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The Angry Rich and Taxes





deanhills
Paul Krugman posted an excellent Opinion-Editorial in the New York Times of 19 September called "The Angry Rich". Really worth reading. He focusses on the frustration of the rich that is being expressed in political terms and how it will work in their favour with regard to tax fights:
Quote:
The spectacle of high-income Americans, the world’s luckiest people, wallowing in self-pity and self-righteousness would be funny, except for one thing: they may well get their way. Never mind the $700 billion price tag for extending the high-end tax breaks: virtually all Republicans and some Democrats are rushing to the aid of the oppressed affluent.

You see, the rich are different from you and me: they have more influence. It’s partly a matter of campaign contributions, but it’s also a matter of social pressure, since politicians spend a lot of time hanging out with the wealthy. So when the rich face the prospect of paying an extra 3 or 4 percent of their income in taxes, politicians feel their pain — feel it much more acutely, it’s clear, than they feel the pain of families who are losing their jobs, their houses, and their hopes.

And when the tax fight is over, one way or another, you can be sure that the people currently defending the incomes of the elite will go back to demanding cuts in Social Security and aid to the unemployed. America must make hard choices, they’ll say; we all have to be willing to make sacrifices.

But when they say “we,” they mean “you.” Sacrifice is for the little people.
socceraggie
This is a very interesting article. I especially found some of the word choices and phases indicative of the writer's bias towards the "successful". I think my favorite phase is
Quote:
the world’s luckiest people
because the author clearly views a person with wealth as being lucky. I'm sure there is a study out there that provides the percentages of people with wealth over a certain million that inherited their wealth and therefore could be classified as "lucky". I'd be willing to bet though that an even higher percentage did not inherit their wealth. Sure these people may have gotten a lucky break or been at the right place at the right time, but for many of them they worked hard. They made sacrifices that others chose not to and they have been rewarded for this work and sacrifice by obtaining wealth.

While I think taxes are necessary, I also think that would country has been heading down a scary path that has deviated from the core intent of our founding fathers. As our government becomes larger, less efficient, and expensive more and more citizens will become dependent upon this government. The government should not have citizens dependent upon it rather the government should be dependent on the people. I know the disagreement will always exist that the less fortunate want the fortunate to pay more for our government, and they certainly should and DO! It is common fact that the wealthy pay the majority of our government's revenue.

I heard an interesting comment from a friend of mine (who is an engineer and probably makes ~$55k / year). When times get hard, taxes go up, or someone's portfolio goes down everyone has a similar reaction: they tighten up their spending. For the average American that may mean they drive less to save gas or eat at home more rather than eating out. These are choices and "sacrifices". A wealthy person makes similar decisions only on a grander scale. They may decide to employ few people to save costs, take a less extravagant vacation or tip less both of which affect average Joe/Jane.

There is no simple answer but I'm a believer that money in the hands of capitalists is better than in the hands of a bureaucrat.
handfleisch
socceraggie wrote:

There is no simple answer but I'm a believer that money in the hands of capitalists is better than in the hands of a bureaucrat.


Well, money in the hands of the middle class is better than money in the hands of the mega-rich. Money in the hands of the fire department and government agencies building bridges and fixing the US infrastructure (which is also run by bureaucrats) is better than money in the hands of the super wealthy. Big gifts to the very rich don't help the economy and actually ends up sending US jobs overseas.

Your $55K per year friend had his taxes lowered by Obama, I hope he appreciates that.
socceraggie
handfleisch wrote:
Your $55K per year friend had his taxes lowered by Obama, I hope he appreciates that.


What did Obama do to lower his taxes? I'm not asking to be confrontational. I'm truly interested as I'm not in that tax bracket and I didn't see any change in my taxes over the past couple of years. If possible provide links to articles or publications citing how he lowered taxes for my friend.

Thank you!
handfleisch
socceraggie wrote:
handfleisch wrote:
Your $55K per year friend had his taxes lowered by Obama, I hope he appreciates that.


What did Obama do to lower his taxes? I'm not asking to be confrontational. I'm truly interested as I'm not in that tax bracket and I didn't see any change in my taxes over the past couple of years. If possible provide links to articles or publications citing how he lowered taxes for my friend.

Thank you!


No problem, glad to answer your questions. Part of the stimulus plan was a tax cut for 95% of working Americans. You can read all about it here:

http://www.politifact.com/truth-o-meter/statements/2010/jan/28/barack-obama/tax-cut-95-percent-stimulus-made-it-so/

Quote:
The tax cut was part of Obama's campaign promises. During the campaign, Obama said he wanted $500 for each worker and $1,000 for working couples. Since the final number was a bit less than he promised, we rated his promise a Compromise on our Obameter, where we rate Obama's campaign promises for fulfillment.

During the campaign, the independent Tax Policy Center researched how Obama's tax proposals would affect workers. It concluded 94.3 percent of workers would receive a tax cut under Obama's plan based on the tax credit to offset payroll taxes. According to the analysis, the people who wouldn't get a tax cut are those who make more than $250,000 for couples or $200,000 for a single person. Obama said he intended to raise taxes on those high earners, a promise he reiterated during the State of the Union, and that revenue would offset the stimulus tax cut.


This was so successful and popular that even the GOP leader Boehner, who has said No to almost every measure Obama has passed, is now supporting middle class tax cuts like it (even if he is probably only doing it for political purposes)

Quote:
Boehner Backs Tax Cuts Limited To Middle Class

http://www.npr.org/templates/story/story.php?storyId=129814058&ft=1&f=1001
deanhills
Handfleisch, I thought that was a short-term thing, so as to get the economy going, and that although it made Obama look good, it did not work in the end as all of the previous problems with regard to housing crisis and unemployment are still there in spades? It might have looked good while the going was good for those who cashed in with their credits, and for Obama, but the Government still needs money to operate, and that has to come from taxes. It can't survive on taking out loans indefinitely.
socceraggie
This appears to be going down a discussion of economic theory. Personally, I think that lower tax rates leads to higher tax revenues. This was proven during the Reagan administration where he lowered the top tax bracket. By doing this there was an infusion of money in the private sector leading to more jobs and thus more tax payers than refund receivers.

There of course is the theory that if you raise tax rates, the government will collect more tax revenue. While this is true for those that are in the higher tax brackets, the total revenues is more inclined to decrease because you have a higher risk of unemployment or underemployment thus few people paying taxes.

There are strong arguments for both approaches; I just agree more with the first. my main reason for agreeing with the first theory is I'd rather have control over where I spend my money than the government distributing wealth. This is a personal opinion.
handfleisch
socceraggie wrote:
This appears to be going down a discussion of economic theory. Personally, I think that lower tax rates leads to higher tax revenues. This was proven during the Reagan administration where he lowered the top tax bracket. By doing this there was an infusion of money in the private sector leading to more jobs and thus more tax payers than refund receivers.

There of course is the theory that if you raise tax rates, the government will collect more tax revenue. While this is true for those that are in the higher tax brackets, the total revenues is more inclined to decrease because you have a higher risk of unemployment or underemployment thus few people paying taxes.

There are strong arguments for both approaches; I just agree more with the first. my main reason for agreeing with the first theory is I'd rather have control over where I spend my money than the government distributing wealth. This is a personal opinion.


Sorry, aggie, but someone is selling you a load of BS. Reagan's experiment ended up with huge budget deficits. And so did Bush when he tried it. He took Clinton's balanced budget and turned it into historic deficit. There's no theory anymore --it just doesn't work and that's a fact.
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