Devil’s advocate position: I work hard. I make decent money. Poverty line considerations not withstanding…Why should anyone have to pay a higher tax percentage just because they make more? I more than likely spent more (education / training etc) to get here, my reward is a bigger bite out of my paycheck?
Really? You haven’t heard the answer to that the 2 or 3 thousand times it’s been asked and answered on this board? So we have to make every single thread about the guy who somehow missed all of the points about the marginal utility of money, etc.?
Edit: That’s probably too rude a response, sorry. It’s just that every time I try to make a thread about a targetted topic it degenerates into Generic [Topic] Thread #6915 and most people ignore the particular point I created the thread to discuss. Asking why it makes sense to have progressive taxation is a very generic tax thread sort of question, and one of the basic ones that has come up hundreds of times on this board.
This is something that the “damn those people with money, make 'em pay” folks never seem to have an answer for - Two Many Cats was the most recent one. Apparently if you don’t have what you want, someone else is supposed to supply it and right now - how about those people over there who have more money than I do? What, they earned it? So what!
:rolleyes:
You want to know why we should tax the rich?
Because that is where the money is.
So, why should hedge fund managers pay a marginal rate of 15% again?
Are you insane? It’s never answered?
I have no desire to punitively punish the rich. I’m only interested in generating revenue to run a society in the way that causes the least pain overall. Progressive taxation is justified all sorts of ways.
The biggest one is the diminishing utility of money as you get more of it. If you take $10,000 from a guy who makes a million, he won’t feel it. If you take $10,000 from a guy who makes $30,000, you’ll cripple him. The more money you have, the less useful every additional dollar is to you, and hence, the less pain you’ll inflict by taking it.
Taxes other than income taxes are regressive. Property taxes, gas taxes, sales taxes, social security and payroll taxes - all of these things take up a relatively higher amount of a poorer person’s income than a rich person’s income. If we all paid the same income tax, this would mean the overall tax burden of a poor person was a higher percentage of their pay than a rich person. Even factoring in that the income tax is progressive, overall factoring in all taxes, our total tax rates are actually very flat. Everyone pays in the area of 19% when factoring in all taxes. If income tax wasn’t progressive, the poor would be paying more.
People will often claim that “I don’t even use public schools, we both use the same roads, we have access to the same libraries - why do I have to pay more?” - because the rich disproportionately benefit from all of the good things society brings in. The Walton family may only drive as much on the roads as I do, but the US road network has allowed their company to make billions and billions of dollars. I may go to public school, but universal education has created a society in which the vast majority of people have basic competance in various areas, which creates a productivity boost for businesses. Etc. etc. Rich people would not be rich without a society to protect their property, give them markets, and generally host economic activity. The more you have, the more benefit you’ve gotten out of the constructs of society.
The rich simply have the money. There’s a huge wealth disparity in this country and quite simply you need to go where the money is if you want to tax it. You hear “the top X% of people pay Y% of taxes!” and we’re supposed to be outraged, but they don’t mention that the same X% of people have a >Y% of the wealth.
Do I need to go on? Really, no one has an answer as to the reason for progressive taxation? It’s just an issue that stumped us and we advocate it anyway because we just want to punish the rich? Come the fuck on.
Actually, that (to me anyway, realizing that it is now almost 2 am) seems to tie together. Your OP was that people use quotes around the word “rich” as if those who make $500K a year cannot be considered rich, yes? And you can’t understand why folks who make that kind of money don’t want additional taxes, right? Well, one reason could easily be because they worked damn hard to get there and now the government wants to take even more of it to waste on some stupid war or something. It does get to the point where one wonders why they should work to get ahead - just to pay more in taxes? For what benefit to those people? No one can be altruistic 100% of the time, eventually they are going to say “enough!” and push back. Particularly these days with so many people demanding this, that and the other thing.
You’re right. I’m guessing you’d rather make $50k a year with 10% taxes than 4 million a year with 30% taxes, right? I mean, why even bother to make $4 million if the government is just going to take a bigger chunk away with it?
That’s why, given the hundred years of progressive taxation in the US, we just don’t have any rich people. No one has bothered to work hard and succeed, I mean - why bother? The government is going to take it all away anyway.
Let’s take a concrete example from earlier in the thread. The guy who’s making $380,000 a year has no incentive to take it up to $550,000 a year, right? Because his overall tax burden would go up by 1%! Why would you fucking work for that extra $120,000 when the government is going to take 1% more from it? Insanity!
Oh, well, if you are just going to exaggerate, then I guess I should try to go sleep.
You’re the one who’s saying that if we raise the top marginal tax rate by 3%, people will wonder if they should bother to work anymore, and I’m the one exaggerating?
The last sentence in my post isn’t an exaggeration. If we raised the top marginal tax rate by 3%, and someone moved up from making $380k per year to $550k per year, their overall tax burden would actually go up by 1%. Are you saying that someone would seriously consider whether it was worth it to put the work in to make $550k vs $380k per year based on the 1% overall higher tax burden?
Speaking of burdens, do you have any idea how burdensome it is to be able to refute someone so clearly and thoroughly - to just wreck them on an intellectual level - and yet never have it sink in, even in the slightest? Undoubtedly you’ll be telling us in a thread in a few weeks about how no one has ever been able to justify progressive taxation, and that a 1% increased tax burden is a strong enough disincentive to make you reconsider whether you want to make an extra $170k per year or not.
Trouble is, we’ve reached the point now where 50% of all American households have been deemed poor enough not to pay any income tax. There are people in this country living in two-story houses, driving multiple cars, watching big-screen TV’s and wearing nice clothes every day who have been deemed by the government to be too poor to pay income tax, and it certainly wouldn’t hurt them to be paying their fair share. That’s what a hundred years of progessive taxation has resulted in, and there’s no end in sight. There are plenty of people in this country who could be…and who were until recently…paying their fair share in return for the benefits they get as a result of living in this country. The definition of “poor” keeps going up and up, while the definition of “rich” keeps coming down and down. I keep waiting for that wonderful cosmic moment when rich gets defined down so low, and poor gets defined so high, that their taxes reverse and “poor” people are suddenly paying taxes for “rich” people. 
Won’t it be fun watching Democrat politicos trying to buy votes with other people’s money under that scenario?
Oh, please.
So, you’ve got nuthin’.
No no, you’ve got it wrong. The correct line is “Thank you sir! May I have another?”
I don’t think that that’s it. I think it’s that some people don’t equate “particularly well off” with rich. I think they equate rich with, oh my god he has a mansion, a Porsche, and a summer home, always flies first class, eats caviar, and never has to work.
And people who are in the middle class in the US (I’m just talking about regular people here, not saying anyone making 250 is in the middle class, they most certainly are not) would be rich in other countries, but that doesn’t mean we should call them rich or tax them like they are, because the cost of living is much different.
So while it is eye opening to realize just how well off we are compared to the rest of the world, I think we need to stick to comparisons within the US rather than outside of it to make reasonable judgments.
My point isn’t that we shouldn’t raise the marginal tax rates on the highest 1 or 2 brackets, I think we should.
My point is that we shouldn’t act as if it is no burden at all to those people - to many, it is. But everyone has burdens, so they’ll just have to deal with it.
The goal shouldn’t be to raise taxes on the rich in order to punish them for being rich. It should be make sure that we have enough revenue to cover our expenses, and the fact of the matter is that the best place to generate more revenue is via increasing the top marginal tax brackets - because, guess what? Low earners don’t really have much disposable income left to tax.
TLDR: Some people may think 250K is rich, others may not - and either case can be made with some force. But it doesn’t matter, we need to raise the taxes regardless.
Missed edit window:
In addition, Senor Beef’s point stands, that those barely over whatever threshold is chosen will feel almost no impact.
I would point out , however, that if the article linked to previously is accurate, during the debates the number that was being thrown around was 250 for couples, and 125 for singles, and 125 is in a much different ballpark than what has been being discussed. I still think that some tax hike is acceptable at this level, but I would prefer to keep the increases at the top marginal brackets.
Problem is, “rich” (oops) is such a fluid concept.
A few years back, Democrats were hollering about “Bush’s tax cuts for the rich”. So now we’re in a big financial hole, logically we should rescind those tax cuts for the rich and get much closer to closing the deficit. But wait! - now it’s been decided that lots of middle income people would suffer mightily if the Bush cuts are rescinded, so we can’t stomach that.
So in just a few years, “the rich” morphed into “the middle class”. No wonder we need to put the term in quotes. In a little while, it’ll mean something else entirely.
Get over it- it’s all relative.
This sounds like the same line of argument that says that someone’s problems are somehow inconsequential because they’re not living in a Rio favela or picking through garbage in a dump outside of Manila.
I personally think that “rich” starts somewhere at about the half-million a year in income mark and/or 2-3 million in net worth. That seems to be where the real changes in behavior and consumption happen in my experience.
For example, my wife and I are somewhere in the 100-150 range in terms of income. We have some friends who are probably right at about the 250k range, and their lifestyle isn’t significantly better or different than ours. They may buy slightly more expensive cars, and spend more on home improvements, but that’s about it. They don’t have a Mercedes, or have a second home, or anything all that extravagant really. None of us are “rich” at all- maybe upper middle class, but not rich.
On the other hand, my uncle (successful small businessman in construction) is in that “rich” category- they do have a second home, and have had one for a long time. They can do things on a whim, like buy a new car that my wife and I can’t do, and nor can our friends.
Amazing.
I’m with even sven. The rich have the best PR and can go around telling people how poor they are. $250K??? You have no idea how the other 98% of the country lives.
If you can make that same argument taking into account the entire tax burden of the respective income levels, I might start listening. Similarly, if you can show that they’re equally benefiting from participation in this great society, then we can talk about equal tax responsibility.
But the top has raked in FAR more than the bulk of the rest. They’re able to leverage their wealth to limit their costs and taxes in a way unavailable to the poor and middle class.
This is the absurd argument that is being hammered now. In spite of the fact that taxes are historically down and the rich and business are taking in record incomes, “they” pretend that we’ve gone socialist. As long as one person fits their image of the welfare queen, the entire system is corrupt.