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by Peter Moskos

July 1, 2010

Tax the Rich

Why? Because they've got the money. And more and more of it. And the system is rigged in their favor. And it's becoming more and more rigged. SocioBlog explains more.

20 comments:

Anonymous said...

We're men, we're men in tights. We rob from the rich and give to the poor, that's right!

Dana King said...

This one is so simple, it defies description to try to understand why it's so hard to explain. Taxing poor people is stupid; they don;t have any money. I'm not advocating confiscatory taxes, or anything close. It's just that every major tax break for the past 20+ years has been in favor of those with the greatest ability to pay. Now, whenever someone wants the flow to be reversed, even a little, it's call "re-distribution of income." What have we been doing since the Reagan years but redistributing income, except in the other direction?

One last thing: My comments may be right, they may be wrong, they may be stupid, but I'll stand by them. No anonymous comments for me.

PCM said...

The only thing worse than taking from the rich and giving to the poor is taking from the poor and giving to the rich.

Reminds me of Paddy Bauler’s line, "They think the whole thing is on the square." But it ain't. The system is always rigged. The question is which way do we want to rig it. I'd prefer to rig it in favor of those making less.

Ironically, just implementing a simple flat tax above a certain income would probably be more progressive than what we now have.

The rich have managed to set up a system to pay less and get a bigger and bigger piece of the pie. It doesn't make sense fiscally or morally.

I suppose it's your right to try and be greedy. But it's our right to say, "hell no!" The rich who benefit most from this great nation should pay the most to support it.

Between 1951 and 1963 (a pretty good time for the economic prosperity of America), the marginal tax rate on income above $400,000 was 90%. It's high time we brought that back.

Call me a socialist if you want, but I just don't have much sympathy for the financial plight of those making more than a million dollars (after taxes, of course).

Dana King said...

I've long believed any tax system where how much you paid was based in large part on how good you were at filling out the form (or how much you could afford to pay someone to do it for you) was inherently unfair. I'd gladly vote for a flat tax where the first (arbitrary numbers here) $40,000 was untaxed, then the next $60,000 at a relatively low rate, then more for the next $100,000, more for the next $300,000, then a higher rate for the second half million, etc. No deductions. The rates would be lower across the board, and everyone would pay his fair share.

PCM said...

I'm with you.

You'd think a system where 90 percent of the people paid less and 5 percent paid a lot more would have the support of more than half the public.

But the rich have got the masses a bit brainwashed into believing that our economic prosperity depends on corporations and the super rich paying less and less.

How did a system of progressive taxes that worked so well for so long in this country ever become considered radical and communist?

PCM said...

Doing some very rough estimates, if we took an average of $1,000,000 in taxes from each of the top 1% of earners (average 2007 income over $2 million) we would take in more than we take in from all income tax right now.

No income taxes for 99% and the rich have to get by on no less than a million a year? Sees like a good deal to me.

Though I do believe everybody should pay some tax on principle, the rich need to pay a whole lot more!

Anonymous said...

"Fair". Please define "fair". And please point to the moral argument that justifies your definition of "fair". Because I think taking NINETY PERCENT of the income (which is private property) of anyone is so vulgar as to be beneath contempt. It punishes achievement. Period. This is glossed over by ginning up outrage over a "rigged" system. You bet the system is rigged. Massively. By the government.

Crony capitalism is as bad as the re-distribution of wealth that is being advocated here. And yes, that is exactly what it is. When you forcefully take money from those who earned it, and give it to those who didn't...that's re-distribution of wealth. I know, I know, they didn't earn it. They worked the rigged system. So let's get the government out of it, right? Don't make the mistake of thinking it's the eeeevil corporations. It's corporations + government. Take away the government, and the corporations are on their own. Now they have to convince people to buy their stuff.

PCM, the reason why people don't support your "economic justice" is because they have enough sense to know that they might someday make over $400,000 themselves. They know that if they keep working hard, taking calculated risks, and being smart with their money, they can be successful too. And, crazy as it may seem, they would prefer to not have all that hard work taken from them and given to the slothful and weak and incompetent, because that's "fair". They also know that any government that can arbitrarily say that $400,000 is the result of cashing in on a rigged system can also say that $75,000 is cashing in on a rigged system.

Free markets. Small government. That's the system that made this nation great. Not pitchforks and torches and G-8 summit protesters.

P.S. - Dana, your passive aggressive snub against anonymous comments is petulant and ignorant. Perhaps you would like to take some of my 1st Amendment rights, as well as my income. That's only fair, right? You're not brave for posting a comment on a blog. Get over yourself.

PCM said...

Let's all not get our knickers in a knot (and nobody has a 1st Amendment right to post on my blog... but anyway).

Anonymous,

It sounds to me like you're against big government more than you're concerned about details of the tax system.

Also, I pick an extreme position here partly for the sake of debate (and to show where the money is). I'm not certain I actually support what I advocate here. But I certainly would like to move in that direction.

To me it is vulgar that somebody making $50,000 pays a higher percentage of their income to the government than somebody making $5,000,000. That simply isn't right.

What I don't understand is why you imply say that 99 percent of workers don't "earn" their money and are slothful and incompetent.

When heads of a corporation vote themselves crazy pay raises and bonuses, that is not free-market capitalism in action. No more than were congressmen to do so. They do it because they're greedy and because they can.

Government is needed to regulate corporations to preserve the free market. Historically, when government is small and free markets unfettered, corporation become oligarchic and destroy the free market. Corporations are designed to make money, not support capitalism. There's a difference. Government is needed to keep corporations in line, which is a way to preserve balance in the free market. Plus, government does a better job in promoting "public good," which I believe should be the role of the government.

And how many people really think they're going to make more than two a million a year? That's where I'd like to start my 90% tax rate. Again, it worked in the 1950s and 1960s. It really isn't and wasn't that radical. And you still have a cool million after taxes.

Maybe the high tax rate would make the rich work even harder. The poor don't work less hard when taxes go up (often they take a second job), why would the rich be so lazy?

Dana King said...

Anonymous said, "people don't support your "economic justice" is because they have enough sense to know that they might someday make over $400,000 themselves."

That is pee your pants funny. I don't have figures in front of me, but I'd guess the odds of someone from humble origins ever making $400,000/year are about the same as them winning the lottery. Yes, people do win the lottery, but playing numbers is no way to plan for retirement.

Also, If I'm willing to make a public statement, I'm willing to stand by it publicly. It's common courtesy to the other debaters.No heroism is involved. That's doesn't mean it's not chickenshit to post anonymously. I don't read blogs like Daily Kos, even though I tend to agree with what's on there; his bloggers don't use their names.

Since you want to debate the Constitution, let's make one thing clear: I'd be the last person to deny you your First Amendment rights. Since we're arguing about the spirit of the Constitution and not the letter (the it applies only to the government; private entities can abridge free speech pretty much how they wish), let's not forget the Sixth Amendment. You want to make accusations and call people names, let's see who you are.

PCM said...

[Dana, not that this is really the issue, but keep in mind that a fair number of my readers and commenters are police officers. They should post anonymously. Police can and do get in trouble for comments to blogs. It's probably not a risk you face at your job.]

Anonymous said...

PCM:
"nobody has a 1st Amendment right to post on my blog... but anyway"

I was referring to posting anonymously. I recognize this blog as your private property.

"It sounds to me like you're against big government more than you're concerned about details of the tax system."

True. Does anyone even know the details? 67,000 pages and counting.

"To me it is vulgar that somebody making $50,000 pays a higher percentage of their income to the government than somebody making $5,000,000. That simply isn't right."

I agree 100%. But I find it to be equally unjust to have it go the other way. A flat tax is the only system I'm aware of that doesn't do that. Millionaires pay a massive amount in taxes, and poor folks pay a pittance. But everyone pays the same %. Most poor people's income in off the books anyway. And lets not get into those "working poor" or whatever the politicians call them who pay, say, $1000 in taxes, but get back $3000 via various rebates and programs. That is NOT paying taxes.

"What I don't understand is why you imply say that 99 percent of workers don't "earn" their money and are slothful and incompetent."

I wasn't trying to imply that. What I meant was those who pay taxes, at any level, don't want their money to go to the 47% or so who pay no taxes (either outright none, or the presto chango I mentioned above). Those who have actually managed to get as high as $400,000/year have probably busted their asses and created value for their consumers, and perhaps a few jobs along the way. That would chap my ass to have that punished with vastly higher taxes in the name of "fairness". Fair to who?

"When heads of a corporation vote themselves crazy pay raises and bonuses, that is not free-market capitalism in action. No more than were congressmen to do so. They do it because they're greedy and because they can."

Somewhat agree. But these guys are really like professional athletes. If they have a bad year, they may get traded, but you better believe they're still gonna get their massive salary which all the fans agree they're not earning. I can't hit a home run and I sure as hell can't run an oil company. Few can.

"Government is needed to keep corporations in line, which is a way to preserve balance in the free market."

I agree, but it does a very poor job of this. "Too big to fail". Don't get too big, but don't get too weak either. It's leveling, and it destroys initiative and innovation while rewarding sloppy business. I was always more of a fan of trust-busting, than I am of permanent regulations that stamp out growth before it ever begins.

"It really isn't and wasn't that radical."

But it's still wrong, even if done to only 1 person. Maybe my goal in life is to make $100 million bucks and buy my own island. That's all I want out of life. 90% tax rate? Why bother? Perhaps I can't get there under that kind of tax scheme, so I say "F*** it." I believe far more people can reach their goals when they keep more of their money. I think it's been the case historically that higher taxes discourage harder work.

Dana:
"I'd guess the odds of someone from humble origins ever making $400,000/year are about the same as them winning the lottery. Yes, people do win the lottery, but playing numbers is no way to plan for retirement."

That's the spirit. Poisonous skepticism about the ability of others justifies crushing them with confiscatory tax systems. Are smash and grab tax rates your idea of a retirement plan?

"let's not forget the Sixth Amendment. You want to make accusations and call people names, let's see who you are."

I think I'll take the 5th.

Dana King said...

PCM,
A fair point, and one I had not considered. I am often struck by the astronomical percentage of anonymous comments that are argumentative or crackpot, and cast a jaundiced eye on them generally. (This is not to imply this anonymous poster is either. His arguments are well presented; I just disagree.) I routinely delete anonymous comments to my blogs, but I also understand you have a different audience, and apologize for making an intemperate comment on your post, when I should have started a new thread of my own. I enjoy reading your blog and the comments included.

Joe the Plumber said...

Rich people shouldn't pay any tax at all. They create jobs and they innovate to make America great. Besides, I'm going to be making over a million dollars a year soon because I work so hard. Why would I want taxes on my future self!?

Anonymous said...

Why not tax everyone at the same rate? If you make nothing... no tax. If you make $10,000,000 or if you make $100,000... whatever % will balance the budget? No deductions, no shenanegans (sic). No one is punished for making alot of $ and no one is penalized for making little $. The magic of fractions. It can be done if we all hold hands and think happy thoughts. Ed

PCM said...

Given how ef-ed up our current system is, the flat tax isn't a bad idea. Especially if you exclude those making under $30,000 (or so). I mean, if the rate were 20%, $4,000 is huge to somewhat making $20,000. $4,000 is nothing to somebody making a million. That's why the rich should be taxed more. And it's not just to take their money (though I'd like to). The rich benefit from our system. The poor less so. Thus the rich deserve to pay more.

Anonymous said...

If a system could be devised where it would be very difficult to escape the flat rate assigned to all taxpayers, it is the most fair way to go forward, but that is a big if.
The rich do not deserve to be taxed at a higher percentage of their income (including investment income). If we were able to dictate a level playing field, would anyone think that is fair?
I do agree that a person who earns a very small income deserves a break, out of sympathy, and a desire to see the person improve his situation. Wouldn't you hate to be the guy making $31,000 though?
Ed

PCM said...

I hope this country hasn't moved so far to the right that taxing rich people more is considered radical. I would imagine there's not a single country in the world than doesn't tax (in theory) the rich at a higher percentage than the poor.

Regardless, you wouldn't hate to make $31,000 because you would only pay tax on $1,000.

Anonymous said...

At what point does that first $30,000 get taxed, $100, $500K? Or does it ever? I suppose the devil is in the details.
What about a consumption tax. We could tax purchases of yachts, ascots and those annoying sweaters that you tie around your neck at like 90%. I could get behind that.

You seem to want to punish the rich for being rich and I don't get that!

Who am I to say that Thurston Howell III should give up half his fortune when he dies? Give it to his spoiled kids and let them blow it on coke and hookers if they want, it was given to them by the guy who earned it. His money, his choice. He doesn't owe me anything except his fair share of taxes.

I happen to think that wealth as a factor in happiness is relative. If you eat filet mignon from day one, anything less is a bad meal. Hamburger everyday makes the occasional steak taste that much better. No tears for the rich here, I just think fair is fair.
I wasn't born rich but I was born with two loving parents who broke their ass raising me to be decent. That was the luck of the draw, you can't take that away from me. Why take away what the rich stepped into or better yet earned?
Ed

PCM said...

I like the idea of taxing bad parents, though that would be tough one to do!

The details of a flat tax would be to take income, subtract a certain amount like $30,000 (a deductible), and then tax the remainder at a fixed rate (kind of like we have today, minus the flat tax).

The philosophical argument though, is that the rich should be taxed more because America has generally believed that you should earn what you have. The idea of level playing field. But the playing field is not level.

The single best predictor or wealth isn't hard work or good luck in your lifetime. It's being born to rich parents. Similarly with being born poor. Of course there are exceptions. But they are much less common than we'd like to believe.

Now we tax the middle class and give government subsidies to the rich. I'd certainly prefer to tax the rich and help the middle class and the poor.

Another argument is moral. Taking money from someone making little hurts a lot more than talking more from the rich. That $500 probably means a lot more to the poorer person than the $50,000 does to the richer person.

An economic argument is that taxing the rich is just a better way to get money. And the government does need money. Raising a tax 1 percent on somebody making $50,000 nets $500. Do the same to somebody making $5 million and you get $50,000. To paraphrase a bank robber, if you need money, you go to where the money is.

And the capitalist argument goes like this: Capitalism does not naturally lead to greater income equality. But capitalism benefits from income equality. Otherwise you get a caste system or revolution. In the long run, rich capitalists need a healthy and more equal society in order to stay rich. Since they benefit most from the system, they should pay the most to support it.

I am against an economic caste system, which is really what we're moving toward. A "progressive" tax system is just a way to create a more level-playing field where everybody has an equal chance to succeed. That's good.

Right now the rich are getting richer and the poor and getting poorer. That's not good for most Americans. And in the long run it's not even good for the rich.

I have nothing against being born rich (and I was not born poor, but that's also because I too had two loving parents). But speaking as a graduate from two Ivy-League colleges, there's nothing quite as disgusting as an entitled young rich person who thinks their wealth is a positive reflection of them personally. How dare they say the poor are less deserving than they are! The vast majority of poor people did nothing to "deserve" being poor. They were simply born that way.

Yeah, I suppose thems the breaks. But we shouldn't have a tax system that reinforces that.

And that's the idea behind the estate tax, but that's a whole-'nother issue.

Nancy Tex said...

Nice work, nice work.
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