Poll: Americans Split Over Taxes on the Rich

There’s only one area in which I agree with you, livefreeordie2, and that is that some areas of cost have to be reduced. Virtually all the rest of your post is, metaphorically, noise. The level of ad hominem in this posting makes it very difficult to take you seriously, and in fact seriously undercuts any credibility you have. Opening: attack. Next: attempt to soften attack, followed by redoubled effort. Next, accusations about motive. Next, accusations about motive. Next, summary. Next, proposed course of action based on conditions present between 10 and 20 years ago. Second paragraph, different argument: my income is my property, it belongs to me. Third paragraph, extension of this: taxation is theft of property, and thus “un-American.”But apart from the personal attacks, what is the core of your argument or counterproposal? You assert that the answer is less government intervention–okay, but have you argued that the conditions present now are the same ones present in 1985 or 1990? You seem to argue that taxation is theft–but on what basis would you have society fund the things that presumably even you would admit need to be there–roads, bridges, defense, basic education?I’m not a “socialist trying to drive class envy.” As it happens, I’m an evangelical Christian who’s voted as a conservative for more than 40 years–until the last election, when it became abundantly clear that the party I’d supported forever–and most of those who spun off even more conservatively from it–were also driven by greed, by selfishness, by materialism. And, of course, as with anyone guilty of persistent moral failures, eventually they were shown to be as vicious and as inept as all get out, a phenomenon as old as Massinger’s Sir Giles Overreach. The last straw for me came when I heard a commencement speaker make the observation that the one issue Jesus asks people in the final judgment (Matthew 25)is: Did you care for the poor? Yes, it might be a parable; yes, he was talking to his disciples before the crucifixion, resurrection, the beginning of the church, etc. It seems irreducible: Glenn Beck and those like him can’t be reading the same book. Look at Ephesians 5:5.One final thing: your accusations about greed or envy seem strong only when you characterize those like Teresa as wanting the wealth of others for themselves. Yet that is clearly not the case: what she suggests is that the entire community would benefit if taxes were adjusted, and adjusted by what is in effect a trivial amount to those concerned. Grow up.

Look: you’re doing it again. The only lens you suggest we use here is “greed”; I don’t think that’s the appropriate way to view this. “Their income and their wealth are their property”; yes, and no. To participate in this culture, we–all of us, by living here–have agreed that we will contribute a certain amount to sustain the infrastructure of the country. We have given the government (our collective selves) the ability to enforce that agreement. Supposedly, No Free Lunch for those earning above a subsistence level. I don’t disagree with you about the inability of the government to produce anything. I wouldn’t mind the shrinking of government. What I’m concerned about in your argument is your unwillingness to acknowledge the good of the community, which benefits when the poor are cared for–and that means providing education, enabling development, not dependency. You turn to scripture to argue against “covetousness,” but again don’t acknowledge that there’s literally nothing personal in my desire to see the wealthy share their resources to sustain other members of the community.I continue to be frustrated by your characterization of others: just where–point me out a sentence–does TG “whine” about something? Have you read “Leadership and Self-Deception?” Useful to think about how we find ourselves characterizing others in ways that enable us to justify both ourselves and our beliefs. I like the line from Anne Lamott, too, as a caution to all of us: “You can safely assume you’ve created God in your own image when it turns out that God hates all the same people you do.” If everything looks like greed to you, you’re stuck some place in the Inferno, with the hoarders and the wasters. It’s a dark and angry place.

purgatoryterrace4 #5 – You are ignoring a few basic things. First, “greed,” even if the word itself was unspoken, is the entire premise of Ghilaraducci’s blog entry. The link on her entry goes to an obscure article/interview that speaks to the rich purchasing luxury items. When she says that they should “adjust by buying fewer goods and services that cultivate what the marketing consults call connoisseurship,” by inference, she is saying their purchases are driven by, well, greed. So it’s not my lens – I’m merely suggesting that it should be pointed the other way.And of course we, as a society, have agreed we will contribute to the common good. But you make it sound like the rich don’t contribute at all. They do. Far more than anyone could ever suggest is their “fair share.” (though obviously, the left does) How much is fair? Are you suggesting that as long as someone has more than you, it’s okay to take the difference? You need to start focusing on the facts. The 700 billion over 10 years is not a real number. Why? Behaviors change. Raising the rates reduces productivity and encourages people to otherwise shelter their income. And whatever taxes do get collected are far more likely to come from reduced investment than reduced purchases. There is a point where, to take any more of a person’s income or property is immoral. Personally, I think that’s probably at 30% when you consider all taxes (federal, state, and local). (and inheritance taxes are the equivilent of grave robbing.) Rather than the rich adjusting their purchases, the moral thing to do is for society to adjust its appetites for consumption. As I said above, democracy was never intended as a vehicle for the majority to steal from the minority.

The notion that someone would have to pay for the costs of government has always been a difficult idea in the US, dating back to the Revolution.What has evolved, has been a system where those with economic power use that power to competitively derive as much income as possible. The counterbalance to that has become that those with political power use their power to pull back some of those profits. The system seems to work pretty well, with occaisional imbalances, depending on your point of view.All members of this society benefit from the vast majority of goverment expenditure – defense, road building , legal systems, police and fire protection, schools etc. Nearly everyone would choose to pay nothing for those services if they could. It doesn’t seem unfair to me to charge fees (taxes) to members of the society based on the benefit those services have provided each member. As an example, an individual who is invested in a major us owned oil company, has his interests heavily subsidized by US defense expenditures. Large property owners in urban areas benefit from heavy police and fire protection expenditures, significantly more than individuals who rent those buildings.One reasonably simple and accurate proxy for determining the value that individuals recieve from their government is to tax income. Simple. Unfortunately it also seems to unfairly transfer wealth that was derived from ability, but the complex tax system that we have evolved is the current result of that tug-of-war. Is out tax system out of balance? Maybe. Unfair? Probably not. Immoral and unreasonable? No way.

According to what I saw on the national liberal news, the 2% affected by the tax increase includes close to 900,000 small businesses. In the same news stories anecdotal evidence supports the idea that each business would have to RIF one to four people. Let’s say it’s an average of two people per business that gets RIF’d. Can we really afford to lose another 1,800,000 jobs? Oh, but $700,000,000 tax income increase will support them. Hm…I thought it was going to decrease the debt. Darn those unintended consequences – we’ll just have to print more money.

@ akellernational liberal news? You mean GE, Disney, Viacom and Fox don’t you? These corporations have tended to be rather conservative in terms of investment companies… They are serving their market demographics and shaping our country into a right center stance historically (not doing due dilgence with the run-up to the IRAQ war, TARP bailouts, financial regulation etc). But I digress!So, relying upon our national news is not a wise thing to do. Second, small businesses have not gone under because of taxation. This is just a subterfuged argument. Since money and resources are fungible (look it up if you do not know the meaning), it is very easy to place blame on taxes for small business failures. However, small businesses this decade have faced three major obstacles that rarely gets discussed without being attached to a conflating talking point from both sides of the aisle:1) Small businesses have been operating in a world where marketshare for large multinational businesses is increasing exponentially: (banking, pharma, energy, health delivery, financial services, automotive, and on and on). This means that the larger economic trend is industry consolidation of the marketplace. We saw thousands upon thousands of buyouts, takeovers and mergers in 80′s and 90′s during the initial period of de-regulation. The final phases of de-regulation allow for the BIGGER to optimize their advantages and push smaller businesses out of the marketplace (see small community banks).So, taxes here is a small fragment of the larger business ecology.2) Small businesses rely and thrive upon credit. Their scales of economy are much smaller and their reliance upon cheap access to capital is paramount to their success (not taxation after the fact). While many employers do complain about not being able to hire new people because of taxes, this argument is about the best way to use capital in an uncertain marketplace where capital may be scarce. The cause is actually lack of cheap capital. Its consequence is that jobs are lost because of this. It is multi-factoral and intersecting, but not causal.3) Small business thrive when the communities that they reside in are healthy. 48/50 states in the US are suffering from debilitating local debt. The cascading effect of losing jobs, heavy personal and local debt loads and the deterioration of the tax base of a community are all huge factors in the success of running a small business. We see this in communities with mass bankruptcies and foreclosures (cleveland, detroit)… Small businesses feed off of the local lifeblood, if it the feeding source is poisoned then so is local industry. * all one had to do is be reminded that the Bush adminstration here took away federal funding and revenues to states during the early 2000′s (pushing many to raise property taxes during the housing boom period). By shifting the responsibility to the states, this created huge deficits as the local tax bases associated with housing went bust…So, akeller you might do some homework before writing so certainly about a subject that is much more complext than what you saw on the national news!

livefreeordie2, do you value democracy? If so, how much? It seems that you are not being honest with yourself. Although you have hinted that you want a democratic government, the only value you have consistently expressed is a preference for plutocracy. After all, if the right to property is to be nearly unabridged, then de facto inequality very quickly becomes de jure inequality. What profiteth it a poor man if he hath the right to a good lawyer but not the mammon to secure one? The wealthy in our society are so absurdly wealthy at this point that they are destroying our society. They have so corrupted our representative government, making it an extension of the plutocratic governments we call “corporations,” that there is not a glimmer of fairness when the average citizen undertakes to negotiate wages with a potential employer. Also missing from your assessment is the quite logical reinstatement of the inheritance tax. Why should the sons and daughters of the ‘deservedly wealthy’ be handed their parents’ wealth? The fact that over 40% of the wealthiest Americans inherited their wealth is appalling. Is it envy to ask them to get off their keisters and earn their upkeep?Finally, as has been pointed out before in other threads, the income tax debate is something of a red herring. The wealthy might pay more absolutely through income tax, but less than a fair percentage of what they get out of a system that keeps them wealthy. Also missing from the equation is the fact that much of the income ‘earned’ by the wealthy comes from dividends, which are taxed at the lower rate of capital gains. This includes hedge fund managers, who have had their entire, obscene incomes taxed at the lower rate.

I would like to leave remedial U.S. Government 050 for a moment and go back to Teresa’s post. Someone should send ‘livefreeordie2′ a tuition invoice.Teresa, given that the wealthy generally take most of their income as LTCG, although admittedly a bit less right now, do you see no merit in the conservative argument that increasing taxes on those whose wages fall in the $250-500K range will have a disproportionately negative effect on small business job creation? From my too small sample of a half dozen social acquaintances who run small businesses, every one of these individuals is standing on the side awaiting clarity on the taxation and other COB issues. Optimism among these few individuals would, by their judgment, create around 90 jobs in the next 90 days. Whatever one’s stance on the Obama administration, one has to acknowledge that help was distributed everywhere first before even considering the plight of small business. Even now, the new plan will still permit banks to invest the money for their own profits and to shore up their reserves rather than loaning it to small businesses that they are ill-equipped to understand. The Administration has been 100% hot air with respect to acting on its frequently expressed belief that small businesses are the engine of job creation and the best solution to 9.7 (actually 15.5%) unemployment. Since you are an economist, I assume your rationale is economic and not ideological. What economic evidence is there that the net returns of the $700 billion over 10 years (a figure that fails to accommodate elasticity issues) would exceed those that would come from opening the spigot wide for small business loans? Are there valid projections on these two scenarios?

Just a last comment (and of course, this is for livefreeordie) from the Change magazine, which landed on my desk yesterday. It’s from Gordon Davies, former leader of higher education in Kentucky and in Virginia:The de-regulation of our corporations and financial institutions, which began in the mid-1990s, has caused havoc throughout the world. What we ought to have learned–and should have known–is that institutions of all kinds will do what benefits them regardless of their obligations to the well-being of individual women and men or to the state or nation of which they are a part.De-regulation of higher education began at about the same time and is causing havoc today. Universities and colleges are institutions; just like banks and investment companies, they will act in their own best interests unless their behavior is governed to some reasonable extent. In an ungoverned environment, in which every institution seeks to be “elite,” the notion of serving all the people becomes a joke. Quality is measured by research volume and admissions selectivity. About 140 years ago, our land-grant universities were established to advance agriculture and to provide educational opportunities for the rural populations of our states. Today, almost all the land-grants focus on research, with scant regard for the millions of “have-nots”–urban and rural–among us.

betterschools, your last post is indicative of the corrosive influence of corporate ideology on all parts of our society, academia and government included.1) “Leaders” should not be running universities, just as they should not be running our government. Instead, it ought to be citizens (faculty and US citizens respectively) since both institutions are based on democratic principles. Citizens know how to rule and be ruled in turn. The term “leaders” when applied to administrators or corporate plutocrats is simply a veiled term for oligarchs.2) Universities cannot demonstrate outcomes because a university education becomes evident over decades, not the quarters that the corporate ideology demands everything be measured. The fact that universities are still run by an essentially medieval system would be a mark in their favor if it were true. Instead, they are run by the faddish system developed in the last hundred years or so called Anglo-American corporate capitalism. The same system dominates the US government, which ought to be ruled by the same principles initially articulated by the ancient Greeks roughly 2,500 years ago. Among these principles, to return to the topic of the entry, is the principle that the use of one’s surplus wealth for the needs of the community is both a duty and a privilege.

@08230010,I agree with you with respect to the ideologues you see here who can’t manage to separate their penchant for political pre- and proscriptions from the topic at hand. Nonetheless, there are some empirical questions that would inform the immediate topic. One I am most interested in is whether good models exist to demonstrate whether we would be waive tax increases for job creators and accelerate the flow of cash to small businesses or to secure the projected $700B over 10 years from hiking the income tax on those who make above $250K, knowing that this will hit the small business job creators disproportionately. I understand that econometric projections are not the same as empirical outcomes. But if you try to follow the above dialog, no small chore, you see that it is progressing largely in the absence of facts or projected facts. It is easy to see why academics are ignored or even ridiculed. Most people don’t care about the ranting of ideologues who have only the their reading preferences upon which to base their claims. They want to know will ‘X’ or ‘Y’ do a faster/better job of getting ‘Z’?Personally, I’ve never been much of a fan of any of the political instantiations of central planning. Guys like you see above end up on those planning boards. On the other hand, it seems that the market is out-pacing our ability to keep its playing fields reasonably level. These failures provide a voice to those who think we are smart enough to command our economy. The alternative is to persevere until we create smarter, surgically precise regulation (more like the Glass-Steagall killed by the Clinton administration and Congress). I’m in the latter camp. I think it more likely that we can prevent most forms of abuse, or at least leapfrog them, than we can see into the future.

betterschools,I really enjoy how you position yourself as a neutral observer; its really cute…. Also, I really love how you are able to discuss small business concerns outside of the context of large business concerns (as if they are invisible)… Remember, in market economy those with the most resources have the greatest power. Why not ask your friends in the business world to create the options that you expect from an over-burdened government. Oh yeah, they would be laughed out of the room

betterschools brings up a question that ought to be clarified. If a small business owner invests in its business (by hiring someone, for example, or buying equipment and depreciating it) than that is a business expense, and they are not taxed on that, only on the profits. I don’t see how personal income really relates to their investment in the business except very indirectly. Perhaps (preferably someone who is not in the harangue business) has more information.

@unused_user_name_727,I’m not certain if this goes to your question but many small businesses are incorporated as S-Corps, a little brother if you will to the C-Corp that is the structure of the really big corporations. An S-Corp must be run on a cash basis i.e., not accrual). All profits realized in the year flow directly through to the shareholder’s personal tax return as ordinary income that is taxed a whatever personal bracket applies to the amount of profits. S-Corps cannot set aside certain kinds of income for deferred expenses as C-Corps can. Every dollar of revenue in excess of expenses is carried directly to the owner’s federal 1040 and is taxed as ordinary income. A friend of mine has worked for 30 years or so to build up a fitness business in my community. He started with one small rented room and, over time, has grown the business to 10 or 11 fitness centers. He now employs more than 350 people (still a pretty small business) and the corporation is an S-Corp. If he makes, say, $275K in profit for the year, his federal marginal tax rate would be 35% . The reason I made this point above is that this kind of income (i.e., income as ordinary wages) is potentially taxed at a much higher rate than the money “earned” by the wealthy. The wealthy generally make their “income” not as wages but as dividends on their investments. If the investments were held more than six months the revenue they produce is considered long term capital gains (LTCG). Currently, the LTCG rate is only 15%. It will go to 20% next year but even 20% is lower than the marginal tax rate for the average blue collar worker. If an S-Corp businessperson hires or chooses not to hire an employee, the marginal cost or savings affects his personal income, dollar for dollar. This is why so many small businesses are standing on the sidelines right now. Their profits are down substantially because of the recession, meaning their wages are down by the same amount. They must find ways to meet their living expenses, even if it means deferring plans to expand, etc. This makes sense because the costs of expansion usually exceed returns for the first 1-3 years, depending on the nature of the business and, literally, the small business in in a position of not being able to afford to expand which, in the end, would add jobs and might make the person more income. These are not trivial matters. I personally know many small business owners in this situation right now.This is the portion of the tax code that caused billionaire Warren Buffet to comment recently that he pays a lower tax rate than his secretary, suggesting that this portion of the tax code needs to be changed. Personally, I doubt that it will be changed because most members of Congress derive a good deal of their income from LTCG, as do their friends and colleagues. These days, there are also some new corporate structures such as LLC, PC, etc. that are essentially as I have described for the S-Corp. There are many other details of course. These are the highlights highlight relevant to my point.Is this what you were asking about?

@ t_paine,The point most of us make is not black and white (either/or). Wealth re-distribution will always find resistance and in some cases reasonably so. In other cases, it is about correcting an injustice or a series of them.There is a big difference between Marxist/Socialist permanent structural interventions for wealth re-distribution and re-balancing an economy that hasn’t seen such financial disparities between the wealthy and the poverty stricken in 70 years. Its not about getting everyone back to equal, but more about clawing back those gains that were siphoned out of the economy by the people who wrecked it (investors, large business executives and speculators). t_paine QUOTE”The rich and powerful are not rich and powerful because they are better criminals than you are; they’re just better at life than you are. What ever your station in life, in America, you deserve your plight until YOU change it.”Let me be clear here. I do not advertise my station here often because it is gauche and fully devoid of much meaning, but my family falls into the top %2 of income we are talking about. Not only do I challenge your notion that the wealthy ae better at life, but that we somehow got to where we got because of hard work. It’s much more nuanced than that. This is the worst type of Social Darwinism (predicated often on whiteness, maleness and access to daddy’s resources/connections/relationships). In the world of Ivy league admissions and its-who-you-know not what you know wall street alliance, the rich and powerful do not want people who are smart; they want people to follow and resemble them. As someone who managed tens of millions of dollars for wealthy investors in the 90′s, I feel that my perspective gives me unique insight (not into their goodness or badness) but into the strategies used to maintain and increase their station. If you want to sit back an admire the wealthy as a group (go for it), especially if it confirms your social darwinstic perspective. However, when you actually get to a station where you see how things work with the very wealthy, I am convinced that your reverance for who deserves what based on talent/knowledge/resources is a managed process often biased in favor of those who are most connected to the power sources…. t_paine QUOTE”you deserve your plight until YOU change it.”No one deserves to die because of a lack of health insurance
No one deserves to be preyed upon financially (payday, subprime etc)
No wountry deserves to be destroyed for oil
No one deserves a life of indentured servitudeFinally t_paine, I have the resources to change my station in life, but anyone with a reflexive imagination can see that this is not the case for the majority of people, (especially communities of difference). So, I would prefer that you be honest with people here and just say out loud what your words betray: “I don’t give a **** about anyone other than myself.”…………Peace
<Moderator’s note: Please don’t use all caps.>

This article repeats a common misunderstanding.”Obama wants to extend the tax cuts for everyone but the top 2 percent of taxpayers earning over $250,000 per year to yield $700-billion over ten years.”This is not true. Obama wants to extend the tax cuts for all wage earners, not just those earning less than $250,000.For taxpayers earning over $250,000 per year, Obama proposes extending the Bush tax cuts “only” on the first $250,000 in income. Under Obama’s proposal, the richest Americans will receive the largest tax break, because they will receive the tax break on the largest amount of income.

@lexalexander,I don’t disagree with your observation about the direction of change. The rate of change in some areas concerns me as well. The worst international comparative metrics from my perspective are the WHO indices. My point is that the US playing field is substantially more level than that of most nations. Separately, as you probably know, imputing the most appropriate comparative meaning to various international statistics is a challenge at best and error-laden at worst. One small example is the paternalistic control mechanisms in place with respect to nutritional supplements in the EC, Australia, and elsewhere. The FDA has sought to harmonize with those regulations in the US, largely because the FDA’s senior decision-makers come from big pharma. It has not happened because grass roots opposition has kept these freedoms. To most individuals, this may not be viewed as a substantial tilt in the playing field but is a very clear example of how difficult it is to interpret these metrics.

@still hiding behind a pseudonym trend,Glad to see you’re feeling better today.

The terrible truth is that the greatest service John Boehner could perform the country is to deny the President his wish to extend the Bush cuts to those making less than $250,000 and ensure that taxes rise for everyone who pays them. (Including me.) Although it is plainly mad to push up the deficit by $700 billion for the benefit of a tiny percentage of vastly over-compensated persons – who are rich because they can essentially set their own salaries, with virtually no constraints – it is not much less mad to lock in $2 trillion of debt by refusing to face the reality that the country cannot afford all the things that the electorate – including the Tea Party – want, without putting up taxes from their present level. It might be a good idea to raise the upper limit on social security taxes, to add half a percent to medicare tax, or whatever; but it can’t be a good idea to pretend that the truths of arithmetic can be evaded by wishing things were otherwise. The other way to sanity would be to transplant the French or German healthcare system to the US; either one would save five percent of GDP, which is about the size of the gap between tax revenues and government spending…