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White House Proposes "Wealthy Tax"
President Obama is proposing a new tax rate for people making over $1m a year. The new rate is part of a larger plan which seeks to bring in $1.5 trillion in new tax revenue and is sure to meet opposition in congress. From the article: "The core of the president's plan totals just more than $2 trillion in deficit reduction over 10 years. It combines the new taxes with $580 billion in cuts to mandatory benefit programs, including $248 billion from Medicare." GOP Rep. Paul Ryan of Wisconsin said, "Class warfare may make for really good politics but it makes for rotten economics."
Who cares how 'large' the incentive is? There will always be incentive for people to cheat to keep their money. It's our patriotic duty to make sure they pay their fair share for this country. This is a step in that direction.
It is class warfare to increase tax rates in the highest income brackets to a level that is about half that of the 1950s http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#1913_-_2010. The current tax rate for the highest income brackets is 33%. In the 1950s and 1950s the highest tax rate was 91%. One can also argue that the proposed increased tax rate won't even restore the high tax rate to the same extent, since the historical tax rates were for income of at least $250,000, whereas this will apply to income of at least a million dollars but this would be slightly misleading since adjusting for inflation $250,000 in 1960 dollars is around a 2 million now. But even given that, the general point should be clear: This is far less than the historic tax rate during a time period that is often considered to be one of the most stable and prosperous.
The other problem with labels like class warfare is how much they miss the point of what actual class warfare is. If one wants to see actual class warfare look at the French Revolution where aristocrats and clergy got executed and this eventually spread to wealthy merchants. Or look at the Russian Revolution and the following years where people were punished and exiled for simply being farmers who owned their own land and equipment. That's class warfare. Voting to increase tax rates to levels well below historical levels is just regular economic policy. One can discuss whether such taxes are a good or bad thing, but it is pretty clear that such discussion isn't going to go very far when people like Ryan are using this sort of ridiculously inflammatory rhetoric.
So instead of giving them "reason" to seek tax loopholes, you suggest giving up that tax revenue without a fight? How is that going to result in a revenue increase?
Some rich people (and wannabes) always bring up the "they (yeah right) will leave and go to tax havens. I say good riddance. If they like it better in those countries, what's stopping them? Or do they just want to stay here and twist our arms, because they actually like it here, you know, with the jobs and the infrastructure, and just don't want to pay as much taxes?
Wealth accumulating at the top does ruin the economy. The only thing that makes this economy thrive is spending. One person having a billion dollars in the bank isn't going to make Target's quarterly numbers, no matter how much real-estate or stock said rich person invests in. Unless that money finds its way to the lower and middle class to be spent again, our economy will continue to stagnate. So yes, rich people continuing to accumulate a larger share of the wealth in this country every year are the problem. Fixing corporate tax loopholes will not increase demand for goods from the middle and lower classes.
Keeping the money that you earned and worked for is cheat
BWAHAHAHAHAHAH. LOL.
The vast majority of this income in this range is "Unearned Income." People aren't earning nor working for multi-million dollar annual incomes, they are enjoying the benefits of others work by collecting dividens and stock profits.
-Rick
"Most people in the U.S. wouldn't know they live in a tyrannical state if it walked up and grabbed their junk." - MyFirs
No, using public services to make money, then hiding your earnings so that you don't have to pay for those public services is CHEATING. EVERYONE in this country benefits from tax-funded services. But the rich seem to think that because they make millions, they don't have to contribute.
Let's put it this way: I am one car on the road, and I have to pay taxes for road upkeep. Mr. Millionaire has a fleet of 1000 semi trucks to deliver his product, but he doesn't have to pay for road upkeep? Does that seem fair to you?
What's going to be entertaining (in the sense that the sad circus of American politics is entertaining) about this whole thing is to watch the about-face the conservatives will make about how much money it takes to be rich. Recently, various state governments have been going after unions, and you see conservative commentators on the various shows talking about how teachers make enough money, how $30-40k a year is plenty when you consider union benefits, blah blah. Now these same exact people are going to go on the same exact shows and, with a straight face, say how those poor folks making a million a year are just struggling to get by and really need a break in this kind of economy while completely ignoring the fact they've spent a better part of a year telling us a teacher's salary is downright lavish. How does a conservative's head not explode from the cognitive dissonance? Do they actually simultaneously believe these polar opposite stances they take, or are they (like all politicians) simply bought and paid for by their masters and puppet whatever talking points they are fed?
For those of you who are going to dispute my point, here are some preemptive replies. First, I know that folks on the left do this shit all the time too. I remember Kerry's "flip flopping" helping cost him the 2004 election. But pointing to the other side and saying "See, they do the same reprehensible thing we do" does not actually make it okay. It's still downright disingenuous. My point is simple: How much money does it take to be rich? Because the conservatives in America have two different definitions that depend not on the amount income, but essentially on class. The fact that these same conservatives are the first to scream "Class Warfare!" at this kind of proposal is deliciously ironic and the whole thing would be fucking hilarious if the stakes weren't so high.
Reality check: to solve the long-term debt crisis, two things need to happen. Taxes need to go up, and spending needs to go down. Either side that says you can do one but not the other is living in some magical fairy-tale land where facts are superseded by what they wish were true.
"To confine our attention to terrestrial matters would be to limit the human spirit." -Stephen Hawking
If by "work hard" you mean go to a business school where they will give you a adress book of other self content bastards who will exclusively hire you instead of someone competent and teach you how to maximize short term profit until you can use your golden parachute (only to be hired the next month by another rogue corporation's board), then that's what you deserve. This is about 50% of the rich, "hard working people". Add to that the 45% of lucky sperms, and you have 95% of the rich out there.
Working hard is by far no guarantee to get wealthy.
Being rich is by far no proof to have worked hard.
The important thing is to spare small businesses from the tax increase. A lot of small businesses are either simple proprietorships/partnerships or LLCs, for which the profits are taxed as an addition to personal income. Proprietors and partners will pay these taxes from the cash on hand of the business, meaning that the business has fewer resources to expand and hire more employees.
So go ahead and tax the $20M CEOs and such, but try to avoid placing the additional burden on small businesses.
What's happening right now is not unlike many third world countries where the rulers grab millions from foreign aid while the people live on a dollar a day. Most of those have a somewhat working economy, they just live in separate worlds where you buy and sell products and services to other equally poor people. I don't think we're heading for a permanent jobless economy, just one with much bigger class separations again with an overclass that can be even more lavish with servants and luxuries. Because their money work for them, it's still diverging even if they're spending big.
Live today, because you never know what tomorrow brings
First, there isn't enough money in million+ income hands to balance the budget.
That's no reason why they shouldn't contribute to balancing it.
This smells like more class warfare shit,
Yeah, and the middle class is losing the war. We should start fighting back.
and now they'll tax the remaining producers into moving their assets out of the country. Maybe it'll get him re-elected, right? We'll worry about the economy in the 2nd term.
Nice disingenuous straw man there, Mr. Koch. This isn't about corporate taxes, this is about personal income tax. Why should Warren Buffett pay half the rate his secretary does? Buffet vs his secretary IS class warfare.
Free Martian Whores!
Note that this is still an income tax -- not a wealth tax. Those who are already wealthy can and will always game this such that they report little income, thereby preserving their wealth. If necessary, they'll just keep their money offshore.
If he had any sense, he'd offer an amnesty to the wealthy. Allow them to repatriate their funds from overseas at a reduced tax rate so that money comes back to the US. The money the treasury makes on that smaller percentage would still be more than the zero they get from it today.
But, earning money is not a side affect of society, it is the primary purpose of society to provide order and mechanisms for economic growth
No, it isn't. The primary purpose of society is to continue the existance of the society. Economic growth is a result of our current growth rates and stability of social interactions. Consolidation of wealth however leads to threats to the continuation of society as we know it. The challenge though, is that many of those with wealth believe they would benefit more from a new society in which more wealth was consolidated. So they can use their wealth to influence people who aren't in their wealth class to believe that there isn't a threat to social stability.
It is a masterful art, but it will not lead to a better America.
That isn't to say that we need to get all commie and make everyone equal. A progressive tax program is hardly full on commie though.
And to counter your political jab: We all know what happens when Republicans propose tax cuts and spending cuts. Taxes decrease on the rich and the poor die in wars. :P
-Rick
"Most people in the U.S. wouldn't know they live in a tyrannical state if it walked up and grabbed their junk." - MyFirs
Goddamn Republicans beating the same fucking drum they've been beating for 10 years "Lower taxes and remove regulations so corporations can compete!" Ignoring the fact that that's what got us into this mess to begin with.
And Goddamn Democrats incapable of showing anything resembling leadership. Hook up that vagisil IV drip because they're just a bunch of vaginas.
Vote them out. Vote them all out. And keep doing it until we find some representatives who are more interested in solving the nation's problems than playing political games with American lives as the pieces.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
No, using public services to make money, then hiding your earnings so that you don't have to pay for those public services is CHEATING.
Then why does the US tax every dollar you make overseas, even if you are overseas for the entire year? If I live in Thailand the entire year and earn my salary over there, I still have to pay US taxes on it - even though I didn't use any US public services. It's not about paying for what you use - it's about paying for what Government wants.
Let's put it this way: I am one car on the road, and I have to pay taxes for road upkeep. Mr. Millionaire has a fleet of 1000 semi trucks to deliver his product, but he doesn't have to pay for road upkeep? Does that seem fair to you?
Mr. Millionaire's company probably pays those taxes on those 1000 trucks. Unless you're suggesting he personally owns them? Do those trucks pay fuel taxes, excise taxes, and State registration taxes? How are they not paying for road upkeep - they pay fuel costs...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
This bill is dead on arrival that the House, which is Republican controlled. Too many there have signed Grover Norquist's pledge to NEVER raise any taxes of any kind.
I'm sorry to say this, but the radicals are now in control. Just like the Taliban, they have an extreme ideology and will not compromise or make "common sense" decisions because they carry a radical philosophy.
As such, there is no longer any 'bargaining" going on. The bill will be flat out struck down or filibustered into oblivion. I'm not sure if you've noticed, but our Congress has passed almost no legislation of any kind since taking office 18 months ago. All they've done is argue.
This is the Congress that campaigned on a platform of "jobs", came in and immediately wasted two days reading the Constitution, then tried to repeal Obamacare and abortion rights, and since then, hasn't done anything except destroy the nation's credit rating.
Good luck getting this through.
If telephones are outlawed, then only outlaws will have telephones.
How about a tax scale that accounts for the current unemployment rate? Higher unemployment = higher taxes for corporations and rich, lower unemployment is lower taxes for corporations and the rich. Hell of an incentive to create jobs.
That's only true for capital gains from dividends. Capital gains from changes in the share price are only taxed at 15%.
For this reason many companies do not make a profit. Instead they spend the money on either capital items or investments and pay $0 tax. These uses of the money increase the assets of the company, which is then reflected by a corresponding (sometimes even amplified) increase in the share price. If a stockholder then sells enough stock to make up the difference in price, they effectively pay themselves dividends at a total tax rate of 15%.
Personally, I think the best way to solve this is to make dividends a before-profit outlay for corporations, and then make all capital gains count as income. Of course, good luck getting something like that implemented...