It's just resting.
Posted on 12/10/2012 7:56:08 AM PST by Kaslin
I was shocked by something I heard from one of my friend’s 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. I’m 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 didn’t 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 couldn’t 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 chairmen’s 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 don’t 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 before—67.3 million Americans, from college students to retirees to welfare beneficiaries—depend 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 don’t 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 don’t 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.
Morgan Brittany
Politichicks.tv
@Morganbrittany4
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."
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