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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.

#51

Earlier quoted context omitted.

Aside from the larger question of why the government has the right to take people's income by force to begin with, I can think of four practical reasons off the top of my head: 1) It is a disincentive to others who might try to reach that level 2) It's hardly clear that the success of the wealthy is due to how society is structured, and not their own effort. Undoubtably some is, but is it 90/10 or 10/90? 3) It encour…

Do you truly believe there's anybody out there who wouldn't work to attain wealth merely because the gov't takes a higher percentage of it? I mean, seriously?

The issue isn't "wealth" as much as it's "more wealth". There's a classic example of a secretary who did her job really well so she got a raise only to find it bumped her into a higher tax bracket and she actually made less money. So from that point on Secretaries didn't bother to excel.

This applies equally to the engineer who makes $225,000 and who might be willing to put in extra effort but won't if the reward isn't worth it.

So the issue is shifting the cost/benefit equation over to where there isn't enough benefit for people to put in the effort

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

#52
post #41

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.…

In reality humans are not so different from each other in terms of production and skill...

Perhaps you simply don't have experience, but this is certainly not true. There are clear deviations from the norm. Once you start your own business or start to manage groups this becomes quite clear.

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

#53
post #4

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.

Uh. No. The answer is the former, for the absolutely overwhelming and unspeakably vast majority of them. And for the rest, there are a dozen equally qualified people ready to do that job for them.

So you're saying that a person intelligent enough to make $250k per year wouldn't sit down and re-evaluate their job choice when they get an (effective) pay cut?

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

#54
post #51

Earlier quoted context omitted.

Do you truly believe there's anybody out there who wouldn't work to attain wealth merely because the gov't takes a higher percentage of it? I mean, seriously?

The issue isn't "wealth" as much as it's "more wealth". There's a classic example of a secretary who did her job really well so she got a raise only to find it bumped her into a higher tax bracket and she actually made less money. So from that point on Secretaries didn't bother to excel. This applies equally to the engineer who makes $225,000 and who might be willing to put in extra effort but won't if the reward isn…

That story about the secretary? That is completely contrary to the way a marginal income tax actually works.

There is no way, in the American progressive tax system, to get a raise, be moved into a higher tax bracket, and end up taking home less money. It's just not possible.

@ryanwaggoner - correct, ty.

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

#55

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…

That's called a consumption tax, which has a lot of intellectual advantages over the current regime.

Income = Consumption + Savings. Right now we tax income, but it's possible to tax consumption instead. That would encourage more saving and less consumption, which is probably a good thing for the country (but probably won't happen any time soon because in the short run businesses wouldn't stand for it).

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

#56
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?

Aside from the larger question of why the government has the right to take people's income by force to begin with, I can think of four practical reasons off the top of my head: 1) It is a disincentive to others who might try to reach that level 2) It's hardly clear that the success of the wealthy is due to how society is structured, and not their own effort. Undoubtably some is, but is it 90/10 or 10/90? 3) It encour…

Your rather extreme libertarian views have really well thought out rebuttals and it makes me think you haven't actually read much to challenge these ideas of yours. I have major libertarian tendencies and I find your arguments extremely wanting. This is like level 1 libertarianism, where all the arguments, if taken to their natural conclusion, result in a tax rate of 0%.

Aside from the larger question of why the government has the right to take people's income by force to begin with

Because the government provides services that you cannot "opt-out" of. You benefit from services (ie, defense), no matter how much you try not to, by merely living within the borders. This is our "social contract". The free-rider problem makes this an essentially necessary part of any modern society.

It is a disincentive to others who might try to reach that level

And your argument ignores the incentives to reach that level (ie, being rich). They are two forces that MUST be balanced. Ignoring the incentives, I can see how you'd view all taxes as ONLY disincentive. This ignores the reality of the situation, however.

It's hardly clear that the success of the wealthy is due to how society is structured, and not their own effort. Undoubtably some is, but is it 90/10 or 10/90?

It's actually quite clear on issues that take very much for granted. Like binding contract law, law and order, due process, and so on. Even still, no matter what the split, the rich -do- benefit from these more than the poor. This is a rather poor argument, though, because even if the rich didn't benefit more than the poor, the progressive tax system is moral for other reasons (decreasing marginal utility of a dollar, most importantly).

It encourages relocation of talent, business, and capital to states or countries where the tax situation is more favorable.

Yes, an economic factor that MUST be considered. Again, pretending that all tax raises are bad for a reason like this implies that the optimal tax rate is 0%.

It's not clear to me that more tax revenue results in a net benefit to society. My opinion is that the rich are better at investing their money for optimum yield than the government, and the end result is more benefit for society.

Is -any- tax revenue a net benefit to society? Or is the optimum zero? If you believe that the optimum is above zero, then you MUST acknowledge that taxes can be too low, and must raised.

Any (libertarian) argument that tends to natural conclusion in an optimal tax rate of zero can be discarded as poorly thought-out. On the flip-side, any (socialist) argument that tends to the natural conclusion of an optimal tax rate of 100% can be equally discarded.

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

#57

Earlier quoted context omitted.

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 'ban…

Yes, absolutely. In this country your political influence is directly proportionate to the money you invest in attaining political influence.

The fact that you chose not to spend your money and use your connections for political gain doesn't make your ability to do so any less noteworthy.

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

#58
post #52
post #41

Earlier quoted context omitted.

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.…

In reality humans are not so different from each other in terms of production and skill... Perhaps you simply don't have experience, but this is certainly not true. There are clear deviations from the norm. Once you start your own business or start to manage groups this becomes quite clear.

Not when there are billions of people in the world in you are looking at the top 100,000 or so. The differences are quite small. This number is far larger and uncorrelated with the number of billionaires in the world.

And even when you cite coding studies, the magnitude is somewhere between 25:1 not 1000:1.

http://www.codinghorror.com/blog/archives/000072.html

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

#59
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?

Aside from the larger question of why the government has the right to take people's income by force to begin with, I can think of four practical reasons off the top of my head: 1) It is a disincentive to others who might try to reach that level 2) It's hardly clear that the success of the wealthy is due to how society is structured, and not their own effort. Undoubtably some is, but is it 90/10 or 10/90? 3) It encour…

Well, the United States government has it because it ratified an amendment to the Constitution saying it does, via the Constitutionally defined process to do so.

1.) Right, I'm going to give up on my dream to get rich because I'm paying a 4% higher marginal tax rate. Nevermind that I can afford an accountant to figure out how to minimize my tax burden and will effectively end up paying a smaller percentage of my wealth.

2.) 'Wealth', as a concept, does not exist except within the structure of the society that recognizes it. Ours happens to be structured so that to some degree you can earn your wealth. It's a Randian fairytale that anyone is wealthy from solely their own effort, though.

3.) That's true. But the U.S. actually has a pretty average tax rate compared to a lot of other places, is more or less stable, and has the largest paying market in the world by far. It's not the only consideration.

4.) That's also true (or at least debatable - a lot of wealthy people invest super conservatively so as to maintain their current wealth, oftentimes right back into the government itself, and are hardly engines of innovation), but you were asking for a basic moral justification, not a full exposition on the effectiveness of the current tax code and budget.

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

#60
post #51

Earlier quoted context omitted.

The issue isn't "wealth" as much as it's "more wealth". There's a classic example of a secretary who did her job really well so she got a raise only to find it bumped her into a higher tax bracket and she actually made less money. So from that point on Secretaries didn't bother to excel. This applies equally to the engineer who makes $225,000 and who might be willing to put in extra effort but won't if the reward isn…

That story about the secretary? That is completely contrary to the way a marginal income tax actually works. There is no way, in the American progressive tax system, to get a raise, be moved into a higher tax bracket, and end up taking home less money. It's just not possible. @ryanwaggoner - correct, ty.

Actually, it's contrary to the way a marginal income tax works.
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