8 ms·

The problem I have with the phrase "Taxes for the rich" is not so much the "taxes" part as the "the". Who are these rich people? How do you draw the line? Wh

The problem I have with the phrase "Taxes for the rich" is not so much the "taxes" part as the "the". Who are these rich people? How do you draw the line? What does it mean for a society to push more and more people into this category in order to tax them punitively?

ewanmcteagle 18y ago
It's also a problem when people keep voting for expenditures by majority rule and deciding that a different minority group should pay. That doesn't seem right.
- redcap 18y ago
  Except of course they don't. All tax goes into a pool that the government (as the representatives of the people, the majority if you will) decides what to do with it. I think a better question is why shouldn't 'the rich' be paying a bigger portion of tax? You mention, 'minority group', but if you change that to 'the rich' (for a good definition of the word), the answer becomes imo that the rich can afford to pay more tax if they stop spending so much money. Many more people can live very with surprisingly less than what 'rich' people have. The answer should be to suck it up and deal with it.
  - dkokelley 18y ago
    This is something that's always bothered me about progressive tax rates: You mention that 'the rich' should be paying a bigger portion of tax. They are, by a number of definitions. At even a simple flat tax the rich are paying more than others, because they earn more. Now we add progressive rates so 'the rich' pay a higher percentage of what they make. Do they receive more of the benefit from their tax dollars? Probably not. National defense protects just about all citizens equally, public schools are hit and miss with tax dollars per student (which may be irrelevant because of private schooling for those who can afford it), and public services like libraries, roads, and protection are not distributed according to who pays more (except when you have higher income communities). If anything the rich receive less benefit per dollar taxed from them than any other group. Now I'm all for helping out those in need, and giving those who don't earn as much a tax break, but in terms of justice and equality I think our tax system unfairly burdens the rich. But hey, they can handle it, right?
    - gjm11 18y ago
      The extra benefit you get from a given increase in income decreases as your income increases. (If someone's on $20k/year then a raise of $5k/year is probably quite a big deal. If they're on $500k/year, not so much.) Therefore, the cost of a given amount of taxation is typically less to someone rich than to someone poor. On the other hand, the benefit of the taxation -- whatever hopefully-useful things the government does with the money -- is independent of whether it came from rich people or poor people. Therefore: whatever amount of taxation revenue you want to raise, and ignoring second-order effects (e.g., that higher tax rates reduce the incentive to work and increase the incentive to find ways to avoid/evade taxes) you will reduce the amount of harm done by collecting the taxes if you take more from the better-off and less from the worse-off. Of course, once the differences between rates become very large, those "second-order" effects may no longer be small. If you ignore them entirely, I think the conclusion is that for maximum total utility you should tax + redistribute until everyone is equally well off, but long before you get there the "second-order" effects will be much more important.
      - dkokelley 18y ago
        I understand your point about the diminishing marginal utility of extra dollars for the rich, but it seems dangerous to make that judgment for them. Who is to say how much the extra $5,000 is worth to me? What if I make $500k/yr, but I've budgeted most of it to regular expenses, some savings, and the rest in investments, and my daughter is now engaged and will have a wedding in 3 months? Now I receive a $20k bonus from my company to help pay for my daughter's wedding. Unfortunately for me I can only spend about $12k of it for wedding expenses, because someone else (society, taxpayers, politicians) has decided that those extra dollars aren't as useful to me than someone else (the government decides who). My point is not that it's possible for someone who makes a lot of money to not have it readily available, but rather that the road we head down when we say "The socially responsible thing to do is tax people who earn more because they can deal with it" is a scary one. Also, tax + redistribute until everyone is equal will never happen, even if there are no second-order effects, simply because people are different. Some are content to work x amount for $y, while others want to innovate, work harder, and do more. The government should make the game equal, not the players.
Tangurena 18y ago
If you're making over $380k, then you're in the top 1% of households in the US by income. If you're making over $150k, then you're in the top 5% of households in the US by income. If you're making over 100k, then you're in the top 10% of households in the US by income. http://elsa.berkeley.edu/~saez/saez-UStopincomes-2006prel.pdf http://elsa.berkeley.edu/~saez/saez-UStopincomes-2006prel.pd... There are some lines. I'd draw it at "top 5% by income."
- deleted 18y ago
  [deleted]
- comatose_kid 18y ago
  I wouldn't define 'rich' by income alone, because 150k ain't rich in the Bay Area.
  - ojbyrne 18y ago
    While I do understand what you're saying, it ain't poor.
  - gjm11 18y ago
    That's like saying "150k ain't rich if you have a 100k/year gambling habit" or "150k ain't rich if you have an enormous house purchased with a big mortgage". Living in the Bay Area is a luxury that only the well-off can afford without great hardship; it has benefits which mean that many people do it even though after paying to live in the Bay Area they don't have much disposable income. Just as many people choose to take out large mortgages, or buy fast cars, or gamble, or whatever, even though they may not then have much disposable income left.
    - diego 18y ago
      The same can be said of living in the US. You could move to a cheaper part of the world, perhaps even telecommute. You could argue that you grew up in the US, so staying home is not a luxury. Those who grew up in the Bay Area don't see living there as a luxury any more than you see living in the US as a luxury.
redcap 18y ago
If you read the article, the author suggests a fairly marginal increase in tax for those with already much more than those in the middle-class. I wouldn't call this being 'punitive'.
- wlievens 18y ago
  Exactly. I just don't get why the conversation about tax raising by one or two percent on a high bracket evokes images of "communism" on some people. Going from 39% to 40% (or whatever) is NOT a paradigm shift people.
  - dkokelley 18y ago
    I think it has to do with people feeling as if they are being taxed enough already. If 39% seemed like too much (but tolerable because it's already there), 40% is just insulting. If it weren't a big deal to go from 39% to 40%, then the government shouldn't mind not having that extra 1%, right?
    - wlievens 18y ago
      Well then, you can oppose the measure and present arguments against it, but calling it OMG COMMUNISM OMG is intellectually dishonest.

ewanmcteagle 18y ago

It's also a problem when people keep voting for expenditures by majority rule and deciding that a different minority group should pay. That doesn't seem right.

redcap 18y ago
Except of course they don't. All tax goes into a pool that the government (as the representatives of the people, the majority if you will) decides what to do with it. I think a better question is why shouldn't 'the rich' be paying a bigger portion of tax? You mention, 'minority group', but if you change that to 'the rich' (for a good definition of the word), the answer becomes imo that the rich can afford to pay more tax if they stop spending so much money. Many more people can live very with surprisingly less than what 'rich' people have. The answer should be to suck it up and deal with it.
- dkokelley 18y ago
  This is something that's always bothered me about progressive tax rates: You mention that 'the rich' should be paying a bigger portion of tax. They are, by a number of definitions. At even a simple flat tax the rich are paying more than others, because they earn more. Now we add progressive rates so 'the rich' pay a higher percentage of what they make. Do they receive more of the benefit from their tax dollars? Probably not. National defense protects just about all citizens equally, public schools are hit and miss with tax dollars per student (which may be irrelevant because of private schooling for those who can afford it), and public services like libraries, roads, and protection are not distributed according to who pays more (except when you have higher income communities). If anything the rich receive less benefit per dollar taxed from them than any other group. Now I'm all for helping out those in need, and giving those who don't earn as much a tax break, but in terms of justice and equality I think our tax system unfairly burdens the rich. But hey, they can handle it, right?
  - gjm11 18y ago
    The extra benefit you get from a given increase in income decreases as your income increases. (If someone's on $20k/year then a raise of $5k/year is probably quite a big deal. If they're on $500k/year, not so much.) Therefore, the cost of a given amount of taxation is typically less to someone rich than to someone poor. On the other hand, the benefit of the taxation -- whatever hopefully-useful things the government does with the money -- is independent of whether it came from rich people or poor people. Therefore: whatever amount of taxation revenue you want to raise, and ignoring second-order effects (e.g., that higher tax rates reduce the incentive to work and increase the incentive to find ways to avoid/evade taxes) you will reduce the amount of harm done by collecting the taxes if you take more from the better-off and less from the worse-off. Of course, once the differences between rates become very large, those "second-order" effects may no longer be small. If you ignore them entirely, I think the conclusion is that for maximum total utility you should tax + redistribute until everyone is equally well off, but long before you get there the "second-order" effects will be much more important.
    - dkokelley 18y ago
      I understand your point about the diminishing marginal utility of extra dollars for the rich, but it seems dangerous to make that judgment for them. Who is to say how much the extra $5,000 is worth to me? What if I make $500k/yr, but I've budgeted most of it to regular expenses, some savings, and the rest in investments, and my daughter is now engaged and will have a wedding in 3 months? Now I receive a $20k bonus from my company to help pay for my daughter's wedding. Unfortunately for me I can only spend about $12k of it for wedding expenses, because someone else (society, taxpayers, politicians) has decided that those extra dollars aren't as useful to me than someone else (the government decides who). My point is not that it's possible for someone who makes a lot of money to not have it readily available, but rather that the road we head down when we say "The socially responsible thing to do is tax people who earn more because they can deal with it" is a scary one. Also, tax + redistribute until everyone is equal will never happen, even if there are no second-order effects, simply because people are different. Some are content to work x amount for $y, while others want to innovate, work harder, and do more. The government should make the game equal, not the players.

Tangurena 18y ago

If you're making over $380k, then you're in the top 1% of households in the US by income. If you're making over $150k, then you're in the top 5% of households in the US by income. If you're making over 100k, then you're in the top 10% of households in the US by income. http://elsa.berkeley.edu/~saez/saez-UStopincomes-2006prel.pdf http://elsa.berkeley.edu/~saez/saez-UStopincomes-2006prel.pd... There are some lines. I'd draw it at "top 5% by income."

deleted 18y ago
[deleted]
comatose_kid 18y ago
I wouldn't define 'rich' by income alone, because 150k ain't rich in the Bay Area.
- ojbyrne 18y ago
  While I do understand what you're saying, it ain't poor.
- gjm11 18y ago
  That's like saying "150k ain't rich if you have a 100k/year gambling habit" or "150k ain't rich if you have an enormous house purchased with a big mortgage". Living in the Bay Area is a luxury that only the well-off can afford without great hardship; it has benefits which mean that many people do it even though after paying to live in the Bay Area they don't have much disposable income. Just as many people choose to take out large mortgages, or buy fast cars, or gamble, or whatever, even though they may not then have much disposable income left.
  - diego 18y ago
    The same can be said of living in the US. You could move to a cheaper part of the world, perhaps even telecommute. You could argue that you grew up in the US, so staying home is not a luxury. Those who grew up in the Bay Area don't see living there as a luxury any more than you see living in the US as a luxury.

redcap 18y ago

If you read the article, the author suggests a fairly marginal increase in tax for those with already much more than those in the middle-class. I wouldn't call this being 'punitive'.

wlievens 18y ago
Exactly. I just don't get why the conversation about tax raising by one or two percent on a high bracket evokes images of "communism" on some people. Going from 39% to 40% (or whatever) is NOT a paradigm shift people.
- dkokelley 18y ago
  I think it has to do with people feeling as if they are being taxed enough already. If 39% seemed like too much (but tolerable because it's already there), 40% is just insulting. If it weren't a big deal to go from 39% to 40%, then the government shouldn't mind not having that extra 1%, right?
  - wlievens 18y ago
    Well then, you can oppose the measure and present arguments against it, but calling it OMG COMMUNISM OMG is intellectually dishonest.