Tax the Rich

Suddenly your previous arguments make sense. I didn't realize you were like "Kennedy" rich. I make a pretty good living, but apparently no where near what you do. So, perhaps I haven't hit the point where my marginal utility curve stops being flat.

And I know plenty of guys who live quite comfortably on 50k, by the way. They would be offended by being described as living "hand to mouth", even after taxes.

Anyway, I'd be happy knowing you multi-millionaires were actually paying the same rate of taxation as the rest of us. As it is, I assume multi-millionaires can afford to pay lawyers, accountants, and politicians to avoid paying even the same amount.

 

Log in or Sign up to hide all adverts.

50K less 20% in Manhattan means you have decide: rent or food?

Please Register or Log in to view the hidden image!

Maybe it's not that bad (ignoring taxes after that 20%), but $2K per month gets you a 400 sq ft studio in Manhattan unless you live in a rent controlled building.

I would think my marginal utility curve is the flat one. After all, if I see a $1 blow swiftly past me in the wind, am I going to chase it? No. Not worth it. The same is true iof $5, $10 and maybe even $20. I might go for the $20, but I'd probably think about whether it was worth my time and the delay would cost me. When I was a poor college student, even the $1 would have had me running, and the $20 would have had me knocking the elderly out of my way. For me now, the different between a $20 and a $1 bill isn't that great. It seemed more significant when I was poor.

 

Log in or Sign up to hide all adverts.

I've always wondered how normal people can afford to live in places like New York or California. I'm sure the average salary is higher, but is it that much higher?

I hear about one bedroom ranch houses selling for over a million dollar in California. The same house where I live would go for 100 grand or less. I presently live in a four bedroom house with a basement in one of the best school districts in my state. It's valued at about 170k.

I'm thinking of upgrading to a nicer house, and I can get what I'd consider practically a mansion for $250-400k (4-5 thousand square feet plus a finished walk out basement). And the prices are dropping right now.

Many people in my neighborhood make around 50k, and the kids at my son's high school are derided around town as "the rich kids".

Interestingly, I just looked up the median household income for New York City verses where I live. It's $38,293 in New York City verses $36,518 in Fort Wayne, Indiana. So I say again, how in the hell can people afford to live there?

 

Log in or Sign up to hide all adverts.

rationing there are also some other spots where land is really expensive like lake geneva

 

For starters, the percentage of people who own their home is much, much lower than the national average. There's also rent control programs and housing projects.

 

Sure, and probably a lot of people don't own cars either in New York City. So you don't own your home, you don't own a car, what the hell do you own? Anything?

This may go a long way towards explaining why big cities tend to be so liberal and the rest of the country so conservative. Where I live, everyone owns their home, a couple of cars, a big screen TV,, etc. And there's not that much disparity in income. Pretty much everyone considers themselves "middle class".

In a big city, the average guy owns nothing while living among giant buildings and vast wealth. The income disparity is much larger. It makes it seem like the "little guy" doesn't stand a chance and needs government to help him out.

 

So if the big buildings and vast wealth are not directly in front of your face, you sort of go along pretending that they - and the income disparity - don't exist?

That may indeed explain a lot.

 

Your retirement account would be the big one.

 

You're missing the point. In middle America, damn near everyone is middle class. Some a little weathier, some a little less. In big cities you have millions of peons who own nothing and a few mega rich people.

We see a continuum with most people in the middle and a few on the top/bottom. We are almost all property owners and so have a stake in the system. Denizens of big cities are more like peasants living on their feudal lord's land. They are much more willing to turn to the crown to protect them (in their helplessness) from their lords and masters.

 

Uh, not really. The home ownership rate in Manhattan is still around 33%, and most cities are not nearly as unaffordable, and so display home ownership rates closer to the national average of 66%. Generally, the people who work in cities are more skilled, and so make more money, and so can afford more expensive real estate. It's only in extremely desirable locations that the housing prices get too far out in front of the median wage.

Moreover, given that federal taxes and spending amount to a national program of taking money away from city-dwelling blue-staters and spending it on country-dwelling red-staters, your characterization seem very much at odds with reality. The political differences between the two groups have less to do with how big or active they want the government to be, and more to do with which exact areas they want to activism to show up in (social welfare on the one hand, defense and cultural issues on the other).

 

Yes, that "smartness" is usually exhibited very early. (By selecting a wealthy family to give birth to them.

Please Register or Log in to view the hidden image!

)

 

This article is pretty interesting at how there are many more people who are millionaires but are still associating themselves with the middle class. I can't blame them because they have more cash flow on hand.

 

This basic pattern explains a lot about conservative politics in the US, IMHO.

 

Lets at least tax 100% these guys (and gals):

"...Even for an industry where pay has always been sky-high, the numbers have become stratospheric - like a $161-million (U.S.) retirement package for Stan O'Neal after he was ousted from Merrill Lynch & Co. in October, or $200-million in signing bonuses and pay granted to Citigroup Inc.'s brand new chief executive officer Vikram Pandit.

The amazement, however, is quickly turning to anger as major investment banks - most notably Bear Stearns Cos. Inc. - have seen profits and share prices tumble due to their exposure to subprime mortgages and complex derivatives.

Investors are facing the realization they not only paid hundreds of millions of dollars for deeply flawed oversight, but those pay packages may have actually fuelled the high-risk business practices that are toppling giants today. ..."

Sub-prime mortgage are another example where the writter got richer the more they wrote, with ZERO risk as they sold them junk away.

From:
http://www.globeinvestor.com/servlet/story/GAM.20080321.RCOMPENSATION21/GIStory/

 

I have not read through the whole thread but I just find the idea of taxing the rich higher rates unfair (I'm not rich by any means!).

Most rich people have worked VERY hard for their wealth. Why should the people working in McDonald's not pay a lot of tax. They're the people who will be needing the health care and other things because the rich will all have private health care...etc. This is just one example but you can't expect the rich to pay more because poor people are too lazy to be smart and innovative therefore making more cash.

Barry

 

First, an aside, I will spare you a detailed discussion of diminishing marginal utility (which I think does explain why the rate of taxes on McDonald's workers should be lower than on people like me). Short form: If you pay 25% of $10,000 in taxes, that generally causes a lot more pain to the average person than paying 25% on $100,000,000 would. I discuss that above.

Second, regarding the quote above, what makes you think that? I ask not because you are wrong, but because I have no idea if you are right or wrong. Frankly, I make a *lot* of money every year and I feel that I work hard for it. That said, my father was a firefighter for 47 years and earned jack shit. I felt he worked pretty hard too. If you measure the effort I put in, and the effort he put in, there is no way I should be earning 100+ times as much as he did in his best year, but I am. He was also as smart or smarter than I am, so surely it's not based on that either.

Add to that that my co-workers, to varying degrees, also work pretty hard, but their kids and many relatives don't. I happen to be in a place where a number of people are from "old money" and we nouveau riche still have a slight stigma having worked our way up. I tend to see a number of hard working rich people in my daily life complaining about all their good for nothing, lazy (but still very rich) relatives, spouses, friends, etc. For every Stephen Schwarzman (or two) there is a Paris Hilton (or two). Paris earns money too, because her vast inherited fortune earns it for her, without her working at all.

Whether the average wealthy person "works hard?" I don't know, and I count myself and work among them. To me, their efforts seem mixed. There are a large number of workaholics who definitely work hard and earn vast sums, but there are also those who do nothing who's money came from some combination of inheritance or pure luck. My honest impression is that the rich, as a group, work no harder (nor significantly less hard) than anyone else, just that you have to average out a number of very extreme individuals to realize that.

 

Do you have any evidence for the belief expressed in the first sentence of yours I quoted? It is my impression that there is a very strong correlation between the wealth of the parent and the wealth of the children. This would tend to contradict what you assert. I.e. the wealthy are rich because they had the capital to become wealthy. As they say: "It takes money to make money."

As far a "working hard" have you tried to dig ditches for a living? Or to get up at 5AM in an urban ghetto to be able to catch the 5:30 bus and ride out to the suburbs and cook and clean some rich person's house while they sit in front of a computer in air conditioned office and make more than 10 times what they pay you. True they may have gone to an "Ivy league" school whereas the 5:30AM bus riding maid did not even finish high school; but what does that have to do with "working hard"?

And yes the privileged by birth and much richer should pay more than the McDonald's worker IMHO, in part because they can and still have much more left over to see that their kids go to good schools and never need to get up at 5AM just to put some potatoes and cheap meat on the table.
--------------------------
A personnel note:
I am one of the rare few who was very poor, worked hard as a “full needs” scholarship student thru the Ph.D. and now have a few millions in my old age, mainly because I can foresee things coming before most people do and “act before the crowd.” I too was lucky or “privileged.” My father was a smart rural West Virginia MD, a “country doctor” paid in jars of pickles or piece of venison more often than cash, if paid at all. He stayed near where he was born to serve those in need. My mother was smart too. She was a “liberated woman” far ahead of her time and in conflict with my father. Because of this, their divorce etc. she became an alcoholic school teacher, who was fired annually from each school she managed to get work in. My father could not help his “women are to serve men” attitude as his father died when he was about three and his mother moved in with four of her sisters. The five of them raised him, attending to his every wish as he grew up. But I was still “privileged” as both parents taught me to love learning.

As I was very poor until nearly 30, but as I am not dumb, and had the direct experience, I understand what a handicap not being “born to wealth” is. I have not forgotten that period of my life – it no doubt “colors” my current POV. Imagine what it is like to be born female with black skin of ill educated parents. If you can’t – I will tell you: IF you lucky and very hard working, you will rise at 5AM and ride the bus to the suburbs, work very hard all your life and when you die, probably partially from lack of medical care, a few of your friends will chip in to pay for your funeral. IF you are not lucky, and are in your 30s or older you probably have several hungry kids, no in-house man, and must do a few "tricks" each month to feed them as your public wealfare check mainly goes to the rich slum landlord in suburbia.

It is improbable my children or grand children will ever be poor as I am very frugal (life time habits are too hard to change). I did have the good sense to let them struggle as they were growing up. They worked hard for everything they got, except education. Until they were about 35 they were convinced that everything I had accumulated was going by my will to Cornell and JHU as compensation for the free education I received. One daughter is much richer than I am – made entirely by her hard work. She has MBA, CFA, etc. She several years ago managed the defined benefits retirement plan for a major airline company, often making more for the company’s “bottom line” than the pilots and their airplanes did. (Defined benefit retirement plans are company assets and liabilities, as Enron employees sadly learned.) She retired from that and now is a private investment councilor to people who do not mind, or at least will hardly notice, losing a million dollars. You must have at least 20 million to invest to be her client. Her clients also know: “It takes money to make money” and few of them do any work, unless you count swinging a golf club at a very exclusive country club.

SUMMARY: Get real.

 

Those numbers don't indicate reality. First, Add, state, local, fees, and and payroll taxes. After doing that the numbers look very different.

Also many of the very rich play games to hide income. Some of the poor and some middle class self-employed also hide income but the very rich do it on a larger scale.

The advocates for the rich will say you can't add payroll taxes because they fund a welfare/insurance program. So far the payroll taxes fund the general fund and promises for the future retirement of the young are not even legally binding. If you want to disqualify certain taxes because they fund programs for certain classes then you must disqualify taxes that fund programs that don't benefit the poor. Our trade policies favor the rich over the poor in a massive way. Do we hold all Americans responsible for programs that benefit nobody or do we blame the rich because lobbyists work for the rich? Lobbyists work for specific rich not all rich? Better that we don't get into what the taxes are for.

Who pays property tax on rented housing? The landlord pays but he passes the cost on to his tenants.

If the poor are legally required to subsidize the car insurance of the rich is that a tax? When a thousand dollar car hits a forty thousand dollar car and "totals" it the cost of the $40,000 car is born by the insured whether they be rich or poor. When the $1,000 car is hit and totaled by the $40,000 car only $1000 is born by the by the insured. Car insurance for everybody would be much less expensive if nobody owned expensive cars. The poor do subsidize the rich in car insurance but the poor have no far fewer people paid to whine on their behalf than the rich do so we don't here about the ways in which the poor subsidize the rich.

The rich would pay a lot more for their nannies and lawn care if we enforced our immigration laws in the USA. Lobbying by big employers of cheap labor is why we don't enforce our immigration laws.

Private ownership of land is necessary to encourage investment in improvements on land, but every new baby born has as much right to own the land as anybody else does. All land is stolen property. Asking the children of the landless to honor the inheritance rights of the the children of those that own land is asking the poor to subsidize the rich.

What should be taxed, income, wealth, or expenditures? The top 5% probably own more than 60% of the wealth of America.

This recent fall in housing prices is going to make a big change in wealth ownership statistics. Home equity, would change faster than home prices because the mortgage owed is not changed by the the falling home price unless there is a default.

Stop your whining you crybaby rich. As for all of the non-rich who parrot the whining of the rich and their lobbyists, talking like the rich does not make you rich or smart.

 

Some rich inherited wealth and don't work hard. Some poor are lazy and don't work hard.

Some rich work very very hard. Some poor work very very hard.

The opportunity and ability to work smart is what separates the rich from the non-rich.

You can't ask people at McDonald's to pay a lot of taxes because they are not paid enough to live on their incomes if "a lot" of taxes are taken out of their pay. If we had a different immigration policy McDonald's would have to pay a lot more for employees and then the McDonald's employees could pay more taxes.