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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.

#61

Post by drewcrawford »

natemartin wrote: post #5
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.

Really? That doesn't make any sense to me. "Oh my, I'm making marginally less take-home money. I should completely change my career and get even less money!" Remember it's a marginal tax system. They would only get taxed more on the amount they are making over 250k. No matter what the tax rate goes to, you'll still be bringing home more money by having a higher paying job.

> Will people create wealth if they can't get paid for it? Only if it's fun. People will write operating systems for free. But they won't install them, or take support calls, or train customers to use them. And at least 90% of the work that even the highest tech companies do is of this second, unedifying kind.

http://paulgraham.com/gap.html

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

#62

Post by ryanwaggoner »

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.

Yes, and they're already paying much, much more than the less successful by virtue of the fact that they make more. But by taxing at a higher rate because they have more money, you're effectively punishing them for success. It'd be a like a VC demanding that if you exit at $10m, you owe them $3m, but if you exit at $1b, you owe them $500m.

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

#63

Post by ryanwaggoner »

ryandvm wrote: post #16
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…

Your edit is the best part. I wouldn't necessarily mind paying higher taxes if the government were a capable solutions provider. Alas, if you've ever actually worked for the government, you know they are not.

I was in the Navy and the month before the end of every fiscal year was "see what kind of expensive shit we can find to buy because I need to use up my budget so I don't lose it next year" time. After that experience, it's hard for me to have faith in the institution of government as an agent of efficient allocation of capital.

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

#64

Post by ryanwaggoner »

lbrandy wrote: post #56
ryanwaggoner wrote: post #20

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…

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 gove…

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.

Please provide some resources, as I'd love to expand my knowledge in this area. I'm serious.

Perhaps I worded a few things incorrectly here. I think a flat tax is a much more workable solution, perhaps with credits at for the lowest income levels.

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).

Can you explain more about this?

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

#65

Post by rbranson »

byrneseyeview wrote: post #29
garethm wrote: post #18

This reminds me of the article a few years ago that indicated that Warren Buffett had a lower effective tax rate than his secretary, even though he made heaps more. http://www.timesonline.co.uk/tol/money/tax/article1996735.ec...

That was because he's counting capital gains. Capital gains are the tax you pay based on the price of a stock, which is based on the net present value of the company's dividends (taxed at 15%), which are paid out of its profits after taxes (35%). So it looks like the taxes he's paying on the extra earnings of Coca-Cola are about 53%. At least he doesn't pay FICA taxes on that. On the other hand, the capital he invest…

Nice try Ronnie, but I highly doubt Mr. Buffet is ignorant enough to take profits he intends to re-invest as income. These likely stay within a holding corporation that re-invests this money and does not pay taxes on the gains. This is the way the system exists now and the way it should work.

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

#66

Post by Poiesis »

idoh wrote: post #55
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…

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).

Would more saving and less consumption be good for the country? I'm not saying it's a bad idea for individuals--it's what we do personally--but it seems like the economy as a whole would stagnate based on my completely unqualified armchair economist opinion.

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

#67

Post by ryanwaggoner »

jfager wrote: post #49
nickpp wrote: post #22

Earlier quoted context omitted.

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?

It seems a bit intellectually unfair to pit one specific person against a bunch of vague groups of people that we generally hold favorable views towards.

In the aggregate, I think one can make the case that the wealthy contribute more to society than the poor, in the form of jobs, capital, etc. How do you determine value to a society other than through what the society is willing to pay? And if those other jobs were worth more to society, presumably we'd pay people more to do them.

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

#68

Post by slpsys »

ryanwaggoner wrote: post #62
javaru wrote: post #14

Earlier quoted context omitted.

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.

Yes, and they're already paying much, much more than the less successful by virtue of the fact that they make more. But by taxing at a higher rate because they have more money, you're effectively punishing them for success. It'd be a like a VC demanding that if you exit at $10m, you owe them $3m, but if you exit at $1b, you owe them $500m.

Except that example assumes perfect fungibility. There's no guarantee PayPal would be a huge company if it were founded in England, Ireland, et al.

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

#69

Post by ryanwaggoner »

bwh2 wrote: post #31

Doctors, lawyers, and other paycheck people making $250k pay around the 35% rate. They get hit hard. Meanwhile, professional investors earning the same amount pay the capital gains rate of 15%, which is less than a paycheck family earning $80k. I don't want paycheck people to pay more taxes, I want the capital gains rate to go up.

Yeah, let's disincentive the wealthy to invest in new companies that create jobs during a recession. Excellent.

I much prefer the idea floated to ditch capital gains altogether for small companies.

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

#70

Post by rbranson »

ryanwaggoner wrote: post #62
javaru wrote: post #14

Earlier quoted context omitted.

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.

Yes, and they're already paying much, much more than the less successful by virtue of the fact that they make more. But by taxing at a higher rate because they have more money, you're effectively punishing them for success. It'd be a like a VC demanding that if you exit at $10m, you owe them $3m, but if you exit at $1b, you owe them $500m.

You aren't punishing them for success. For a whole lot of reasons, the fact of the matter is, the value of individual units of money (one dollar) DECREASES non-linearly as your personal supply increases. When you were making $50k/yr, you'd probably be quite careful with how you allocated $500, because it represented a sizable chunk of your time. Now that you make $5m/yr, $500 is literally worth to you what $5 was when you were making $50k/yr. Throw away money.
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