Skip to comments.Why Work Anyway?
Posted on 12/10/2012 7:56:08 AM PST by Kaslin
I was shocked by something I heard from one of my friends sons the other day. He is a college graduate with a business degree and fortunately has a job. We were all talking about the fiscal cliff and how it would affect people making over $250K a year. His reaction to the top rate rising to 39% along with the California State tax increase due to Proposition 30 prompted him to say, Whew, I think I dodged a bullet! I was up for a promotion with a pay raise but someone else got it. Im pretty sure my taxable income will be under the level where I would have gotten punished. PUNISHED.
He was basically saying that he would rather earn less and stop advancing in his career than be hit with massive taxes. I asked him to explain and he said that basically he didnt want to work and then fork over 50% or more of his earnings to the government. He said that he had gone to school, studied hard and gotten a job but was still burdened with excessive student loans and he felt that with that hanging over his head he couldnt afford to pay more in taxes.
As for buying a home and starting a family, well that was not even an option for him. He said that if they were talking about taking away the mortgage home deduction then why buy a house anyway?
This is where we have come in this country. It is now a better option to take a lower paying job, rent a home or live with mom and take government benefits than it is to climb up the ladder to success. The American dream is fading folks. Like an old photograph from a Polaroid instant camera, the picture is slowly disintegrating.
Our entitlement society is out of control. It is a sad fact that a head of a household of four making minimum wage has more disposable income than a family making $60,000 a year. In an article in August 2010 this issue was discussed in The National Review.
In many cases, economists have calculated, welfare recipients who enter the work force or receive pay raises lose a dollar or more of benefits for each additional dollar they earn. The system makes fools of those who work hard.
Recently the chairmen of two important subcommittees on Capitol Hill convened a hearing on this issue. The hearing elicited some revealing testimony from one of the chairmens congressional colleagues.
The more benefits the government provides, the stronger the disincentive to work, Representative Geoff Davis (R., Ky.) pointed out. The great irony, he added, is that although federal welfare programs are designed to alleviate poverty while promoting work, collectively they have an unintended side effect of discouraging harder work and higher earnings.
Less work and lower earnings, in turn, translate into greater dependency on the government and zero or even downward social and economic mobility for those mired in poverty.
Working women who are single with children often forego a raise because it would push them into the dilemma of losing Title 20 daycare if they made more money. There are over 70 Federal welfare programs right now and the list will continue to grow under Obama. If a person works and climbs the ladder, they will become disqualified for these programs and lose all of the benefits that they have become so accustomed to.
This creates a moral dilemma. When good people continue to stay on unemployment because taking a job would not pay them as much as their benefit, how can you really blame them? We dont live in a culture where people are embarrassed to ask for a handout. It is so easy just to file for benefits by computer, have the funds deposited directly into your bank account or take your EBT credit card to buy anything you want. There is no shame in taking government assistance, you are entitled to it.
Today, more people than ever before67.3 million Americans, from college students to retirees to welfare beneficiariesdepend on the federal government for housing, food, income, student aid, or other assistance once considered to be the responsibility of individuals, families, neighborhoods, churches, and other civil society institutions. The United States reached another milestone in 2010: For the first time in history, half the population pays no federal income taxes. - National Review
So the tipping point has been reached and now the government is scrambling to grab any and all money that working people make just to pay these entitlements. Unfortunately, the American people are waking up and becoming more like the young man I talked to. They are seeing that their hard work and effort is not benefiting their own families, but being redistributed to others; some who need it and others who just dont bother to work. Look at the major companies that are paying out dividends before the huge taxes kick in. They can see the writing on the wall and are preparing for it.
The young already know that they will probably never see social security or Medicare benefits in their lifetime yet they see it withdrawn from their checks every week. They are the ones sensing the unfairness of all of this, not the people reaping the benefits.
This is NOT America, this is not who we are as a country. If we dont stop punishing success and achievement, future American generations (if there are any) will be content to sit at home and count their government goodies but will never excel at anything, never strive to be anything. There will be no incentive to achieve success. Why should you? It will just be taken away.
Once the so-called rich have been drained dry the only option left for the government will be to just keep printing money. That lasts until the economy collapses in on itself and by that time the country we knew will be just like that fading Polaroid, a memory.
And most of the jag-offs who voted to reelect ObaMao will still have learned nothing.
America is already a fading memory. The liberals have already killed it and its not coming back.
The socialists dumb down program appears to be working as planed has breed so many slackers.
The flyover state congressman has it right except for the "unintended side effect" part.
My father learned this back in the 1960s when he was encouraged by local citizens in the small town in Kansas where we resided to run for the town council where he was elected.
FWIW, Dad was a quiet guy and an introvert who did NO campaigning, but these type of elective offices went begging for good people back in those days because they paid next to nothing and required a lot of responsibility for not a lot of power.
Anyway, one of the council's jobs was to help unemployed people find work. One fellow in particular was a talented mechanic and seemed ambitious. They had him matched with a job within a week or two after Dad took office.
The guy came to the next council meeting not grateful, but incensed to find out he was getting up early to drive to to a job in a neighboring town and, after the expenses of commuting and such were paid, was actually less better off than he'd been before when he was sleeping until 10 a.m. or so, going fishing when he pleased and doing some occasional mechanical work for people in the small town for cash under the table during those occasional times when he wanted extra money.
Actually, it seems to be proceeding rather rapidly.
This is NOW America, this is who we have become as a country.
We have a few younger relatives and friends, who are/will be in the new tax bs.
A couple have told their bosses or if they control/run the company, they only want to earn about 200K and have more time off each year.
They saw this coming with the Joe the Plumber and reactions from Obozo to Joe’s comments.
So they are spending more time on vacations and/or just off work.
Two young couples in their late 30’s-early 40’s, where the wife is the big earner, the husbands have given up working and are house dads.
Another couple in their early fourties with now two teen agers, had planned on the wife going back to work. She is now messing around with a couple of small business startups with minimal pay instead of going with a good 6 figure salary.
All of them saw this coming and knew if they brought in more money, they would have gone to another level of spending and then taxes from the Obozos. So they are capping their incomes and doing more enjoyable things.
“H.I., You are young and you have your health. What do you want with a job??” — Gale, in Raising Arizona
“Welcome to CLAWS (Creating Livable Alternatives to Wage Slavery)
at whywork.org. We’re a pro-leisure and anti-wage-slavery group of people dedicated to exploring the question: why work? This site provides information, support, and resources for those looking for alternatives to traditional employment.”
“...side effect of discouraging harder work and higher earnings.”
I remember many years ago seeing Bob Hope on (probably) The Tonight Show. He said with the then current tax structure, he had to charge $1000 in order to make $100.
To fill the jobs that really must be filled, they will have to raise the salary to the point it is worthwhile to undertake the job. That cost will be passed on.
The Dems used to be made up of more liberals than leftists. That was bad enough i.e. LBJ's Great Society, but now more and more Dems are leftists. They want to punish the rich even though a sizable percentage of Dems are very wealthy like Warren Buffett. Even supposed conservative Ben Stein thinks taxing the rich more will help balance the budget. He's full of bananas, but more and more people have bought into the "tax the rich" scam. We're going over the cliff alright, and now we're in a freefall without a parachute.
Perverse, isn’t it. And here’s Obama extolling the virtues of a college education, but you’ll never be able to pay it off decently if you ever wanted to.
Yeah, but we’re going to make great little communists.
I recall from the mid-80s several at the company tried to decline ‘raises’ because the raises put them in a higher tax bracket. As a result, their take home pay was actually less with the raises.
The company refused, because it was a government contractor. They had a choice of taking the raises offered or finding a new job.
Wow, if I made $250k/yr, the govt could take 60% of it, and we’d still make more than we make now combined.
When any government taxes (punishes) a behavior, they get less of that behavior. If they punish making money, people will find ways to avoid making money. When a behavior is rewarded, you get more of it. Nitwit progressives just don’t want to understand. Give more money to help single welfare moms with their kids = more moms and kids on welfare with fathers absent. Tax society’s workers and producers more = get less taxes and less production. It took 70 years for the Soviet Union to collapse from the logical outcome of their policies. How long with it take the US to do the same?
I’ve thought about this. If I’m not living that much better than someone who maxes out on all of the freebies that are out there, why not spend my time raising my own kids instead of having to turn them over to day care providers and public schools? Might they not be better off in the long run. Their dad would be a loser, but at least they’d get to see lots of him!
With a progressive tax system, that is true. Everything OVER $250k may get taxed at 60%, and it would still be worth it to a lot of people.
Where they lose a lot of people is with the surcharge style taxes. I.e. when you hit the $250k number, you have an additional 10% tax on all of your income. So, if you make $249k, your tax bill is X. But if you make $250k, your tax bill is (X+$25k).
In the example above, you take home less money at $250-299k than you do at $249k, at a 50% tax rate. At $300k you break even. If the tax rate is higher, it takes even more to break even.
The question becomes, why bother? You might as well make right up to that limit, unless you are going to make far and above the break even point.
I call BS. If someone really did turn down a promotion or a different higher paying position because of a 39% top marginal rate then that person is an idiot. Who in their right mind would turn down more cash in their pocket?
Those 39% top marginal rates sure did hurt people back in 2000. :rolleyes:
Exactly. Where the hell are these people learning their economics from?
With the price of everything doubling and tripling in the past 10 years, 50k is like earning 1980s wages in 2012.
Ya want to make as little as possible in today's America.
Why in hell would you want to feed and support this government monster more than need be?
I see you don’t understand economics all that well either.
I don’t know anyone that can make the choice between making $249k or $250k.
It's just resting.
This is the kind of "Going Galt" that I've been seeing (heck, I've been DOING) for a number of years. Lots of people not completely off the rails like in Rand's novel ....but only pulling along at about 50% of their capacity.
For instance, my dad was a computer consultant. For a long, long time, he'd only plan to work for a certain number of months a year. He'd say "After I reach X in income, 2 out of every 3 dollars I make goes directly to the government. Why bother?" He'd usually wind up piddling around the house for 4-5 months a year, only working contract gigs if he felt like it, or if one of his customers really, really needed a hand.
He retired completely a few years ago. Said that it was more fun to play with the grandkids than it was to work.
Just recently he told me that, even though his spending is scaled way back, it didn't really change his lifestyle all that much. I'm paying *very* close attention to what he's doing, and learning one heck of a lot. :-)
You on the other hand seem to have no issues with supporting government by giving corrupt government more and more money.
... but who did he vote for in the last 3 elections?
Are taxes really punishment, or simply the way govts generate revenue?
But you'd do even better if you earned $249,999.99/year.
Actually, I think the penny applies at $250,000.01, but the point is still that you should not have to try to keep your salary under a ceiling so you can take home more money.
IIf the after-tax money is more you are a foll to turn down the promotion and raise,all else b eing equal.
Buyt if the taxes aaaaaaaactually decrease your net pay from the previous level then you are wise to refuse the raise.
Hence my claim that the super-rich want these taxes to create a barrier to entry into their exclusive club, not because they want to pay their "fair share."
Luckily I’ll never find out, ‘cause I’ll never make even 1/2 of that.
Am against all income taxes but get real. These are marginal rates. Even if rates go up for the top bracket, somebody making 275K makes more that someone making 250K. It is just that 275K is making less than before.
You won't sacrifice for what is right?
You support profits regardless of consequences?
Profits over principle?
How's that worked out for the U.S.?
I personally would turn down more money if it meant supporting corrupt government with more and more cash.
Another thing to note is that entitlements become generational. The brood moms of today are raising the next generation of takers; likely just as they themselves were raised.
If a person made $260k/yr, couldn’t they take $11k pre-tax earnings and invest it in something that is tax free? Wouldn’t that make their taxable income $249k?
Obama extolls the virtues of a college education alright but only if you use it to serve mankind not get ahead for yourself. FUBO!
He better be careful making his thoughts publicly known. We all know it his duty to be as productive as he possibly can be...
From each according to his ABILITY, to each according to his need.
He didn't say it was because of the federal tax increase, but because of all the tax increases.
You have to think like an economist, not just a plugger. How much more effort does he have to put in to get that additional cash in the pocket? What's his return on investment?
Let's assume I can work for an hour before the raise at $125/hour at an effective tax rate of 40%, so I take home $75/hour. Now let's assume I get a raise to $135/hour, but take my effective tax rate to 43%. Now I take home $76.95. If I'm doing exactly the same work for exactly the same hour, then it's a free $1.95 and I have no complaint. But if I take on any additional responsibility or have to put in any additional more effort, the $1.95 may not be a reasonable return. I might be happier if I kept the lower rate and the lesser responsibility.
And, if you do the math, if I only get a raise to $126/hour at a new 41% effective tax rate - I lose money.
You would still take home more money if your salary went from $249,999/yr to $250,001/yr if the Bush tax cuts expired.
Is this really why a bunch of people oppose the Bush tax cuts expiration, because they think they will take less home if they take a raise and get pushed into the >$250,000 tax bracket? Because if it is then you are wrong.
“the governemnt will step in a select people it likes to be society’s aparatachiks.”
Our name is Equality 7-2521, it is illegal to write this.
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