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Scott Adams: Tax the Comfortable

71 points by cwan 16y ago

rflrob 16y ago
Is there some income level where everyone can agree that nobody is a "sucker", and you're just rich at that point? I would imagine all but a handful of doctors make less than 2 million dollars (40 times the median household's income), and those that do I'd be fine calling rich. If you create a new tax bracket for the rich at that point, you're losing only 2% of the increased tax income on the 100 millionaires, but not harming the struggling, debt-ridden doctors of the world.
wccrawford 16y ago
Wow, he really had to pile a lot on that doctor to make people feel sorry for him. College loans, mortgage, and 3 grandparents' nursing homes. Plus, his parents and his wife's parents also need support. It's a good thing normal people never end up in that situation! If he wasn't rich, he couldn't afford it. Wait... I think they do! He has a good point, but his analogy completely obliterates it. Unfortunately, he acts like we've never heard of the middle class and that he's delivering us news that they exist. They have been part of every tax discussion I've heard in the last few years. It's not news.
- dlnovell 16y ago
  In the example scenario, wouldn't the doctor be able to get tax deductions for college loan payments as well as dependent care of seniors? The mortgage underwater scenario sucks, but is he losing his home because it's not worth what he paid? I no tax expert, but wouldn't the increased taxes only apply to income that isn't covered by the deductions? If he's still making $250K+ per year beyond the deductions for those expenses, then I don't see that the sob story of the poor doctor just trying to get by with all the uncontrollable expenses is really valid.
  - gnaritas 16y ago
    > If he's still making $250K+ per year beyond the deductions for those expenses, then I don't see that the sob story of the poor doctor just trying to get by with all the uncontrollable expenses is really valid. Exactly.
  - Vivtek 16y ago
    Well, but he can't even deduct the salaries of his cook, nanny, and gardener! You heartless fiend!
  - tedunangst 16y ago
    If he's hit with AMT, he won't get the deductions.
deleted 16y ago
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- luigi 16y ago
  Political discourse is in a sad state when it's okay to use the term "gang rape" when talking about a proposed increase in tax rates.
drags 16y ago
Caring for parents and grandparents, paying off college loans and servicing a mortgage are all tax-deductible activities. I'm not saying it isn't hard to make ends meet with all those obligations, but a tax hike would disproportionately affect his _discretionary_ income, not income that ends up being spent on caring for others or paying off student debt.
- keithwarren 16y ago
  But current policy direction and talk is often focused around capping or ending deductions...
OstiaAntica 16y ago
There is a huge difference between the "wealthy"/"rich" and high income earners. Many high income earners, like young doctors or entrepreneurs, have negative net worth and are not wealthy at all. The progressive tax system is a scam rigged by the true rich-- who control assets and take income mostly as capital gains-- against the next generation of strivers who have earning power but few assets.
- deleted 16y ago
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gjm11 16y ago
If the class he's calling "Suckers", in between the Rich and the Majority, includes Scott Adams -- as he says it does -- then I can't help thinking that this is just the old, familiar gambit where rich people try to redefine a term like "middle class" to include themselves, so that they can portray self-interest as looking out for the poor beleaguered middle classes.
- bcrescimanno 16y ago
  I don't think that's a fair assessment; it's completely absurd to categorize people simply into two categories (and I'd even argue that 3 is probably not enough but that's far too long-winded for a HN comment). A family with an income of $200,000 per year is certainly more well-off than a family with an income of $50,000 per year; but there's absolutely no parallel to a family with income of $5,000,000 per year. I'd contend that the family with the $200k income has far more in common with the $50k income than the $5m family. And then we look at the $5m per year family and the $500m per year family. There's still no comparison. I don't think this is a case of Adams trying to push himself into the "middle class," I think what he's getting at is that the "middle class" is really a myth.
- jerf 16y ago
  The interesting question isn't whether it's a "gambit", the question is whether it is true. Calling people with large incomes and large unavoidable outflows "rich" isn't necessarily right, and while the stuff Adams said about that guy may mostly not look like unavoidable outflows, we do saddle all our doctors with debt and a lot of small business owners do have a lot of unavoidable outflows like, say, other people's salaries. Just taxing everybody with a high income is not necessarily a good idea for anybody, however good it may feel. He is certainly right that not all rich is created equal and the language here is very impoverished. It's also worth pointing out that a lot of those outflows are avoidable only to the extent that they are picked up by taxpayers, like taking care of his parents or college grants. We don't win if we grab $10,000 more from that guy, he goes bankrupt, and we incur $30,000 more in liabilities picking up what he now can't carry. (And yeah, I think those numbers do work, as the government frequently picks things up inefficiently.)
yummyfajitas 16y ago
Relatedly, we could also tax leisure. This would do a great job at hitting Paris Hilton, while leaving the doctor alone. Of course, we'd need to create a big exemption for the poor (most of whom choose not to work). [edit: citation for my assertion that the poor choose not to work: http://www.bls.gov/cps/cpswp2008.pdf http://www.bls.gov/cps/cpswp2008.pdf ]
- ceejayoz 16y ago
  Most of the poor in this country are working poor. http://www.cbsnews.com/stories/2008/10/14/national/main4522599.shtml http://www.cbsnews.com/stories/2008/10/14/national/main45225... > The number of jobs with pay below the poverty threshold increased to 29.4 million, or 22 percent of all jobs, in 2006 from 24.7 million, or 19 percent of all jobs, in 2002.
  - yummyfajitas 16y ago
    This is simply false. In 2008, 78% of the poor chose not to work (or even seek work) more than 26 weeks/year. See the link I provided in my edit. If you bothered to read your link as far as the third paragraph, you would realize they redefine poverty to be $41k/year. By that definition, more than half of France lives in poverty, oh noes! http://www.insee.fr/fr/themes/tableau.asp?reg_id=0&ref_id=natsos04202 http://www.insee.fr/fr/themes/tableau.asp?reg_id=0&ref_i...
    - ceejayoz 16y ago
      > If you bothered to read your link as far as the third paragraph, you would realize they redefine poverty to be $41k/year. Considering I quoted the fourth paragraph... $41k is a pretty small sum for a family of four. My family of four's health insurance premiums would eat up 1/4 of that. Our copays would eat up another 1/4. Not much money left for rent, insurance, food, transport to work, education, etc., let alone longer term stuff like college and retirement savings.
      - yummyfajitas 16y ago
m_myers 16y ago
Hmm. I wanted to post a link to one of the comments (currently the second-newest), but apparently his comment system doesn't have permalinks. So here's a copy-and-paste: --- MikeStansky (http://dilbert.com/users/MikeStansky http://dilbert.com/users/MikeStansky) Dec 27, 2010 I saw an amusing analogy on taxation: Suppose that every evening, 10 men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this: The first four men (the poorest) would pay nothing. The fifth would pay $1. The sixth would pay $3. The seventh would pay $7. The eighth would pay $12. The ninth would pay $18. The tenth man (the richest) would pay $59. So, that's what they decided to do. The 10 men drank in the bar every evening and were quite happy with the arrangement, until one day, the owner said "Since you are all such good customers, I'm going to reduce the cost of your daily beer by $20". Drinks for the 10 men would now cost just $80. The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? The paying customers? How could they divide the $20 windfall so that everyone would get his fair share? They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay. Therefore, the fifth man, like the first four, now paid nothing. The sixth now paid $2 instead of $3 (33% saving). The seventh now paid $5 instead of $7 (28% saving). The eighth now paid $9 instead of $12 (25% saving). The ninth now paid $14 instead of $18 (22% saving). The tenth now paid $49 instead of $59 (16% saving). Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings. "I only got a dollar out of the $20 saving," declared the sixth man. He pointed to the tenth man, "But he got $10!" "Yeah, that's right," exclaimed the fifth man. "I only saved a buck too. It's unfair -he got 10 times more benefit than me!" "That's true!" shouted the seventh man. "Why should he get $10 back, when I got only $2? The wealthy always win!" "Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!" The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill! And that, boys and girls, is how the tax system works. The people who pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier. --- The comment id is 75340, if anyone knows how to hack the URLs.
aresant 16y ago
There's already a word for the "suckers": HENRY - High Earner, Not Rich Yet http://money.cnn.com/2008/10/24/magazines/fortune/tully_henrys.fortune/index.htm http://money.cnn.com/2008/10/24/magazines/fortune/tully_henr...
- m_myers 16y ago
  Yeah. Um. Is there a third option?
petercooper 16y ago
The most interesting part there, to me, was the currently first comment by poke111. I'll reproduce it here: Imagine the government found some way to fund itself without any tax revenue at all. Say, a giant reserve of natural resources were found on federal land, and now tax revenue isn't needed to fund the government. As a libertarian-leaning conservative I personally would be delighted to see all federal income tax go to zero. After all, we've always been told that taxes are needed to fund the government. But somehow I think some people would not be happy that even "rich" people wouldn't have to pay taxes anymore. And here I think is where the real difference lies: libertarian and conservative type people see taxes as a necessary evil. If the government wouldn't need the money, the ideal situation would be zero taxation. But I think liberals tend to see things in the opposite way: Taxes are a way to acheive fairness, and funding the government is a convenient means to that end, in the absense of which they would find a different means. Conservatives want to set the level of taxation to match their preferred level of spending (at least in theory), and liberals want to set the level of spending to match their preferred level of taxation. The difference is whether taxation is the means or the end. Any truth to this technically? It feels right to me but I'm neither an economist or much of a politician.
- DanI-S 16y ago
  I think he's confusing liberalism with socialism.
  - Vivtek 16y ago
    I think he's confusing both liberalism and socialism with a straw man he emotionally substitutes for both.
  - hnal943 16y ago
    How would you define the difference? Is it a matter of degree? I'm not saying there isn't one, but I'd be interested in your distinction.
- TomOfTTB 16y ago
  This is a good article by Charles Krauthammer on that topic: http://www.washingtonpost.com/wp-dyn/content/article/2010/12/09/AR2010120904472.html http://www.washingtonpost.com/wp-dyn/content/article/2010/12... The gist is that President Obama really cut a fantastic deal for liberals yet many were still livid because it also contained an extension of the tax cuts. Hence they want to punish the rich above or equal to achieving their own goals. Personally I think the left is a sliding scale that goes from Moderate to Marx. Marx's famous quote "From each according to his ability, to each according to his need" is in line with the comment you quoted and I think people on the far left believe just that. I think the further you get away from the far left on the sliding scale the less that becomes true.
known 16y ago
The top American marginal income rates from 1944 to 1963 were 92%. http://news.slashdot.org/comments.pl?sid=1794484&cid=33651716 http://news.slashdot.org/comments.pl?sid=1794484&cid=336...
TomOfTTB 16y ago
The solution to the problem he puts forth is actually a simple one: Go entirely to a consumption tax. Then the doctor with all the family to support gets taxed very little despite his income and the rich guy going out to buy a Yacht gets taxed a huge amount. It's as fair as fair could be. The problem with a consumption tax is getting the Government to agree to a system that doesn't guarantee them a certain income and getting the people to accept huge price spikes (which are emotionally jarring even if your income tax has been eliminated).
- zdw 16y ago
  Then yacht guy buys and registers said yacht in the barbados, avoiding the tax entirely... Similarly, very few people pay attention to the "use tax" where that's in effect, and buy small, high price items like computers online where tax < shipping.
  - TomOfTTB 16y ago
    Yacht guy can just as easily set up his legal residence in Barbados while actually living in the U.S. and get the same benefits (and many do).
    - neworbit 16y ago
      As I recall he has to spend at least half his time outside the US in that instance (or is taxed as if he were natively resident). I am not a tax lawyer, YMMV
- ceejayoz 16y ago
  > It's as fair as fair could be. The poorer you are, the larger the proportion of your income that gets used for consumption. Folks making minimum wage currently pay little or no taxes, so they'd see a significant tax increase with consumption-based taxation - an increase they can't afford.
  - rick888 16y ago
    "Folks making minimum wage currently pay little or no taxes, so they'd see a significant tax increase with consumption-based taxation - an increase they can't afford." Maybe they would see what it's like to be taxed..and not vote to get everyone else gouged while their income isn't affected.
zdw 16y ago
So, what would work? A "Millionaire tax bracket" that was bandied around there for a while? Or increase the tax on capital gains? I'd love to hear a workable solution to this...
- hnal943 16y ago
  What would work is finding a way to tax wealth instead of income. That would shut Warren Buffet up.
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TheSOB88 16y ago
Interesting how state-funded health care would prevent his doctor example completely. True, we might need more taxes, but the cost would be evenly divided among the 'suckers' who have ill family members and the 'suckers' who don't.
lkrubner 16y ago
Scott Adams writes: "Before you break out the tiny violins for my hypothetical doctor, allow yourself to imagine that he's got a mountain of college loans, his mortgage is underwater, and he's supporting three grandparents (one on his wife's side) who all need some form of senior care, and the doctor's parents, and his wife's parents, have no spare cash. The doctor's parents might also need help in a few years. Oh, and the doctor has two kids of his own, one of whom needs some sort of special care. That's what the real world looks like for the so-called Sandwich Generation. For this imaginary doctor, any extra tax burden takes money from four generations of his family who needs it and distributes the cash to strangers." Imagine that instead of a doctor, we are talking about a hard working carpenter who makes about $40,000 a year, and of whom we could say "his mortgage is underwater, and he's supporting three grandparents (one on his wife's side) who all need some form of senior care, and the carpenter's parents, and his wife's parents, have no spare cash. The carpenter's parents might also need help in a few years. Oh, and the carpenter has two kids of his own, one of whom needs some sort of special care." Why do the woes of the hard-working doctor demand more sympathy than the woes of the hard working carpenter?
- bcrescimanno 16y ago
  "Why do the woes of the hard-working doctor demand more sympathy than the woes of the hard working carpenter?" If that's what you drew from the article; you've missed the point entirely. The point Adams is making is that a doctor making $250,000 per year has a lot more in common with the $40,000 per year carpenter than he does with the truly rich. This isn't about having sympathy for the doctor OR the carpenter; it's about understanding that both of them will be significantly hurt by higher taxes. Since no one is talking about increasing taxes on the carpenter, it's fair to question whether we've set the bar of "rich" far too low--or if two categories even make sense.
  - napierzaza 16y ago
    No I think you've missed the point. The doctor is making far more over the basic rate required to get by than the carpenter. The doctor's cries at night because he can't afford another Mont-Blanc pen and the carpenter can't send his kids to school. You have to understand that the doctor's needs are satisfied, not his wants.
gst 16y ago
Tax the ones who use the most resources. In my opinion an income (or wealth-based) tax systems is not really that optimal in a globalized world. Instead I propose a kind of resource-based tax systems: Instead of taxing income tax the amount of scarce resources used. For example, the amount of land owned, the amount of oil used, or even the amount of CO2 emitted. I think that such a system would have several nice implications: * Businesses would automatically look for ways to save taxes, and thereby help the environment. * It better reflects the true cost of a business or person to the society: If someone earns a lot of money this does not reduce my standard of living. However, if someone destroys the environment it does. * As a country you can avoid loosing many of the Internet businesses to tax havens, as there is a lesser advantage of moving away. Unfortunately, in many countries it's exactly the other way around. For example, many South American countries endorse usage of scarce resources by subsidize oil. While this works in the short-term, the consequences in the long-term will be fatal.
jessevondoom 16y ago
Am I the only one who thinks "gang rape" is a little extreme here? Granted, I'm on the low end of the "majority" but I find the perspective all sorts of wrong. My family was left penniless just paying the healthcare bill for our first daughter, and even then I would never compare a broken system to gang rape. I'm not saying we should discount the woes of middle-class America, but I think it's irresponsible to act as though the poor don't have it worse — and even more irresponsible to imply that the poor and the rich are somehow in collusion to "rape" the middle class. His initial point is a good one, but it strays really far.
HaloZero 16y ago
Why not just another higher tax bracket where income is greater than $1 million or something?
cmelbye 16y ago
Wow, finally a voice of reason in this argument. Just because you're in the highest tax bracket does not mean you have disposable income like Warren Buffet, Bill Gates, etc do. I'd think that most of the assets of people at the lower end of the highest tax bracket are illiquid.

71 points by cwan 16y ago

Is there some income level where everyone can agree that nobody is a "sucker", and you're just rich at that point? I would imagine all but a handful of doctors make less than 2 million dollars (40 times the median household's income), and those that do I'd be fine calling rich. If you create a new tax bracket for the rich at that point, you're losing only 2% of the increased tax income on the 100 millionaires, but not harming the struggling, debt-ridden doctors of the world.

wccrawford 16y ago

Wow, he really had to pile a lot on that doctor to make people feel sorry for him. College loans, mortgage, and 3 grandparents' nursing homes. Plus, his parents and his wife's parents also need support. It's a good thing normal people never end up in that situation! If he wasn't rich, he couldn't afford it. Wait... I think they do! He has a good point, but his analogy completely obliterates it. Unfortunately, he acts like we've never heard of the middle class and that he's delivering us news that they exist. They have been part of every tax discussion I've heard in the last few years. It's not news.

dlnovell 16y ago
In the example scenario, wouldn't the doctor be able to get tax deductions for college loan payments as well as dependent care of seniors? The mortgage underwater scenario sucks, but is he losing his home because it's not worth what he paid? I no tax expert, but wouldn't the increased taxes only apply to income that isn't covered by the deductions? If he's still making $250K+ per year beyond the deductions for those expenses, then I don't see that the sob story of the poor doctor just trying to get by with all the uncontrollable expenses is really valid.
- gnaritas 16y ago
  > If he's still making $250K+ per year beyond the deductions for those expenses, then I don't see that the sob story of the poor doctor just trying to get by with all the uncontrollable expenses is really valid. Exactly.
- Vivtek 16y ago
  Well, but he can't even deduct the salaries of his cook, nanny, and gardener! You heartless fiend!
- tedunangst 16y ago
  If he's hit with AMT, he won't get the deductions.

deleted 16y ago

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luigi 16y ago
Political discourse is in a sad state when it's okay to use the term "gang rape" when talking about a proposed increase in tax rates.

drags 16y ago

Caring for parents and grandparents, paying off college loans and servicing a mortgage are all tax-deductible activities. I'm not saying it isn't hard to make ends meet with all those obligations, but a tax hike would disproportionately affect his _discretionary_ income, not income that ends up being spent on caring for others or paying off student debt.

keithwarren 16y ago
But current policy direction and talk is often focused around capping or ending deductions...

OstiaAntica 16y ago

There is a huge difference between the "wealthy"/"rich" and high income earners. Many high income earners, like young doctors or entrepreneurs, have negative net worth and are not wealthy at all. The progressive tax system is a scam rigged by the true rich-- who control assets and take income mostly as capital gains-- against the next generation of strivers who have earning power but few assets.

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gjm11 16y ago

If the class he's calling "Suckers", in between the Rich and the Majority, includes Scott Adams -- as he says it does -- then I can't help thinking that this is just the old, familiar gambit where rich people try to redefine a term like "middle class" to include themselves, so that they can portray self-interest as looking out for the poor beleaguered middle classes.

bcrescimanno 16y ago
I don't think that's a fair assessment; it's completely absurd to categorize people simply into two categories (and I'd even argue that 3 is probably not enough but that's far too long-winded for a HN comment). A family with an income of $200,000 per year is certainly more well-off than a family with an income of $50,000 per year; but there's absolutely no parallel to a family with income of $5,000,000 per year. I'd contend that the family with the $200k income has far more in common with the $50k income than the $5m family. And then we look at the $5m per year family and the $500m per year family. There's still no comparison. I don't think this is a case of Adams trying to push himself into the "middle class," I think what he's getting at is that the "middle class" is really a myth.
jerf 16y ago
The interesting question isn't whether it's a "gambit", the question is whether it is true. Calling people with large incomes and large unavoidable outflows "rich" isn't necessarily right, and while the stuff Adams said about that guy may mostly not look like unavoidable outflows, we do saddle all our doctors with debt and a lot of small business owners do have a lot of unavoidable outflows like, say, other people's salaries. Just taxing everybody with a high income is not necessarily a good idea for anybody, however good it may feel. He is certainly right that not all rich is created equal and the language here is very impoverished. It's also worth pointing out that a lot of those outflows are avoidable only to the extent that they are picked up by taxpayers, like taking care of his parents or college grants. We don't win if we grab $10,000 more from that guy, he goes bankrupt, and we incur $30,000 more in liabilities picking up what he now can't carry. (And yeah, I think those numbers do work, as the government frequently picks things up inefficiently.)

yummyfajitas 16y ago

Relatedly, we could also tax leisure. This would do a great job at hitting Paris Hilton, while leaving the doctor alone. Of course, we'd need to create a big exemption for the poor (most of whom choose not to work). [edit: citation for my assertion that the poor choose not to work: http://www.bls.gov/cps/cpswp2008.pdf http://www.bls.gov/cps/cpswp2008.pdf ]

ceejayoz 16y ago
Most of the poor in this country are working poor. http://www.cbsnews.com/stories/2008/10/14/national/main4522599.shtml http://www.cbsnews.com/stories/2008/10/14/national/main45225... > The number of jobs with pay below the poverty threshold increased to 29.4 million, or 22 percent of all jobs, in 2006 from 24.7 million, or 19 percent of all jobs, in 2002.
- yummyfajitas 16y ago
  This is simply false. In 2008, 78% of the poor chose not to work (or even seek work) more than 26 weeks/year. See the link I provided in my edit. If you bothered to read your link as far as the third paragraph, you would realize they redefine poverty to be $41k/year. By that definition, more than half of France lives in poverty, oh noes! http://www.insee.fr/fr/themes/tableau.asp?reg_id=0&ref_id=natsos04202 http://www.insee.fr/fr/themes/tableau.asp?reg_id=0&ref_i...
  - ceejayoz 16y ago
    > If you bothered to read your link as far as the third paragraph, you would realize they redefine poverty to be $41k/year. Considering I quoted the fourth paragraph... $41k is a pretty small sum for a family of four. My family of four's health insurance premiums would eat up 1/4 of that. Our copays would eat up another 1/4. Not much money left for rent, insurance, food, transport to work, education, etc., let alone longer term stuff like college and retirement savings.
    - yummyfajitas 16y ago

m_myers 16y ago

Hmm. I wanted to post a link to one of the comments (currently the second-newest), but apparently his comment system doesn't have permalinks. So here's a copy-and-paste: --- MikeStansky (http://dilbert.com/users/MikeStansky http://dilbert.com/users/MikeStansky) Dec 27, 2010 I saw an amusing analogy on taxation: Suppose that every evening, 10 men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this: The first four men (the poorest) would pay nothing. The fifth would pay $1. The sixth would pay $3. The seventh would pay $7. The eighth would pay $12. The ninth would pay $18. The tenth man (the richest) would pay $59. So, that's what they decided to do. The 10 men drank in the bar every evening and were quite happy with the arrangement, until one day, the owner said "Since you are all such good customers, I'm going to reduce the cost of your daily beer by $20". Drinks for the 10 men would now cost just $80. The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? The paying customers? How could they divide the $20 windfall so that everyone would get his fair share? They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay. Therefore, the fifth man, like the first four, now paid nothing. The sixth now paid $2 instead of $3 (33% saving). The seventh now paid $5 instead of $7 (28% saving). The eighth now paid $9 instead of $12 (25% saving). The ninth now paid $14 instead of $18 (22% saving). The tenth now paid $49 instead of $59 (16% saving). Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings. "I only got a dollar out of the $20 saving," declared the sixth man. He pointed to the tenth man, "But he got $10!" "Yeah, that's right," exclaimed the fifth man. "I only saved a buck too. It's unfair -he got 10 times more benefit than me!" "That's true!" shouted the seventh man. "Why should he get $10 back, when I got only $2? The wealthy always win!" "Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!" The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill! And that, boys and girls, is how the tax system works. The people who pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier. --- The comment id is 75340, if anyone knows how to hack the URLs.

aresant 16y ago

There's already a word for the "suckers": HENRY - High Earner, Not Rich Yet http://money.cnn.com/2008/10/24/magazines/fortune/tully_henrys.fortune/index.htm http://money.cnn.com/2008/10/24/magazines/fortune/tully_henr...

m_myers 16y ago
Yeah. Um. Is there a third option?

petercooper 16y ago

The most interesting part there, to me, was the currently first comment by poke111. I'll reproduce it here: Imagine the government found some way to fund itself without any tax revenue at all. Say, a giant reserve of natural resources were found on federal land, and now tax revenue isn't needed to fund the government. As a libertarian-leaning conservative I personally would be delighted to see all federal income tax go to zero. After all, we've always been told that taxes are needed to fund the government. But somehow I think some people would not be happy that even "rich" people wouldn't have to pay taxes anymore. And here I think is where the real difference lies: libertarian and conservative type people see taxes as a necessary evil. If the government wouldn't need the money, the ideal situation would be zero taxation. But I think liberals tend to see things in the opposite way: Taxes are a way to acheive fairness, and funding the government is a convenient means to that end, in the absense of which they would find a different means. Conservatives want to set the level of taxation to match their preferred level of spending (at least in theory), and liberals want to set the level of spending to match their preferred level of taxation. The difference is whether taxation is the means or the end. Any truth to this technically? It feels right to me but I'm neither an economist or much of a politician.

DanI-S 16y ago
I think he's confusing liberalism with socialism.
- Vivtek 16y ago
  I think he's confusing both liberalism and socialism with a straw man he emotionally substitutes for both.
- hnal943 16y ago
  How would you define the difference? Is it a matter of degree? I'm not saying there isn't one, but I'd be interested in your distinction.
TomOfTTB 16y ago
This is a good article by Charles Krauthammer on that topic: http://www.washingtonpost.com/wp-dyn/content/article/2010/12/09/AR2010120904472.html http://www.washingtonpost.com/wp-dyn/content/article/2010/12... The gist is that President Obama really cut a fantastic deal for liberals yet many were still livid because it also contained an extension of the tax cuts. Hence they want to punish the rich above or equal to achieving their own goals. Personally I think the left is a sliding scale that goes from Moderate to Marx. Marx's famous quote "From each according to his ability, to each according to his need" is in line with the comment you quoted and I think people on the far left believe just that. I think the further you get away from the far left on the sliding scale the less that becomes true.

known 16y ago

The top American marginal income rates from 1944 to 1963 were 92%. http://news.slashdot.org/comments.pl?sid=1794484&cid=33651716 http://news.slashdot.org/comments.pl?sid=1794484&cid=336...

TomOfTTB 16y ago

The solution to the problem he puts forth is actually a simple one: Go entirely to a consumption tax. Then the doctor with all the family to support gets taxed very little despite his income and the rich guy going out to buy a Yacht gets taxed a huge amount. It's as fair as fair could be. The problem with a consumption tax is getting the Government to agree to a system that doesn't guarantee them a certain income and getting the people to accept huge price spikes (which are emotionally jarring even if your income tax has been eliminated).

zdw 16y ago
Then yacht guy buys and registers said yacht in the barbados, avoiding the tax entirely... Similarly, very few people pay attention to the "use tax" where that's in effect, and buy small, high price items like computers online where tax < shipping.
- TomOfTTB 16y ago
  Yacht guy can just as easily set up his legal residence in Barbados while actually living in the U.S. and get the same benefits (and many do).
  - neworbit 16y ago
    As I recall he has to spend at least half his time outside the US in that instance (or is taxed as if he were natively resident). I am not a tax lawyer, YMMV
ceejayoz 16y ago
> It's as fair as fair could be. The poorer you are, the larger the proportion of your income that gets used for consumption. Folks making minimum wage currently pay little or no taxes, so they'd see a significant tax increase with consumption-based taxation - an increase they can't afford.
- rick888 16y ago
  "Folks making minimum wage currently pay little or no taxes, so they'd see a significant tax increase with consumption-based taxation - an increase they can't afford." Maybe they would see what it's like to be taxed..and not vote to get everyone else gouged while their income isn't affected.

zdw 16y ago

So, what would work? A "Millionaire tax bracket" that was bandied around there for a while? Or increase the tax on capital gains? I'd love to hear a workable solution to this...

hnal943 16y ago
What would work is finding a way to tax wealth instead of income. That would shut Warren Buffet up.

deleted 16y ago

[deleted]

TheSOB88 16y ago

Interesting how state-funded health care would prevent his doctor example completely. True, we might need more taxes, but the cost would be evenly divided among the 'suckers' who have ill family members and the 'suckers' who don't.

lkrubner 16y ago

Scott Adams writes: "Before you break out the tiny violins for my hypothetical doctor, allow yourself to imagine that he's got a mountain of college loans, his mortgage is underwater, and he's supporting three grandparents (one on his wife's side) who all need some form of senior care, and the doctor's parents, and his wife's parents, have no spare cash. The doctor's parents might also need help in a few years. Oh, and the doctor has two kids of his own, one of whom needs some sort of special care. That's what the real world looks like for the so-called Sandwich Generation. For this imaginary doctor, any extra tax burden takes money from four generations of his family who needs it and distributes the cash to strangers." Imagine that instead of a doctor, we are talking about a hard working carpenter who makes about $40,000 a year, and of whom we could say "his mortgage is underwater, and he's supporting three grandparents (one on his wife's side) who all need some form of senior care, and the carpenter's parents, and his wife's parents, have no spare cash. The carpenter's parents might also need help in a few years. Oh, and the carpenter has two kids of his own, one of whom needs some sort of special care." Why do the woes of the hard-working doctor demand more sympathy than the woes of the hard working carpenter?

bcrescimanno 16y ago
"Why do the woes of the hard-working doctor demand more sympathy than the woes of the hard working carpenter?" If that's what you drew from the article; you've missed the point entirely. The point Adams is making is that a doctor making $250,000 per year has a lot more in common with the $40,000 per year carpenter than he does with the truly rich. This isn't about having sympathy for the doctor OR the carpenter; it's about understanding that both of them will be significantly hurt by higher taxes. Since no one is talking about increasing taxes on the carpenter, it's fair to question whether we've set the bar of "rich" far too low--or if two categories even make sense.
- napierzaza 16y ago
  No I think you've missed the point. The doctor is making far more over the basic rate required to get by than the carpenter. The doctor's cries at night because he can't afford another Mont-Blanc pen and the carpenter can't send his kids to school. You have to understand that the doctor's needs are satisfied, not his wants.

gst 16y ago

Tax the ones who use the most resources. In my opinion an income (or wealth-based) tax systems is not really that optimal in a globalized world. Instead I propose a kind of resource-based tax systems: Instead of taxing income tax the amount of scarce resources used. For example, the amount of land owned, the amount of oil used, or even the amount of CO2 emitted. I think that such a system would have several nice implications: * Businesses would automatically look for ways to save taxes, and thereby help the environment. * It better reflects the true cost of a business or person to the society: If someone earns a lot of money this does not reduce my standard of living. However, if someone destroys the environment it does. * As a country you can avoid loosing many of the Internet businesses to tax havens, as there is a lesser advantage of moving away. Unfortunately, in many countries it's exactly the other way around. For example, many South American countries endorse usage of scarce resources by subsidize oil. While this works in the short-term, the consequences in the long-term will be fatal.

jessevondoom 16y ago

Am I the only one who thinks "gang rape" is a little extreme here? Granted, I'm on the low end of the "majority" but I find the perspective all sorts of wrong. My family was left penniless just paying the healthcare bill for our first daughter, and even then I would never compare a broken system to gang rape. I'm not saying we should discount the woes of middle-class America, but I think it's irresponsible to act as though the poor don't have it worse — and even more irresponsible to imply that the poor and the rich are somehow in collusion to "rape" the middle class. His initial point is a good one, but it strays really far.

HaloZero 16y ago

Why not just another higher tax bracket where income is greater than $1 million or something?

cmelbye 16y ago

Wow, finally a voice of reason in this argument. Just because you're in the highest tax bracket does not mean you have disposable income like Warren Buffet, Bill Gates, etc do. I'd think that most of the assets of people at the lower end of the highest tax bracket are illiquid.