t it account for that increase if folks at the bottom are getting no worse at making decisions while folks at the top are getting better at it? Ah, a fair point. I have no idea why that would be the case, but I guess it’s possible. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [August 2, 2011, 3:13pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/332 "2011-08-02T15:13:29Z")
> [@Damuri\_Ajashi](#): > > The estate tax is alive and well. The exclusion amount is sorta high ($5,000,000 is exempt) but $5,000,000 is hardly a dynastic accumulation of wealth. True, it is back after it’s near-death experience. I think the limit is a bit high, and the rate a bit low, and it’s far too easy to avoid, but you’re correct. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [August 2, 2011, 3:17pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/333 "2011-08-02T15:17:14Z")
> [@Damuri\_Ajashi](#): > > Our “system” rewards specific behaviour and traits. The most important trait is STILL having rich parents but in this country you can overcome having poor parents if you have other traits. If you want to become RICH, then you need at least a little luck. I don’t disagree with any of that. The most important predictor of your economic outcome is your parents’ economic condition (and, I think, second is your race). Perhaps this is how it should be, but claiming that it’s solely (or even primarily) on the decisions made by each person is incorrect. ---
**Author:** ![quixotic78](https://avatars.discourse-cdn.com/v4/letter/q/3ab097/32.png) [@quixotic78](https://boards.straightdope.com/u/quixotic78)\ **Post date:** [August 2, 2011, 5:04pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/334 "2011-08-02T17:04:31Z")
In the context of bad decisions, one should note that even if you make all [good decisions](Costly illnesses trigger about half of all personal bankruptcies, and most of those who go bankrupt because of medical problems have health insurance, according to findings from a Harvard University study to be released Wednesday.), you can still get royally screwed: > [@](#): > > Costly illnesses trigger about half of all personal bankruptcies, and most of those who go bankrupt because of medical problems have health insurance, according to findings from a Harvard University study to be released Wednesday. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 2, 2011, 8:29pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/335 "2011-08-02T20:29:42Z")
> [@The\_Other\_Waldo\_Pepper](#): > > Which, if either, outweighs the other? Do they pay a disproportionate amount of taxes relative to income, or vice versa, or is it about even, or what? If you subtract the amount of income needed to stay alive, the rich have even more than their apparent share, and should be paying taxes on that. If it takes $20,000 to live in a town, and you have 10,000 people making $20,500 and 50 people making a million, should a fair share of taxes be levied on the entire income or income less than money needed to live? If you decide that the tax should be 10%, the poor starve and the rich have $900K left. If you levy it on the money left over, and least the poor have $450, but the rich have still almost $900K. The 50 rich people contribute $5 million to the tax pool, while the poor contribute $500K. Unfair to the rich, right? Now, is the increase in benefit to the poor from going from $50 in taxes to nothing greater than the cost to the rich of going from $100K in takes to $110K? Would they even notice a 1% decrease in income (after expenses) versus a 10% increase for the poor (after money needed to stay alive?) > [@](#): > > I’m not. I’ve heard it plenty of times; I just don’t happen to believe it. My happiness seems absolutist rather than relative, as sure as I don’t cheer up because the janitor makes less than I do. Maybe you’re an outlier, but for the most part people aren’t like that. CEOs compare themselves to other CEOs, not the lowest paid in their companies. Baseball players compare themselves to other major league players, not people in the minors. > [@](#): > > So why should they feel worse upon hearing the rich make _ **more?** _ Because it is coming at their expense. During the bubble the rich were doing very well also, but so was the average person, so fewer people minded. > [@](#): > > So – give the poor nothing, to avoid insulting 'em with something small? How odd. This has nothing to do with the poor, but has a lot to do in showing that happiness is not a linear function of money. It is like the ultimatum game, where people turn down a gain if they feel the other person, who set the amount of the gain, is getting too much. > [@](#): > > Well, forget raises to focus on promotions for a moment. Often there’s only one to go around, right? Winner take all? Maybe it goes to someone a little more qualified? I’ve never notices anyone being made at promotions going to people they indeed think are more qualified. There is only rancor when people perceive favoritism, or see it as an insult. If the entire raise pool was $100 a year, probably no one would mind it all going to one person. But, do you agree that winner take all in raises is not a reasonable approach when there is a reasonable amount of money? > [@](#): > > Shouldn’t we all pay in for stuff like that? The poor pay by sending their children to fight it. But, whether or not the poor supported the war, they weren’t the ones moaning and groaning about tax hikes to pay for it, were they? ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 2, 2011, 8:36pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/336 "2011-08-02T20:36:55Z")
> [@emacknight](#): > > They don’t have to make more stupid decisions, it’s just that the stupid decisions they make now have heavier consequences. > > Need an example: ARMs. > Need another: getting an ARM without bothering to look up what ARM stands for. > Here’s another: getting an ARM with 5% down, borrowing that 5%, for a mortgage that’s more than the house is worth. > And one last example: assuming that in 5 years interest rates will be lower, your house value will be higher, and your duel income will have increased. > > There are four examples of stupid decisions that made a lot of people poor, including people that had been rich. I don’t think any of those options existed in 1967. The first ARMs I heard of were in the very early 1980s when high inflation rates made mortgages at even the prime unaffordable, and the expectation was that interest rates would go down, meaning you didn’t want to lock into really high rates. However, unlike a few years ago, if you walked into a bank and asked for a mortgage with no money down and inadequate income, they would have thrown you out, politely no doubt. They didn’t want to be stuck with a nonperforming loan. Contrast that to conditions under the bubble, where brokers were compensated more for riskier loans, and they actively tried to sell crap loans to people who could afford better ones, including to whose houses were paid up. ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [August 3, 2011, 12:44am UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/337 "2011-08-03T00:44:54Z")
> [@gonzomax](#): > > Your premise is ridiculous. People who could not afford some of the loans ,were called night and day. They were emailed endlessly . All by people who identified themselves as financial experts. What was wrong with these stupid people? They took deals offered to them by experts. I just wish I could understand how they forced the banks to do it. Am I reading this wrong? Where you wrote “emailed” did you mean “threatened at gun point?” How fucking stupid can you possibly be? What the fuck is wrong with you? People chose those fucking bullshit mortgages, and are poorer as a result. The exception being actual cases of fraud, and those are being dealt with (see Wells Fargo). That you so easily transfer blame from morons to bankers shows what a fucking imbecile you really are. You think my premise is ridiculous because people got a bunch of spam? I had 3 credit card offers in the mail today. There are hundreds of shit offers in my junk mail folder. You know how many of them I respond to? Zero. Only an idiot thinks a “expert” is offering them “a deal.” That’s how it works. People pretend to be experts, and take money from stupid people. I’m sorry that you were one of those idiots, but hopefully you learned your lesson and next time will simply hang up. I got a call an hour ago inviting me to “a once in a life time investment opportunity.” It even came with $100 and 7 nights in a hotel. I hung up. Wasn’t that hard, assuming you’re smart enough to know how to do that. You I’m not so sure. ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [August 3, 2011, 1:02am UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/338 "2011-08-03T01:02:33Z")
> [@Voyager](#): > > If you subtract the amount of income needed to stay alive, the rich have even more than their apparent share, and should be paying taxes on that. If it takes $20,000 to live in a town, and you have 10,000 people making $20,500 and 50 people making a million, should a fair share of taxes be levied on the entire income or income less than money needed to live? If you decide that the tax should be 10%, the poor starve and the rich have $900K left. If you levy it on the money left over, and least the poor have $450, but the rich have still almost $900K. The 50 rich people contribute $5 million to the tax pool, while the poor contribute $500K. Unfair to the rich, right? Now, is the increase in benefit to the poor from going from $50 in taxes to nothing greater than the cost to the rich of going from $100K in takes to $110K? Would they even notice a 1% decrease in income (after expenses) versus a 10% increase for the poor (after money needed to stay alive?) That looks good in theory. But what happens to your budget if just a few of those 50 millionaires move or go broke? You established a $5.5million entitlement program that people were counting on. Now you’ve got a budget deficit of $500,000 that needs to be picked up by the remaining 45 millionaires, assuming you can’t reduce the handouts. ---
**Author:** ![The\_Other\_Waldo\_Pepper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/the_other_waldo_pepper/32/12370_2.png) [@The\_Other\_Waldo\_Pepper](https://boards.straightdope.com/u/The_Other_Waldo_Pepper)\ **Post date:** [August 3, 2011, 1:29am UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/339 "2011-08-03T01:29:24Z")
> [@Voyager](#): > > Maybe you’re an outlier, but for the most part people aren’t like that. CEOs compare themselves to other CEOs, not the lowest paid in their companies. Baseball players compare themselves to other major league players, not people in the minors. You’re arguing that folks don’t compare themselves to folks on a different level, which I’d think would mean they _ **wouldn’t** _ care whether the rich are getting richer… > [@](#): > > Because it is coming at their expense. How do you figure that? How could I hypothetically falsify it? Imagine two rich guys: one gets richer at the expense of his poorer countrymen – and the other gets richer, but not at the expense of his poorer countrymen. Is that possible? If not, why not? If so, how can we tell which is which? > [@](#): > > I’ve never notices anyone being made at promotions going to people they indeed think are more qualified. There is only rancor when people perceive favoritism, or see it as an insult. If the entire raise pool was $100 a year, probably no one would mind it all going to one person. But, do you agree that winner take all in raises is not a reasonable approach when there is a reasonable amount of money? I’m not sure. I’d like to hear the exact reasons given by the guy who thinks he’ll get the best results from a winner-take-all distribution, so that I could (a) try to sell him on the idea of getting better results with a different distribution, or (b) position myself to be the winner who takes all. > [@](#): > > The poor pay by sending their children to fight it. No, some poor folks never had kids, and some who have kids don’t send their kids off to fight. How can we make sure _ **they** _ pay as much as the ones you’re talking about? ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 3, 2011, 2:47am UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/340 "2011-08-03T02:47:36Z")
> [@emacknight](#): > > Am I reading this wrong? Where you wrote “emailed” did you mean “threatened at gun point?” > > How fucking stupid can you possibly be? What the fuck is wrong with you? People chose those fucking bullshit mortgages, and are poorer as a result. The exception being actual cases of fraud, and those are being dealt with (see Wells Fargo). That you so easily transfer blame from morons to bankers shows what a fucking imbecile you really are. > > You think my premise is ridiculous because people got a bunch of spam? I had 3 credit card offers in the mail today. There are hundreds of shit offers in my junk mail folder. You know how many of them I respond to? Zero. > > Only an idiot thinks a “expert” is offering them “a deal.” That’s how it works. People pretend to be experts, and take money from stupid people. > > I’m sorry that you were one of those idiots, but hopefully you learned your lesson and next time will simply hang up. I got a call an hour ago inviting me to “a once in a life time investment opportunity.” It even came with $100 and 7 nights in a hotel. I hung up. Wasn’t that hard, assuming you’re smart enough to know how to do that. You I’m not so sure. Congratulations, that is the dumbest post of all time. Spend a little time thinking. The ARMs and phony mortgages were products of the banks. There is no way a person is responsible for creating zero down loans, 100 percent mortgages or not assessing property. That was a wet dream of banks. They offered these crappy and dangerous loans because they immediately sold them off. They moved the risk to major investors around the world who took horrible baths on them. These major investment companies are the people who you somehow think are special smart people, not dumb like those people who forced the banks to give them a house they could not afford. Try and buy a house today. The requirements are much more stringent. Like they were before the banks lowered them before. Note ,the banks lowered them before. I wish you could understand that. It is not difficult. [Previous page](https://boards.straightdope.com/t/taxing-the-rich/590209.md?page=16) [Next page](https://boards.straightdope.com/t/taxing-the-rich/590209.md?page=18)