Raising taxes on the rich

[ComputerGeek25]

First, you have to define “the rich”. I am convinced that the average person considers himself poor and those earning more than he to be “rich’. So we have to decide just what constitutes “rich”.

Øbama campaigned on “getting the rich to pay more of their fair share.” This is not original, for Bill Clinton use the exact words to get congress to raise taxes “on those earning $300,000 or more." Clinton’s press secretary, Dee Dee Meyers was cornered in a press conference and force to admit that the increase would reach down as far as the $30,000 level, slightly above median and one-tenth what Clinton claimed.

Then consider this. Rich people are rich because they have more money than they need to live on at an average level of comfort. What do they do with the excess that is not taxed away? They invest it in the economy. This is the capital that makes capitalism work. If you tax more of that capital away, less is invested into the economy, hence, fewer jobs. If you have some excess money, you can do only two things with it: invest it or spend it. The government can only spend it, therefore, government spending is consumption unless it is for some form of infrastructure improvement like roads. Having worked in the government for many years, I can assure you that there is a lot of waste, for individuals will always take care of their own assets better than the government will.

About ten years ago, California was in dire straits, and the federal government offered $3B in bail-out aid. What did Sacramento politicians do? They resurrected over $3B in spending that had been shelved due to the extreme budget shortfall. This is how politicians think. They will always spend more than what is collected in taxes, hence a persistent deficit. So increasing taxes will not solve the problem; it just gives elected officials more to spend and a bigger incentive to borrow more, and for the wealthy to increase lobbying efforts, exacerbating the problem.

One reason that Republicans resist raising taxes on the rich is the “feedback effect”, AKA, unintended consequences that need to be considered. Rich people are powerful because they are rich. If you were super-wealthy you would have a different outlook on taxes from the “they’ve-got-so-much-so-let’s-make-them-pay-more” outlook you currently have, and you would likely use some of your wealth to limit your taxes. Enter lobbyists. Lobbying is such a lucrative business that they can afford to pay college students $30 an hour to hold a place in line for them to get into congressional hearings. The job of the lobbyist is to get congress to vote his clients’ activities favored treatment by the tax code. That’s why the code is so long. It also limits the ability of new entrepreneurs to provide competition with big corporations. Some years ago, when Microsoft started to make big bucks but was not lobbying, it was hit with an anti-trust lawsuit by the government. Gates learned his lesson, and the next year he spent money on lobbying. High tax rates therefore are also an incentive to lobby, and lobbying provides the politician with campaign contributions. So, for both of them, it is a win-win situation. If, on the other hand, there was a flat tax of, say, 10% of the top line [a big number] instead of, say 90% of the bottom line [a small number close to zero], there would be no incentive to lobby because a company wouldn’t be able to reduce its taxes.

About 20 years ago, the* Wall Street Journal *carried an article [wish I’d kept] about a survey done on ordinary people about how they felt about taxes. The average person, it turns out, is willing to try to hurt “the rich” even to the extent that he hurts himself in the process. Clearly, we need to do more to educate people on how the economy works.

Under the current progressive income tax system, “the rich” [those above median] pay essentially 100% of the tax burden. That means “the poor” [those below median] get a free ride. Is this right? I think not for several reasons. If everyone had to pay something, the poor would learn that it takes money to run a government and that they have the ability to give of themselves too.

I think this is a well written post.

I also would like to point out that the “rich” also give a lot of money in the name of “philanthropy” - how many wings of hospitals or buildings at colleges/universities were built because the “poor” donated a few million out of pocket?

 

[copperblade]

Well you can see the people that copy and paste comments and know nothing about the subject, The rich accoount for 20% of the wealth but already pay 44 % of the taxes.

So copying and pasting data is worse than making a claim without citing a source? Interesting.

And that’s only the beginning of it. Most people focus on federal income taxes, which is a fallacy. There are plenty of other taxes that the “regular folks” never see. Example: what percentage of the poor and middle class pay yacht tax? The answer: 0%. There are all sorts of other taxes that have cut-offs, which basically means only the wealthy are paying them; e.g., inheritance tax, mansion tax, etc.

I posted a study here that shows the real taxes paid are close to flat. While it may be true that the rich pay more luxury taxes, they also have other write-offs that bring it out to be about the same.

 

[sedonaman]

… what percentage of the poor and middle class pay yacht tax? The answer: 0%. There are all sorts of other taxes that have cut-offs, which basically means only the wealthy are paying them; e.g., inheritance tax, mansion tax, etc.

The recent story of John Kerry tying his yacht up in Rhode Island to evade Massachusetts taxes reminded me of the saga of Alfred P. Sloan, Jr. and the Rene Corporation.

The president of General Motors Corporation, Alfred P. Sloan, Jr. was fond of saying that he had no bobbies. He believed only in work. “Without hard work, nothing real can be accomplished,” he once said. The exception to Sloan’s strict regimen was his yacht, the Rene, a breathtaking $1.1 million vessel 235 feet long, which he moored on Long Island Sound near his Great Neck, New York, home.

Having powered GM past Ford Motor Company in the race to manufacture more cars, Sloan was in 1936 the nation’s highest-paid chief executive. When his $565,311 annual salary from GM was coupled with dividends, stock benefits, and other income, he and his wife had a total income of $2.9 million for the year. The Rene cost roughly $150,000 a year for upkeep and crew, an expense easily within Sloan’s means. Nevertheless, he found a way to cut costs: He incorporated his yacht and wrote off its operating expenses as a business deduction, thereby reducing his federal income tax bill.

Sloan turned over title to the vessel and common stock valued at more than $1 million to a paper company he had created, the Rene Corporation. He executed a lease between himself and his newly formed company, in which he agreed, in effect, to pay Rene Corporation – his own company – an annual fee to rent the good ship Rene – his own yacht. [This would be like incorporating your kitchen as a restaurant and writing off its expenses.]

The charter fees never covered annual upkeep and costs. No matter. The deficit was made up by income from dividends on stock Sloan had given to the Rene Corporation, thereby reducing the holding company’s taxable income and the amount of federal income tax Sloan would owe.

In 1934, Rene Corporation showed gross income of $153,864 of which $63,750 represented dividends received and $90,114 charter fees paid principally by Sloan to his own corporation to use his own yacht. Total deductions, however, were $223,219, resulting in a net loss of $69,353 to the corporation. From 1931 to 1936, Sloan saved $222,647 in federal income taxes – the equivalent of about $2.3 million today.

From America: Who Really Pays the Taxes? p. 76-77, by Donald Barlett and James B. Steele

 

[tqualey]

Hi, Valentino,

As a general question, just how would you go about seeing that such proposed outcomes were, in fact, being realized. Serioulsy, we aleady have an almos ‘Nanny Government’ - with government insisting that it and only it knows best (look at the Obama Administration’s heroic effort to keep Planned Parenthood funded with tax dollars by threatening the States that want to defund it!)

Those on W-2 income are not ussually the ones other people work for. Those making regualar salaries and wages and not hiring anyone - they are ones who either want to be hired or hope to maintain their present positions. The Main Strees of many small cities are littered with closed stores - and, there is a reason for this. They are not selling or providing the services necessary for them to stay afloat. Some had employees, but as the economy became further entrenched in a recession - they had to be let go - and the owner and his family had to decide whether to stay open by working these positions or to close. Just look around.

The idea that we demand adequate compensation for labor - is about as solid as a soggy noodle. How about ‘we demand’ a healthy environoment where people with ideas can help establish businesses and actually hire people. There is no guarantee of economic success - 4 out of 5 small business ( the actual backbone of the economy) fold within the first year for various reasons - but the principle is that they were not able to keep their business dream alive. The 1 out of 5 that makes it through the 1st year has only a slim chance to making it through the 2nd year. Usually, by the 3rd year, things have settled down … but, just look at all of those old line companies that have either folded or been bought out by conglomerates.

Does such an approach encourage the return of the Robber Barons - those who will lie and exploit workers - even to jeopardize the workers health, safety and even life so the company can make more profit? Well, guess what, even with today’s laws this is still going on!! Well, here is an item from today’s newspaper on the 2-sets of books kept by the Big Branch Mine involving safety violations: blogs.wvgazette.com/coaltattoo/2011/06/28/msha-to-families-ubb-mine-kept-2-sets-of-books/ My point is you can not screen for greed, or selfishness or pride or any of the other vices that allow such violations - but you certainly can have the unintended consequences of screening out those who would like to see their dream become a reality.

I know it is hard … but, stop moaning about inadequate wages. It is this that has fueled the fires of inflation that has come to devour everyone’s money. I have spent most of my life in Louisisiana. The State pinned its budget on the price of a barrel of crude oil at between $30-$32/barrell. Louisiana is broke and oil is just below $100/barrell! There are some things we just can not afford to continue throwing money at - someone needs to say, “Hold on there - this far and no more!” The answers from Socialism have remained consistent: throw more dollars (your dollars, not mine) to solve this problem. With a $16 trillion debt…and rising … does anyone really think this can continue. Look at Greece - they just narrowly approved an austerity budget that will not allow them to get more money to go deeper in debt - paying off past debt with current borrowing… and the Greek citizens rioted at the austeriry program proposed. If the proposed budget had failed, does anyone know what Greece would have used for money when they ran out in approximately 3-weeks time.

God bless

i think it wrong to raise taxes on the rich.the bigger question is are the poor getting adequate compensation for labor,are their jobs available for all people,and all people have their basic needs met.its not fair to overtax any class of people.If the rich pay their fair share they shouldn’t be taxed more.if the system is unfair to the poor the government should help them.But ideally all citizens should be mindful of the poor and see that their needs are met.

 

[mary_bobo]

i think it wrong to raise taxes on the rich.the bigger question is are the poor getting adequate compensation for labor,are their jobs available for all people,and all people have their basic needs met.its not fair to overtax any class of people.If the rich pay their fair share they shouldn’t be taxed more.if the system is unfair to the poor the government should help them.But ideally all citizens should be mindful of the poor and see that their needs are met.

Let’s define just what their fair share is. We all have heard how much of the taxes is paid by the “wealthy” and we also know that a sizeable portion of our citizens pay no income taxes at all. I think most of us are mindful of the poor. We just differ on the best way to help. We have tried giving government handouts and that has not helped one wit. Let’s try something different for a change. The War on Poverty has been a big boondoggle.

 

[tqualey]

Hi, Sedonaman,

Sloan was truly an intersting man … moreso than Sen Kerry! But, as I read the story there are two issues that should also be considered.

1.) The adage of ‘Tax avoidance is appropriate but tax evasion is illegal’ still holds true to this day. Given the complexity of the 1930 tax code - I guess you could say that Sloan used his accountants to find loopholes and then to exploit them. There is nothing wrong with this is there? I do not think Sloan was accused to income tax evasion. But, rather than re-write the tax code so that he would simply pay a flat percentage - it was re-written so tax attorneys and accounts have to go to more seminars to find out how to utilize the NEW loopholes.

2.) Unlike Kerry who just played a game of trying to move his yatch around so as to EVADE taxes - Sloan hired crews, maintenance workers and others that were fully employed to keep his yatch in good shape (and accounts and tax attorneys to make sure that the law was followed). While we may wonder about the really good use of this money being spent on AVOIDING taxes - how people choose to legitimately spend their earned money is ultimately a matter that does not involve government.

In my judgment, we need to find ways for people to be encouraged to start businesses - and move the country forward by the strength of their dreams and the sweat of their brow. Those who earn a lot are considered to have made a greater contribution - at least during the time of Sloan. I am not sure about the time of Lehman Brothers… (en.wikipedia.org/wiki/Bankruptcy_of_Lehman_Brothers )

God bless

The recent story of John Kerry tying his yacht up in Rhode Island to evade Massachusetts taxes reminded me of the saga of Alfred P. Sloan, Jr. and the Rene Corporation.

The president of General Motors Corporation, Alfred P. Sloan, Jr. was fond of saying that he had no bobbies. He believed only in work. “Without hard work, nothing real can be accomplished,” he once said. The exception to Sloan’s strict regimen was his yacht, the Rene, a breathtaking $1.1 million vessel 235 feet long, which he moored on Long Island Sound near his Great Neck, New York, home.

Having powered GM past Ford Motor Company in the race to manufacture more cars, Sloan was in 1936 the nation’s highest-paid chief executive. When his $565,311 annual salary from GM was coupled with dividends, stock benefits, and other income, he and his wife had a total income of $2.9 million for the year. The Rene cost roughly $150,000 a year for upkeep and crew, an expense easily within Sloan’s means. Nevertheless, he found a way to cut costs: He incorporated his yacht and wrote off its operating expenses as a business deduction, thereby reducing his federal income tax bill.

Sloan turned over title to the vessel and common stock valued at more than $1 million to a paper company he had created, the Rene Corporation. He executed a lease between himself and his newly formed company, in which he agreed, in effect, to pay Rene Corporation – his own company – an annual fee to rent the good ship Rene – his own yacht. [This would be like incorporating your kitchen as a restaurant and writing off its expenses.]

The charter fees never covered annual upkeep and costs. No matter. The deficit was made up by income from dividends on stock Sloan had given to the Rene Corporation, thereby reducing the holding company’s taxable income and the amount of federal income tax Sloan would owe.

In 1934, Rene Corporation showed gross income of $153,864 of which $63,750 represented dividends received and $90,114 charter fees paid principally by Sloan to his own corporation to use his own yacht. Total deductions, however, were $223,219, resulting in a net loss of $69,353 to the corporation. From 1931 to 1936, Sloan saved $222,647 in federal income taxes – the equivalent of about $2.3 million today.

From America: Who Really Pays the Taxes? p. 76-77, by Donald Barlett and James B. Steele

 

[tqualey]

Hi, Mary Bobo,

I totally agree - encouraging people to do nothing and live in subsidized housing and buying subsidized food and not make a more independent citizenry. Come to think of it, ‘boondoggle’ is probably an upgrade…

For those keeping track of the federal debt limit, Aug 2 (theoretical date when the US runs out of money…just don’t tell that the Bureau of Printing and Engraving - the group responsible for printing our money) is 33 days from now. What is going to happen? I certainly do not know, but Obama threatening the Republicans is probably a good way to sink whatever good will may still be afloat.

My suggestion is to find ways to support Congressman Paul Ryan’s budge plan: roadmap.republicans.budget.house.gov/Plan/ - here is a specific proposal that undoubtedly will annoy a lot of vested interests… but, considering what else is out there - this looks like the best thing I have seen.

God bless

Let’s define just what their fair share is. We all have heard how much of the taxes is paid by the “wealthy” and we also know that a sizeable portion of our citizens pay no income taxes at all. I think most of us are mindful of the poor. We just differ on the best way to help. We have tried giving government handouts and that has not helped one wit. Let’s try something different for a change. The War on Poverty has been a big boondoggle.

 

[vz71]

The recent story of John Kerry tying his yacht up in Rhode Island to evade Massachusetts taxes reminded me of the saga of Alfred P. Sloan, Jr. and the Rene Corporation.

The president of General Motors Corporation, Alfred P. Sloan, Jr. was fond of saying that he had no bobbies. He believed only in work. “Without hard work, nothing real can be accomplished,” he once said. The exception to Sloan’s strict regimen was his yacht, the Rene, a breathtaking $1.1 million vessel 235 feet long, which he moored on Long Island Sound near his Great Neck, New York, home.

Having powered GM past Ford Motor Company in the race to manufacture more cars, Sloan was in 1936 the nation’s highest-paid chief executive. When his $565,311 annual salary from GM was coupled with dividends, stock benefits, and other income, he and his wife had a total income of $2.9 million for the year. The Rene cost roughly $150,000 a year for upkeep and crew, an expense easily within Sloan’s means. Nevertheless, he found a way to cut costs: He incorporated his yacht and wrote off its operating expenses as a business deduction, thereby reducing his federal income tax bill.

Sloan turned over title to the vessel and common stock valued at more than $1 million to a paper company he had created, the Rene Corporation. He executed a lease between himself and his newly formed company, in which he agreed, in effect, to pay Rene Corporation – his own company – an annual fee to rent the good ship Rene – his own yacht. [This would be like incorporating your kitchen as a restaurant and writing off its expenses.]

The charter fees never covered annual upkeep and costs. No matter. The deficit was made up by income from dividends on stock Sloan had given to the Rene Corporation, thereby reducing the holding company’s taxable income and the amount of federal income tax Sloan would owe.

In 1934, Rene Corporation showed gross income of $153,864 of which $63,750 represented dividends received and $90,114 charter fees paid principally by Sloan to his own corporation to use his own yacht. Total deductions, however, were $223,219, resulting in a net loss of $69,353 to the corporation. From 1931 to 1936, Sloan saved $222,647 in federal income taxes – the equivalent of about $2.3 million today.

From America: Who Really Pays the Taxes? p. 76-77, by Donald Barlett and James B. Steele

You know the difference between a democrat and a republican…
The democrat reads the above and complains.
The republican reads it and admires.

 

[sedonaman]

Hi, Sedonaman,

Sloan was truly an intersting man … moreso than Sen Kerry! But, as I read the story there are two issues that should also be considered.

1.) The adage of ‘Tax avoidance is appropriate but tax evasion is illegal’ still holds true to this day. Given the complexity of the 1930 tax code - I guess you could say that Sloan used his accountants to find loopholes and then to exploit them. There is nothing wrong with this is there? I do not think Sloan was accused to income tax evasion. But, rather than re-write the tax code so that he would simply pay a flat percentage - it was re-written so tax attorneys and accounts have to go to more seminars to find out how to utilize the NEW loopholes.

2.) Unlike Kerry who just played a game of trying to move his yatch around so as to EVADE taxes - Sloan hired crews, maintenance workers and others that were fully employed to keep his yatch in good shape (and accounts and tax attorneys to make sure that the law was followed). While we may wonder about the really good use of this money being spent on AVOIDING taxes - how people choose to legitimately spend their earned money is ultimately a matter that does not involve government.

I agree with what you are saying. I posted them just to show that the rich have ways to avoid taxes and that a 90% tax bracket doesn’t mean that anyone actually pays 90% of his last dollar. In fact, I remember an article in a business weekly in the late '60s when the top rate was 70% which said that the most anyone paid was 48%. They actually interviewed a rich man who said he could have gotten away with paying nothing but paid 10% because he felt he should pay something.

In my judgment, we need to find ways for people to be encouraged to start businesses - and move the country forward by the strength of their dreams and the sweat of their brow. …God bless

I don’t think people lack encouragement; what we need is to stop the current system from discouraging them.

 

[sedonaman]

You know the difference between a democrat and a republican…
The democrat reads the above and complains.
The republican reads it and admires.

Well, I’m a Republican, I read it, and I’m complaining. So what does that make me?

 

[ComputerGeek25]

I agree with what you are saying. I posted them just to show that the rich have ways to avoid taxes and that a 90% tax bracket doesn’t mean that anyone actually pays 90% of his last dollar. In fact, I remember an article in a business weekly in the late '60s when the top rate was 70% which said that the most anyone paid was 48%. They actually interviewed a rich man who said he could have gotten away with paying nothing but paid 10% because he felt he should pay something.

I don’t think people lack encouragement; what we need is to stop the current system from discouraging them.

Very interesting points you and tqualey bring up.

The current problem is that business and so-called “rich” people find it profitable to hire armies of accountants, lawyers and lobbyists to abuse so call tax loopholes.

 

[MarkInOregon]

Well you can see the people that copy and paste comments and know nothing about the subject, The rich accoount for 20% of the wealth but already pay 44 % of the taxes. We need to get those people that are used to entitlements to start paying taxes. The rich got rich by using their talents and resources and did not wait for Government handouts For this they should be punished? These are the people that do provide jobs and again they must be punished to satisfy those people who expect and accept that the Government owes them a living

And some can just make up any old number they want out of thin air.
Where do you get your numbers from? Just reading it I’m knowing that it doesn’t sound right–based on sources I’ve seen.

The work of economist Edward N Wolff at NYU provides this information on wealth as of 2007:

Net Worth:
Top 1%: 34.6% (far cry from 20%)
Next 19%: 50.4% (top 20% account for 85% of net worth)
Bottom 80%: 15.0%

In the US wealth is highly concentrated.

Now lets look at financial wealth (net worth less the value of your home)
Top 1%: 42.7%
Next 19%: 50.3%
Bottom 80%: 7.0%

Just who are you defining as rich? Lets look at inheritance taxes. According the Federal Reserve Bank of Cleveland 1.6% of americans receive $100,0000 or more, 1.1% receive 50-100,000 while 91.9 % receive -0-.

These few facts would seem to indicate that your 20% figure is incorrect. It is also incorrect to say in a blanket statement the rich got rich using their talents–many got rich by inheriting money or working for granddad. Many do get rich by starting companies that are successful–and many also get weathly by working for a W-2 at companies like Intel–where they get (or used to get) great stock options. But to act like the guy who went to Andover and Harvard and got the gig at the investment bank because his family had money and connections–did it all by his own talent–while the kid from the inner city of deep south or poor rural america who’s parents struggled working 60 hours a week to put food on the table–is somehow lazy and unworthy–is well…well I’m not going to say. People do rise above their situation but all situations are not equal and not all have the same opportunity and there are plenty out there - who’s talent has nothing to do with their wealth or position.

Peace,
Mark

 

[sedonaman]

…The current problem is that business and so-called “rich” people find it profitable to hire armies of accountants, lawyers and lobbyists to abuse so call tax loopholes.

But loopholes don’t just drop into the tax code like so much hail falling from the sky; they are put there by the “armies of accountants, lawyers, lobbyists,” and politicians. So naturally they are going to avail themselves of their own creation. The current problem is rather the tax code itself. It serves any number of purposes, e.g., modifying behavior; collecting revenue to pay for government is probably far down the priority list. The most egregious purpose has got to be collecting taxes for the sake of collecting taxes.

 

[mary_bobo]

And some can just make up any old number they want out of thin air.
Where do you get your numbers from? Just reading it I’m knowing that it doesn’t sound right–based on sources I’ve seen.

The work of economist Edward N Wolff at NYU provides this information on wealth as of 2007:

Net Worth:
Top 1%: 34.6% (far cry from 20%)
Next 19%: 50.4% (top 20% account for 85% of net worth)
Bottom 80%: 15.0%

In the US wealth is highly concentrated.

Now lets look at financial wealth (net worth less the value of your home)
Top 1%: 42.7%
Next 19%: 50.3%
Bottom 80%: 7.0%

Just who are you defining as rich? Lets look at inheritance taxes. According the Federal Reserve Bank of Cleveland 1.6% of americans receive $100,0000 or more, 1.1% receive 50-100,000 while 91.9 % receive -0-.

These few facts would seem to indicate that your 20% figure is incorrect. It is also incorrect to say in a blanket statement the rich got rich using their talents–many got rich by inheriting money or working for granddad. Many do get rich by starting companies that are successful–and many also get weathly by working for a W-2 at companies like Intel–where they get (or used to get) great stock options. But to act like the guy who went to Andover and Harvard and got the gig at the investment bank because his family had money and connections–did it all by his own talent–while the kid from the inner city of deep south or poor rural america who’s parents struggled working 60 hours a week to put food on the table–is somehow lazy and unworthy–is well…well I’m not going to say. People do rise above their situation but all situations are not equal and not all have the same opportunity and there are plenty out there - who’s talent has nothing to do with their wealth or position.

Peace,
Mark

Just for interest sake, I pulled up stats from NYTimes and the top 1% paid more in taxes than the bottom 95% combined, in 2007. In 2008, the top 10% of earners paid 70% of federal income taxes in 2008. Interesting differences, no?

 

[sedonaman]

…
Net Worth:
Top 1%: 34.6% (far cry from 20%)
Next 19%: 50.4% (top 20% account for 85% of net worth)
Bottom 80%: 15.0%

In the US wealth is highly concentrated.

Now lets look at financial wealth (net worth less the value of your home)
Top 1%: 42.7%
Next 19%: 50.3%
Bottom 80%: 7.0%

Every one of these discussions I’ve ever been in always leads to statistics like these. If there is something wrong with this picture, I would love to see the person who quotes them to present what he thinks is the ideal distribution of wealth. So, what do you consider the ideal distribution of wealth? Give me the numbers, not the adjectives.

And why do you ignore the value of your home? As you work through your career, you are paying off the loan and thus building equity. So it should count.

Another thing. Statistics like these ignore the fact that people move up and down the wealth brackets throughout their working careers, so they are not too meaningful unless to paint a misleading picture.

… Lets look at inheritance taxes. According the Federal Reserve Bank of Cleveland 1.6% of americans receive $100,0000 or more, 1.1% receive 50-100,000 while 91.9 % receive -0-.

What do these dollar figures represent? An inheritance? Are you saying, for example, that 91.9% receive no inheritance?

… It is also incorrect to say in a blanket statement the rich got rich using their talents–many got rich by inheriting money or working for granddad. Many do get rich by starting companies that are successful–and many also get weathly by working for a W-2 at companies like Intel–where they get (or used to get) great stock options. But to act like the guy who went to Andover and Harvard and got the gig at the investment bank because his family had money and connections–did it all by his own talent–while the kid from the inner city of deep south or poor rural america who’s parents struggled working 60 hours a week to put food on the table–is somehow lazy and unworthy–is well…well I’m not going to say. People do rise above their situation but all situations are not equal and not all have the same opportunity and there are plenty out there - who’s talent has nothing to do with their wealth or position.

People have different advantages: some are more talented than others; some are smarter than others; some are more beautiful than others; and, yes, some are “luckier” than others, and these all translate into varying degrees of income and wealth. For the most part, the harder the individual works, the “luckier” he gets. Which reminds me, few people put in the hours that most rich people do.

What I think of when reading figures like yours is envy and the desire for the government to “do something” to assuage it.

 

[Thorsson]

Read the quote at the link from St John Chrysostom.

Read Acts. I recall the end of chapter 1 or 2 discusses those who follow Chirst, giving up everything (spelled EVERYTHING) and all sharing the resources. I cant stick up for those who need no help.

 

[valentino]

Well you can see the people that copy and paste comments and know nothing about the subject, The rich accoount for 20% of the wealth but already pay 44 % of the taxes. We need to get those people that are used to entitlements to start paying taxes. The rich got rich by using their talents and resources and did not wait for Government handouts For this they should be punished? These are the people that do provide jobs and again they must be punished to satisfy those people who expect and accept that the Government owes them a living

The rich should pay their fair share and nothing more.As regards to the poorer people all the better off should see to it that the poor’s needs are met.Its society(people)who should help the poor not government.We still live in a generous society.People still have feelings for people.Government does nothing more than mandate charity.Its not their place.

 

[copperblade]

Just for interest sake, I pulled up stats from NYTimes and the top 1% paid more in taxes than the bottom 95% combined, in 2007. In 2008, the top 10% of earners paid 70% of federal income taxes in 2008. Interesting differences, no?

It’s only interesting relative to the amount of income. If the top 1% of the people make 95% of the money, then a flat tax would mean they pay 95% of the taxes.

 

[tqualey]

Hi, ComputerGeek,

The very fact that there is a loophole - the Congress approved that some would get a tax break not available to others. The use of a legal remedy does not constitute an abuse. If you have complaint, it is really with the Congress that has decided to single our some tax payers as more deserving than others of the taxes they legislate for all.

Personally, I see it as a game the US Governemnt plays with its citizens. Those who know the rules (existance and proper utilization of a loophole) will always do better than those who don’t. For whatever reason (surely it isn’t economic) we have rewarded those who play this arcane game - by buying the services of those who specialize in arcane sciences of tax accounting and tax law.

Of course there is a reason why we as a society have chosen to reward this truly unproductive activity (getting around the laws we make) - but, I really do not know what it is. But, whatever it is - it has managed to withstand the efforts of many to introduce logic and a reason into the US Tax Code.

God bless

Very interesting points you and tqualey bring up.

The current problem is that business and so-called “rich” people find it profitable to hire armies of accountants, lawyers and lobbyists to abuse so call tax loopholes.

 

[vz71]

Well, I’m a Republican, I read it, and I’m complaining. So what does that make me?

odd