Taxing the rich - what is the cutoff?

[SC Skins Fan]

Originally Posted by firstdown

Well the people I know who makes that kind of money started from the bottom. Some worked their way to the top and some took tons in loans so to become doctors. These guys work harder then anyone I know and thats why they have the incomes they do today. They are the working class as much as anyone of us. If they went back to what you call the working class they would just work their way up as they did the first time. I just do not get your way of thinking or maybe you just have not been around and seen how hard people work to make that kind of money. I guess you could point out some who had it handed to them. You could also find some not working that hard today but it was the hard work they put in when younger to enjoy life a little more from the top.

My simple point was that I wonder what these people would do if they found themselves having to support a family of four on a household income of $40,000-45,000. But maybe you haven't been around and seen how hard people work to make that kind of money (my dad was a carpenter, my wife's father a fire fighter - obviously if they possessed more personal virtue they would have attained greater things and made more money). I have a tough shedding tears for folks who are crying poor because they make $300,000 and their taxes might go up 3%.

It is a basic question about the role of government in society, which is the core of the ideological divide between what we refer to as liberalism and conservatism. George Will calls it the difference between 'freedom' and 'equality' (as well as the difference between truth and fantasy, but I'll avoid such a dichotomy), which contains some truth perhaps. I'd say that only those at the top can experience true freedom because at the bottom economic necessity greatly constrains choice, so I'd disagree with Will, but I do think equity - if not equality - should be a core American value. I also think that people who 'succeed' do so not only by their virtue but with the help of a social infrastructure (roads, police enforcement, the rule of law, government policy, etc.) that supports the attainment and aggregation of wealth. That they therefore have an obligation to to contribute to the maintenance of that infrastructure. It strikes me that rolling back parts of the Bush tax cuts is not particularly onerous and that those cuts were a bad idea in the first place, especially given the apparent imperative of fighting a war that has cost exponentially more than what we were told by the administration in 2003. You can disagree, certainly, but I'd appreciate it if you didn't treat me like I am just some idiot who 'hasn't been around'. Maybe, rather than being a simpleton, I disagree ideologically.

[Sheriff Gonna Getcha]

Originally Posted by SC Skins Fan

I also think that people who 'succeed' do so not only by their virtue but with the help of a social infrastructure (roads, police enforcement, the rule of law, government policy, etc.) that supports the attainment and aggregation of wealth.

I think that few wealthy individuals have a problem paying for roads, police, the military, etc. Some government programs, however, are not so vital to our society or economy and I think some people have a problem paying for them.

Originally Posted by SC Skins Fan

It strikes me that rolling back parts of the Bush tax cuts is not particularly onerous and that those cuts were a bad idea in the first place, especially given the apparent imperative of fighting a war that has cost exponentially more than what we were told by the administration in 2003.

Some of his tax cuts, however, actually increased tax revenue. Reducing the capital gains tax, for example, actually increased capital gains tax revenue. Moreover, capital gains tax cuts were not aimed squarely at the upper echelons of society. More than 50% of the American households report capital gains/losses. Moreover, the notion that we should increase taxes on people who have gained money by pumping money into the economy sounds somewhat counterproductive to me, especially in light of the fallout of the subprime market and its aftershocks (e.g., limited credit availability for M&A and capital expenditures).

[SC Skins Fan]

Originally Posted by Sheriff Gonna Getcha

Some of his tax cuts, however, actually increased tax revenue. Reducing the capital gains tax, for example, actually increased capital gains tax revenue. Moreover, capital gains tax cuts were not aimed squarely at the upper echelons of society. More than 50% of the American households report capital gains/losses. Moreover, the notion that we should increase taxes on people who have gained money by pumping money into the economy sounds somewhat counterproductive to me, especially in light of the fallout of the subprime market and its aftershocks (e.g., limited credit availability for M&A and capital expenditures).

I don't claim to understand the in's and out's of tax policy, but the 'tax revenue increases with decreased rates of taxation' is apparently a questionable assertion.

FactCheck.org: The Budget According to McCain: Part II

But if we want to cut taxes then we have to cut spending (which is what McCain said way back in 2001/2003) because the effects of the current administration's policies have been to enlarge the deficit enormously. It is the 'no sacrifice required' ethos that infuses so much of contemporary American culture. And with McCain's current rhethoric that means cutting domestic spending, which has consequences. So then you have to ask who is being asked to sacrifice and who gains most from that sacrifice.

[Sheriff Gonna Getcha]

Originally Posted by SC Skins Fan

I don't claim to understand the in's and out's of tax policy, but the 'tax revenue increases with decreased rates of taxation' is apparently a questionable assertion.

It's debateable for a number of reasons. First and foremost, it is difficult to separate causation from correlation. But, even if cuts in the capital gains rate do not result in substantial increases in tax revenue, I have yet to see anything which indicates that cuts in the cap gains rate results in the loss of substantial amount of tax revenue.

[onlydarksets]

Originally Posted by SC Skins Fan

My simple point was that I wonder what these people would do if they found themselves having to support a family of four on a household income of $40,000-45,000. But maybe you haven't been around and seen how hard people work to make that kind of money (my dad was a carpenter, my wife's father a fire fighter - obviously if they possessed more personal virtue they would have attained greater things and made more money). I have a tough shedding tears for folks who are crying poor because they make $300,000 and their taxes might go up 3%.

Why stop there? $40-50k/year is excess. You can live off of $12k a year:
How to retire on $12,000 a year - MSN Money