Tuesday, March 03, 2009

"Dodging" is for Tim Geithner, not for honest Americans

I love the negative spin by ABC news when they pose a question to readers about Obama's proposed tax increase on those making over $250,000 (via Michelle Malkin) :

Lawyers, dentists and entrepreneurs are among some high-earning professionals brainstorming ways to decrease their pay to dodge [my emphasis] a proposed tax increase on incomes over $250,000.

Is it fair for people to reduce high salaries to sidestep President Obama's tax proposal?


Last time I looked, involuntary servitude was outlawed by the Thirteenth Amendment (but maybe not for long!). No one in the US (yet) can be forced to work just so they can keep paying money to the government and programs they may not want to support. I remember reading an article about an artist who decided to cut back on his hours and live on almost nothing because he did not want to pay taxes to support the war in Iraq under Bush. The article never questioned whether what this man was doing was "fair" or constituted "dodging" taxes.

Now the tables are turned and there are Americans who do not want to support Obama's socialist agenda or who simply do not want to work more for less and less money.

It is their right. We must fight to keep it that way.

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101 Comments:

Blogger Roman Wolf said...

Of course the libs in the media are trying to defame these people...because unlike a mere starving artist, these people make serious money. Money they need to push through their agenda.

"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands." - Learned Hand

Of course rich liberals are some of the most guilty of using tax shelters(The Kennedys) or dodging taxes(many of Obama's nominees to appointed office) while they tell others that it's "patriotic" to pay more taxes. Good thing the courts disagree with this liberal train of thought(but for how long can we hope for that?).

7:12 AM, March 03, 2009  
Blogger Brett Rogers said...

If Liberals were really serious about "fairness," they would not just label "rich" as high-income earners, but those who are wealthy. Of course, there's no talk of a wealth because then too much old money (Kennedy, Rockefeller, etc) would be under assault.

High-income folks are engines of productivity. High wealth folks are the true upper class. The crazy thing is that most lower-income folks should be upset with those rich in wealth, whose money is untouched by taxes because it's no longer income. But the elites have fraed the "rich" label in such a way as to avoid any cry to touch their old money.

Clever straw man, that.

The better thing is for the government to leave our money alone, but if high-income folks are fair game, why not the idle wealth folks? At least the former are productive...

7:22 AM, March 03, 2009  
Blogger Cham said...

I'm not planning to read the article. I completely believe that if you don't want to pay lots of taxes you have the right to reduce your work hours to avoid it. Go for it, Republicans, Democrats, Conservatives, Liberals, everyone has the opportunity to do this. It's your right as a citizen and tax payer.

7:22 AM, March 03, 2009  
Blogger br549 said...

"Why kill yourself working if you're going to give it all away to people who don't work as hard?" Or won't.

If we all go Galt, they'll just continue to lower the bar. If you'll remember, they already have. They just aren't saying so anymore. Also, the 13 bucks we're getting back every week are going to come out of next year's taxes. The rates aren't changing to suit the 13 bucks.

The first paragraph has been my feeling since this crap came about. Trust stated quite a while ago there are people who have never been slaves that want retribution from people who have never owned slaves. I'm Irish - American (humor!). My "ancestors" didn't hit Boston until after the civil war was over. I don't owe anything to anyone beyond my fair share - as earned right here, right now, on a daily basis.

If one lives here, Obama, one has "skin" in the game. Even if you only make a buck, some of it needs to go in the pot. It's up to the individual to be worth more, if he wants to get paid more.

7:24 AM, March 03, 2009  
Blogger Helen said...

br549,

"If we all go Galt, they'll just continue to lower the bar."

Exactly, and then many more Americans will be angry, not just the 5% making over 250,000 who are labeled as evil. When more people are hit with higher taxes, then maybe they will start to wonder why they voted for this guy, or at least they will share in the responsibility for their decision.

7:29 AM, March 03, 2009  
Blogger JG said...

I agree that "wealth" should be taxed and not income. People earning an income are productive and creating jobs, people with "wealth" but without earned income are not producing anything and a whole lot of them are only there because of lucky circumstances in life (such as the foresight to pick the right parents before you were born).

The second point is that people with "wealth" should be taxed so that it hurts them the same as lower-wealth people. Any tax at all on a father of four who earns $50,000 per year is going to hurt; the equivalent hurt for a trust-fund guy may be to take away 3/4 of his money.

The only problem with taxing "wealth" instead of income: That pesky Constitution.

7:31 AM, March 03, 2009  
Blogger Helen said...

JG,

Taxing wealth is outrageous and luckily, at this point, against the law. At some point, the trust fund guy's father or grandfather or mother, grandmother etc. made that money. He or she is free to give it to anyone they like. You seem to think otherwise. Get over it.

7:57 AM, March 03, 2009  
Blogger James said...

Tax avoidance is legal, per the Supreme court, tax evasion (Geithner's crime) is not.

Anyone may structure their affairs to minimize taxes (avoidance), deliberately misreporting (evasion) is unlawful.

ABC should know the difference.

8:05 AM, March 03, 2009  
Blogger JG said...

"At some point, the trust fund guy's father or grandfather or mother, grandmother etc. made that money."

---

Yeah, but that person is probably dead now. If I had the choice of taxing a person who earned it, or a person who didn't earn it, guess who I'd pick. And so would any other fair person.

"Get over it."

Any particular reason for your smart mouth?

Am I somehow hitting a vulnerable area here when I talk about people who didn't earn their own money?

Learn a bit of politeness.

8:05 AM, March 03, 2009  
Blogger JG said...

Heather Mills was NOT taxed on her windfall settlement from Paul McCartney. She did not earn that much money by being wined and dined for 4 years, all while being an utter spoiled brat and bitch to Paul.

She was not taxed.

On the other hand, a father of four who works 10-12 hour days, who does nothing else but hard, grueling work, and who makes $50-60 thou a year, may be taxed up the wazoo.

Anyone really thing that's fair?

If I had to choose between taxing a person who earned it and a person who didn't earn it, I would pick a tax on the person who didn't earn it.

8:08 AM, March 03, 2009  
Blogger Helen said...

JG,

"Learn a bit of politeness."

Agreed, but you should take your own advice, you have been fairly rude to others here lately. Perhaps I am just responding to that.

8:08 AM, March 03, 2009  
Blogger fred said...

In fact, Obama merely restoring what Bush had put in place to help the high earners. If it is servitude to work for that level of tax money, then it is servitude to work for any level of tax money.

The reality is that many high earners dodge tons of tax money while those with much less income have simple forms and very few possible deductions and thus pay what the tax code calls for...
the argument that I owe because now I will get a tax that I had dodged so I will work less means that others will enter that field because there will be more opportunities for them: dentist will work fewer hours? Ok, let new dentist go into his town.

You might better suggest a different form of taxation to replenish the empty coffers that all our states and the nation now has. a form you consider fair to all people and not just the folks making over 250,000...

8:21 AM, March 03, 2009  
Blogger Larry J said...

My wife used to work for a gifted oral surgeon. He could've easily earned twice the income but choose to take off several months each year because it simply wasn't worth it to work so hard only to get slammed with taxes. He retired young, too. I predict a lot of higher income people will reconsider working 60+ hours a week just to pay higher taxes, especially if they're self-employed. The earlier commenter is right, though, in that Congress will simply lower the bar to $200,000 a year or less. Before long, anyone making over the federal poverty level will be considered "rich" and taxed accordingly.

8:25 AM, March 03, 2009  
Blogger javadoug said...

HELL YES it is right for people to avoid high taxation, in fact, it is their patriotic duty to keep government small, as was the goal of our founding fathers. To maintain the republic, as it stands, we must resist ALL attempts at moving left towards democracy and oligarchy!

8:32 AM, March 03, 2009  
Blogger MJ said...

Fred's pretty funny. It never occurs to him that the solution to "replenish the empty coffers" is to quit emptying them in the first place.

He's also wrong suggesting that high income earners pay a lower rate because of deductions. The top 1% and top 2-5% pay 22.8% and 17.5% average rates, as compared to 12.6% population average and 3% bottom 50%. Someday liberals will have to educate themselves instead of relying on discredited liberal talking points.

Source: Internal Revenue Service, http://www.irs.gov/taxstats/indtaxstats/article/0,,id=133521,00.html ("Individual Income Tax Returns with Positive Adjusted Gross Income (AGI) Returns Classified by Tax Percentile - Early Release")

9:06 AM, March 03, 2009  
Blogger Rob Fedders said...

Progressive taxation, wealth taxes and inheritance taxes are all the creation of Karl Marx. There is a reason for that - they are anti-capitalist, and thus, anti-civilization.

The best taxation would be a consumption tax, based upon what you spend. This way, if it currently costs you $3,000/month to live, add a 33% consumption tax on everything you spend, and you come to $4,000/month in expenses - BUT, you pay zero income taxes.

This encourages savings and it also encourages people to work harder. (Your "consumption expenses" can be fixed by your own accord - and once you earn more than your consumption, you are encouraged to work more and more, because it ALL becomes savings). Once people have some real savings/capital behind them, they generally put that money to work... it's called capitalism... because it's hard to be a capitalist if you don't have any capital.

Another proper form of taxation is a flat tax. Before 1999, I believe Hong Kong had a 15% flat tax. Didn't matter if you made $10,000/yr or $1,000,000/yr - you paid 15% tax. The result? Lots of people were motivated to earn more and more, and they had one of THE most vibrant economies that ever existed. (15% is perhaps a little low to fund a large Western country, given current gov't wastefulness... 33% flat tax might work, and still leave in the motivation factor).

The people would wake up right quick to this Marxist scam of progressive taxation if a person earning $25,000/yr had to pay $1.00 for a tube of toothpaste at Wal-Mart, while a person earning $250,000/yr had to pay $10.00 for the same tube of toothpaste... what's the difference?

Also, inheritance tax (49% here in Canuckistan) is considered anti-civilization specifically because of its relationship to men... after mid-life crisis/andropause, what is it that keeps men getting out of bed in the morning? It is the motivation to provide a better future for his offspring - often by creating vast amounts wealth which he can pass on to his OWN children... that's why men in their 50's and 60's (who could easily retire earlier) feel
motivated to work and continue to create wealth.

Also, keep in mind another government scam - in regard to GDP figures:

In our Marxist progressive taxation scam, the government requires all kinds of hoops and crap for the people to jump through - which is why we hire extremely expensive accountants and tax lawyers (both personally and commercially). Now, professions such as these DO NOT produce wealth for the country, in fact, they represent EXTRA taxation... but, the government includes the "products created" by these professions as part of the GDP - which it isn't... because they are a net drain, and really produce nothing. The same goes for all the other myriad of profession that are related.

If there was a 33% consumption tax or a 33% flat income tax (business tax etc. etc), all of those professions would just "poof" disappear. Why pay $90/hr to an accountant when you can stop in at Walmart and buy a calculator... or, use pre-baby boomer math, and a pencil and paper...

Now THAT would be some stimulus, eh?

Because it's hard to be a capitalist if you don't have any capital.

9:34 AM, March 03, 2009  
Blogger Brett Rogers said...

I tend to think that if we threaten a wealth tax as a matter of fairness, then maybe the wealthy wouldn't think higher taxes for the "rich" are such a good idea.

9:39 AM, March 03, 2009  
Blogger Brett Rogers said...

Rob Fedders,

Agreed, a consumption tax certainly puts it front and center for everyone. It's a great way to level the playing field and to keep taxes low.

But then the wealthy won't go for it, which means that the politicians in their pocket won't do it and it will never become law.

Find a way to target the wealthy who buy the politicians to drive the tax rate lower, which is why I support a movement for a progressive wealth tax beyond an income tax. I don't believe in either, but it should excite enough of the leftist base that the leftist wealthy will stop believing that taxing high income earners at unproductive levels is a good idea.

Or, it may encourage them to pull a U2 and become citizens in another country with lower tax rates...

Capitalize on hypocrisy and we'll achieve our goals.

9:46 AM, March 03, 2009  
Blogger JG said...

A "wealth tax" (as opposed to a tax on the earnings, i.e. interest, off that wealth) would be an uphill battle because it is clearly unconstitutional. There would have to be a whole constitutional amendment process and that ain't gonna happen.

10:03 AM, March 03, 2009  
Blogger I R A Darth Aggie said...

When more people are hit with higher taxes

Ah, if that where true. Oh, it will be, but they'll more likely be hit with unemployment first, when their "evil" employer decides to cut back on the business so there's a lesser tax burdern on him/her.

It's gonna be a bumpy ride. Please fasten your seat belts. It isn't the time to assume the position. Yet.

10:11 AM, March 03, 2009  
Blogger Brett Rogers said...

JG said, "A 'wealth tax' (as opposed to a tax on the earnings, i.e. interest, off that wealth) would be an uphill battle because it is clearly unconstitutional. There would have to be a whole constitutional amendment process and that ain't gonna happen."

Aw, c'mon. You're missing the fun to be had here.

1. Create a veneer group called TaxTheWealthy.org. Have it list the wealth owned by John Kerry, Bill Gates, Mark Cuban, Hollywood, Kennedy family, etc. Fake the outrage, and target it to leftist groups.

2. Make it an issue of fairness, and promote a progressive one-time taxation on wealth. It's patriotic, don't you know... this country has been good to these people - certainly these "life's lottery winners" can tear a page from Joe Biden and make it their civic duty to cough up some of their wealth at the same rates Obama proposes. Except instead of $250,000, make the 39% rate applicable to anyone with $25 million or more.

3. The money would be used to help the poor, the foreclosed, the unemployed.

It shouldn't be too hard to get the leftists excited about this. They don't care about the constitution. It's a living document, I hear. Obama's our newest founding father. Hope and change!

No conservative or libertarian would go for this - that's not the purpose. We actually care about the constitution. It's to divide the left and the hypocrisy of progressive income taxation and fairness. Therein lies the fun to be had! The rest of us can sit back and pass the popcorn.

10:28 AM, March 03, 2009  
Blogger TMink said...

"Is it fair for people to reduce high salaries to sidestep President Obama's tax proposal?"

This is exactly the wrong question to ask. A more salient one would be to ask if it is fair for people to refuse to work to their abilities, to refuse to raise the children they produce, and refuse to carry their own weight.

If we can once again become a nation of people who find accepting public assistance embarassing, we will be on the right track.

Question the leeches, not the producers.

Trey

10:57 AM, March 03, 2009  
Blogger K-Man said...

Many of us actually pay wealth taxes at the state and local level. They are simply called something else: "real estate tax", "school tax", "personal property tax", etc., and they target specific types of wealth. Some states such as Arkansas tax to this day the value of furniture in one's home, for example.

The kicker is that at one time wealth taxes were viewed as constitutional at the federal level. A famous early case involved a federal tax on privately-owned carriages (Hylton v. US, 1796), which the Supreme Court ruled not to be a direct tax of the type prohibited by the Constitution. Another decision some 100 years later overturned that logic, but it could be resurrected to impose a wealth tax on a federal level one day...

11:06 AM, March 03, 2009  
Blogger K-Man said...

Forgot to mention that many states tax the value of motor vehicles. In Virginia the annual "car tax", often 4% of the value of the car depending on locality, was one of the most hated taxes until relief passed some years back.

11:08 AM, March 03, 2009  
Blogger fred said...

Fred indeed funny: it was Bush , your guy, who emptied the coffers. Bush.
Percentage of Americans making over 250,000 per year? 2%. two percent. 2.
Are you one of them?

11:10 AM, March 03, 2009  
Blogger MJ said...

K-Man - Another example: Florida taxes "intangible assets", essentially stocks & bonds.

11:29 AM, March 03, 2009  
Blogger DADvocate said...

From the same article (a dentist speaking):

"I've put thought into how to get under $250,000," said Poczatek. "It would mean working fewer days which means having fewer employees, seeing fewer patients and taking time off."

"Generally it means being less productive," she said.

"The motivation for a lot of people like me – dentists, entrepreneurs, lawyers – is that the more you work the more money you make," said Poczatek. "But if I'm going to be working just to give it back to the government -- it's de-motivating and demoralizing."


This reminds me of the luxury tax on yachts from years ago that nearly put yacht builders out of business and cost many jobs. The wealthy don't have to buy yachts.

And, the wealthy don't have to make large sums of money just to give it to the government. Atlas is shrugging.

Obama's plan will also cause a health care crisis because doctors, dentists, etc will be working fewer hours thus making it more difficult for patients to receive treatment.

A local radio talk show host suggested that Obama want as many things to fail as possible so he can nationalize and socialize them. The sooner Obama does it the more he can blame Bush, a la fred the witless who doesn't know the difference between servitude and involuntary servitude.

11:37 AM, March 03, 2009  
Blogger Sparks said...

JG, a wealth tax is pure socialism.

So the guy making 50k doesn't get taxed because he has no accumulated wealth. The guy that has accumulated or inherited wealth (which was accumulated and then gifted to him) will be taxed at 75%. Great... So now his $100M net worth is reduced to $25M... Which leaves him still wealthy... So I supposed next year when he files, he'll be hit with another 75% tax... So now he's left with $6.25M... Gee, that still seems like an awful lot of money, but we'll give him a break. Under $10M in wealth now, he falls into the 50% bracket on next years filing.

So what's this wealth tax about... Everybody asymptotically approaches equality in wealth (socialism?)

Is there motivation to save? Of course not, because the government will take care of you.

Is there motivation to produce? Why? Wealth isn't rewarded. If I make more money than I actually "need", then the rest will go into savings... Savings leads to wealth... Wealth lets to the government stealing it from me... Thus I will rely on the government for my retirement...

America starts looking an awful lot like Cuba... We'll all be driving 50 year old rusty cars, living in shacks.

JG, what you're proposing is a dumb idea. You're idea that people having a lot of money while others don't have a lot of money is "unfair" is simply naive.

11:55 AM, March 03, 2009  
Blogger Sparks said...

This comment has been removed by the author.

11:55 AM, March 03, 2009  
Blogger JG said...

Look, here's my idea in a nutshell:

People who produce something for the world, people who work, should keep the fruits of their labor.

If you are going to tax people at all, tax the non-productive people who have wealth. Plenty of people have wealth without having earned it (I'll be glad to elaborate, if you want - hint to start you off: Heather Mills has not earned $50 million in her life).

Now if you are in favor of an elitist or feudal system, where people own others and boss others around solely based on birth into a particular family, if you are in favor of money flowing to people who didn't earn it, and money being taken away from people who DID earn it, then you are not going to like my idea.

Why not let people who produce things simply keep the stuff they produce? If you HAVE TO tax anyone, and I don't like taxes either, tax the people who are sitting on money they didn't earn.

12:10 PM, March 03, 2009  
Blogger Rob Fedders said...

The first "cost-cutting" I personally would be enacting is to lay off any employees who support Socialism in any minor way, shape or form.

I openly discriminate against those who discriminate against me - especially those who feel discrimination against white, heterosexual males is a "good thing."

To quote a capitalist... "You're fired."

What people really have to do though, is to start realizing that it is no longer "a penny saved is a penny earned." Once you get into the realm of 50% taxation like in Canada, it becomes far more accurate to say that "a dollar saved is worth two dollars earned." (In socialist Europe, taxation is coming to 70%... in Soviet Russia, it equated around 90%)

When you get into this frame of mind, it suddenly seems a bit more worthwhile to cut back on your payable work hours, and spend a bit more time producing non-taxable vegetables in your back yard... or, sewing your own shirts... or building your own furniture. (Every $100 worth of value you create, would take you $200 to earn - get taxed - and then spend).

The home used to be a place of economic production - it used to actually make things. It can do that again quite easily, especially if people start going John Galt.

Also, as per Randian ideology... don't feel obliged to donate to charity just because you are wealthy. You are already giving enormous amounts of "charity" with your tax dollars. You needn't give anymore to ease your conscience.

Giving 10% of everything you earned to charity used to be considered the good rule of thumb - AND the proper way to become wealthy (Re. Og Mandino/The Greatest Salesman in the World). This is one of the reasons why the US Founding Fathers said that their governmental system was based upon the morality of the Bible... because freedom can only be maintained in direct relation to the personal morality we are willing to place upon ourselves... the less personal morality = the more government intervention. They are directly related.

The Good Samaritan was "good" because he stopped along the path and GAVE OF HIS OWN ACCORD.

If the Samaratin had stopped someone else along the path, pulled out his sword, and FORCED the other person to give... then he would have been called "The Crap-ass Samaritan."

In the Communist State of Canuckistan, after the Tsunami in South East Asia, the government gave what they felt was a proper amount of aid... the people however, kept on giving their own money, until it FAR exceeded what the government had given... so... to not look cheap, the Canucklehead government said that OBVIOUSLY the people had spoken, and wanted to give more... SO, they pledged to match each dollar that Canadians personally donated... basically saying: "OK, if you feel that giving $20.00 from your right-side pocket is the proper amount, then we will reach into your left-side pocket and match that - with YOUR money... you felt $20.00 was right - we agree! So now you're paying $40.00"

Governments are filled with jerk-offs.

Here in Socialism-North, the general rule is that EVERYTHING which the government touches costs 30% more than what the private sector can accomplish.

This is what happens when you have vast governmental departments that are concerned with SPENDING money to ensure that they get allocated the same budget next year, rather than using money and capital to be the most efficient. No private enterprise could survive on the premise that they MUST spend/waste as much money as possible, in order to get more money next year, and yet, this is the general rule in government.

I could tell you personal stories of how this works... but, when I worked for government, I actually had to swear on the Bible and sign a document stating that I would not publicly reveal the inner workings of their (wasteful) departments... I kid you not.

I did not work there long... it disgusted me intensely.

12:15 PM, March 03, 2009  
Blogger JG said...

If you let people who produce things in the world KEEP the money they earned, that would be a tremendous stimulus for the economy. It would motivate people.

If you shift the current tax on producers (i.e. the income tax) to a tax on non-producers (i.e. some kind of wealth tax), is anyone afraid that the non-producers are going to quit their non-production? LOL

Aside from being a stimulus for the economy, there is a FAIRNESS aspect. I can't even fathom why people would argue in such a feisty way about non-producers keeping their money, but producers being taxed instead. WTF? It is simply FAIR to let someone who WORKS keep his money. Tax the idiots who are sitting on money without having earned it.

12:15 PM, March 03, 2009  
Blogger JG said...

"You're idea that people having a lot of money while others don't have a lot of money is "unfair" is simply naive."

-------

That's not what I'm saying at all and that's not what I think at all.

Some people earn their money - and they are taxed every step of the way. Others simply *get* their money - and they are not taxed at all. Bill Gates earned his money, Heather Mills didn't. The first Hunt (H.L. Hunt) earned his money, his idiotic progency (the Hunt brothers) who squandered it all trying to corner the silver market did not earn their money (and lost it).

I've come to see that people intentionally misrepresent what I say, though. I can't understand why, but I can talk until I'm blue in the face and people still overlay their ideas of what they *think* I'm saying.

Let an entrepreneur keep his money. If you are going to tax ANYONE, tax scum like Heather Mills.

12:24 PM, March 03, 2009  
Blogger DADvocate said...

JG - if the world was fair, birds wouldn't eat worms.

If I work my butt off, produce and whatever, why can't I give that money to my children and grandchildren? Because it's not (best whiny voice) fair? It's more motivating to me to leave something to my children, to give them a head start in life or make their lives better than to earn the money just for myself. That's totally selfish and greedy. Frankly, your arguments are childish.

12:30 PM, March 03, 2009  
Blogger JG said...

Well, don't worry too much DADvocate. No one is going to be implementing my plan in the near future.

But wishing for an end to a tax on my WORK (i.e. the income tax), with a desire to shift it to the non-productive dolts of society, is not really childish.

It's the same kind of concept involved when people wanted to do away with the system of a small number of landowners who passed everything on to their kids - keeping a lock on everything (that was called "feudalism"). And the lords had the same argument, that they wanted their kids to have an advantage over others.

So you go from a guy who conquered land (a King at the top) to his grandkids who were petty, stupid and mean. Wise and productive people were locked out, but the great-great-great-great grandkids (like the Windsors) are still kicking, happily with no real power anymore.

1:02 PM, March 03, 2009  
Blogger JG said...

The world seems to have its own mechanism for solving this anyway - it's said that the family fortune is lost by the third generation, and I think there's some truth to that.

Dad busts his butt, his son gets too much too quickly and winds up in a rehab center, doing nothing for the world, trying to get free of drugs.

1:05 PM, March 03, 2009  
Blogger John said...

The moral aspects of this aside, I don't see how it could practically work. When your income rises into the next tax bracket, only portion ABOVE the cutoff is taxed at that bracket's rate. The income that falls below the cutoff is taxed at the rate of the lower bracket. So there's no way your after-tax income would actually fall by being in a higher bracket. That's why the tax forms come with tables, because it's not just a single calculation to figure your tax.

If they changed the law so that your entire income was taxed at the rate of your hightest bracket, this would make sense.

1:07 PM, March 03, 2009  
Blogger Roman Wolf said...

JG,

You just don't get it do ya? A wealth tax would give incentive to just spend money. Your idea would crash capitalism because it would give no incentive to invest one's money instead of just spending it. Capital is needed for Capitalism to work. You'll basically replace a bad tax(income) with a worse tax(wealth). Neither is a good tax in any sense.

For instance, a man works to give his kid a ten million dollar fortune. The kid doesn't do anything with it but spend it...never working for himself. You'd say he does nothing, well, you're plain out wrong. Most people keep money in banks(conservative) or in various investment instruments. Those banks use the money to make loans(ideally good loans) or companies spend the capital to develop technology, ect.

Let's say there is a 100% estate tax. Now the father has no incentive to save the money and invest it and instead buys himself a personal hovercraft and other useless consumer crap.

So, while you may believe you're making incentives for work you're taking away something more important, free capital to invest in new technology and other things businesses need.

This doesn't even gets into practical considerations of how to execute such a tax.

John,

Well, it's quite simple really. Some people don't understand how the income tax works, some don't want their money going to socialist projects, and some(with the increased taxes) don't find any incentive to work beyond the quarter million mark anymore.

1:46 PM, March 03, 2009  
Blogger DADvocate said...

The world seems to have its own mechanism for solving this anyway - it's said that the family fortune is lost by the third generation, and I think there's some truth to that.

JG - This probably happens much of the time. So quit being jealous because Johnny has more toys than you.

You're comparison with feudalism doesn't hold water. In our current system a person with ambition and a work ethic can go from the dirt poor son of an immigrant to a billionaire. Ask Cincinnati's richest man and one of the richest in the world, Carl Linder, Jr.. This is the American Dream. What you describe is the Communist Dream. We all know how that has turned out.

2:45 PM, March 03, 2009  
Blogger fred said...

I love the American Dream. On the one hand, it gave a vet like me the G.I. Bill and I went on to college. My father was a high school drop out. On the other hand, all those auto workers etc out of jobs they will never get back is not what they had in mind for the Am Dream, nor the thousands who had health care but lost it or had but lost pensions etc.
So which Am Dream is it you have in mind? The one you would like to believe rather than what is also going on?

3:03 PM, March 03, 2009  
Blogger Rob Fedders said...

The best way to keep a herd strong and healthy is to let the weak ones get taken by the wolves.

It's cruel and harsh.

And it's also the way the real world works.

The best way to kill an entire herd? Force the strong to be able to only run as fast as the slowest. (Btw... who do you think the wolves would prefer to eat the most? The young fast ones, or the old sick ones? - they are all running at the same speed).

Probably one of the best lessons that the Bible teaches is that evil is around us. We must resist it, we must fight against it... but WE are not powerful enough to defeat evil. We must live within those parameters.

Those who think they can create a utopia by defeating nature are, in fact, people who believe they are God themselves.

Iccarus and the sun, anyone?

3:22 PM, March 03, 2009  
Blogger James said...

There is a wealth tax, its called the estate tax. And, should you try to minimize it some by giving your estate to, say, your grandchildren, you're hit with an additional tax called the GSTT or Generation Skipping Transfer Tax. That's designed to hit you for attempting to give the government one less opportunity to take it from you.

This BTW is how the soak the rich crowd has killed the family farm.

Obama, Pelosi and Reid; proudly paving the road to hell.

3:28 PM, March 03, 2009  
Blogger Larry J said...

I read several years ago that when the 16th Amendment authorizing an income tax was being proposed back around 1913, it was sold as a tax on the rich and would only affect the top 2% of wage earners. A few years later, America was involved in WWI and the "tax on the rich" income tax was expanded to cover virtually everyone.

Back in the 1960s, someone learned that a couple hundred wealthy families were taking advantage of the tax code to avoid paying income taxes. Congress passed the Alternative Minimum Tax to make sure that couldn't happen again but failed to index it to inflation. As a result, another "tax on the rich" ended up hitting millions of middle income families.

Beware of any politician promising a tax on the rich. All too soon, you'll find out that it'll hit you, too. It's the worst sort of political demagogary.

4:00 PM, March 03, 2009  
Blogger DADvocate said...

fred - again, you fail to look at the whole picture and face the truth but rather babble liberal talking points. The auto workers dug their own graves by demanding too much and failing to produce a good enough product. These guys make more than I do and have much better benefits and still whine.

James - good point about the family farm. My late father-in-law grew up dirt poor in rural Kentucky. He made is first dollar selling a racoon skin at at "Court Days" in Carlisle, Ky. Eventually, through working 12-16 hour days all his life he owned 3,000 acres and was worth about $10 million when he died.

After the estate is settled, taxes payed, etc, no farm land will remain in the family although 3 of his sons continue to farm.

4:38 PM, March 03, 2009  
Blogger Larry J said...

Eventually, through working 12-16 hour days all his life he owned 3,000 acres and was worth about $10 million when he died.

Your late father-in-law worked hard all his life but apparently didn't make enough to buy a high-priced lawyer to protect his estate. That happens a lot to small business owners (and that includes farmers). The truly wealthy employ lawyers to protect their assets.

4:52 PM, March 03, 2009  
Blogger RR Ryan said...

Did someone miss the point that all that inherited money sitting in stock and savings accounts is providing backing for loans? Sheesh! And it's not paying that much in interest.

5:03 PM, March 03, 2009  
Blogger DADvocate said...

Larry - he had lawyers but things are never as simple as they seem they should be. But most of his worth was tied up in land which is hard keep when settling estates.

5:11 PM, March 03, 2009  
Blogger Larry J said...

But most of his worth was tied up in land which is hard keep when settling estates.

The same thing happens to small business owners whose net worth is tied up in equipment instead of cash assets. Farmers like your father-in-law may be paper millionares but they can only get their hands on the money by selling their most important asset, their land. This is especially true when development drives up the cost of land way beyond its value as farmland. Your father-in-law would've had to sell the farm (or large chunks of it) in order to have the cash to save it. Catch-22, anyone?

5:50 PM, March 03, 2009  
Blogger Steve J. said...

Progressive taxation, wealth taxes and inheritance taxes are all the creation of Karl Marx.

Adam Smith favored progressive taxation.

6:07 PM, March 03, 2009  
Blogger Steve J. said...

Eventually, through working 12-16 hour days all his life he owned 3,000 acres and was worth about $10 million when he died.

After the estate is settled, taxes payed, etc, no farm land will remain in the family although 3 of his sons continue to farm.


Another Fairy Tale. The exemption will be over $6 million by then and there are several ways to avoid taxes on the remainder.

6:09 PM, March 03, 2009  
Blogger Andy Freeman said...

> Another Fairy Tale. The exemption will be over $6 million by then and there are several ways to avoid taxes on the remainder.

If the estate tax isn't collecting any money, then there's no reasonable objection to repealing it....

I note that the estates of the very rich, Buffet, Gates, et al, are not taxable. Buffet, however, supports the estate tax. One of his companies sells insurance to folks so they can pay estate taxes....

6:40 PM, March 03, 2009  
Blogger Rob Fedders said...

Steve J.,

Adam Smith argued that there should be increased taxation upon housing rents, that the rich ought to pay more taxation on their luxurious housing than the poor, and that the rich ought to bear more of the tax burden than the poor than just an equal proportion of the tax burden.

So... he is saying that if there is a tax bill of $100,000 between 100 people, it should not be that all 100 people equally pay $1,000/person.

Thus, when you get a person who pays property tax on a $1,000,000 house, he pays more into the kitty than the person paying property tax on a $100,000 house... similarly, if there is a consumption tax, a rich person who is spending $25,000/month, will shoulder more of the tax burden than a person spending $1,500/month... and also, if flat taxed, a person earning $250,000/yr @ 15% flat tax pays more taxes than a person earning $25,000/yr @ 15%... and yet, they all only receive the same amount of benefits, therefore, it is justifiable for the rich to contribute more to taxes.

One of the justifications is, btw, that since the rich man has more to be protected, he ought to be contributing more to those forces that protect his wealth.

Karl Marx, on the other hand, argued for OUR kind of progressive taxation, which penalizes people for trying harder, and is specifically DESIGNED to be a de-motivator... to destroy capitalism, reduce mankind to a tabula rasa state, whereupon mankind can be "re-evolved" into a new form of mankind which will transcend anything previously known... in other words, Karl Marx speculated that by removing our desires, we could be re-evolved into becoming gods, and create a Heaven on Earth.

6:51 PM, March 03, 2009  
Blogger Thomas said...

A consumption tax has the advantage of taxing people who manage to finance their consumption without realizing taxable income (i.e. by borrowing against appreciating assets), and so accomplishes the equitable purpose of a "wealth tax" without actually imposing one.

7:00 PM, March 03, 2009  
Blogger Rob Fedders said...

The 10 Planks of the Communist Manifesto

7:15 PM, March 03, 2009  
Blogger JAL said...

I'm not the best one to comment about tax rates.

But what I will comment on is the evil, ugly class wars the Democrats keep trying to incite and play. Forget the "race" card which they are ready to slide across the table slyly at anyone's hiccups.

They fly the anti-rich flag over and over and over and tell their peons how unfair it is, and that they that they will "fix" that by giving the bad guys' money to the peons.

I, for one, am sick of it.

This is America for crying out loud. If someone wants to make money and it's not illegal -- there is no law, and there should be no law against that -- go for it.

As a lower middle class denizen who has raised some kids who are doing very well, thank you, I marvel at how much money / wealth / opportunity / whatever there is out there.

My kids have worked their butts off doing what they wanted to do. (And at least one of them is still in hock for it.) So now if they get near the magic evil number they have to plan their lives around those of unknown others who didn't take the risks and make the choices and work the hours they did?

It's fabulous that we can change tracks, change occupations, move (you have to register in Germany), attempt, innovate, and even sometimes achieve great things, in this country. I really don't think America needs to be Europe of huge taxes, and lots of government control. Europe tends to be rather static with little upward mobility. Lots of dependence on the government. Shoot, there are places the owner of a business can not work overtime or be open at certain times in Europe. Ha!! Tell that to the immigrant Indian hotel keeper or the Pakistani convenience store (sorry Joe B.) owner, or the Vietnamese fisherman, or once Russian owner of the heating and ventilation company we use.

You who voted for Barack Obama need to ask yourself why you hate the guy who looks for opportunity and takes risks. Sometimes she / he misses, sometimes makes it. But who are you or the Federal government to tell them they're in the cross hairs if they make it and might become "rich."

My husband worked for years at businesses which were started and owned by "rich" guys. And we ate and vacationed and raised kids and paid off a house on that income from they jobs they created. And it was good. And we were never "rich" but we didn't spend our time whining about how they were. That was okay, they made their money. We made ours. That is LIFE.

Obama & Company need to cut out the social engineering crap and put American businesses on their "A" list.

Oh Wait. As socialists and "progressives" that can not be done.

Good lord, I can't believe America is even having this discussion.

I cannot wait until 2010.

7:29 PM, March 03, 2009  
Blogger Flowerdew Onehundred said...

If they fully nationalize health care, I predict mass retirement of older doctors.

Of course, the Obamites will then have to "re-evaluate" that 13th Amendment thing because they will have to draft doctors (back) into practicing.

7:36 PM, March 03, 2009  
Blogger John Shirey said...

I can imagine that someone would want to cut back on work because they have been working too hard or because they have enough money, but just because they want to pay 5% or whatever less in federal income taxes? In any case, so what? If the $250,000 dentist wants to be a $200,000 dentist, that just leaves $50,000 for someone else. "Oh, I'm sorry, Dr. Judy is cancelling your root canal because President Obama is raising her taxes. What, you say she is the only dentist you trust and you would be willing to pay her more than her normal ridiculously high fee to make up for her loss? No, she couldn't do that, it would only help Obama and the Democrats, and she hates them more than she wants to help you. Bye bye." Heh.

7:39 PM, March 03, 2009  
Blogger George said...

Adam Smith favored progressive taxation.

I call BS. Give a citation. I hate the way liberals make up facts.

7:41 PM, March 03, 2009  
Blogger George said...

So now if they get near the magic evil number they have to plan their lives around those of unknown others who didn't take the risks and make the choices and work the hours they did?


----That's me. Make it to fifty have kids in college, try to make enough to keep them in and prepare for retirement and Bam, I'm rich.

Great, Just Great!

7:43 PM, March 03, 2009  
Blogger toaster lover said...

The attempt to forge a paradise out of the here and now has always resulted in worst kinds of hell. See our predicament now, where the socialists currently running the country seek to build their paradise on the backs of the slaves and beggars they're trying to turn us all into.

7:44 PM, March 03, 2009  
Blogger obakasan said...

This is almost as funny as Dianne Feinstein calling gun manufacturers "despicable" for making new gun models smaller to accommodate the reduced ammo capacity her recently-enacted "assault weapon" ban mandated. It's like threatening a motorist for "avoiding the law" by driving one MPH below the speed limit.

7:50 PM, March 03, 2009  
Blogger br549 said...

RR Ryan, I'm with you. The money people borrow doesn't grow on trees. Put your money to work for you, instead of working for your money. That's what it's all about. That's the level of savings one spends his working life to achieve.

People (who still have jobs, anyway) are saving at an increasing rate at this time. There aroma of coffee is in the air! I forget where I heard it or read it. But I can vouch for it. I am redoubling my efforts to save, redoubling my efforts to spend even less. Part of it is because I too could be out of a job in a few months. I have grown children not as far along as me, as far as how much of their income stays, and how much has to go out. So I am concerned for them. I can't worry much beyond that. The rest of you suckas are on your own!

But once again, I am reminded of sitting in an airplane on the tarmac, awaiting take off. The stew starts the speech. They discuss the oxygen mask falling down in front of you in the instance of a cabin breach at altitude. What do they tell you to do??

Put. Your. Own. Mask. On. First.

You sure as hell can't help someone sitting next to you put their mask on if you're passed out too.

I recently purchased a tank of gas. The one before that lasted 17 days. That's pretty damned good, I think. But hell, I've always been cheap. If I ever owned a yacht, it would be a sailing vessel. Power boats were invented for people who aren't really wealthy enough to spend the proper amount of time sailing.

7:54 PM, March 03, 2009  
Blogger MB said...

JAL sez: "My husband worked for years at businesses which were started and owned by "rich" guys. And we ate and vacationed and raised kids and paid off a house on that income from they jobs they created."

----

I'm not sure exactly what you are arguing for, but it sounds like you made your money and got your life paid for the old-fashioned way ... by leeching off someone.

7:57 PM, March 03, 2009  
Blogger br549 said...

JAL for President!

8:08 PM, March 03, 2009  
Blogger Seerak said...

JG: We have a sort-of wealth tax already. It's called "inflation".

8:16 PM, March 03, 2009  
Blogger Seerak said...

If they fully nationalize health care, I predict mass retirement of older doctors.

Of course, the Obamites will then have to "re-evaluate" that 13th Amendment thing because they will have to draft doctors (back) into practicing.


IIRC, they actually did that in Belgium at some point -- they drafted doctors into the army, and ordered them back to work.

8:17 PM, March 03, 2009  
Blogger Nancy said...

It is my understanding that in some states child support payments are based on what the court estimates the father's potential income to be, not the father's actual income. This means that many of these individuals are required to work at the highest paying job possible not the job that gives them the highest satisfaction. In short, the 13th admendment does not apply to non-custodial fathers. Please note that I am not nor am I associated with a non-custodial father.

8:31 PM, March 03, 2009  
Blogger JG said...

Nancy:

Right.

That's also called "imputed income".

Judges will set a child support payment based on an amount that the judge thinks the man can earn. The alternative is to go to jail for contempt, to start with, and later on for felony non-support if it gets that far. You ARE going to work and work a lot.

The bizarre thing is that I have never heard of a judge thundering at a non-custodial woman that she is going to pick up cans on the roadside for the deposit or work 3 jobs if she has to, but she is going to make the payment that was set. So where's this "equality" stuff I keep hearing about?

8:38 PM, March 03, 2009  
Blogger JG said...

As far as I can tell, the system of assigning child support (and alimony) payments based on imputed income (with the threat of jail as the stick) is a pretty direct violation of the 13th amendment.

I also think that requiring people to submit tax declarations - with the further requirement of listing ALL sources of income, legal or illegal, under the pain of perjury - is a pretty clear violation of the 5th amendment, especially since the 16th amendment (the income tax one) COULD be tailored more narrowly so as not to conflict with the other amendments.

But oh well. That's the system and everyone accepts it. I'm not going to rock the boat other than question it on an obscure message board in the Internet.

8:42 PM, March 03, 2009  
Blogger bitsy said...

If you think you are going to escape the Obama tax regime because you make less than $250K then I have a bridge to sell you. Obama's wealth destruction policies will make all of us suffer together.

My husband and I make less than $250K a year; we are going Galt on principle. We refuse to support the moochers who think that 40% of the population should support the remaining 60%.

8:57 PM, March 03, 2009  
Blogger JG said...

If you look around, it's more like 10% are supporting 90%. Aside from all the people on social security disability (working under the table) and other forms of welfare, usually there is a solid earner in an extended family with a horde of people (spouse, children, the odd in-law etc.) all attached to his neck like vampires.

There are people in school (college) to hide out from work, there are people leeching off others, people leeching off the system and on and on.

9:13 PM, March 03, 2009  
Blogger Pissed Off Hillbilly said...

Fred brayed:
"Percentage of Americans making over 250,000 per year? 2%. two percent. 2.
Are you one of them?"

I'm not one of them.
But you know what?
That 2% paid over 40% of all taxes collected.

40%

9:13 PM, March 03, 2009  
Blogger DADvocate said...

Steve J - you're an idiot. How can you claim to have some sort of information on this man's estate? Larry J pegged the problem. None of the original farm will be in any of his children's hands unless they buy it at auction. Unless you have huge amounts of cash, the family farm no longer exists for more than a generation. I don't know the laws and taxes, I just know what I see in this case and others.

John Shirey - people primarily become doctors and dentists because they can make lots of money and have high social status (which generally goes with lots of money). Presently only the best and brightest get into medical schools because the competition is high. The competition is high because for the reasons stated. Take that away and we may have fewer doctors or we may just have fewer competent doctors.

My physician and his wife, who is also a physician, moved here from Canada because of the low rewards for being a doctor in Canada. Yes, most doctors have some professional pride and want to help people but they also want the material rewards for working their butts off for over a decade in school and training. The best and brightest will be doing something else if medical fields don't provide the rewards wanted.

Dr. Judy won't be canceling your root canal, Dr. Judy won't ever schedule your root canal. It'll be someone who ten years ago couldn't have gotten into dental school

9:26 PM, March 03, 2009  
Blogger JG said...

A lot of people here seem to be falling into the "Platonic" error - meaning that they are so fixated on the forms and theories and ways things *should* be ... that they think that's how things ARE.

Lots of people with very fixed notions of economics (whether school economics or their own brand). The problem is that real people in reality don't always behave that way. They really don't.

And then, to top it all off, you have the "told you so" crowd. If a certain politician puts through his plans, then no one will work anymore and I told you so.

Well ... people will generally keep on working. A big-mouth dentist (and: do dentists really earn more than 250k?) still probably has a leeching wife, a leeching ex-wife and some kids to support. So you do what you can.

All these economics experts here are going to tell you "they told you so" with the appropriate eye-roll.

9:35 PM, March 03, 2009  
Blogger Ima said...

I was always confused about European attitudes on money and vacation until recently when I started working closely with a guy from Austria.

It seems in Europe extra vacation time is more valued than a raise simply because taxes don't take 70% of your vacation, while the marginal tax rates do that on money.

That insight made the European attitude rational.

9:49 PM, March 03, 2009  
Blogger omnivorous monkey said...

It's kind of funny from where I sit listening to all these comments about working less to pay less taxes. Many of us should be so lucky as to contemplate this choice. I'm working all the hours I can find (at bugger all wages) just to pay the bills without dipping into savings for my day to day expenses. I'm also burning savings paying former employees cash under the table (<$10.00/hour) to do work on my properties that I don't really NEED and can't truly afford, because they are having their utilities turned off and going to the food bank to feed their children. Probably stupid of me, but my former employees are also friends and decent people. I can't see them without food and electricity if there is anything I can think of to do.

Wealth tax? F*&%k no! I have some wealth, it happens to be illiquid. A "wealth" tax would kill me. Higher marginal rates? No thank you. I still need customers / clients.

I'm OK if things carry on like this for the next ten years. Not good, but OK. Many people I know are wondering where the next month's rent bill are coming from.

Perhaps a little perspective is in order here.

10:54 PM, March 03, 2009  
Blogger randian said...

Cap and Trade is implicitly a tax on everybody, so Obama is already lying about increasing taxes only on people earnings > $250k.

12:13 AM, March 04, 2009  
Blogger crionna said...

Interesting. I've said for a while now that what we really need is a potential based tax plan. We'd test everyone's IQ at a pre-determined age and then set their tax rate; the higher the IQ, the higher the rate. This would adequately punish braniacs who waste time as a waiter while trying to write the rext great american novel, while properly benefiting those who rise above their lack of IQ to do well. So, you Harvard-types can spend your time earning minimum wage working for Acorn if you want, but there'll be no shirking the tax man just because you think you're doing something you think is more valuable than creating income to be taxed.

1:35 AM, March 04, 2009  
Blogger jcr said...

Last time I looked, involuntary servitude was outlawed by the Thirteenth Amendment (but maybe not for long!)

Well, we know that Obama's fascist pig chief of staff, Rahm Emmanuel, has a major hard-on for "national service".

-jcr

2:26 AM, March 04, 2009  
Blogger cubanbob said...

The only thing these democratic thieves will do is take tax avoidance and evasion to new levels. Doctors won't work the extra hours, they will simply take longer vacations. That is what doctors do in Canada. Once they hit the maximum they can earn (the state is the single payer) they stop working. Instant shortages. Or in Sweden, once they cross the threshold, they stop working officially. Barter comes in to play with select patients; a home repair equals a certain amount of care. Both parties keep the taxman out of the picture.

The wealthy will simply take their money out of the country. The Dart family is a famous example. When faced with over a 50% estate tax, they sold of their US interests and moved to Brazil. Saved 5 billion at the time. The only thing higher taxation levels will do is encourage outsourcing. Why manufacture in the US and have the government rob you to support parasites? Become an importer of the same product and control your profit. The government cannot and does not have the ability to know what your true foreign costs are, only the value the importation invoice is declared for. Just happens your import cost is nearly that of the selling price, hardly a profit. Here. But if you happen to own the exporting company and pay the much lower tax rate in the foreign company and never repatriate your profit, the US government is stuffed. Watch every bit of wealth creation that can be exported out of the tax man's hand be exported. And already the Swiss are now getting a backbone about any further cooperation with the US IRS. Their attitude is that foreign tax laws are not their problem, if the analogue isn't a violation of Swiss law, then they will not cooperate. Watch and see as the UBS deal is the last one they ever do and if foreigners want to flood their banks with cash, as long as its not traditional criminal money, they will be quite happy to take it. And so will an increasing number of countries. Remember the majority of the wealthy are small to medium sized business owners. They can very creative in inventing imports. And that includes services.

Why should the wealthy pay more in relative or absolute terms than the average person? They get the same single vote. Or should the vote be weighted proportionally to the taxes one pays? Why not progressive voting? The more you pay, the more your vote counts. Seems fair to me. Why should a welfare parasite even be allowed to vote? The government does nothing more for the wealthy than for the poor. The protections offered to the wealthy are the same as those who pay nothing. Indeed the wealthy pay taxes and receive virtually nothing for what they pay. The rich can live without medicare or social security, but they pay disproportionately more than they will ever receive for those 'benefits'. They don't get food stamps, welfare benefits, medicaid, disability and so on. Why should they pay for other peoples problems? Are those people doing the wealthy a favor? Are they compelled to render them a service in exchange? The FBI does not offer special security to the rich, the highways do not have a wealthy only lanes. The military does not offer special VIP protection for the wealthy in the event of imminent attack. So why should they pay more? If the theory of government is that everyone benefits equally, then everyone ought to pay equally.

The notion of the government using the power of punishment to steal from John to subsidize Paul is wrong on its face. Indeed the majority of what the government spends other than on national defense and law enforcement and essential regulatory rule making and debt service is highly dubious of what is the proper role of government.

3:01 AM, March 04, 2009  
Blogger br549 said...

Plus, cubanbob, Brazilian women are babes! Have you seen what the bikinis in Brazil are like? Hoowah!
And summers are longer in the southern hemisphere!

5:34 AM, March 04, 2009  
Blogger JG said...

cubanbob:

Philosophically, I make a distinction between people who earned it and people who didn't.

If Rick the plumber starts his own contracting company and then grinds out a few million over 40 years of hard work, I say let him keep every penny of that.

On the other hand, I don't care what happens to people like Heather Mills (to use a perfect example of someone who didn't earn it).

And the joke is that Rick is taxed up the butt, in addition to probably supporting a bunch of people around him, and Heather wasn't taxed a dime.

The other theory I've heard about money transfers in society is that you are buying a bit of security. If welfare didn't exist, you may be faced with a lot more violence in society as attempts are made to simply take it away from you, or there is vandalism and rioting out of frustration. Kind of a cynical idea, but there you have it.

7:12 AM, March 04, 2009  
Blogger TMink said...

Cubanbob wrote: "Why manufacture in the US and have the government rob you to support parasites?"

I think it has to do with how irritating the parasites are, and how many of them there are. A small parasite load is no problem, the host does not even really know they are there. That makes sense, as irritating parasites lead to measures to eradicate them.

There are parasites, then there are viruses. I think we have moved from the former to the latter. Some viruses kill the host.

Trey

8:22 AM, March 04, 2009  
Blogger Larry J said...

Well ... people will generally keep on working. A big-mouth dentist (and: do dentists really earn more than 250k?) still probably has a leeching wife, a leeching ex-wife and some kids to support. So you do what you can.

General dentists in most locations probably don't make that kind of money but specialist like periodontists and oral surgeons can. About 10 years ago, my wife worked for one of the best periodontists in the state. Even then, he decided to take off several months each year because he didn't see the point of working all those extra hours only to end up paying so much of it in taxes. In Colorado, state taxes are tied to the federal taxes, so when the feds increase their tax rates, the state gets a free tax increase as well. Add in the cost of self-employment taxes and the total tax burden on a high earning self-employed individual can easily get to the point where they decide it isn't worth it any more.

Someone mentioned that this would open up opportunities for other dentists to do the job. That's true in a way, but they weren't as good as the man my wife worked for. It's like getting cut-rate lasic. Sure, there are cheaper doctors out there but they're generally cheaper for a reason.

8:47 AM, March 04, 2009  
Blogger seaheather said...

I don't know who said it, but "if you want to get less of something, tax it." Why would anyone knock themselves out to earn more money, only to give more and more of a percentage of it to the government? Those who can afford to cut back their work (and income), while still making a decent living, are doing it. What that does to the tax revenue projections in the massive spending program is anybody's guess, but it's not going to make things better for those printing the money.

As for me and my family, we're not buying anything that isn't a necessity for the foreseeable future. The President's speeches encouraging spending are falling on deaf ears here. I may not be a rocket scientist, but I'm not so stupid as to believe that while the government is forcing massive debt on me, I should be spending while my Republic burns!!

ARGHHHH. Who is John Galt?

11:09 AM, March 04, 2009  
Blogger Rob said...

"If Rick the plumber starts his own contracting company and then grinds out a few million over 40 years of hard work, I say let him keep every penny of that."

Right, and if he wastes it; so be it. His call.

But if he wants to leave it to his daughter, or his wife, or someone of his choosing, rather than wasting it himself; he shouldn't have that right and you should get to decide how his money gets spent.

I got that correct, right? As soon as he decides he'd rather someone other than you or he gets to spend it; you'd like to step in and take that choice away?

So your choice for him is to waste it before he dies; or to have you take it from him "for the good of the people"? Or did I misrepresent you somehow?

1:54 PM, March 04, 2009  
Blogger JG said...

I can understand what you're saying Rob.

The difference in our thinking comes from the difference in our attitudes: You think that controlling wealth after you are dead is something important and I don't. I guess you could continue to let the dead guy control his money via an Ouiji Board, but I don't know how practical that is.

That's a bridge that argument probably won't span. I'm not going to change the way I think on that and neither are you.

But here's a different point of view on that: If you HAVE TO tax someone, who should be taxed (from a moral point of view and the point of view of fairness): The person who earned the money or a person who didn't earn the money?

Put a tax on leeches first, then tax consumption, then (last in priority) tax producers. Maybe you could switch 1 and 2. Producers should be left alone.

The most preferable, of course, would be NO TAXES on anyone. But I don't think that's going to happen.

3:22 PM, March 04, 2009  
Blogger JG said...

This comment has been removed by the author.

3:24 PM, March 04, 2009  
Blogger Alex said...

I agree with JG, there needs to be a much more punitive estate tax. We do not want feudalism in America. However the flip side of that is reduce income taxes on current earners so they can enjoy more of the fruits of their labors while they still live. Certainly we seem to agree on that right JG?

7:15 PM, March 04, 2009  
Blogger randian said...

In the absence of government-granted power to demand service from others, inherited wealth does not create a state of feudalism.

7:32 PM, March 04, 2009  
Blogger br549 said...

Looks like fairness, as like beauty, is in the eye of the beholder.

The voting booth is where it will continue to be resolved, until it no longer is. Then might will become right. As customary and usual.

5:22 AM, March 05, 2009  
Blogger DADvocate said...

...inherited wealth does not create a state of feudalism.

Correct. feudalism includes having administrative and judicial power over others which the wealthy don't have in this country. Unless, they are members of government.

Our government is the greatest threat to our freedoms and livelyhood. In Jefferson's words, "A government big enough to give you everything you want, is strong enough to take everything you have." Including taking away our freedom.

Have to many people simply become so lazy and/or so stupid that they don't care about freedom any more? But want "free" stuff instead of freedom?

7:55 AM, March 05, 2009  
Blogger JG said...

This comment has been removed by the author.

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10:48 PM, April 01, 2009  
Blogger peter.w said...

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10:34 AM, May 01, 2009  
Blogger 9988 said...

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5:17 AM, July 15, 2009  

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