Let's Tax The Rich!!!

[GregLee]

Quote:

Originally Posted by Midpack Almost 700 views now, and 2 people said they should have let the Bush tax cuts expire and 1 said increase the top two levels by 10%-20%. Therefore I take it most of this audience believes the rich are being taxed enough ...

That is not a reasonable conclusion.

[sheehs1]

My problem with "tax the rich"...is the definition of rich. "Rich" is usually defined by net worth. Net worth is not taken into the yearly tax calculation. A person /family can make $250,000 one year and zero the next but they are getting nailed for the one year they made over the $250,000. My other problem is 2 nurses working in the same family with some interest and investment income can make over the $250,000. These are not the rich in our country....they are middle America by profession.
This may or may not apply if the $250,000 is AGI rather than gross.

[LightningDawg]

Quote:

Originally Posted by sheehs1 My problem with "tax the rich"...is the definition of rich. "Rich" is usually defined by net worth. Net worth is not taken into the yearly tax calculation. A person /family can make $250,000 one year and zero the next but they are getting nailed for the one year they made over the $250,000. My other problem is 2 nurses working in the same family with some interest and investment income can make over the $250,000. These are not the rich in our country....they are middle America by profession. This may or may not apply if the $250,000 is AGI rather than gross.

Nurses must have significantly higher salaries in your area than mine, to make $250,000 combined, unless their "interest and investment income" doubles their salaries.

[missionfinder]

Quote:

Originally Posted by lets-retire You do realize there are functions performed by DHS that are specifcally listed and required by the Constitution, right?

Q. How did we abide by the Constitution for 200+ years without DHS?

A. The Army and Navy.

[nun]

Quote:

Originally Posted by missionfinder Lowering rates overall has shown to bring in more tax revenue and increase economic growth.

Wow you could have fooled me. Looking at the way the US economy and federal revenue have gone over the years of tax cuts doesn't seem to support your contention.

[lets-retire]

Quote:

Originally Posted by missionfinder Q. How did we abide by the Constitution for 200+ years without DHS? A. The Army and Navy.

No, some sections that are currently part of DHS were parts of other agencies. Treasury, Justice and Transportation come directly to mind. My point was that simply disbanding DHS would not get rid of as much government as people think it will.

[HFWR]

Quote:

Originally Posted by jebmke What is probably needed is a fairly long phase out of all the subsidies (with possibly some grandfathering) to the housing sector (mortgage deduction, mortgage guarantees). Right now, there is too much capital tied up in housing because of the distortions.

This would require actual planning, beyond the next congressional election. Not likely...

We should tax enough to cover the cost of the government our reps have legislated. Mildly progressive is okay by me.

[photoguy]

Quote:

Originally Posted by Midpack Almost 700 views now, and 2 people said they should have let the Bush tax cuts expire and 1 said increase the top two levels by 10%-20%. Therefore I take it most of this audience believes the rich are being taxed enough with the top 20% of income earners paying 68.7% of all federal income tax revenues and the other 80% of the population paying 31.3% per the CBO. Seems reasonable...

I think one thing to consider is what tax bracket people are in when they give their responses (or were in before they ER). It's very easy for someone in the top bracket to support a new tax scheme where their rate would be lower. Conversely, those in the lowest brackets might not have any compunction about raising taxes on the wealthy. In fact, everybody has a big conflict of interest here so responses need to be taken with a grain of salt.

Personally, I think the US should have let the bush cuts expire. But I am astounded that US top rate is now higher the Canada. That was something growing up that I just took for granted that because of the bigger social net (and healthcare) that canada would have higher taxes. Regarding my conflict of interest -- this past year I was pretty close to the top marginal rate.

[FinanceDude]

How is this board defining "rich". Forget wha the govt says "rich" is, that's a moving target!

[photoguy]

Quote:

Originally Posted by FinanceDude How is this board defining "rich". Forget wha the govt says "rich" is, that's a moving target!

The guy with twice as much money as myself is rich!

[frank]

glippy: If you pay into ss for lots of years and then apply for it, no matter how much you make, how can you call it an entitlement? If you buy mutual funds for years and then when you retire you decide to cash them in, would that to be an entitlement?

[Mulligan]

I'm not a an expert on the government budget, but before we gouged anyone, I would not be opposed to letting Bush tax cuts expire and revert the federal budget back to 2008, before the stimulus program. 2008 budget was 20% less than this year. While this may not balance it, I would think it would stop the profuse bleeding of red ink. It hard to imagine but it was only a little over a decade ago that the federal deficit was being projected to being eventually paid off based on then government surpluses.

[SunsetSail]

In answer to the original question - No. It neither solves the issue of increasing sufficient revenue to solve government debt problems nor does it provide a beneficial incentive.

The problem with the premise of the question (not Midpack’s question, but the issue in general) is that in the context of an income tax ‘rich’ means high income. I can have a portfolio of $100 million in CA muni bonds with no other income and pay virtually nothing in tax so I wouldn’t be ‘rich’ according to the income tax system. My point is that if you have a high income you will be considered rich for income tax purposes. This definition includes the individual that grew up dirt poor but went on to make a large income through hard work and adversity by putting themselves through an undergraduate university and graduate school only to emerge with $250,000 in student loans. However, it doesn’t include the holder of the $100 million muni bond portfolio.

The call to tax the rich is merely a political move to gain the favor of certain voting blocks. It doesn’t even accomplish the goal of taxing those most able to handle the burden (I assume this is the stated goal). If a lawmaker raised the possibility of a tax on wealth at least they would be proposing laws that would actually accomplish the apparent goal.

Maybe I should start a poll to find out how many people here who are in favor of increasing the tax on the ‘rich’ are also in favor of a tax on wealth.

[scrabbler1]

Quote:

Originally Posted by Mulligan I'm not a an expert on the government budget, but before we gouged anyone, I would not be opposed to letting Bush tax cuts expire and revert the federal budget back to 2008, before the stimulus program. 2008 budget was 20% less than this year. While this may not balance it, I would think it would stop the profuse bleeding of red ink. It hard to imagine but it was only a little over a decade ago that the federal deficit was being projected to being eventually paid off based on then government surpluses.

Important thing to remember here. When the Bush tax cuts were first enacted in 2001, some in Congress wanted to include triggers which would cancel or postpone the tax cuts is the projected budget surpluses did not materialize. These proposals went nowhere. The budget surpluses never materialized, but the tax cuts continued. Now, with record deficits, the tax cuts get extended anyway.

Only in Washington can policy makers (mainly Republicans but many Dems adopt a "mee too" attitude) advocate the same tax policy using diametrically opposite reasons. "Large projected budget surpluses, tax cuts for the rich. Large projected budget deficits, tax cuts for the rich."

"<Fill in the blank> budget or economic situation, tax cuts for the rich."

[haha]

Quote:

Originally Posted by scrabbler1 Only in Washington can policy makers (mainly Republicans but many Dems adopt a "mee too" attitude) advocate the same tax policy using diametrically opposite reasons. "Large projected budget surpluses, tax cuts for the rich. Large projected budget deficits, tax cuts for the rich." "<Fill in the blank> budget or economic situation, tax cuts for the rich."

Only 50% of tax return filers pay income tax, and the lowest strata may not even file.

So how could you cut taxes for these people who pay no tax anyway? In fact, many of them get payments. We have a situation where 50% of the population is all for raising taxes, since they will never pay them. And the another large % is all for raising taxes, as they work for governments and will get more in salary and benefits than they will ever pay in increased taxes.

If you earn good money, and are not a government worker, best to emigrate because the die is cast for us here in the land of the free.

Ha

[Westernskies]

We've had many discussions here about "tax fairness", most turn out like a coyote trying to eat its own tail...

On a cautionary note, now that the the hue and cry has apparently shifted from the relative merits of "tax fairness" to "tax the rich, they can afford it!" the same logic can and may be applied to LBYM'ers at every income level. If you have more than you "need" it is your moral and (soon-to-be, if the 50+% of the population who pay little or no tax sell their votes in favor of a proposal) ) legal obligation to subsidize those who have less. How you earned it, what you lived without to accumulate it, and what taxes you already paid on your "wealth" really doesn't matter- you are "rich" in the eyes of your fellow citizens who have less, and a target in the new economic redistribution climate.

[kombat]

Quote:

Originally Posted by sheehs1 Ex: Housing market if the tax deduction on mortgage interest is eliminated. Can you imagine the social implications of this? Where is the incentive to buy over renting? O.K. - some might say no incentive is needed. But...can you imagine the companies that would go out of business if owning a home became passe? Or ...why would anyone want to pay $800 of interest and only $200 principle if they can't deduct that interest. I'd think the entire amortization of a loan would also have to change. Like I said, this can get so complicated that my head hurts!

You realize that mortgage-interest-tax-deductibility is largely just a US-thing, right? Lots of other countries have mortgages without being allowed to deduct the interest, and somehow we manage just fine. We're not a nation of renters, or a barren wasteland littered with rusty backhoes. There's life after mortgage deductibility.

[kombat]

Quote:

Originally Posted by veremchuka the estate tax is beyond cruel and should be immediately abolished. imagine having to pay 40% to 55% of your estate to the government because you died! this is nothing short of confiscation of wealth

+1

I've never understood the justification of people who would defend this particular legislation. A person works and pays taxes their whole life, manages to squirrel away a comfortable nest egg from what's left, and somehow the government thinks it has a claim on the remainder, too? They're just waiting for you to die, so they can come take it?

The estate is what's left after you've paid taxes. How can anyone justify taxing that remainder portion too? What makes it OK? Is it just because you've died, so you're not around to argue anymore?

It smacks of pure envy opportunism, in my opinion, utterly bereft of any remotely moral justification.

[kombat]

Quote:

Originally Posted by glippy There ought to be no cap on SS taxes but there ought to be a means test for collecting SS

Then SS just becomes another wealth-distribution program, instead of the forced-savings program it was originally envisioned as.

There is already a welfare program for redistributing wealth from the rich to the poor - why repurpose SS into another one? If you want to boost payments under welfare, then just do it directly, rather than in a roundabout way that involves castrating what is supposed to be a federally-managed retirement income program.

[kombat]

Quote:

Originally Posted by lets-retire You do realize there are functions performed by DHS that are specifcally listed and required by the Constitution, right?

But the DHS didn't even exist until after 9/11? So who was performing those functions prior to the genesis of the DHS? Why can't those constitutionally-mandated functions just revert back to whoever was doign them before DHS was created?