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As you know, fairness is a concept that was invented so that children and idiots could participate in arguments. I was reminded of this when thinking about taxes. According to one source, the people in the top 1% of incomes pay more federal taxes now than at any time since 1979:


http://www.factcheck.org/askfactcheck/what_percent_of_taxes_does_the_top.html


The reason the top 1% are paying more taxes is because they are earning far more money than before. So while the rich are paying a lower percentage than during Clinton's time in office, they are paying more in dollars under Bush.


In other words, each rich person is subsidizing more poor people than ever. Still, each rich person has more left over for himself than ever. If you are on the side that says that isn't fair, what percent of a rich person's income do you think should be distributed by threat of force to those in need?


50%?


75%?


90%?


Keep in mind that a person making ten million a year can get by on one million a year. So is there any good reason not to take 90%? Think about all the people it would help.

 
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Jul 9, 2008
ThisSucks asks how many people would play the lottery if the winners had to give 90% to the non-winners. Well, the vast majority of the people who play the lotter now give ALL of their money away (ie they lose) so maybe the numbers wouldn't change much at all.
 
 
Jul 9, 2008
"Keep in mind that a person making ten million a year can get by on one million a year. So is there any good reason not to take 90%? Think about all the people it would help."

I would say that someone making $10M annually has more to lose if society collapses than someone making much less. Because the social contract is benefiting such an individual so well, he or she should understand that paying more in taxes as a % of his income than those who earn less helps to prevent poor uneducated hoodlums from stealing everything he owns.

I don't have any kids going to public school right now. I still enjoy paying taxes to support public schooling so that a writhing mass of uneducated worthless humanity does not descend upon my doorstep, and steal said doorstep.

When I make $10M per year maybe I will disagree with the point of view. As of now I think it is !$%*!$ that Warren Buffett pays less as a % of his annual earnings than his secretary. Source: http://business.timesonline.co.uk/tol/business/money/tax/article1996735.ece

I understand your argument that even though the rich are paying less as a percentage of their income now than in the past they are now paying more in total dollars than every before. However, Yay inflation.

Gas is $4 a gallon here. Food costs are going up. Getting by on the median family income in the US is getting harder and harder to do. I say this as a recently married person with a great job, decent pay, no kids, and no debt including no car payments, no credit card debt, no mortgage and having a sizeable amount of our earnings going to savings every month. F this I'm going to start drawing cartoons.
 
 
+3 Rank Up Rank Down
Jul 9, 2008
The reason you don't take 90% is because then you would be a cotton-pickin' communist. And you know how well communism works. It's very "fair." Everyone gets to be poor, and work as a slave to prop up the 1% in the politburo.

To get wealth, one must work hard, try hard, risk, invent, apply oneself, innovate, inspire, and try repeatedly after failure.

If the reward is but 10% of what you manage to make, most of us will not be terribly motivated.

But if the reward is just about 100% of what you produce, well, you get Eli Whitney, Bill Gates, Malcom Forbes, and even Donald Trump. You get people like my dad who bought a restaurant and worked like a crazy man to make it profitable, constantly fine tuning and tweaking, and employing hundreds of other people in the process. He wouldn't have done that for no 10%.
 
 
Jul 9, 2008
Scott, there you go again. Re-defining words to support your arguments. In this case, the term "fairness." Here's what "fair" really means: "free from bias, dishonesty, or injustice: a fair decision; a fair judge."

Of course, you're just doing what you do so often: make a statement you know is ridiculous in order to stir up the masses. This post is no more than a straw man meant to incite loud shouting and wailing. But in the interests of fairness, I'll respond as though it were real.

Here's something that will probably shock many of the readers of this blog: money belongs to the people who earn it. I know, you're all gasping like strangled ducks right now, but before you dismiss this concept that might be outrageous to some of you, think about it. People don't walk into the bank and steal the money - they work hard, deprive themselves of a family life in many cases, take risks, fail fail fail, learn from their failures, pick themselves back up and try again - and then finally, some few of them succeed. Those are the ones who get rich. And they're the ones that many point to as being somehow undeserving of their wealth.

What taxes were supposed to be for (on the federal level) was to support the tasks put upon the federal government by the Constitution. This includes such things as defending the country; hence the military, paid for by tax money. It was never intended to be a wealth-redistribution mechanism. What the government is doing by taking away one person's money and giving it to another person who did not earn it is more honestly called by a different name: stealing.

Your post posits two incorrect positions: first, fairness should be ignored in such dealings; second, that, in effect, it's really the government's money, not the money of those who earn it, and therefore the government has the absolute right to determine how much of it they will let an individual keep.

This school of economic theory is generally known by the name "socialism," where the state defines fairness (much as you did), owns everything, and then gets to decide who gets what. The term "creeping socialism" is meant to describe a propaganda campaign wherein two things happen: those who produce and earn are vilified as greedy, overly-paid individuals who don't deserve the money they've earned; second, those who don't produce are declared as being in one or more "victim classes" due to some clearly definable attribute of their accident of birth. These victim classes are then told that they have somehow been cheated out of the money they would have received if this were a "fair" country, and that the government thus has the right to take it from the producers and give it to them.

This is how we move to socialism. This is also how we become an unfair country, in the guise of fairness. It is the age-old battle between those who believe in equality of opportunity and those who demand equality of outcome, regardless of the contribution made by those receiving other people's largess.

Sounds great, but it doesn't work. Currently, the US has a future unfunded liability of a staggering amount. In 2005, federal spending rose to almost $21K per household, and that doesn't count the percentage of the unfunded liabilities. The government is now one big spending machine, writing checks for money that it doesn't have, and is borrowing from other countries. The Social Security unfunded entitlement is over $23 trillion. The Medicare drug benefit has added about $10 trillion to that.

So why don't we take every penny earned by anyone making, say, over $1M per year to get us out of this mess? Well, if we did that, we'd only increase the federal tax revenues by less than 10%. They're already paying 40% of the federal tax, and putting that high a burden on them practically ensures they will look for ways to keep their earnings out of this country.

At the same time, the bottom 50% of wage earners, those who vote for people who will give them these massive entitlements, pay only around 3% of federal taxes. If you're not paying taxes, but you can decide to vote for someone who will raise the taxes on those who are, yippee! You're happy as a kid in a candy store.

Sad fact: the federal government now spends about 20% of the GDP. Based on CURRENT entitlements (not any new ones the government may decide to create), the federal government will have to spend nearly 33% of the GDP by 2050. That will hobble our economy and pretty much make us a third-world country. If you'd like to see some details, here's a good link: http://www.heritage.org/research/budget/bg1818.cfm.

So think about the real definition of "fairness" the next time you are tempted to vote yourself someone else's money. It's the least you can do. And it might just stop you from becoming a thief in the name of fairness.
 
 
Jul 9, 2008
Scott, come on. It's not the 50 or 60 or 90% that's the problem. It's the distribution side. I understand why Dilbert had to work in a company and not in government...because the insanity in a company is at least mildly believable. Look at this lunatic Edgerly in Oakland. Government takes it to a whole different level. So the answer isn't the % we take, it's figuring out how to put some honesty and discipline into the distribution of that funding...otherwise we're just giving more food to the monster.
 
 
Jul 9, 2008
Keep in mind that the origin of the income tax in the early part of the 20th century was to soak the rich. Who isn't paying now?
 
 
Jul 9, 2008
I've heard enough of the arguments ("The rich are the ones who need the money, because they are the ones who create the jobs, and starting a business takes money", "The rich got to be rich because of some inequaliity in 'the system' - higher taxes aren't on the rich, it's really a tax on 'the inequality") that I've pretty much become a "flat tax" type, with a few twists.

1) People can't obey a law they can't understand. There is not one human alive who understands ALL the tax codes. No two people will come up with the same tax amount on a resonably complex income. So throw the current system out and start over.

2) Three indicies should be tied together: the Poverty Line; the Minimum Wage; and the Standard Deduction.
a) That is, if someone works full time, they should just make ends meet (barring catastrophy), and should pay not pay any taxes.
b) Anything more than that minimum, is fair game, and taxed at the same percentage.

3) Income is income is income. So "Capital Gains" should be treated exactly as income, just indexed for inflation. (If I make 5% on my investment this year, but inflation is 5%, I haven't actually increased my wealth at all.).

4) Only the Standard Deduction. Period. "Congress shall make no laws altering the tax code" - should be a Constitutional Ammendment. Owning a house is such a financial advantage that there's no need for the government to subsidize it. If the government has a "noble cause" that it wants to promote, rather than giving "tax breaks", the government should just hand out cash. This will allow them to budget just how much a "program" costs. And when the money runs out, that's it.

5) Same for business taxes, but with no standard deduction. All "profit" is taxable. BUT a company can reduce it's "profit" if it a) Invests in itself (creating jobs, good for the economy) or b) pays dividends (distribing the money, the governement still gets its share).

So simple. So sensible. So never-going-to-happen.

 
 
Jul 9, 2008
90% on money they earned just because they have money (dividends, capital gains, etc.)

50% on money they actually earned by working at a job.

The 90% will insure that they keep that money in the economy (so they don't have to pay the 90%)

50% because it feels unfair for the government to take more than half your paycheck even if you can afford it.
 
 
Jul 9, 2008
Well, that can't be right! According to Obama, if he repeals the Bush tax cuts only the richest will see a tax increase! Surely the rich were paying a larger percentage before that.

Of course, what Obama doesn't want you to know (yet) is that if you make 30K a year, he considers you 'among the richest'.

I too, would be in favor of a flat 10% tax, no exceptions, no loop holes for this special interest group or that special interest group. The tax code should fit in a 10 page pamplet, that the average high school graduate could understand.

Better yet, create a National sales tax and do away with Income taxing altogether. That would solve a whole host of problems.



 
 
Jul 9, 2008
10% is a fair tax rate for the wealthy. A wealthy person will create more wealth than the government will with the same amount. In the long run, the more money that wealthy people keep, the better for all of us.
If we took 90%, then who in their right mind would put in the effort to become wealthy?
 
 
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Jul 9, 2008
Its likely that it would also benefit people like my older brother, who's lazy to look for a job.
 
 
Jul 9, 2008
Taxes do not help anyone. They go to the government which wastes more money than anyone can imagine. Any argument that taxing the rich more is equitable is nothing more than class envy.
 
 
+1 Rank Up Rank Down
Jul 9, 2008
The sad truth is even if you took all the money from the rich, it still wouldn't be enough to help all the poor. Here in Pennsyltucky we have over a million people getting assistance from the government. The Medicaid budget is 19 billion. Who is rich enough to fund that?

Let's talk about what happens with money. If I buy a yacht, then my money gets distributed to various parties involved in yacht building. They turn around and purchase goods and services with that money. Then, the recipients of that money turn around and purchase goods and services. So one yacht purchase actually allows many other purchases.

Debt works the same way in money creation. For example, if I borrowed a billion and bought a yacht, all the same things would happen.

The biggest worry isn't rich people. The biggest worry is what happens when credit dries up.
 
 
Jul 9, 2008
Sometimes all your thoughts can be expressed by a single movie quote; this is the !$%*!$%*!$%*! the poor!
(History of the World, Part I - Highly recommended btw.)

Personally I'm in favor of flat tax, 10-15% everyone; regardless of the income...
 
 
Jul 9, 2008
Interesting questions, Scott. Fair taxation is a tricky thing to figure out. I'm reminded of your kids with marbles suggestion: you'd give a kid who didn't enjoy marbles way more than the kid who did, in order to have them garner the same enjoyment out of it.

I'd look at taxation in the context of other things provided by society. What do the rich get from the poor through our social contract? We agree to help each other out if we go to war, for instance. Currently we have an all-volunteer army, but a draft is always an option to fall back on; most people think this is a good idea because it's the sort of country we want to live in. So, we should look at it from that perspective: what sort of country do we want to live in? One with universal health care and education would be wonderful, but what are the costs? Is there a way the poor can give back to the rich in exchange for the massive capital required for the social institutions?

I think we should work this out like everything else, through compromise. Some people want certain things, others want other things, what sort of middle ground can we agree on?
 
 
+1 Rank Up Rank Down
Jul 9, 2008
Who gives a damn about fair? If it was fair, everyone would pay a fixed amount.

Taxation is based on what works. Taxing the rich is a lot easier. Nobody has a lot of sympathy for a guy who only has half as many millions as he might otherwise have, so you take him to the cleaners. Don't like it? Well, maybe you should have chosen a less social species rather than one that likes to form communities.

And so you increase the tax rate to the level where people start thinking that it's just not worth earning the extra.
 
 
Jul 9, 2008
I agree with the flat tax comment. If you start taking away 90% of 10 million dollars, pretty soon there will be no one making 10 million dollars. It's like at a huge company where I used to work - If you got a 5 on your performance appraisal, you got a 5.8% raise. If you got a 3, you got a 5.5% raise. Who wants to work that hard for .3%?
 
 
Jul 9, 2008
The problem with a progressive tax system (which I'm sure you haven't overlooked, but I like hearing myself type), is that you have bands where making more money often means keeping less. Now, most people that make that kind of money aren't the sort that would just STOP making money at a certain level, but they ARE the sort to hire people that find sneakier ways to make it LOOK like they're making less money, at least as far as tax law is concerned. So basically, all you get from increasing tax rates on the smartest Americans, is less money actually taxed.

Celebrities, of course, are excluded from this argument, as they rarely make their money using their brain, and are rarely smart enough to handle it wisely. You'll note that many of the rich people campaigning to tax the rich, are celebrities.
 
 
+1 Rank Up Rank Down
Jul 9, 2008
By using 1979 as a starting point, you are missing the rest of the varied history of taxation of rich which hit once hit 94% 1944 and as recently as 1969 was 77%. In general, whenever we've been at war the tax rate on the rich has jumped. This is because while in general the young who don't yet have money go out and fight and potentially die or get maimed, the older and more affluent sacrifice via wallet. We have a very rare situation now where not only the young are going out to fight, but they will be also picking up the bill plus interest for the war. (yes over simplified emotional argument)

Here is an interesting chart for you.
http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of_progressivity_in_federal_income_tax
 
 
0 Rank Up Rank Down
Jul 9, 2008
With all this talk of taxes, fairness, and whatnot...Hm...Can anyone say "Ayn Rand"? I *knew* you could!! :^D
 
 
 
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