# Why is it that the super-rich are given breaks? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [February 23, 2012, 1:11pm UTC](https://boards.straightdope.com/t/why-is-it-that-the-super-rich-are-given-breaks/613723 "2012-02-23T13:11:27Z")\ **Posts on this page:** 13\ **Page:** 3
**Author:** ![handsomeharry](https://avatars.discourse-cdn.com/v4/letter/h/e9c0ed/32.png) [@handsomeharry](https://boards.straightdope.com/u/handsomeharry)\ **Post date:** [February 25, 2012, 7:51pm UTC](https://boards.straightdope.com/t/why-is-it-that-the-super-rich-are-given-breaks/613723/41 "2012-02-25T19:51:10Z")
I think that the rich are given less tax breaks. After all, the entire graduated tax system is set up to take a higher ratio of their earnings. Why should they be penalized more than the average citizen? ---
**Author:** ![What\_the](https://avatars.discourse-cdn.com/v4/letter/w/f4b2a3/32.png) [@What\_the](https://boards.straightdope.com/u/What_the)\ **Post date:** [February 26, 2012, 4:18pm UTC](https://boards.straightdope.com/t/why-is-it-that-the-super-rich-are-given-breaks/613723/42 "2012-02-26T16:18:44Z")
> [@Sampiro](#): > > Does anybody know offhand if anybody knows how capital gains are taxed in other G8 countries as compared to the U.S.? > (I could google, but I’ll be lazy since I’m busy.) I’m too lazy too but if the answer was acceptable to most here you’d get a bunch of responses. Corporate tax rates too. ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [February 26, 2012, 4:50pm UTC](https://boards.straightdope.com/t/why-is-it-that-the-super-rich-are-given-breaks/613723/43 "2012-02-26T16:50:19Z")
> [@handsomeharry](#): > > I think that the rich are given less tax breaks. After all, the entire graduated tax system is set up to take a higher ratio of their earnings. > Why should they be penalized more than the average citizen? Taxes aren’t penalties. If you are asking why the rich should pay a higher rate, it’s a very debatable issue, but I would say because the rich recieve the greatest benefit from the government. And to follow up on that would require a long and contentious thread. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [February 26, 2012, 5:12pm UTC](https://boards.straightdope.com/t/why-is-it-that-the-super-rich-are-given-breaks/613723/44 "2012-02-26T17:12:34Z")
> [@aceplace57](#): > > Overtaxing the rich can make them flee the U.S. That’s been a big problem in the UK for a long time. That’s far easier to do under UK tax law than it is under US tax law. In the US, if you flee the country for tax reasons, they’ll arrest you if you ever want to set foot in this country again. To avoid U.S. taxes, you need to become a permanent exile. Maybe if you are uber wealthy, not being able to visit friends, see grandkids, or go the Mayo Clinic for cancer treatment is something you can compensate for by flying other people to you. But it isn’t something you can do if you are the mere 5%…its the end of the long tail that has that option to them…and many of them are the same folks that have come out in favor of higher taxes. ---
**Author:** ![Zebra](https://avatars.discourse-cdn.com/v4/letter/z/c0e974/32.png) [@Zebra](https://boards.straightdope.com/u/Zebra)\ **Post date:** [February 26, 2012, 6:41pm UTC](https://boards.straightdope.com/t/why-is-it-that-the-super-rich-are-given-breaks/613723/45 "2012-02-26T18:41:04Z")
> [@handsomeharry](#): > > I think that the rich are given less tax breaks. After all, the entire graduated tax system is set up to take a higher ratio of their earnings. > Why should they be penalized more than the average citizen? Why should they be penalized less? ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [February 26, 2012, 9:07pm UTC](https://boards.straightdope.com/t/why-is-it-that-the-super-rich-are-given-breaks/613723/46 "2012-02-26T21:07:39Z")
> [@handsomeharry](#): > > I think that the rich are given less tax breaks. After all, the entire graduated tax system is set up to take a higher ratio of their earnings. > Why should they be penalized more than the average citizen? Why should they be compensated so much more highly? 20% of households hold ~80% of the wealth and make \>90% of the income. That’s an increasing disparity, or “rising inequality” as the kids say. And much of that is in the top 1% of households, who own about half the country’s assets. You say “penalized” as if we were punishing them. Well, maybe they deserve to be punished for how they run the businesses they own & bleed. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [February 26, 2012, 10:04pm UTC](https://boards.straightdope.com/t/why-is-it-that-the-super-rich-are-given-breaks/613723/47 "2012-02-26T22:04:15Z")
> [@foolsguinea](#): > > You say “penalized” as if we were punishing them. Well, maybe they deserve to be punished for how they run the businesses they own & bleed. Why? It’s not their fault you couldn’t invent a better lightbulb, start or run a successful business or build a lucrative career for yourself. The reason why we theoretically tax wealthier people at a higher rate basically comes down to they can afford it. A 3% tax increase for a coffee shop waitress working for minimum wage may be the difference between paying the gas and the electric or paying for just one. For a highly compensated professional like me, I wait another week to buy that flat screen TV. For Derek Jeter, maybe he buys that other house in the Hamptons. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [February 27, 2012, 1:14am UTC](https://boards.straightdope.com/t/why-is-it-that-the-super-rich-are-given-breaks/613723/48 "2012-02-27T01:14:20Z")
> [@msmith537](#): > > Why? It’s not their fault you couldn’t invent a better lightbulb, start or run a successful business or build a lucrative career for yourself. I was thinking of layoffs and high shareholder compensation. But sure, it’s not an engineer’s fault I’m not an engineer, no. But do you really think that rich Americans don’t engage in restraint of trade for self-interested reasons? When someone who makes his living selling coal pays off a major political party to slam more efficient lightbulbs, that’s kind of a problem. > [@](#): > > The reason why we theoretically tax wealthier people at a higher rate basically comes down to they can afford it. A 3% tax increase for a coffee shop waitress working for minimum wage may be the difference between paying the gas and the electric or paying for just one. For a highly compensated professional like me, I wait another week to buy that flat screen TV. For Derek Jeter, maybe he buys that other house in the Hamptons. This I agree with. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [February 27, 2012, 5:51pm UTC](https://boards.straightdope.com/t/why-is-it-that-the-super-rich-are-given-breaks/613723/49 "2012-02-27T17:51:54Z")
> [@foolsguinea](#): > > As for the Laffer Curve, there is no unambiguous evidence that it has a measurable effect distinguishable from background noise and rounding error. I’d call that “tiny.” > > A quick search for any evidence of a measurable Laffer Curve finds, well, a cite ( [http://biggovernment.com/dmitchell/2010/03/05/real-world-evidence-for-the-laffer-curve-even-from-the-government-of-washington-dc/](http://biggovernment.com/dmitchell/2010/03/05/real-world-evidence-for-the-laffer-curve-even-from-the-government-of-washington-dc/) ) referring to high local cigarette taxes pushing purchases across state lines, of all things. Gee, you want to hold onto your elasticity-of-ciggie-consumption argument or to the Laffer Curve? Your cite makes my point, cigarettes bought in DC have an easily available alternative, cigarettes from VA and MD. Thus they have a large price elasticity and the inflection point on the laffer curve is low. Thus raising the taxe rates on them lowered overall tax revenue. Capital Gains income has a larger price elasticity than labor income thus taxe ratess on labor are higher than the rates on capital gains. ---
**Author:** ![Filbert](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/filbert/32/3433_2.png) [@Filbert](https://boards.straightdope.com/u/Filbert)\ **Post date:** [February 27, 2012, 7:11pm UTC](https://boards.straightdope.com/t/why-is-it-that-the-super-rich-are-given-breaks/613723/50 "2012-02-27T19:11:39Z")
> [@Der\_Trihs](#): > > Doesn’t work any more than moving to some Third World hellhole does, and for much the same reason. You just don’t have the same amenities there that you do in a place like America. According to the studies on the matter if you want rich people like CEOs to move in taxes are largely besides the point; it’s local amenities catering to rich people that attract them. Nice private schools, golf courses, that sort of thing. Sure if you give them tax cuts and subsidies they’ll take them; that won’t keep them from moving away anyway. It does both work and happen regularly in the UK. We are different from the US in that the British Isles includes several small islands, which are semi-independent from the mainland, and can set their own tax rates. Probably the best known example is the Channel Islands; between England and France, only a few miles off the coast. These have an indistinguishable standard of living from mainland Britain, and there is basically free movement for people between them and the mainland (they do restrict renting/buying a house for immigrants- with a ‘wealthy person’ exemption), but the tax rates are much lower. As they are such small islands, the local government has taken the approach of encouraging the rich to move there, as well as giving very favourable tax breaks for businesses. For the islands, this means that despite the tax rate being so low percentagewise, the average wealth is so high, the total tax paid is much higher than the mainland average. Many businesses are based there and contracts are signed there, even when the actual people involved stay living in the mainland. Low value goods can be sold from there to the EU without any additional taxes; a large amount of what I buy online here in England comes with a Jersey or Guernsey stamp. This is the situation in Britain, no ‘third world hell-holes’ required. ---
**Author:** ![handsomeharry](https://avatars.discourse-cdn.com/v4/letter/h/e9c0ed/32.png) [@handsomeharry](https://boards.straightdope.com/u/handsomeharry)\ **Post date:** [February 28, 2012, 8:00pm UTC](https://boards.straightdope.com/t/why-is-it-that-the-super-rich-are-given-breaks/613723/51 "2012-02-28T20:00:24Z")
> [@Zebra](#): > > Why should they be penalized less? I have no idea. I wasn’t aware that they were. See the graduated tax that I referenced (but, didn’t cite.) ---
**Author:** ![handsomeharry](https://avatars.discourse-cdn.com/v4/letter/h/e9c0ed/32.png) [@handsomeharry](https://boards.straightdope.com/u/handsomeharry)\ **Post date:** [February 28, 2012, 8:02pm UTC](https://boards.straightdope.com/t/why-is-it-that-the-super-rich-are-given-breaks/613723/52 "2012-02-28T20:02:34Z")
> [@TriPolar](#): > > Taxes aren’t penalties. If you are asking why the rich should pay a higher rate, it’s a very debatable issue, but I would say because the rich recieve the greatest benefit from the government. And to follow up on that would require a long and contentious thread. I never tried to indicate that taxes are penalties. I tried to indicate that the graduated income tax was a penalty. ---
**Author:** ![handsomeharry](https://avatars.discourse-cdn.com/v4/letter/h/e9c0ed/32.png) [@handsomeharry](https://boards.straightdope.com/u/handsomeharry)\ **Post date:** [February 28, 2012, 8:03pm UTC](https://boards.straightdope.com/t/why-is-it-that-the-super-rich-are-given-breaks/613723/53 "2012-02-28T20:03:52Z")
> [@Der\_Trihs](#): > > No; that’s something the rich say they will do, but they don’t. Especially in America. Where are they going to go where the rich are treated better, after all? To Canada, with Alec Baldwin. I also would like a cite as to the rich being treated better in America. I contend that the rich are treated as royalty \*everywhere. \* [Previous page](https://boards.straightdope.com/t/why-is-it-that-the-super-rich-are-given-breaks/613723.md?page=2)