"Does anyone really deserve an an annual income of $30 million? I think half of that should be shared for the benefit of society and those much less fortunate." Laurie
"I don't agree completely with this writer as choices, including working hard do matter. I just don't see how one accepts that the super rich are 500 times smarter and harder working than someone like me." LaurieNow Laurie is a Progressive, and thus a big fan of Robinhood and a very progressive tax system which is "fair". However there are a whole bunch of Conservatives like me who are against a very Progressive tax system, and prefer a flat tax system because it is "fair".
I am curious why there are so many of us that are against the very progressive system that Laurie thinks is fair. I mean if:
"As of 2011, the average household income of the top 10 percent of households in the United States was $164,647. For the bottom 90 percent, it was $31,244. The top 1 percent averaged $3,238,386, and the top 0.1 percent $27,342,212. The wealthiest 1 percent of households in the United States possessed 32.7 percent of the wealth, while the bottom 50 percent held between 1 and 2 percent." LaurieWhy are we resistant to raising the taxes on the 1%? Is it fear that some day we would have to pay the bill, a sense of fairness, fear that taxing these people would damage the USA or other?
Thoughts?
17 comments:
how much does an American citizen deserve to own or earn? Who should decide?
Interesting questions, but compensation has never been decided that way. A teacher makes less than a major league shortstop, not because he or she is less deserving, but because of various economic considerations. Lots of people earn big salaries who are actively destructive. I read every couple of days or so, of executives who are paid large sums in the form of golden parachutes to literally go away.
--Hiram
Income disparity is an economic problem, or at least that's why I am concerned about it. And more specifically, the problem is that too many people don't make enough money. Wages are stagnant. 47 percent of the American people don't even make enough to pay federal income taxes. And that fact is messing up the economy as a whole.
--Hiram
I saw a chart a while back showing the "barriers" to more income from the poor. First of all, there is the barrier that some jobs are not worth the minimum wage. The second barrier is extended unemployment, which pays better than some jobs a person would take otherwise, and the third, fourth and fifth are various steps in the welfare system by which a person looking for work might need as much as $60,000/year to profit from actually taking a job. Add to that the way the government schools disadvantage progressive generations of students by not educating them, and you have a near-toxic mix of disincentives that keep many from moving up the economic ladder.
Even at that, this "income disparity" thing is a figment of the politician's fertil[izer] imagination. Studies have found that, over 20 years (I think), someone in the lowest 20% of income is as likely to move into the top 20% as to remain in the bottom. Thank heavens it's not always the same people. You sure can't thank government. Remember, government cannot create wealth. They can only redistribute it or destroy it.
J. Ewing
There are indeed lots of reasons not to pay people more. My boss never seems to suffer from a shortage of them whenever I ask for a raise. My point isn't that there aren't reasons why people are paid what they are, why a shortstop gets paid more than a teacher. Rather it's that stagnant wages across the economy are damaging. Basically, we are focused on making the pieces of the pie bigger, rather than the pie bigger.
Of all the economic entities out there, which can create, redistribute and destroy wealth, why is government the exception? And the exception in only one respect, it seems, the capability to destroy wealth. And does this even make sense? What's accumulated property value of a town with a public school as opposed to a town without one? What's the value of a drug patent that's protected by the government as opposed to one that isn't? Clearly, like most other economic entities, government is perfectly capable of creating, redistributing and/or destroying wealth.
--Hiram
Yet Progressives keep saying that "Short Stop" should pay hundreds of thousands of dollars in taxes, where as they ask that Teacher to pay only ~$10,000. Even though they both use the same schools, roads, services, etc.
It seems they have been and want to continue reducing the amount people can earn. (ie take home income)
Regarding gov't and wealth, I guess I see how a gov't can enable wealth creation. However I don't see it actually "creating" wealth. Though I can see how it can destroy wealth by taking money from individuals who are striving to create wealth with their assets and giving it to people that squander it.
Yet Progressives keep saying that "Short Stop" should pay hundreds of thousands of dollars in taxes, where as they ask that Teacher to pay only ~$10,000.
Sure, because that's the only way the system works. It's certainly not because he deserves to pay more in taxes. And the fact is, the shortstop gets a relatively rotten deal because his wealth comes from income, as opposed to appreciation of assets. A huge part of the wealth of someone like Mitt Romney comes from tax protection devices which income based taxpayers can't benefit from to anything like the same degree.
Public schools increase property values. If you choose to think we enable public schools as opposed to build them and create them, I won't quibble.
--Hiram
Why are we resistant to raising the taxes on the 1%?
Because they are politically powerful.
--Hiram
I should note here, that if we define taxes as robbery, everyone who pays taxes gets robbed. Looking at taxes from that perspective in no way helps us to address other tax issues.
"Because they are politically powerful."
I think each of them only gets one vote, just like the poorest street person...
I think each of them only gets one vote, just like the poorest street person...
Actually, many of them don't vote at all. That's not the source of their power. Indeed, if they didn't have power, they would certainly pay more in taxes.
--Hiram
I don't think so. I support flat taxes because they make sense, not because the rich have "influenced" me... And I think there are a lot of normal non-rich citizens that aagree.
So I assume you think that most politicians are corrupt and can be bought, since you believe money influences our tax policy so strongly.
just a few random thoughts
my proposal for a 50% marginal tax rate is actually moderately progressive. A very progressive tax system would have a top rate of 90%, which is what we had in the 50's and 60's.
Nearly $6 billion was raised and spent on the 2012 election. Anyone who thinks big $ donors don't get access and influence is very naive.
I think Joe Mauer is deserving of a high salary, as he is a better hitter than 99.99% of the population. Maybe if he was paid only $10 million a year a Twins ticket would cost less and I might choose to go to a game. Whatever his multi-million $ salary I still say a 50% tax rate is fair.
My bottom line is capitalism is an imperfect economic system where huge disparities of income are in need of at least some modest level of adjustment in terms of the rich paying a greater share of public goods.
If I won a $100 million in the lottery next month would that make me successful? or is it fair that part of this money that came from millions of people be used for public benefit.
So Hiram seems to think we keep taxes low on the wealthy because they have some power over us. I think it is because many of the people like J and myself see aggressive Progressive taxation as Un-American and unfair. Thoughts?
Laurie here are some interesting reads.
AC Tax Rate Myth
Atlantic Rich Pay Less?
So I assume if you won $100,000,000 in the lottery, you would see nothing wrong if the government seized $50,000,000 right off the top.(as they do today) In fact, you would support the government seizing even more of it... (ie 50% Feds + 10% State + ???) You are much more generous than I am...
I support flat taxes because they make sense, not because the rich have "influenced" me.
The reason flat taxation has no chance of success is because rich people don't want the tax increase. They may not influence you, but they have a great deal of influence on Congress.
--Hiram
hiram, that's where I think you are mistaken. A flat tax won't pass Congress precisely because it deprives high-paid lobbyists and Congresscritters something to sell-- that is, favorable treatment in our complex tax code.
J. Ewing
Laurie, your tax policy seems based, as that of most "progressives," on the notion that tax policy is about "fairness," and having some wholly altruistic (ahem) third party-- government-- decide how much you "deserve." A conservative would say that the purpose of tax policy is to raise the dollars necessary to fund the reasonable and rightful functions of government in the fairest and least intrusive manner.
And I think your math is off. A perfectly progressive rate of 23% (the FAIR tax) would raise all the revenue the federal government currently receives (but far more than it needs and far less than it spends).
J. Ewing
A flat tax won't pass Congress precisely because it deprives high-paid lobbyists and Congresscritters something to sell-- that is, favorable treatment in our complex tax code.
Lobbyists don't set policy. They are hired to advocate policies set by others.
That said, flat taxation is of no interest in Washington, because it doesn't clearly benefit anyone. For many influential players, it would mean an increase in taxes.
This is the usual dynamic, by the way. The conventional wisdom of tax reform is to "broaden the base". That is, lower tax rates, and have more people. Whatever the merits of that are, in theory, in practice, such policies have little support. We are seeing that now with regard to Dayton's tax cut proposals, where everyone is complaining that the sales tax is being expanded, ignoring the fact that he would cut overall rates. As it turns out, people have little problem with that expansion, just not on the stuff they buy. Turns out every little arbitrary exception in the tax code Dayton would eliminate turns out to be vital to the future of the republic for those who benefit from them.
--Hiram
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