Why is taxing the rich so terrible?

Republicans seem able to successful dismiss the thought of making the rich pay more in taxes as “class warfare” and “raising taxes” and it seems to be a successful tactic among their base.

How are they so good at getting nearly half of america to shed tears for the Poor Oppressed Rich? Do people vote Republican because they empahize with the plight of the CEO that has to wait a couple extra months to buy a yacht?

Why is so terrible to tax the rich? What cramp are we putting on their lifestyles that is so intolerable? I’m not just talking numbers in their bank accounts. I’m talking about the food they eat, the houses they live in, the cars they drive. If some raking in 50 million a year has to pay 30 million in taxes, why should we give a damn?

Because it’s their money. They earned it. Now, you may say that they’re not worth what they’re getting paid, but that’s just your opinion - since you’re not the one paying them, it hardly matters. If someone is willing to pay Shaq an absurd amount of money to toss a ball through a hoop, or Eisner an absurd amount of money to drain Disney stock of value, then Shaq and Eisner are, respectively, worth it.

Since they earned the money, it belongs to them. If we take some of it from them in taxation, we should do so fairly - at roughly the same percentage we take it from others. Otherwise we are penalizing them for being successful, which is not the message we should be sending to either Shaq or Eisner.

That’s why.

Keep yer greedy mitts offa my money, ya mooch.

  • Rick

Is this an attempt at an actual debate or a very thinly veiled pit?

Can you define what you mean by “the rich”?

Clearly, you did not read the OP. The Rich are obviously any CEOs with a yacht.

The basic ethical problem has already been described in part (it’s unjust to just take money from people, rich or otherwise, though when it comes to funding the truly essential functions of government it can be excused as the lesser of two evils).

The political problem is that a policy of providing bread and Circus Peanuts for the masses at the expense of a minority creates pressure to keep increasing the boodle – a politician who robs Peter to pay Paul will have the support of Paul, and the Pauls outnumber the Peters. This leads to the economic problem, which is that people are less inclined to work hard and take risks to become rich if the lion’s share of the reward is just going to be taken away.

And raise the rate TOO high and the rich will skeedaddle. They like their money just as much as you do.

Why is it an honor for the poor to die for their country, but it is a burden for the rich to pay their taxes?

Yeah, I’ve noticed how much paying the rent, buying food, and getting basic health care resembles bread and circuses. Those stupid, greedy, lazy poor people…

It’s hardly a burden. But you have to realize that at some point it becomes self-defeating.

The rich won’t take risks with their money if the proceeds from that risk taking will be taxed away at too high a rate. They’ll stash it away in nice safe investments where it does few people any good.

This policy takes entrepreneurship, the kind that created lots of high tech jobs, say, and completely smothers it.

John F. Kennedy realized this, incidentally, when he cut taxes himself in the early 1960’s. Those tax cuts were aimed at freeing up capital.

Obviously, the problem is that the former readily degenerates into the latter, given the political dynamic in play when a minority of the voters pay a majority of the bill.

Why does the OP feel that the rich AREN’T currently being taxed? Do you have a cite or something to show how the rich guys aren’t being taxed? Or is your point that they aren’t being taxed ENOUGH?? If so, what rate exactly should they be taxed at? What would be a ‘fair’ tax rate for ‘the rich’, and should it be applied across the board or graduated? If graduated, what do you suppose is a ‘fair’ rate for the various graduated steps? And how does this differ from our current tax system?

Finally, have you ever actually looked at the percentages of federal taxes paid by the various tax brackets?? That might be a good place for you to start with…you might be surprised by the results.


How is taixing the rich at roughly the same percentage rate fair if they’re left with all the loot?

On one hand we’re talking about making the rent for the month and on the other hand we’re talking about sitting on a giant stack of money. I guarantee you that if you just give me the chance, I too will run a giant energy company into the ground and take everyone’s pensions with me.

The argument that if you over tax the rich, we’ll all be in trouble just doesn’t fly with me. They’ll always figure out a way to stay rich.

Wasn’t that pretty much the same idea as trickle-down-economics? If you don’t let all the wealth climb to the top, doen’t it take less time to trickle down?


I’ve been alive for forty-eight years. I have yet to see this nation come close to that kind of degeneration. Nor do I see it in any of the so-called socialist states in Europe. I’m not saying it can’t happen; obviously it can. But I see precious little danger from it in anything like the near-term future.

When you folks talk about the loss of incentive to make more money due to taxes, do you understand how the tax system works? As I understand it, only the moneys that fall into a given tax bracket are taxed at that level. For example, you are taxed at a low rate for the first $15 K of your annual earnings, a little higher rate of your next few thousand, and so on. Given the same deductions, there is no way a person earning more money will end up with less after taxes than someone who earns less. The question is how much more more, if you will. Please, someone who has greater knowledge of tax law correct me if I’m wrong here.

You know, somehow I just don’t see someone making $200K a year saying “Damn, I’m only going to be able to keep 60% instead of 65% - I think I’ll throw it all in and become a janitor!” What I do see is this argument used to frighten middle class people into approving large tax cuts for the very wealthy in the hopes that this will allow them to keep their $50/year job. And, btw, I’m in one of, if not the, highest tax bracket, so yes, I am willing to put my money where my mouth is.

Well, Rooves, maybe you can answer me a question.

The company I work for was started by two guys who had a little bit of money back in 1995. They both had some cash from a combination of military retirements, savings, appreciated stock, and land investments. Pooled together, it was about $1.5 million bucks that they could spare.

This was a big hit to the finances of their families, and was a big risk. If there was a confiscatory tax scheme in place, they wouldn’t have taken it. The potential rewards would have been smaller, making the risk less worth taking.

But today, this company employs 215 people. Annual revenues total about $30 million bucks. The stock is held totally in the hands of the employees, so we all benefit when the company does well.

The government makes far more money from the corporation, and from the incomes of all its employees, than it would have if the founders had sat on their money back in 1995.

My question to you is, fairness be damned. Is the country better for the risk taken and the rewards reaped? And is this something we want to encourage? I think it’s far better, myself, for people to unequally share prosperity than to equally share poverty.

(1) The main reason a minority pay so much is because they have a majority of the money. If you want to change that fact, then we have to have a national dialogue about why there has been an explosion in inequality, so that inequality has followed a U-shaped curve in the 20th century…High at the beginning of the century, dropping in the middle, and then exploding upward again toward the end. (Very few politicians, either Republican or Democrat seem to want to touch this issue.) Taxes are not in fact that progressive, especially once you consider the whole mix…The relatively progressive federal income tax is offset to a fair degree by regressive payroll taxes (regressive because most of it cuts out after a certain income and because it applies only to wage income) and state and local taxes which tend to be regressive (see here). Of course, the tax cuts under Bush (and the corresponding increases in state and local taxes and fees) have only made the system less progressive. In fact, we now have the case where unearned income consisting of dividends and capital gains is taxed at a considerably lower rate than wage income…even ignoring the payroll tax part.

(2) This minority of voters also gives the majority of the money to fund political campaigns and thus enjoys political power well beyond what their voting numbers might imply. In fact, they enjoy amazing access to the policymakers themselves.

This book is a good place to start: Perfectly Legal.

You understand it correctly. Actually, my first post here on the SDMB was to make this point to correct the mistaken impression some people had that you could earn more money but end up with less after taxes if the additional money pushed you into a higher tax bracket.

The problem I see with this is that percentages mean different things to different income brackets.

If I have a dollar and you have ten, taking ten percent of that will leave me with nintey cents and you with nine dollars. I will feel the “crunch” of the loss of that ten cents far more than you will feel the dollar.

Secondly, the rich are the ones who get the incentives and tax breaks from the system. They get subsidies for their businesses, they can invest their money in tax-free shelters which the middle class can rarely afford to do, and they’re also sometimes recipients of what is charmingly termed “corporate welfare.” Hell, some corporations don’t even pay taxes at all. (See this GAO office report. Page six has a handy chart. And this article which discusses just one of the many ways the rich can avoid paying taxes.)

So, it’s my belief that having gotten more from the system, the wealthy are obligated to pay back into the system in the form of higher taxes. Sure, it’s their money, but they probably wouldn’t have gotten it in the first place without government grants and programs designed to help businesses.

Oh come, now! You know this sort of either-or crap is B.S. Noone is talking about a system in which everyone shares equally in prosperity. We just don’t want one in which nearly all of the rewards are going to a tiny group of people. When the top 1% sees their after-tax incomes increase by over 200% (in real…that is, inflation-adjusted terms) between 1979 and 2000 while the folks in the middle quintile see only a 15% increase during that time and those at the bottom quintile see only a 9% increase during that time (see here), I think we have very little worry that there is anything remotely dangerously close to equal sharing going on. [And, note that the only reason that median and bottom folks saw a rise at all was during the latter part of the Clinton years…They had actually seen essentially a stand-still during the last era in which we tried “trickle-down” economics policies of making the rewards for the rich ever-larger by cutting their taxes.]

Well, it it doesn’t have to do much to acheive its purpose. Potential supporters from lower economic classes don’t have to be convinced… merely confused about where their financial interests lie.

I seriously doubt poor Republicans empathize with some CEO in this unfortunate situation. I haven’t read What’s The Matter With Kansas? yet but the premise is nothing new. Republicans gain the support of low-income Americans by appealing to cultural issues such as abortion, the flag, and homosexual marriage.

How did they get this money? Did they “earn” it on their own? Did they rise from a bed they handcarved themselves with pillows hand sewn from feathers they themselves had plucked? Did they make coffee from beans they had picked and ground on their own? Did they chart their own way to the office, which they designed and built from the ground up? What’s that? They didn’t?

Well then I guess we need to drop the Rugged Individualist assumptions. Rich people make their money by working with others. Our society has a complex division of labor. We each depend on the others for our mutual survival. No one can accomplish anything on their own. Nor does money grow on trees. Since maintaining this complex society costs money we have to pay for it somehow. Should we not expect those who have profited more from our society to shoulder more of the taxes that support it?

And lets also note that America has a marginal income tax. Everyone pays the same rate. I payed the same percentage on the first thousand dollars of taxable income I earned last year as Bill Gates did. If I somehow manage to bring in millions of dollars this year I will pay the exact same percentage on each dollar as he does. There is nothing unequal about progressive taxation. Bill Gates has the same opportunity to pay as little as I do in taxes. He merely has to forgo his huge income. If he felt the tax burden was not worth the effort presumably he would do just that. As others have noted it is the tendency to create a disincentive to earning that places a practical limit on tax rates.

This makes sense as far as it goes but it ignores the larger reality. Our government is designed to facilitate minority resistance to popular impulses. I have seen no evidence that it isn’t continuing to do so. The fact that the top marginal rates have declined over the last 2 decades lends credence to the opposite possibility.

Thanks, I’ve read it already…as well as AMERICA: WHO REALLY PAYS THE TAXES?
by Donald L. Barlett. You’ll have to show me where it says the rich aren’t being taxed at all though, which is what the quote of mine you used asked. I realize that you (and the book) don’t feel the rich are being taxed enough. I think even you will admit its a pretty fine line and a difficult thing to balance. Tax the rich too much and you shoot yourself in the foot…don’t tax them enough and you shift more of the burden on the middle class. The OP was pretty simplistic on a complex subject.