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People who make $250,000 or more a year can afford a tax hike.

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Re: People who make $250,000 or more a year can afford a tax hike.

#41

Post by codexon »

ryanwaggoner wrote: post #6

Of course they can "afford" it. But so what? Every single billionaire can "afford" to be taxed at a 99% rate. The bigger question: is it in any way fair, just, or moral to tax society's most successful more heavily just for being more successful? EDIT: The other salient question that I forgot to mention is: "why do we need more taxes?" Our government already can't manage what they have with any sort of reasonable eff…

It is because of tournament theory that people are requesting billionaires to be taxed more.

http://ingrimayne.com/econ/resouceProblems/Tournament.html

The differences between individuals (say top 10,000) in certain skills becomes negligible due to the sheer amount of people in the world. However, due to winner take all systems, it is possible for someone that works 0.01% harder or luckier to take 100% of the reward. This is why it is possible for wage disparities to increase beyond ratios of 1000 to 1 without someone having to work 1000 times harder.

The reasoning behind increasing the tax rate on the super wealthy is for several reasons

1) It is easier to accumulate money the wealthier you are. This creates a negative incentive for the super rich to work as hard since it becomes easier to simply buy out competition and form monopoly status. Or crush everyone else due to economies of scale rather than true innovation.

2) This conundrum is well known in many companies where they try to pay their employees as much as they can, but not too much, or else they retire early. If you believe in the mantra that the richest people are the most productive, then it is obviously in society's best interest to keep them productive.

3) The more percentage of total wealth you have, the more US infrastructure you use and rely on. For example: Exxon heavily relies on the US military and government sponsored roads. Tech companies like Google and Microsoft heavily relies on the nationalized electric grid, subsidized education, the invention of the Internet, and subsidized telecoms that allowed people to use it. The average Joe does not have as much to lose if these tax subsidized services were to disappear tomorrow.

4) The tournament theory I mentioned above. The vast differences in wealth are due to situation or luck, and not because someone truly works 1000 times harder than you.

Re: People who make $250,000 or more a year can afford a tax hike.

#42

Post by _delirium »

fleitz wrote: post #27
jfager wrote: post #12

Earlier quoted context omitted.

Why shouldn't the people who benefit the most from how society is structured be expected to pay the most for its maintenance?

I believe you are conflating society and government, and I'd actually be very much in favor of the gov't providing bills for it's services so that I could cancel the "services" I don't want, and/or find alternate providers.

It's not clear how some of the services would work if there were opt-in though. If I opt out of the government-provided property-rights system, for example, but someone else doesn't, what happens? If we have a dispute over who owns a particular piece of land, usually a court resolves that. But I've opted out of the government court system, so how do we resolve this dispute? By force of arms?

Re: People who make $250,000 or more a year can afford a tax hike.

#43

Post by gyardley »

People who make $250,000 or more a year can afford to pay more for a lot of things. But if you tried to charge one person more for an identical candy bar or television or movie ticket just because they make more money, everyone would instantly see this as unjust. Why should government services be any different?

I'd be a lot more content with differential tax rates if the money I'm saving to start my next business - and create jobs for Americans - was exempt. Every dollar I give the government is a dollar they're going to spent a whole lot less efficiently than I will.

Re: People who make $250,000 or more a year can afford a tax hike.

#44

Post by DanielBMarkham »

_delirium wrote: post #33
DanielBMarkham wrote: post #26

Earlier quoted context omitted.

Ok so let's say I have a billion dollars. I can live anywhere in the world I want to -- and with all kinds of luxuries. Seems to me like the "people who benefit most from how society is structured" would be those poor folks who through no fault of their own, perhaps mental retardation, chronic illness, or birth defect, cannot make a living and yet are provided for by the rest of us. These are the people who would die…

There might be an ethical argument, but the "rich people have lots of options, and might leave" argument isn't really convincing to me. Recall that to avoid U.S. income tax, you must move abroad and permanently renounce your citizenship. How many wealthy Americans do you think would really do that solely due to a tax hike? Especially one that was in the range that would actually likely be passed (i.e. not 99%)?

I'm not saying they might leave. I'm saying that rich people have a good life in any kind of system. This includes being mobile.

Your point was we should take money from those who got the greatest benefit from our society. By that reasoning, people who are alive now and would have died otherwise have it the best, right? Or does that extra boat or summer house so important that it's a better benefit than living?

Listen very closely: whatever system you set up, there will be rich people. If you tighten the tax laws, the rich will be criminals and politically-connected people. But there will always be rich people. It's true in any societal construct. They will always have a better lifestyle than the average person. Given the criteria you have presented, you will never end your quest to find rich people and tax them.

Re: People who make $250,000 or more a year can afford a tax hike.

#45

Post by jfager »

DanielBMarkham wrote: post #26
jfager wrote: post #12

Earlier quoted context omitted.

Why shouldn't the people who benefit the most from how society is structured be expected to pay the most for its maintenance?

Ok so let's say I have a billion dollars. I can live anywhere in the world I want to -- and with all kinds of luxuries. Seems to me like the "people who benefit most from how society is structured" would be those poor folks who through no fault of their own, perhaps mental retardation, chronic illness, or birth defect, cannot make a living and yet are provided for by the rest of us. These are the people who would die…

Rich folks are only as rich as the society they inhabit recognize them to be. Ask white Zimbabwean farm owners how wealthy they are now (only one recent example). The wealthy benefit the most - by far - from how society is structured, if for no other reason than that societal structure is what's holding them up as "rich" in the first place.

Re: People who make $250,000 or more a year can afford a tax hike.

#46

Post by encoderer »

modoc wrote: post #3
drewcrawford wrote: post #2

The question is not "Can they afford a tax hike?" The question is, "Will they continue to gross $250,000 and take home less of it, or will they find a lower-stressed job and make less?" The answer is probably the latter, for a lot of folks.

I'm right there on that line. Honestly I pay a TON of taxes already. Very high rate, lots of taxable income. Cutting back to be under 250k would probably make more sense than making 255k and paying a lot more in taxes. I don't mind taxes and social programs. I do mind paying for unending wars in the Middle East (not making a political statement, just a budgetary one). Cut some of the crazy expenses, and I'll be happi…

If you make nearly $250k and do not understand even the basic progressive income tax system in this country, then I just don't know where to begin...

Re: People who make $250,000 or more a year can afford a tax hike.

#47

Post by SamAtt »

gyardley wrote: post #43

People who make $250,000 or more a year can afford to pay more for a lot of things. But if you tried to charge one person more for an identical candy bar or television or movie ticket just because they make more money, everyone would instantly see this as unjust. Why should government services be any different? I'd be a lot more content with differential tax rates if the money I'm saving to start my next business - a…

Your example is bad because people making over $250,000 generally don't use most Government services. A better example would be if the person came in to buy a TV and you forced him to buy a TV, DVR and surround sound system for the guy standing behind him in line.

Re: People who make $250,000 or more a year can afford a tax hike.

#48

Post by gyardley »

encoderer wrote: post #32
ryanwaggoner wrote: post #6

Of course they can "afford" it. But so what? Every single billionaire can "afford" to be taxed at a 99% rate. The bigger question: is it in any way fair, just, or moral to tax society's most successful more heavily just for being more successful? EDIT: The other salient question that I forgot to mention is: "why do we need more taxes?" Our government already can't manage what they have with any sort of reasonable eff…

You know what... I'd almost feel sorry for these top 1%'ers... Almost, if it wasn't these very people who OWN our gov't through their lobbyists and cash contributions. These are the people who have orchestrated public policy in this country directly and indirectly for at least 30 years. Now the suggestion comes up that the gov't that they bankrupted might actually expect them to pay for it, and a slew of people, none…

America's population is over 300M. Do you really think 3MM+ people all 'own the government' as a collective? Do you really think 3MM+ people are responsible for bankrupting the government?

I had a good year last year thanks to the business I founded, so I'm in this top 1% of taxpayers, but I have exactly the same political influence as everybody else. Less, since I can't even vote in this country. And instead of 'bankrupting the government', my cofounder and I worked hard and created some jobs in the middle of a recession.

Re: People who make $250,000 or more a year can afford a tax hike.

#49

Post by jfager »

nickpp wrote: post #22
jfager wrote: post #12

Earlier quoted context omitted.

Why shouldn't the people who benefit the most from how society is structured be expected to pay the most for its maintenance?

Who benefits the most from the society IN RAPORT TO HIS CONTRIBUTION: the one making 30k or the one making 300k? Edit: just having the money in the bank is not benefiting. Using service, health care, infrastructure, education, free time, etc. That is benefiting. Edit2: Furthermore, they are ALREADY paying the most.

Your claim is that John Paulson is contributing 5 orders of magnitude more to society than teachers, social workers, police officers, firefighters, construction workers, engineers, nurses, and soldiers?

Re: People who make $250,000 or more a year can afford a tax hike.

#50

Post by slpsys »

javaru wrote: post #14
ryanwaggoner wrote: post #6

Of course they can "afford" it. But so what? Every single billionaire can "afford" to be taxed at a 99% rate. The bigger question: is it in any way fair, just, or moral to tax society's most successful more heavily just for being more successful? EDIT: The other salient question that I forgot to mention is: "why do we need more taxes?" Our government already can't manage what they have with any sort of reasonable eff…

I would say that the society's most successful are often the ones benefiting the most from the law and order provided by government. If the highway, mail, law enforcement, and judicial systems, for example, didn't work as well, it would be much harder to create a successful business.

Exactly. "If you wish to make an apple pie from scratch, you must first invent the universe." It's not as if wealth can be generated from the void. The top 1% often give so graciously to the universities that made it possible, but complain heartily about the governmental institutions that have, as well.
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