"It is a tricky situation in which some Americans find themselves after a long boom: They are by no means struggling, compared with the 98% of Americans who make far less, but depending on where they live and the lifestyle choices they have made, they don't necessarily feel rich, either."
http://finance.yahoo.com/focus-retirement/article/106934/Wealth-Less-Effect-Earning-Well-Feeling-Otherwise
Oh, yes, the life style choices... Take me, for instance. My personal choice, as anyone who knows me well will confirm, is to fly my own 747. I love to travel, and the fact that I have to wait in airports, sleep in a chair on long flights, and stand in long lines is simply unacceptable. It makes me feel positively broke. Middle class you say? As far as I am concerned, I am a pauper.
Now, Obama thinks that we are rich and wants to tax our hard earned money (that is, the amount above $250k) at 3% more. Which means that if we were to make, say, $350k next year, we'd be forking over $3000 more to the government in taxes. Instead of buying one of these: http://1-800-magic.blogspot.com/2009/04/computer-porn.html, which my chosen lifestyle dictates that I have. Talk about socialism!
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11 comments:
LOL. Very good point. Happy to see you have a sense of humor. Not to mention one of proportion :)
LOL. Very good point. Happy to see you have a sense of humor. Not to mention one of proportion :)
I'm from socialism country, China. OK, at least the government believes it's socialism country.
Here they don't rise tax rate. But your "computer po*n" may double the price because of other visible or invisible taxes.
It completely baffles me what is "socialist" (or communist) in China.
There is no free healthcare. There is no free education. There is no social protection net.
Any European country seems to have more socialist attributes than China...
Do not forget an Apple tax: if M$ will screw up with Windows 7 you may pay it as well;-)
Well, hmmm, at least your situation is not too bad?
Some so called "socialist" country is worse than yours. lol.
Yi,
I do not live in Europe. We don't have free healthcare, free education, or social net either :-).
Our government would even give banks more money than they're worth WITHOUT GETTING THE CONTROLLING SHARE, to avoid the word "nationalization".
We clearly have no socialism here...
You're sarcasm is well taken. But to conclude that Federal income taxes need to be more progressive than they are is based on class envy and not on what is best for a nation of free but responsible citizens.
As Ari Fliescher recently pointed out, most of us can agree on a progressive tax system...he and I both do. But we *cannot* expect healthy democracy to take place when more than 50% of all tax payers pay no income taxes whatsoever. The top 10% of income earners already pay 65% of all income taxes. The top 40% pay 99% of the income tax. Sure, let's have a progressive tax curve...but everyone needs to pay. And make no mistake about it, capital *does* flee to wherever it provides the best return. You cannot keep increasing taxes on the top few percent and expect to see them behave the same way economically. It is definitely a game of diminishing returns.
A system where the many reap the benefits paid for by a few cannot last. Even worse, an overly progressive tax structure depends too heavily on the fortunes of a select few. It is not too unlike states which rely on revenue from cigarette taxes and Tobacco settlements. The state depends on the continuance of the very thing you despise to make ends meet!
Nathan,
Throughout most of 20th century in US the upper tax bracket was far, far bigger than it is now. They were 90% under Eisenhower (http://citizenchris.typepad.com/citizenchris/2009/02/the-90-tax-bracket.html).
Very high upper tax bracket does not necessarily mean that more taxes are paid by the rich. It forces a more even income distribution (whereby it is impractical for a corporation to pay obscene salaries to the CEO, and so it could pay more to the workers), and actually (eventually) a BROADER tax base.
Which is what you (and I :-)) both want, right?
The 90% tax rates always turned out to be counter productive. Even Democrats led by JFK agreed to cut these taxes. Like I said, I'm okay with a progressive tax system, but there are limits. The 2003 Bush Tax did in fact *increase* the amount of income paid by the upper class because the incentives for making money were marginally increased. The same concept applies in sales. If lowering the price by 5% of product X means that you sell 10% more of it, you make more revenue.
Obviously, you can't go on decreasing the price of product X indefinitely before you revenues will drop too. But the evidence shows that the Bush Tax cuts didn't hit the threshold.
So you're right, if we raise top marginal tax rates so that the rich will be disinclined to make as much money the tax burden will fall more heavily on the middle and lower classes.
But this came about due to less productivity. I'd rather keep the top marginal tax rate at 33% and *raise* the rate on the lower classes to a minimum of 2% for the poorest. Everyone should be a part of this democracy no matter how poor.
The worst thing about low taxes on the rich is that they encourage irresponsible behavior.
If the marginal rate is low, it is a rational behavior for a CEO to pay himself/herself 10M in bonus even if the company goes down the next year. If the marginal tax rate is very high, the same CEO would prefer a steady $500K/year salary.
The events of the 30 years (AKA Reaganomics) has proven this without and reasonable doubts.
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