# What is a fair amount of tax for the rich to pay? **URL:** \ **Category:** Great Debates\ **Created:** [April 26, 2010, 4:52pm UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416 "2010-04-26T16:52:59Z")\ **Posts on this page:** 20\ **Page:** 21
**Author:** ![Maeglin](https://avatars.discourse-cdn.com/v4/letter/m/8baadc/32.png) [@Maeglin](https://boards.straightdope.com/u/Maeglin)\ **Post date:** [May 8, 2010, 1:37am UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/401 "2010-05-08T01:37:22Z")
[quote=“DSeid, post:399, topic:537416”] The last point first: but it is being proposed to use it in that way, to decide what is fair based on marginal utility between individuals and assuming that that varies linearly with size of income. [quote] It’s a terrible argument. Different people have different utilities over the same amount of money. By this logic, we should tax two people who earn 50k per year in accordance with how much they value the money. If this doesn’t incent people to conceal their preferences, i.e. the shape of their personal utility functions, I don’t know what would. > [@](#): > > As to the first point. The marginal utilty of the nth dollar is a function of how much greater n is than the commitments made for the income. When I was a resident, once my rent was paid and I had enough to buy groceries and pay the bills additional dollars had little utility for me even though n was pretty damn small. I had few commitments and obligations other than going to work. Now I have four kids, college bills, a large mortgage … and concern about saving for the remaining ones’ colleges and for retirement someday. I actually care more about the nth dollar now. I still should pay more tax now. This doesn’t undermine the idea of diminishing marginal utility in any way. Maybe the shape of your welfare has changed over time, but that doesn’t say anything about the rates of change evaluated at different points on the curve. Furthermore, perhaps you can do with a bit of downsizing. You may have the large mortgage, but you can probably move elsewhere and still put a roof over your head. You can do this several times and progressively lower levels of income. Then you’ll start renting. Then you’ll start renting in a crappy neighborhood. Then you’ll be living in a box. This is where DMU kicks in. The move from a big house to a somewhat smaller house probably represents a smaller loss in utility than moving from a crappy studio in a lousy part of town to the street, and for substantially more money saved. ---
**Author:** ![cosmosdan](https://avatars.discourse-cdn.com/v4/letter/c/a6a055/32.png) [@cosmosdan](https://boards.straightdope.com/u/cosmosdan)\ **Post date:** [May 8, 2010, 2:20am UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/402 "2010-05-08T02:20:12Z")
> [@DSeid](#): > > I do not disagree with this statement in so far as it goes. Americans “with” do give when it touches their heart and there are a variety of causes that touch each of their hearts. And when they give the give joyfully. > > The problem is it is really that that sort of giving that is relatively inefficient and unlikely to get to many in need. It is about how it is delivered. And despite their notions they don’t do it anywhere near as well or as _fairly_ as we do it when we work together by way of our government. If by efficiency you mean more money going to more people then I agree. I’ve come to see government run entitlement programs as a sort of sliding scale. The more liberal their guidelines are the more inclusive they are and more people get money. That also opens the door to abuse and gaming the system as well as some just relying to much on someone else. The other end of that scale is where the rules are so tight that too many with real needs get left out. That happened here in TN when the state needed to get rid of most of Tenncare, our health care for the poor. First we were covering too many and simply couldn’t afford it, and then too many with real needs got excluded. I haven’t seen any stats on government efficiency in helping the less fortunate have you? I know the ceases of abuse are real, but I also suspect they are a minor issue when it comes to the economy. I remember years ago meeting a man who worked for a company that helped troubled teenagers who had committed non violent crimes. They had a higher success rate than state institutions and operated at a profit. I think some charities are pretty useful and efficient at helping others and some aren’t. The nature of the human beast I guess. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [May 8, 2010, 3:36am UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/403 "2010-05-08T03:36:42Z")
The bank entitlement programs were in the trillions. That is really busting the bank to benefit the wealthy. The very people who thoroughly fucked up the economy consumed tons of tax money . The bankers are the rich. The first step should have been to confiscate the wealth of those who perpetrated the schemes that destroyed the worlds economy. There is no way to justify them getting huge salaries and bonuses. ---
**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:** [May 10, 2010, 7:20pm UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/404 "2010-05-10T19:20:56Z")
> [@DSeid](#): > > If one was to use marginal utility _alone_ then the underwater wealthier individual may have more utility for that marginal dollar than the thrifty lower middle or working class individual, and should therefore be taxed at a lesser rate. Obviously that makes little sense. The point of my post was merely to point out that limitation of the concept. Yes there are limitations to EVERY concept in individual cases. There are kids that die from vaccinations but our public sschool system requires everyone to be vaccinated nonetheless ebcause you can’t make public policy decisions based on anecdote. ---
**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:** [May 10, 2010, 7:23pm UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/405 "2010-05-10T19:23:54Z")
> [@DSeid](#): > > The last point first: but it is being proposed to use it in that way, to decide what is fair based on marginal utility between individuals and assuming that that varies linearly with size of income. > > As to the first point. The marginal utilty of the nth dollar is a function of how much greater n is than the commitments made for the income. When I was a resident, once my rent was paid and I had enough to buy groceries and pay the bills additional dollars had little utility for me even though n was pretty damn small. I had few commitments and obligations other than going to work. Now I have four kids, college bills, a large mortgage … and concern about saving for the remaining ones’ colleges and for retirement someday. I actually care more about the nth dollar now. I still should pay more tax now. I think it bears repeating. You are not even in the vicinity of the category of “rich” when people talk about fleecing the rich. Most flat tax ideas don’t shift the tax burden from the rich to the poor, they shift the tax burden from the rich to the upper middle class. ---
**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:** [May 10, 2010, 7:25pm UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/406 "2010-05-10T19:25:48Z")
> [@gonzomax](#): > > The bank entitlement programs were in the trillions. That is really busting the bank to benefit the wealthy. The very people who thoroughly fucked up the economy consumed tons of tax money . The bankers are the rich. > The first step should have been to confiscate the wealth of those who perpetrated the schemes that destroyed the worlds economy. There is no way to justify them getting huge salaries and bonuses. Yeah, we needed to prevent bank failures but we didn’t need to prevent the bankruptcy or incarceration of those who caused those banks to fail. ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [May 10, 2010, 9:09pm UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/407 "2010-05-10T21:09:46Z")
> [@Damuri\_Ajashi](#): > > I think it bears repeating. You are not even in the vicinity of the category of “rich” when people talk about fleecing the rich. Most flat tax ideas don’t shift the tax burden from the rich to the poor, they shift the tax burden from the rich to the upper middle class. Well my exact income level is not the issue here (and not something I’d share publicly in any case) but I can promise you that some would call me “rich” merely because I am a physician. And I aint complaining … I do well enough. What income level do _you_ call “rich”? Feel free to go by percentile or dollar amount. What is the vicinity that people are talking about? Is a household income of $250K/yr rich? That gets to the 1.5% right there. Now true 'nuff once you get into the top 1% the numbers start going up pretty fast but still that top 1% starts in the $300’s/yr of household income and I am sure that most of those folks wouldn’t call themselves “rich”, just “upper middle class” and worried about their bills. Some say that “rich” is four time more than “you” make. So please define your term. ---
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [May 11, 2010, 12:01am UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/408 "2010-05-11T00:01:51Z")
> [@DSeid](#): > > Is a household income of $250K/yr rich? That gets to the 1.5% right there. Now true 'nuff once you get into the top 1% the numbers start going up pretty fast but still that top 1% starts in the $300’s/yr of household income and I am sure that most of those folks wouldn’t call themselves “rich”, just “upper middle class” and worried about their bills. Why household income? A couple making $250,000/yr + 3 kids is richer than a single invidual making $200,000? ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [May 11, 2010, 12:45am UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/409 "2010-05-11T00:45:00Z")
Because that’s how the percentiles are reported. If you have access to percentile figures reported by individual income only then fine, have at it. What I got is by household income. ---
**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:** [May 11, 2010, 5:37pm UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/410 "2010-05-11T17:37:46Z")
> [@DSeid](#): > > What income level do _you_ call “rich”? Feel free to go by percentile or dollar amount. What is the vicinity that people are talking about. $1,000,000/year. ---
**Author:** ![spazattak](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@spazattak](https://boards.straightdope.com/u/spazattak)\ **Post date:** [May 11, 2010, 6:18pm UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/411 "2010-05-11T18:18:42Z")
> [@DSeid](#): > > Well my exact income level is not the issue here (and not something I’d share publicly in any case) but I can promise you that some would call me “rich” merely because I am a physician. And I aint complaining … I do well enough. What income level do _you_ call “rich”? Feel free to go by percentile or dollar amount. What is the vicinity that people are talking about? > > Is a household income of $250K/yr rich? That gets to the 1.5% right there. Now true 'nuff once you get into the top 1% the numbers start going up pretty fast but still that top 1% starts in the $300’s/yr of household income and I am sure that most of those folks wouldn’t call themselves “rich”, just “upper middle class” and worried about their bills. > > Some say that “rich” is four time more than “you” make. So please define your term. I think 250k/yr is fair to call ‘rich’. At that point a household is easily pulling in over 10k a month. We’re looking at comfortably being able to afford a half-million dollar house, 2-3 luxury car payments, a modest vacation property and the best private schools in the area while maxing out retirement plans. ---
**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:** [May 11, 2010, 7:53pm UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/412 "2010-05-11T19:53:11Z")
> [@DSeid](#): > > Is a household income of $250K/yr rich? That gets to the 1.5% right there. Now true 'nuff once you get into the top 1% the numbers start going up pretty fast but still that top 1% starts in the $300’s/yr of household income and I am sure that most of those folks wouldn’t call themselves “rich”, just “upper middle class” and worried about their bills. Being worried about bills doesn’t mean anything. Michael Jackson was worried about his bills, or should have been. I think being comfortable or perhaps rich is having lots of money left over after a rational level of spending. If my income went up to $300 K, almost every penny of it could be saved or used for fun luxuries. Justin Wilson had a good definition when he told a story about a rich guy, who had oil wells that made more money each night than he could spend the next day. That’s rich. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [May 11, 2010, 8:49pm UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/413 "2010-05-11T20:49:22Z")
[http://www.usatoday.com/money/perfi/taxes/2010-05-10-taxes\_N.htm](http://www.usatoday.com/money/perfi/taxes/2010-05-10-taxes_N.htm) Like I have said before ,our taxes are too damn low. They are at the lowest since 1950. If we paid reasonable taxes ,we would not have financial troubles in the government. ---
**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:** [May 11, 2010, 9:29pm UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/414 "2010-05-11T21:29:12Z")
> [@gonzomax](#): > > [http://www.usatoday.com/money/perfi/taxes/2010-05-10-taxes\_N.htm](http://www.usatoday.com/money/perfi/taxes/2010-05-10-taxes_N.htm) Like I have said before ,our taxes are too damn low. They are at the lowest since 1950. If we paid reasonable taxes ,we would not have financial troubles in the government. Here’s the thing. Our projected expenses in medicare/medicaid are high enough that they will require far more than historical levels of taxation to cover. In other words we need to revert to higher levels of taxation AND we need to cut entitlements and military spending if we hope to get to a surplus that will allow us to balance the budget over the long term. In fact we would ideally run surpluses to pay down our debt to historic levels of GDP to debt. What we cannot afford to do is continue with the idiocy that cutting taxes at this point would increase tax revenue. ---
**Author:** ![A\_Dodgy\_Dude](https://avatars.discourse-cdn.com/v4/letter/a/a87d85/32.png) [@A\_Dodgy\_Dude](https://boards.straightdope.com/u/A_Dodgy_Dude)\ **Post date:** [May 11, 2010, 9:44pm UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/415 "2010-05-11T21:44:40Z")
The same as the guy making $10,000 a year. Society has no right to punish people for being successful. ---
**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:** [May 11, 2010, 10:14pm UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/416 "2010-05-11T22:14:03Z")
> [@A\_Dodgy\_Dude](#): > > The same as the guy making $10,000 a year. > > Society has no right to punish people for being successful. Try reading some of the thread and get back to us. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [May 12, 2010, 12:14am UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/417 "2010-05-12T00:14:53Z")
> [@A\_Dodgy\_Dude](#): > > The same as the guy making $10,000 a year. > > Society has no right to punish people for being successful. Punish??? How about paying for the breaks and benefits that society and the government has bestowed on him. It is all possible because we have a system that allows it. We regulate the competition and the playing field. Provide a legal system to protect your rights as an entrepreneur . We protect your patents. Our society provides for you. You don’t get successful in spite of the government but because of it. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [May 12, 2010, 12:39am UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/418 "2010-05-12T00:39:43Z")
[QUOTE=A Dodgy Dude] The same as the guy making $10,000 a year. [/QUOTE] I’d rather chew off my own arm than agree with gonzo on anything, but I have to say that having the guy making $10k a year pay the same as the guy making $10 million a year, even if you meant percentage wise, is insane. I’m not a ‘to each according to his ability to each according to his needs’ kind of guy, by any stretch of the imagination, but even if it was ‘fair’ to charge the guy making $10k a year the same percentage as the guy making $10 million (which it is NOT, by any definition), we’d go bankrupt as a nation if you tried to implement it…either that or you’d have the guy making $10k starving, since you’d be taxing him something like 30% (which means he’s only be bringing home $7k…and then he’s ALSO be paying things like sales tax). > [@](#): > > Society has no right to punish people for being successful. No, they don’t. And there is no doubt that some of the people in this thread DO want to punish ‘the rich’ (or at least squeeze them dry) by imposing harsh levels of taxation in order to hammer in through their concept of ‘fair’. However, if we as a society determine that we need certain services from our government, then it’s going to be up to our citizens to pay for them…within limits of course. That’s the rub. Balancing the needs of society with the need to keep the economic engine purring along at something approaching an optimal clip, factoring in all the variables. As I said earlier, I think we are pretty close to that optimal level right now…a good balance between a decent revenue stream to the government to pay for all the goodies we all seem to want and keeping the economy ticking along. It could be tweaked up a bit, no doubt, but we’re within a couple percentage points, tops. -XT ---
**Author:** ![erez](https://avatars.discourse-cdn.com/v4/letter/e/e47c2d/32.png) [@erez](https://boards.straightdope.com/u/erez)\ **Post date:** [May 12, 2010, 2:01am UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/419 "2010-05-12T02:01:59Z")
> [@gonzomax](#): > > Punish??? How about paying for the breaks and benefits that society and the government has bestowed on him. It is all possible because we have a system that allows it. We regulate the competition and the playing field. Provide a legal system to protect your rights as an entrepreneur . We protect your patents. Our society provides for you. You don’t get successful in spite of the government but because of it. This is a terrible argument (I guess that’s not surprising considering low knowledge of economics among liberals, as proved by a recent study 😉 ). Even if all these things you listed were actual benefits to entrepreneurs or other “rich” people, what percentage of government’s spending do you think goes to these activities? Very low. Largest portions of the US government’s spending (Social Security, national defense, unemployment, welfare, Medicare, Medicaid, debt interest, transportation, Veterans, HUD, education) are things that do not benefit rich people much more than than their proportional income and some of them even benefit them less. The story is the same with local taxes (pensions, health care, education, welfare, policing, fire protection, prisons, water, waste, recreation, libraries, interest). Therefore, the rich are definitely not getting the benefits disproportionally greater than their income. What all the advocates of high taxes on the rich in this thread fail to understand is that we live in a world where people can make choices. If you try to squeeze every last cent out of them, people can decide to move to a different state or country or just to work a bit less and take up a hobby instead. Unemployed make similar choices when they reject landscaping job offers because they prefer to continue receiving unemployment benefits ([Detroit Local News - Michigan News - Breaking News - detroitnews.com](http://www.detnews.com/article/20100510/BIZ/5100335/1001)) and the rich can make them even easier. They might not do so immediately and not every one of them will make such changes, but if they do, the result will not be positive for the economy. ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [May 12, 2010, 2:37am UTC](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416/420 "2010-05-12T02:37:10Z")
> [@Voyager](#): > > Being worried about bills doesn’t mean anything. Michael Jackson was worried about his bills, or should have been. I think being comfortable or perhaps rich is having lots of money left over after a rational level of spending. If my income went up to $300 K, almost every penny of it could be saved or used for fun luxuries. > > Justin Wilson had a good definition when he told a story about a rich guy, who had oil wells that made more money each night than he could spend the next day. That’s rich. So no answer? Just subjective hand waving about “having lots of money left over after a rational level of spending” with no attempt to define what is “lots” and what is “rational”? Or is it that only those who can make more each night than they can spend the next day are rich? Sorry but very disappointing. [Previous page](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416.md?page=20) [Next page](https://boards.straightdope.com/t/what-is-a-fair-amount-of-tax-for-the-rich-to-pay/537416.md?page=22)