Posted on 10/18/2008 7:22:26 AM PDT by babygene
The fallacy of taxing only the rich
As the U.S. tax laws today stand, and their only going to get worse with the "Spread the wealth around" polices of a future Obama presidency where the super achiever in this country pay most of the income tax, is that the wealthy people can opt out.
That's right. People who have worked hard and saved and have been winning life's lottery so to speak, really don' t NEED to work or pay income taxes.
I say that based on my personal experience; Although I had never came close to the $250K trigger point in my career, at 55 I decided to get out of the rat race...
Almost 8 years later I am doing very, well thank you... I do still pay some taxes on my monthly 401K draws and my Social Security, but it's a pittance. I don't have two new cars every year, but my over-sized high value house is paid for and I get medical from my retirement, and my income is still above average.
Just as "white flight" decimated many of our cities (been there and done that too), "rich flight" can happen as well and most likely will. This socialist idea of spreading the wealth is "Crazy Talk". It didn't work for the former Soviet Union, nor is it working for are high-tax states or urban areas. It has never worked where ever it has been tried.
Many people in that top 5%, the people who create wealth and employ others, don't really NEED to work. And many of them will make the same decision I did almost 8 years ago if their wealth is "spread around" any more than it is today.
If you ask anyone that profess’s taxing the rich the following.
1. Do you work?
2. Does the government take out taxes?
Of course they answer yes. You then shake thwir hands and congradulate them for being rich and say that’s the dirty little secret, Democrats think anyone with a job is rich.
“are high tax states” = “our high tax states.”
How many people do you know that work for a poor person?
It’s pretty obvious an increase of the top rate to 39% from 36% will be a disincentive for people to make money. It’s a proven fact that increasing taxes like that discourage people from trying to make more. Why would I want to make $300,000 if that last $50,000 will be subjected to a 39% tax? That’s almost $20k of that last $50 right in the hole. What’s the point? It’s better to have nothing than $30,500.
Obama (and the rest of the well-known Commies) believe in penalizing the producers, and they “tell” the non-producers that they are going to benefit from this typically socialist move. What you really do is DE-MOTIVATE the producers, penalizing them for being successful, so that they QUIT PRODUCING and providing jobs.
Hey Obama, you stupid thug communist, see the problem with your “buying the Presidency” scheme???
The truth is that the poor are lazy. They need to be induced to work at some income producing job that is taxable.
When they are productive and taxed, they become Americans.
More likely, many "rich" and successful, small operations will start to fudge reported income, as was the case prior to the JFK tax cuts for the "rich." The end result? Dwindling tax revenues and consternation in Washington as the legislature tries to sugarcoat the new and necessary taxes for ALL taxpayers.
If the tax laws were to actually tax the rich, then we'd have wealth taxes, and people like Warren Buffet, Bill Gates, and Jerry Sinefeld would get slammed.
No, what we have is a tax on productivity. The most productive people in our society are the ones facing the highest tax burden.
There are some concessions, both to the rich, and through realizing that if the tax burden becomes to onerous, the rich will, as you so rightly state, move their money elsewhere. This is how Warren Buffet gets away with "complaining" that he pays a lower tax rate than his secretary. Because the majority of his income is either sheltered or comes through investments, which are (currently) taxed at a lower rate than income.
But what happens to investments when the capital gains tax rate, as well as interest and dividend rates go up? People move their investments elsewhere. And that could well mean out of the country. And if those investment dollars move out of the country, what happens to the economy?
Mark
Obama plans to take money from the producers in society and give it to the non-producers, all of whom vote democrat.
And this is why, the Socialism spilled out of the snake-charmer’s mouth........
I’M WITH JOE! This theme needs to go big very fast. I’M WITH JOE!
Freepers need to spread the word in every place there is a MAC or BO raly.
Purchase plungers and make signs in this theme to take to the rallies.
We are all plumbers now that need to unclog the system from impending over-taxation (Socialism) and the legalized ‘theft’ of our hard earned income.
Call to MAC/Palin campaigns and organize people to go with you.
If you are going to bring a plunger, remember that you can’t bring the stick part into a rally. So if you are staying outside a BO rally, that’s fine. If you are headed into the rally, you need to replace the stick with rolled corrogated paper carried separately until you’re in the rally.
This theme needs to be the universal cry against Socialism and carries the implicit message of unclogging the “waste’ from the system.
A dozen guys with plungers just freeped a stinkin’ BO rally in VA!
Support Joe, the first average Joe to stand up to the tyranny of neo-Marxism!
Plus we can shout his middle name, “JOE” without the fear of taking a lead pipe to the knees! Try and escape the wrath of the Left if you are bold enough to utter.......barack HUSSEIN obama.
I had the same discussion with a person I knew, years ago. He liked the democratic party and I like the republicans. He mentioned one time that “democrats were on the side of the working people and republicans were on the side of big companies”. I said “Really? You and I work for very large companies. Without them, you and I wouldn’t have a job. Is that what you want?” We never talked politics again.....he was my father and the hatefulness of politics wasn’t worth loosing that friendship and love.
The “FAIR TAX” would fix all this ‘class warefare’ crap in my opninion. Everyone would contribute.
A nation is doomed that allows voters to vote themselves money.
Reparations by any other name is still reparations.
I'm trying to remember what state it was, but there was a state that got greedy when it came to taxing casinos. They decided that they were going to raise the tax rates by a substantial margin. Nearly 30% IIRC. Well, the casinos ran the numbers, and realized that they could continue to operate in the state, however, they needed to substantially cut back on their hours of operations in order to keep their business profit margins up. So they went from operating 24 hours a day to 12 or 14 hours business days. Their take went down, so although their profit margins were down somewhat, they were still profitable. But the state actually got less money, since the 30% increase in tax rate didn't cover the lost revenues from shorter hours. Plus, the casinos in the state wound up laying off a lot of workers (I believe about 1/3 of their staff), since the shorter hours didn't require the number of employees.
In the end, raising the taxes on the casino put a bunch of people out of work (and on state funded unemployment), and reduced state revenues. But everybody felt better because the "rich casinos" were finally paying their fair share.
Mark
Obama wants us to do just that....we work, they get the paycheck.
Those of us who are “rich” don’t need to shop, either
Frankly, my family of 4 having been bypassed for the last “child credits” and “stimulus check” for being “too rich”- I decided to NOT SHOP
The marxists democrats spout their mantra about growing the economhy “from the bottom up”. Well then.
I will create as little wealth as possible
for them to tax, ony what I need for my fmaily.
As a blue state captive, I will be helpless as my political non-representatives eagerly concur with Obama Reid and Pelosi in bankrupting our treasury to send checks to “the bottom” of the economy.
I will watch the results as the democrats let “the bottom” spend the democrats into prosperity for the next election.
I will watch. I will reduce my debt while taking on no new debt. I will take no capital gains, my assets will sit fallow, wither if they may.
In these times, reducing debt may be a better way to build and conserve wealth enough to survive, than creating pools of taxable, seizable, deflated value savings or investment.
The top-earning 25 percent of taxpayers (AGI over $64,702) earned 68.2 percent of the nation’s income, but they paid more than four out of every five dollars collected by the federal income tax (86.3 percent).
The top 1 percent of taxpayers (AGI over $388,806) earned approximately 22.1 percent of the nation’s income (as defined by AGI), yet paid 39.9 percent of all federal income taxes.
That means the top 1 percent of tax returns paid about the same amount of federal individual income taxes as the bottom 95 percent of tax returns.
from taxfoundation.org
Amen. We need to go to a usage/service based tax and get away from income taxes. A fine is a penalty for doing bad, income tax is a penalty for doing good.
When they are productive and taxed, they become Americans.
Neal Boortz once (only slightly joking) that we need a REGRESSIVE income tax. The problem is that the current "progressive" income tax penalizes excellence, productivity, and success. At the same time, it rewards failure. But if were were to tax lower income people at a higher rate, it would give them incentives to improve their job skills, and become higher wage earners, and more productive citizens.
He does have a point. The current system (just like the economic bail out) rewards failure and bad judgment, while productive people who play by the rules get saddled with the bills.
Mark
have freep mailed my address. Please send me a check for $30,500.
In other words, If Obama really wants to spread the wealth around a la Marx, he will have to go after your accumulated wealth, property and savings.
He would.
The point is you bust your butt for that last $50k, but only have $30,500 to spend. A real disincentive. Why bust your butt only to hand over 39%? It makes no sense, we will see people value other things more highly than work. I personally would rather spend more time with the kids than fork over that much green.
Frankly, my family of 4 having been bypassed for the last “child credits” and “stimulus check” for being “too rich”- I decided to NOT SHOP
The marxists democrats spout their mantra about growing the economhy “from the bottom up”. Well then.
I will create as little wealth as possible for them to tax, ony what I need for my fmaily.
"Who is John Galt?"
Mark
An excellent summation
You're still not safe from the long arm of government.They want your 401k money.
“With respect to the 401(k), it appears to be a plan that is not really well-devised for the changes in the market,” Rep. George Miller, D-Calif., said.
“We’ve invested $80 billion into subsidizing this activity,” he said, referring to tax breaks allowed for 401(k) contributions and savings.
With savings rates going down, “what do we have to start to think about in Congress of whether or not we want to continue and invest that $80 billion for a policy that is not generating what we … say it should?” Mr. Miller said.
Congress should let workers trade their 401(k) assets for guaranteed retirement accounts made up of government bonds, suggested Teresa Ghilarducci, an economics professor at The New School for Social Research in New York.
you’re right. The tax scheme that would serve us best is a consumption tax such as the “fair tax”. The more you earn the more you consume generally. Plus you can give yourself a tax cut anytime you want by spending less.
I know what the point is. My point is I’ll take the money you don’t think is worth it.
“In other words, If Obama really wants to spread the wealth around a la Marx, he will have to go after your accumulated wealth, property and savings.
He would.”
I’m not sure if that’s correct since the politicians have more accumulated wealth than most others...
No, I barely remember what I had for lunch yesterday! But it was an article that I read posted here on FR, but I think it was shortly after I first joined.
Mark
“Who is John Galt?”
Mark - I’ll take characters from Ayn Rand’s classic novel “Atlas Shrugged” - for a thousand!
I think there is great satisfaction to be drived in doing a job well,and especially in creating or building something .Note how many retire from some paper pushing job only to take up restoring old cars,homes,or master gardening or some other hobby.
I believe the commercial interests' view of people as only consumers is harmful.
I note that the longer people receive free goodies,the more free goodies they demand.A late friend who was handicapped but yet held a police dispatch job and did accounting from his home ,became a different person following a fall which worsened his condition.He lost the job,was found eligible for subsidized housing(where the more elderly residents resented him) where he was forbidden to continue his accounting sideline(can't conduct business in subsidized housing)but given SSI..With his now total dependency on the State,his attitude changed,he gained weight from less activity,he was given excess medications (the more Medicaid/Medicare work,the more doctors made from the gov't)he had fewer contacts with non-subsidized persons,and he began complaining about anyone or anything not bending over backwards to accomodate the handicapped.
He died rather young and practically alone (of pnuemonia left untreated too long).
I firmly belive that people have a deep need to feel they are doing something useful and worthwhile;it is this need left unfulfilled which cause so many liberals to take on a great cause ,no matter how illogical the cause may be.It is this lack of usefulness ,which deep down,cause the welfare recipient to lose self-esteem.Left with no other outlet for interaction thay become demanding of attention and money.
It’s going to be worse than that. Just the additional FICA tax alone on self employed will raise the top rate to and effective 50% (35% plus about 15% if you are self employed). Of course a true marxist like obama will also raise the top marginal rate so that when you make over 350K you will be keeping less than 50% of your earnings. This doesn’t take into account the cost of running your business ( in my case about 55% overhead). So lets see how this works out for me. I net 45% after overhead. I get taxed at least( I suspect more) over 50% of the 45% so that leaves me about 22 cents on the dollar. I don’t work as hard as I work for 22%. I plan to adjust my work schedule to make only 250K and let go some employees and stop ordering the supplies I need to keep up with the work I used to do. I never liked playing golf but maybe I need to learn to so I can start using my days off.
Politicians and liberals are exempt of course. Lenin, Stalin, and the politbureau still had their caviar.
It would also be nice if the 'death tax' 'marriage penalty tax' the 'capital gains tax' and the corporate tax' could be properly explained as to whey the need to be eliminated.
Socialists always are ignorant of economics, civics, and human nature. They are purely driven by anger and greed. Rich people can always put their money outside the US.
Absolutely. And if you live in a high state tax stae like California, add another 10%.
I did exactly what you propose - only ten years ago. Never looked back and do enjoy golf now that I have the time. Who wants to work hard for 40% of their dollar income?
WELL SAID.
I believe it’s called “diminishing returns.”
Where I work at one tme we didn’t get time-and-a-half for overtime past a certain pay grade. As I went up in grade the overtime pay was actually less than my straight pay. I told people it was like having second job at Wal-Mart except I didn’t have to learn anything new. Now they’ve “fixed” it so that I do get straight pay for any overtime I work, which they don’t let me do now.
Any idea where the rich/wealthy will put their money?
It’s John Galt Junior, a work slowdown instead of a strike. You don’t have to withdraw from society completely, just cut back on your contribution.
Work less.
Earn less.
Spend less.
Own less.
They can’t take what you don’t have. Don’t be a parasite, produce enough to support yourself and your family, but not enough to support anyone else. Let them eat eat each other.
Productivity is inherently fungible and extremely transportable,far more so today due to technology, than during FDR's or Carter”s administration.
For all his numerous faults, Clinton was fortunate enough to benefit from the tax cuts of previous administrations, and intuitively understood the need to cut the budget (by gutting Defense spending) to pay for his new spending. However, by gutting the defense budget and politicizing and corrupting the Intelligence Community,Justice, and State Departments.
George W. Bush's tragic flaw was believing he could buy, with the taxpayer's money, a perception of “compassion” for Conservatism as well as generate “bipartisan”support from democrats.
Bush failed to realize that government is most compassionate” when it is most limited and that democrats have no interest other than increasing their own power, even at the expense of the nation.
If Obama wins, the flight of capital, intellectual property, innovation, productivity, and jobs from this country will occur on a scale and with a speed never seen before in history. None of it will ever be repatriated back to this nation.
With a $14 Trillion economy it is NOT a given that the U.S. must collapse like the Spanish, British, and Roman empires before it.
However, even a $14 Trillion economy cannot continue to withstand the repeated assaults of socialism that both major parties continue to inflict upon it.Obama’s tax and spend plans will guarantee an immediate decline and an irreversible demise.
By the middle of the 21st century, in order to be a superpower in the world, a country will have total government spending under 20% of GDP, a top marginal tax rate of under 25%, a sustainable birthrate of 2.1 or higher, the rule of law, and absolute respect for property rights. Health care, education, housing, and employment will NOT be consider as “rights” but as good and services to be freely produced and consumed in the marketplace.
“Neal Boortz once (only slightly joking) that we need a REGRESSIVE income tax.”
The best tax system wouldn’t tax income at all: it would tax consumption at a flat rate. That way, you have maximum incentive to produce, since you keep 100% of it. You also have maximum freedom to do what YOU want with it: spend it, save it, or even give large sums to family, friends, good causes etc. without triggering a confiscatory 45% gift tax. Taxing consumption would strongly encourage savings, which in turn would lower interest rates and greatly stimulate investment, thereby accelerating the pace of new innovations and allowing for economic growth rates that would put even the Reagan years to shame.
Taxing consumption at a flat rate still will result in the “rich” paying more than everyone else in absolute terms, but it would halt in its tracks the current class warfare politics practiced by Obama and other progressives who exploit the illusion that we can finance goodies for 95% of Americans by simply taxing the 5% who can “afford to pay more.” The reality is, the “rich” already pay a vastly disproportionate share of taxes (if the public knew the truth about how much the “rich” already pay, they would be aghast at Obama’s claims that they deserve to pay even more) and instead of being grateful for this, panderers like Obama prefer to stir class envy by suggesting they pay even more.
What’s truly comical, but Obama will never tell you, is that the “rich” pay a higher share of US income taxes today under the Bush tax cuts than they did under the higher marginal tax rates of the Clinton administration. Yes, they received a higher share of the savings, but that’s only because they were the ones paying such a disproportionate share of the savings in the first place.
An acroos the board flat tax for everyone is the solution. It’s fair and politicians will no longer be able to play the class warfare card.
acroos=across
Then you will be blamed when Obambi fails. Minority groups are attached to playing passive-aggressive, yelling and complaining when things go wrong because they aren't in charge. They don't have practice being responsible for everybody else. Every time Obambi screws up, which he is certain to do often, they will fall into their old aggressive behavior and blame you for sabotaging his success.
“Our government taxes productivity, not wealth. It has to because a government CANNOT produce anything, it can only consume resources, hopefully to provide for essential services such as National Defense, but most often to buy votes to keep politicians in power.”
Well said. I think you broke the code...
Thanks to all for your comments.
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