Raise Taxes on the Rich?

August 1, 2011 | Vanity

[yetidog]

Forgive me for asking…but what is so wrong about raising taxes to some negotiated extent on the most wealthy taxpayers in the US? While I know this question violates conservative orthodoxy, there are a lot of folks in the US who make a lot of money…some of it easily earned (inherited), some of it by talent (professional athletes), some of it by luck (actors and lottery winners) and some of it by a lot of hard work and perseverance. Now I agree that $250,000 is not the place to start, but maybe 5 million (or some other negotiable figure and percentage) is. And I know that revenue gained from “raising taxes on the rich” is a mere drop in the bucket, but an negotiated agreement to do so would destroy a persistent liberal argument that makes a lot of sense to many voters in the country. Not every rich person is the key to unemployment nor or they particularly deserving of protection because they are among the 5% or so that pay 80% of the taxes. This is not a matter of class envy nor income distribution, rather it addresses about the only rational argument that liberals still have in the ongoing fiscal policy debate.

[BigSkyFreeper]

According to the IRS itself, the “top 1%” (Leftist for “rich”) pay 39% of ALL taxes the government takes in. They’re not paying “almost nothing”.

[jimfree]

How much should the rich and responsible pay for those who have been irresponsible? How much should the rich pay for folks who will vote for the irresponsible?

[reg45]

Within a decade, we’ll all be billionaires.

Just like in Zimbabwe, thanks to the "American Mugabe".

[Age of Reason]

Now I agree that $250,000 is not the place to start

And remember, that figure is proposed for couples filing jointly. But liberals (are you one, by any chance?) keep palming it off as if it were for individuals.

Anyway, 125K for individuals or 250K for couples is too low. That's barely getting by.

But income over a million or two a year should be taxed to ribbons. Let those people feed their feelings of inadequacy by doing good deeds for country and society, instead of by conspicuous consumption of overpriced status symbols.

NO ONE is worth a million or two a year. If they're making that much money, it because of a distortion in the system.

However, since America is overpopulated (thanks to democrats changing our immigration laws in 1964), only a few people can afford to live decently in today's overpopulated America.

Therefore, allowing a few people to make more than they're really worth, say two or three million a year, should be permitted to give the rest of us hope that maybe someday some of us might live well too. Otherwise all of us would be doomed from birth to live lives of constant struggle and misery.

But more than that is more money than anyone should have.

So tax the rich and use the money so gained to reduce taxes for the rest of us.

[randita]

With your question comes the assumption that the government spends money more efficiently and effectively than a rich private citizen. Rich people create wealth with their economic activity. The government just takes wealth and transfers it from one person to another person whom they decide should have it (usually those who are most likely to vote for them). Along with the transfer comes waste and abuse.

A couple of other info sources:

http://online.wsj.com/article/SB10001424052748704608104575217870728420184.html

"What's the origin of this limit beyond which it is impossible to extract any more revenue from tax payers? The tax base is not something that the government can kick around at will. It represents a living economic system that makes its own collective choices. In a tax code of 70,000 pages there are innumerable ways for high-income earners to seek out and use ambiguities and loopholes. The more they are incentivized to make an effort to game the system, the less the federal government will get to collect. That would explain why, as Mr. Hauser has shown, conventional methods of forecasting tax receipts from increases in future tax rates are prone to over-predict revenue. "

Bill Whittle's "Eat the Rich" You Tube:

http://www.youtube.com/watch?v=661pi6K-8WQ

Simply put - if you want less of something (economic growth), tax it. I don't care how rich you are, the government doesn't have the right to make you a slave.

[Iron Munro]

"...what is so wrong about raising taxes to some negotiated extent on the most wealthy taxpayers in the US?

This corrupt, intrusive, overbearing, tyrannical government is not entitled to another red cent from any source.

There is nothing in the US Constitution about wealth redistribution, promoting class envy or inculcating a sense of dependency among 50% of the population. Nor is there any authority for the federal government to establish bureaus and agencies to dictate every aspect of how we will be permitted to live. More money only means the government will get bigger, more intrusive and pursue more unconstitutional activities.

The "War On Poverty" is 45 years old, trillions have been spent, but we have more people officially in poverty every year. No matter how much money the government takes from others to finance wealth redistribution they will never solve the poverty issue. They only create generation after generation of people who don't, or won't, lift a finger to help themselves if they can hustle a free ride (free to them) from the government.

My family was of very modest means but I never heard a word spoken in envy of those who had more. We did give thanks for what we had. Perhaps that sense of appreciation and self reliance came from parents who lived through the First Great Depression and WWII.

The only thing I ever wanted from a person who earned more than I is the opportunity to learn how they did it.

As for people who are born into wealth, fell into a gold mine in their back yard or won a box of $1,000 bills - that is the luck of the draw. There is always someone bigger, faster, wealthier. Stay busy making the most of your own life and none of that matters in the long run.

The constitution guarantees equal opportunity. Our troubles began around the time leftists tried to force equality of outcome without concern for quality or quantity of the input.

[randita]

I hope I’m correct in taking your post #84 as illustration in absurdity.

[asinclair]

Forgive me for asking…but what is so wrong about raising taxes to some negotiated extent on the most wealthy taxpayers in the US?

You are going to touch a nerve on this forum with that question. However, I think a frank and thoughtful discussion of your question is in order. (I like being different.)

First and foremost, the short-term problem isn't revenue, it's spending. Specifically, government spending way beyond the means of the government to bring in money. I still remember William G. Moore, the corporation turnaround expert, saying in an all-employee meeting "the key to business success is bringing in a dollar more than you spend." So increasing tax rates promotes more spending, not less, and so Congress and the President end up kicking the can down the road some more.

Now, if Obama wants more revenue, it's within his sole power -- no action by Congress needed -- to increase the government's income. All he has to do is make the country's business environment attractive for people -- that's rich, not-so-rich, and even bordering on poor -- to take a chance and start or grow a business. Google Steve Wynn for his take on the current business climate. See what the CEO of Home Depot had to say about trying to start that company now, instead of years ago. Gee, Obama could solve two problems with the same action, raise money AND lower unemployment, with the stroke of the pen and turning the bully pulpit inwards, toward the Executive branch. (I'm not holding my breath.)

How, you ask? Apply the 80/20 rule to all regulations: dump the regulations that have a small return, and keep the regulations that actually are a win to the population as a whole, everybody and not just a few. Fix the Executive Branch.

But let's talk about increasing taxes a moment. Several people have done the analysis that if confiscate all the income from the richest people, that doesn't even begin to cover the annual shortfall. And increasing taxes on the rich is the camel's nose into the tent -- politicians can't help but take matters to the extreme. That's how we got to where we are!

So you need to go after a wider base if you are going to do anything at all. How about the 50 percent that pay no federal taxes? How about GE, who paid no federal taxes?

So let me dream a little, and propose the second Alternative Minimum Tax. If, on an individual return, "calculated tax due" is $6 or less, or a negative number, plug $6 into the "total tax due" line on your 1040 or whatever. You're filing a return, so you earned $600 or more, and $6 is the price of a modest dinner for one night. For corporations, the equivalent AMT would be $0.06 per share of common stock per year.

And how about treating hand-outs from local, state, and Federal government to individuals the same way that dividends, retirement benefits, and other "unearned" income are treated: tax them. Set up the tax rates so that people who get food stamps, unemployment, and other unearned payments are taxed at a low rate, but are taxed. Google "social security as taxable income" as an example of how retired people can be nailed for taxes; why not the welfare class? That means the 2ndAMT lets everyone contribute to the kitty.

"But the poor can't afford it!" But the poor can budget just as well as the rich can. And the standard deductions should reflect the cost of being alive. How many "poor" people have expensive sneakers, big screen TVs, and other things that are hard to justify as "needs"?

(Then there is the guy today that proposed the "Democrat" tax, but I won't go there.)

President Obama talks about "fairness", yet he thinks it's fair for people to get a free ride while the rest of us work and grovel for income. To me, that disparity is not The American Way. The Boomers and Sooners didn't want handouts for no work: they went and homesteaded and improved virgin land, some purely by hand, and made something out of it. How about the 49ers digging for gold in California and silver in Nevada?

What to talk about unfair? Our college students bought the idea they could rise above the crowd through diligent study and sparks of inspiration, yet after going many thousands of dollars into debt getting an education, they can't find a job...because the employers are too spooked by the White House Blue-Pencil Corps to take any chances: the business environment is hostile indeed. I wonder how many businessmen and -women would view playing double-zero on a Nevada roulette wheel to represent better odds?

So when you ask "why not tax the rich" see the other options, and calculate how much more revenue would come in based on my proposals.

[Danae]

eggxaly.

[meyer]

...but what is so wrong about raising taxes to some negotiated extent on the most wealthy taxpayers in the US?

What is right about 47% of the working population in this country paying NO federal income tax, while using proportionately greater taxpayer-funded resources and services? When the deadbeats start paying the same rate as Bill Gates, then we can talk about raising taxes. As it stands now, until all citizens are treated equally, there is nothing fair or correct about taxing one entity at a greater rate than another.

[Age of Reason]

I hope I’m correct in taking your post #84 as illustration in absurdity.

OK, fine.

Let's go all the way--remove all regulations on business and allow everyone complete freedom to do whatever it takes to accumulate as much wealth as they can by any means they can get away with.

Oh wait--we tried that once, and ended up with feudalism.

[BobP]

House OKs debt

Clowns to the left of me, jokers to the right...

We said; cut, cut, cut. But it looks like we got; spend, spend, spend. A hamburger today for payment later.

We add another trillion each year to the $14.4 trillion debt and pretend this is responsible?

Once you go off a cliff you can't stop halfway down, and the DeathCare bill that Zer0 and Nancy put in place might finish us off.

BOHIC-A! (The Greatest Depression is on its way.)

How much of this final deal was worked out weeks ago between Obama, Boehner, McConnell, Pelosi, and Reid?

The economy is off the table until after the 2012 election and there's no commitment for a BBA. Is that about right? Fire Boehner for not stopping this.

This was never about stopping the spending. Boehner screwed up with the CR in December 2010, with Boehner 2.0 and now with Reid/Zer0's H.R. 2480: Administrative Conference of the United States Reauthorization Act of 2011. They should have passed 'Cut, Cap and Balance' as many times as necessary, putting the ball in Cowboy Reid's court until he cries 'uncle.'

And as to the proposed DoD cuts over 10 years: The cuts would amount to about 5.1%. I want all branches of government to match that, not just the DoD.

''The best advise I can give you all is to ignore any symptoms and ignore all the concerns from taxpayers
that will arise after taking your blue pill medication. That $14 trillion deficit is just the status quo.
So 'eat your peas,' ... and steer for the cliff!'' /sarc

[The_Reader_David]

What is wrong with it is that it interferes with capital formation and is a drag on the economy, and, like all tax increases encourages the growth of government, both in absolute terms (making it more tyrannous) and in proportion to the economy (which is also, per se, a drag on economic activity).

There is one way of raising taxes on the wealthy that does not create a drag on capital formation: to place limits on the exclusion of income from taxation. Calvin Coolidge (hardly a raging leftist, in fact one of the first Presidents to support tax-cuts which spurred economic growth) opposed the tax exemption for municipal bonds because it allowed the wealthy to avoid paying taxes.

Now, every tax exemption, deduction, and credit was put in place to encourage some socially useful end. While cleaning up the tax code is, in the long run, very desirable, in the short-run every change to abolish a deduction or credit or to make now tax-exempt income taxable will meet stiff resistance. I would therefore propose the following: first abolish the AMT (it was a horrid kludge trying to get at what the rest of my proposal does more simply), then set a maximum amount of income that can be excluded form taxation by any means other than charitable contributions (which would still be allowed to exclude any amount from taxation — otherwise the statists’dream of all of civil society having to pass through the government would be brought one step closer by withering private philanthropy).

As a ball-park figure I propose $250,000 for individuals, $500,000 for married couples filing jointly, and $100,000 for persons who can be claimed as dependents. One would complete one’s taxes the usual way, then add up all the deductions (other than charitable contributions), all tax exempt income, and the amount of all tax credits divided by one’s top marginal rate.
If the total is more than the cut-off, the excess gets added to income before figuring the tax.

It’s a heckuva lot easier than the AMT forms, and actually gets the rich to pay more taxes.

Now, why does this not have the baleful effect on capital formation that raising the top marginal rate has? Because it encourages the rich to pursue income generation, rather than tax avoidance, thereby pushing capital formation in the private sector, while raising marginal rates does just the opposite.

It still has the downside from the POV of shrinking government of providing more money to the Federal government, but it’s something to consider throwing into the mix as an inducement to actual cuts, rather than decreases in the rate of increase like the “deal” is giving us.

[Polybius]

Forgive me for asking…but what is so wrong about raising taxes to some negotiated extent on the most wealthy taxpayers in the US? ..... This is not a matter of class envy nor income distribution, rather it addresses about the only rational argument that liberals still have in the ongoing fiscal policy debate. .... yetidog

The problem is that you have fallen into the trap of allowing the liberals to define "wealthy" to mean "high earner for the last tax year.

As rabscuttle385 pointed out:

"The problem with the income tax is that it doesn't tax existing wealth, only the creation of new wealth. As such, it serves as a barrier to entry to the upper classes of American society for those Americans who elect to climb the social ladder through hard, honest work."

The truly wealthy, like John Kerry and Teresa Heinz, can enjoy a fortune estimated at between $750 million and $1.2 billion, TAX FREE because they both married into it and because the Federal Government does not tax a single dollar of wealth.

Only "income" is taxed.

During the year that he ran for President, I paid more income taxes than Kerry did because my 6 day per week, very high volume, medical practice in an under-served, low reimbursement rural county brought me more income than John Kerry's Congress-critter salary.

During that year, I was "The Evil Rich" that was not "giving back to society" or doing or "paying my fair share".

Yet, there was Kerry, the champion of the poor, demanding more and more of me as he enjoyed the Billionaire lifestyle but paid less taxes than I did.

After a while, you can only drain so much blood out of a workhorse. Like many solo, high volume practitioners, I burned brightly like a shooting star until the day I simply burned out and retired last year in my mid-50's at an age two years younger than when my father dropped dead. Enough is enough.

So, now, the truly wealthy Kerry, who paid less income taxes than I did, is still worth hundreds of times more than I am worth. Whatever "wealth" I was able to save after the Government taxed me more than $100,000 per year for tax year after tax year after tax year, is what I have to carefully manage for the rest of my life.

I do think that taxes need to be raised but they need to be raised on the almost 50% of all Americans that currently pay ZERO income tax.

As the old joke goes, "When you rob Peter to pay Paul, you will always be assured of Paul's vote".

As long as Paul receives and receives and receives from the Government, at ZERO cost to himself, the more that Paul will want to tax and tax and tax Peter until the day comes when Peter drops dead from over-work or just says "F**k it!", like I did. Like Atlas, I shrugged.

By extending the tax base so that EVERY Paul has to pay at least something in income tax, even if it is a very small sum, you give Paul a stake in the desire to curtail unnecessary Government spending.

On the other hand, once you try to find more ways how to rob the remaing Peters to a greater degree, all you are doing is feeding Paul's appetite for more, more, more!

Any discussion of increasing taxes has to involve increasing taxes for EVERYBODY .... not just the ever dwindling supply of Peters.

Once the Pauls start sharing the tax pain, I guarantee that the Pauls will start bitching about LOWERING taxes and DECREASING Government spending.

[sten]

the most wealthy?

that’d start around $50m/yr

the $250k/yr number is to keep the upper middle class from breaking out

either way, why the hell should a person pay more, yet consume less? how does that make sense?

[1066AD]

Some time ago (1986 ?) the working Joe lost a whole bunch of deductions, started paying more FICA (uncapped) and at some time later (Clinton ?) retirees started paying income tax on their social security. Medicare tax however was still capped.

Given the above I’d not object to Medicare tax being uncapped like Soc Sec. Also I believe unemployment checks should not be subject to income tax either, that’s just idiotic.

Still, it’s always the middle income people who get screwed when taxation rears its head.

[sarasmom]

Who is John Gault?

I know, and it is going to shock the hell out of all you greedy, self-righteous, evil socialist pigs.

Why would anyone tithe to charity, what the government takes by force?

[SERE_DOC]

Since you asked, let me ask you, what is wrong with 47% not paying any tax and living off the ones who do?

As some one already pointed out so succinctly "it's not the governments money" and it's not your money.

[1066AD]

$200K ? $250K ?

Trouble is, that level of income means entirely different things depending upon where you live - cost of living.

In some parts of the country it’d be spectacular, in others much less so.

[andyk]

what is so wrong about raising taxes to some negotiated extent on the most wealthy taxpayers in the US?

You mean aside from the fact that we have a system of taxation that by its own definition cannot specifically target the wealthy (leaving aside for the moment that the purpose of taxation is to pay for government, not acheive some kind of distributive nirvana)?