Tax on rich will bring in 63.67B per year

[RAE]

Guys (and gals), let's not forget - all Obama is doing here is allowing the Bush tax cuts of 2001 and 2003 to expire, for those workers earning over $250,000 joint income ($200,000 individual). He was very clear during the campaign that he intended to do this if elected, and he is now simply following through. Apparently enough people (me included) thought it was a good idea, because he got elected. You can complain/speculate all you want about how this is going to destroy the entrepreneurial spirit in America, but I don't recall the years prior to 2001 being noticeably lacking in entrepreneurial spirit. Let's face it - the Bush tax cuts did not work. Trickle-down economics has been tried, and it has failed miserably. I support Obama's decision.

 

[newporttony]

Guys (and gals), let's not forget - all Obama is doing here is allowing the Bush tax cuts of 2001 and 2003 to expire, for those workers earning over $250,000 joint income ($200,000 individual). He was very clear during the campaign that he intended to do this if elected, and he is now simply following through. Apparently enough people (me included) thought it was a good idea, because he got elected. You can complain/speculate all you want about how this is going to destroy the entrepreneurial spirit in America, but I don't recall the years prior to 2001 being noticeably lacking in entrepreneurial spirit. Let's face it - the Bush tax cuts did not work. Trickle-down economics has been tried, and it has failed miserably. I support Obama's decision.

I understand Mr Obama won the election. However, I think you and other like-minded individuals need to understand is that tax rates matter. I, and many other people in similar situations, will simply choose to work less. I will probably even have to let people go. Maybe that will cause you to vote for even higher taxes, but that will cause me to work even less.

 

[ERD50]

Let's face it - the Bush tax cuts did not work.

what newporttony said. Plus...

How can you say that the tax cuts did not "work"? As I stated above, there are so many variables in play, that it is tough to isolate cause/effect.

Explain to me how Obama (or anyone) is going to suspend the laws of Supply & Demand?

-ERD50

 

[ERD50]

Let's face it - the Bush tax cuts did not work.

Ok, here is some data for you. Now explain to me what you mean by "did not work".

http://www.irs.gov/pub/irs-soi/05in05tr.xls

When I sum the individual tax collections for the 5 years from 2001-2005 (last year with data), I get:

4,199,276 Million dollars collected.


When I sum the individual tax collections for the 5 years from 1996-2000 , I get:

4,031,692 Million dollars collected.

So tell me, is 4,199,276 not larger than 4,031,692?

What didn't work?


-ERD50

PS: It will facilitate discussion if you don't put words in my mouth:

You can complain/speculate all you want about how this is going to destroy the entrepreneurial spirit in America,

I don't think anyone said "destroy" or "they will all quit working". We said it will negatively impact it. At a time when we need POSITIVE reinforcement.

 

[aaronc879]

Okay i'll admite that this is just jealousy because i'll never make a base income of more than $55K, in todays dollars, but if you make over a quarter of a million $ a year you don't have anything to complain about. Even if you have to pay an extra couple percent in taxes you still make more than 90% of the US population where the average individual income is under $50K and the average household income is under $70K. Yes you may work hard for that $250K/yr but I work hard too for 12+ hrs a night and nobody earns 5x what I earn... nobody.

 

[Texarkandy]

Okay i'll admite that this is just jealousy because i'll never make a base income of more than $55K, in todays dollars, but if you make over a quarter of a million $ a year you don't have anything to complain about. Even if you have to pay an extra couple percent in taxes you still make more than 90% of the US population where the average individual income is under $50K and the average household income is under $70K. Yes you may work hard for that $250K/yr but I work hard too for 12+ hrs a night and nobody earns 5x what I earn... nobody.

Yes, but have you taken the financial risks most successful entrepreneurs who make over 250k took to get there (& continue to take)?

The people I know making over 250k mostly have their own businesses and, pretty much without exception, have at one time or another put their entire financial lives (& financial future) on the line to make a go of it. (not to mention countless 16 hour days)

Building a business (like high stakes investing) has a significant amount of risk, and risk should have it's reward - if it doesn't why should anyone take it on?

(Not trying to be snide or anything (I'm a "wage earner" too) - but, pretty much anybody can work long hours with little risk - now, I don't know what it is you do to earn money from the "investment" of your labor, but perhaps you might want to re-think that if you're unhappy with the return your getting vs. risk)

 

[ERD50]

Okay i'll admite that this is just jealousy because i'll never make a base income of more than $55K, in todays dollars, but if you make over a quarter of a million $ a year you don't have anything to complain about. Even if you have to pay an extra couple percent in taxes you still make more than 90% of the US population where the average individual income is under $50K and the average household income is under $70K. Yes you may work hard for that $250K/yr but I work hard too for 12+ hrs a night and nobody earns 5x what I earn... nobody.

First, I appreciate that you acknowledge this is an emotional response. OK, but let me ask you to consider a few things:

1) I often hear this "they" can afford to give more, they're rich! But, where does it end? And why? It's always, more, more, more. You could raise the marginal rate to 98% and someone would say make it 99%, they can afford it! Is it really right that just because it is there, it should be taken? Those people (most of them anyway) worked hard for it, and they already give a disproportionally large %.

2) I always like to turn it around and ask why the bottom 50% of filers pay less than 3% of the total fed income tax. That seems awful low to me to share in the services we all get.

3) Let's not forget that many of those making $250,000 or more are business owners who create jobs. They take the risk, put in the effort and create real jobs. Whenever we increase income tax rates on those people, we are reducing incentives. Would you want to put in the kind of effort and risk it takes to run a small business when you see the rewards being chipped away? That is not going to help the economy, and I thought that was the point.

4) Again, if these plans were seen as helping the economy, wouldn't the market be responding positively? SPY down another 2% today

-ERD50

 

[aaronc879]

Yes, but have you taken the financial risks most successful entrepreneurs who make over 250k took to get there (& continue to take)?

The ones I know, pretty much without exception, have at one time or another put their entire financial lives (& financial future) on the line to make a go of it. (not to mention countless 16 hour days)

Risk should have it's reward - if it doesn't why should anyone take on any significant amount of risk?

I agree that small business owners who take on great risk, those with extensive education(ex-lawyers), and those with special skills(ex-doctors) should be rewarded but they shouldn't make more than twice what any other hard working american makes. I just don't see how an extra couple percent in taxes makes it not worth working towards a $250K+ job.

 

[Gone4Good]

If, once our income passes $250K, it gets taxed at a much, much higher rate, then in effect I will be working for a dramatically lower hourly rate than I am right now. Why should I strive to maximize my income if it ends up benefiting the government more than it benefits me? At this point, I might see it more worthwhile to work less and enjoy other leisurely activities.

Um, because it's not that dramatic. Someone working 50hrs / week making $250,000 / yr makes $65 / hr after tax at the margin. If he works an additional hour and gets taxed at 40% instead of 35% his after-tax hourly rate for that hour only goes down to $60.

 

[ERD50]

I agree that small business owners who take on great risk, those with extensive education(ex-lawyers), and those with special skills(ex-doctors) should be rewarded but they shouldn't make more than twice what any other hard working american makes.

And who is going to determine what someone "should make"? A salary czar? Do you really think people are going to take risk, if some govt official gets to chose their salary?

We have a free market to determine what someone can earn. What could be better than that?

I just don't see how an extra couple percent in taxes makes it not worth working towards a $250K+ job.

This does not seem to be getting through. No one said it won't be worth it. But it will be worth less. So you will get less of it.


It's a matter of degrees. As I said, we want to encourage business owners to create jobs. Increasing their taxes will do the opposite. It doesn't make sense, and the market is reacting to that.

-ERD50

 

[Gone4Good]

Ok, here is some data for you. Now explain to me what you mean by "did not work".

When I sum the individual tax collections for the 5 years from 2001-2005 (last year with data), I get:

4,199,276 Million dollars collected.


When I sum the individual tax collections for the 5 years from 1996-2000 , I get:

4,031,692 Million dollars collected.

So tell me, is 4,199,276 not larger than 4,031,692?

What didn't work?


-ERD50

Inflation increased the later period receipts by at least 12%. On a constant dollar basis the 2001-2005 receipts would be more like $3,741,767.

 

[RAE]

Ok, here is some data for you. Now explain to me what you mean by "did not work".

http://www.irs.gov/pub/irs-soi/05in05tr.xls

When I sum the individual tax collections for the 5 years from 2001-2005 (last year with data), I get:

4,199,276 Million dollars collected.


When I sum the individual tax collections for the 5 years from 1996-2000 , I get:

4,031,692 Million dollars collected.

So tell me, is 4,199,276 not larger than 4,031,692?

What didn't work?

I think it's a little more complicated than just total tax collections. Here is a link to a 2007 NY Times article by economist Robert Frank that goes into a little more depth on why the trickle-down theory has not worked:

http://www.nytimes.com/2007/04/12/business/12scene.html?_r=1

Quote from the article:

"In the 1950s, American executives earned far lower salaries and faced substantially higher marginal tax rates than they do today. Yet most of them competed energetically for higher rungs on the corporate ladder. The claim that slightly higher tax rates would cause today’s executives to abandon that quest is simply not credible."

 

[FIREd]

Um, because it's not that dramatic. Someone working 50hrs / week making $250,000 / yr makes $65 / hr after tax at the margin. If he works an additional hour and gets taxed at 40% instead of 35% his after-tax hourly rate for that hour only goes down to $60.

But you also lose deductions once you pass the $250K mark. So the hourly loss could much greater.

At any rates, I will let you work that extra hour for less money if it's no big deal. I'll be fishing. And if really it doesn't make that much difference in the end, then why not increase taxes on everyone? Surely you wouldn't mind working an extra hour for 7% less money.

 

[FIREd]

Okay i'll admite that this is just jealousy because i'll never make a base income of more than $55K, in todays dollars, but if you make over a quarter of a million $ a year you don't have anything to complain about. Even if you have to pay an extra couple percent in taxes you still make more than 90% of the US population where the average individual income is under $50K and the average household income is under $70K. Yes you may work hard for that $250K/yr but I work hard too for 12+ hrs a night and nobody earns 5x what I earn... nobody...I agree that small business owners who take on great risk, those with extensive education(ex-lawyers), and those with special skills(ex-doctors) should be rewarded but they shouldn't make more than twice what any other hard working american makes. I just don't see how an extra couple percent in taxes makes it not worth working towards a $250K+ job.

I have nothing against you Aaron, but I got so confused reading your posts that I had to turn on my GPS just to make sure I was still in America. Last time I was meant to feel ashamed of making a good living was I lived in Europe.

 

[aaronc879]

I have nothing against you Aaron, but I got so confused reading your posts that I had to turn on my GPS just to make sure I was still in America. Last time I felt so ashamed of making a good living was I lived in Europe.

I have nothing against you making a good living. I just don't believe there should be such a large difference in income between one hard working person and another. Just because someone is willing to pay you six figures doesn't, in my opinion, mean that you 'earn' that much more than the average hard working american. Being on the end that your on I can see you making the agruement your making. I'm just saying that there are two sides to the agruement. I'm not saying i'm right. I'm not sure there is a "right".

 

[Dog]

I'm still confused at how 95% of Americans will receive a tax cut when a good portion of the 95% don't pay income taxes.

 

[ziggy29]

I have nothing against you making a good living. I just don't believe there should be such a large difference in income between one hard working person and another. Just because someone is willing to pay you six figures doesn't, in my opinion, mean that you 'earn' that much more than the average hard working american. Being on the end that your on I can see you making the agruement your making. I'm just saying that there are two sides to the agruement. I'm not saying i'm right. I'm not sure there is a "right".

But the thing is, that's determined by the marketplace. If someone has a six-figure salary, it's because they can do something businesses have decided they have to pay six figures to get. If a business pays you $200,000 a year, it's because they think you'll add more than $200,000 in value to the business each year through your labor.

That's how all salaries are set. We may think some occupations are way overpaid and some are way underpaid, but it's all based on supply and demand. Why do you think nursing salaries have risen so sharply in the last 20 years? The demand has shot through the roof relative to the available supply.

 

[Bikerdude]

Okay i'll admite that this is just jealousy because i'll never make a base income of more than $55K, in todays dollars, but if you make over a quarter of a million $ a year you don't have anything to complain about. Even if you have to pay an extra couple percent in taxes you still make more than 90% of the US population where the average individual income is under $50K and the average household income is under $70K. Yes you may work hard for that $250K/yr but I work hard too for 12+ hrs a night and nobody earns 5x what I earn... nobody.

Guys (and gals), let's not forget - all Obama is doing here is allowing the Bush tax cuts of 2001 and 2003 to expire, for those workers earning over $250,000 joint income ($200,000 individual). He was very clear during the campaign that he intended to do this if elected, and he is now simply following through. Apparently enough people (me included) thought it was a good idea, because he got elected. You can complain/speculate all you want about how this is going to destroy the entrepreneurial spirit in America, but I don't recall the years prior to 2001 being noticeably lacking in entrepreneurial spirit. Let's face it - the Bush tax cuts did not work. Trickle-down economics has been tried, and it has failed miserably. I support Obama's decision.

"The politician who robs Peter to pay Paul will always have the support of Paul".

 

[FIREd]

I have nothing against you making a good living. I just don't believe there should be such a large difference in income between one hard working person and another. Just because someone is willing to pay you six figures doesn't, in my opinion, mean that you 'earn' that much more than the average hard working american. Being on the end that your on I can see you making the agruement your making. I'm just saying that there are two sides to the agruement. I'm not saying i'm right. I'm not sure there is a "right".

There sure are 2 sides to that argument. But there is no line in the sand. Had Obama proposed to increase taxes on those making $1M or more, I'd probably be less inclined to protest. And had he proposed to increase taxes on those making $25,000 or more, you'd probably be more inclined to protest.

I know exactly how people on the other side see things. I am surrounded by people who share your ideas. That's why I never divulge my income to anyone I know in real life and keep a low profile by living way below my means. The last thing I want is to be chastised for having or making too much. And perhaps, I should also guard against revealing income and net worth information on this forum as well from now on.

To be clear, I don't mind paying my fair share of taxes (and, as opposed to many rich people I know, I do not think that the current tax code is terribly unfair to the rich) but I am not going to volunteer for excessive taxation either. I really feel like policy makers have engaged in an overt and unapologetic attack on the "rich". Of course, given the current economic situation, it's the path of least resistance and the popular thing to do. Who doesn't like bashing the rich when the cr@p hits the fan? It's been the mobs' favorite sport since ancient times. And it's easy to understand why people who aren't targeted by the attack feel the way they do: they are getting a pay raise (tax cut) while I am getting a pay cut. So what's not to like? Clearly, we all seek what's most advantageous for ourselves. So this discussion is probably going nowhere and that's my final word on this thread.

 

[Gone4Good]

At any rates, I will let you work that extra hour for less money if it's no big deal. I'll be fishing.

Really? So I'll take that comment to mean that you work just enough so as to earn up to, but not over, the 10% tax bracket threshold?

No? You mean you keep working after the government takes 10%, and then 15%, and then 25%, etc. etc?

 

[HFWR]

I'm getting a pay raise? Kewl!!

 

[Gone4Good]

Just because someone is willing to pay you six figures doesn't, in my opinion, mean that you 'earn' that much more than the average hard working american.

The sense of entitlement among many high income individuals is breathtaking. The idea that "I earned my 7 figure salary" usually ignores the opportunities and protections given the individual, often due to an accident of birth, that made success possible. This is not to say society shouldn't reward high achievement, it should. But high achievers should display a little humility and recognize that our system and infrastructure, built and maintained through the hard work and sacrifice of countless people, both living and dead, is what made that achievement possible.

No one's success is achieved in a vacuum.

 

[Rustic23]

Anyway you look at it, it will take $637B out of private sector spending and put it in government sector spending. Now, seeing as we all know that the government sector is far more efficient than the private sector, we can all sleep tight at night.

 

[thefinancebuff]

I agree that small business owners who take on great risk, those with extensive education(ex-lawyers), and those with special skills(ex-doctors) should be rewarded but they shouldn't make more than twice what any other hard working american makes.

If you think doctors and lawyers, or whoever else who make more than twice what others make, are paid too much, why not become one of them? Figure out what they do and do what they do. Then you will make more money too.

 

[RAE]

The sense of entitlement among many high income individuals is breathtaking. The idea that "I earned my 7 figure salary" usually ignores the opportunities and protections given the individual, often due to an accident of birth, that made success possible. This is not to say society shouldn't reward high achievement, it should. But high achievers should display a little humility and recognize that our system and infrastructure, built and maintained through the hard work and sacrifice of countless people, both living and dead, is what made that achievement possible.

No one's success is achieved in a vacuum.

Well put, ...Yrs. to Go.