How to Tax the Rich

January 30, 2011 1:27 PM

Scott Adams suggests that if we assume that the solution to our fiscal problems is increased taxes on the wealthiest Americans, perhaps we should figure out how to make the taxation amenable to them...

I was hiring a salesperson a few weeks ago and had to reduce my original offer a bit after talking to the board. The salesperson's response was interesting: "I'm not opposed to the reduction, but if I'm going to give up something, I'm accustomed to getting something in return."

This makes a ton of sense at an individual level. The question is whether this is reasonable at the macro level. Can reasonable incentives be created or is Adams' plan just another way to reinforce the return of the aristocracy?

posted by bpm140 (223 comments total)

What they can have in return is not being eaten.
posted by fleetmouse at 1:29 PM on January 30, 2011 [152 favorites]

How about giving them entrenched political, regulatory, and social structures that favor their interests in every single way? Oh, wait.
posted by facetious at 1:30 PM on January 30, 2011 [109 favorites]

Scott Adams is awesome

For those of you with healthy egos—and that would be every reader of The Wall Street Journal— ...

... That's important to understand because the rich won't give up their cash unless they feel they are getting something in return. And so far, saving the country doesn't seem to be enough of a payoff.

posted by memebake at 1:32 PM on January 30, 2011 [7 favorites]

Wondering if either of you actually, you know, read the article. Because I actually found it really interesting and was hoping for some informed discussion. Or is that what Meta is for?
posted by bpm140 at 1:33 PM on January 30, 2011 [1 favorite]

And so far, saving the country doesn't seem to be enough of a payoff.

And never will be. Causing the downfall of America is no longer considered much of a negative outcome in the era of Multinationalism.
posted by oneswellfoop at 1:35 PM on January 30, 2011 [11 favorites]

Taxing the rich is one way of seeing it. Waiting to tax people until after they get rich first because we live in a demand-side economy is another way of seeing it.
posted by Brian B. at 1:35 PM on January 30, 2011 [11 favorites]

It's an interesting thought exercise, but it's worth noting that this reasoning only ever applies to those who are already in positions of power and privilege. There is no "trade" made when unemployment benefits are cut, or when the overall tax burden is shifted down to the middle class via a regressive payroll tax.

Why not ask them what we, as a nation, got in return for cutting the top marginal rate from 70% in 1980 to 35% today.
posted by verb at 1:35 PM on January 30, 2011 [68 favorites]

"Suppose all government agencies had a mandate to handle the affairs of the rich before everyone else."

I'm not sure that's so outside of how things happen currently.

I know this is semantics, but I dislike the phrase "the rich can be taxed at a higher rate". Everyone is essentially taxed under the same rate system, but with different levels of their income taxed at different percentage rates. Their first x amount is taxed the same as the first x amount of the poor family down the street.
posted by bizzyb at 1:38 PM on January 30, 2011 [17 favorites]

I wonder, is this Mr. Scott Adams wealthy?
posted by chavenet at 1:39 PM on January 30, 2011

Wondering if either of you actually, you know, read the article.

Reading to the end exposes you to this final paragraph:

The way our political system is designed, politicians are not free to float bad ideas. Doing so is a sure way to lose an election. Politicians aren't even free to support good ideas if they are too far from the norm. But as citizens, we're free to speculate all we want. And if some new and better idea gains popularity at the grassroots level, our elected leaders would then be able to embrace it. In other words, it's literally your job to fix the budget problem because your government isn't equipped to handle it. The ideas I've mentioned here are bad by design. But if a few million people start brainstorming their own ideas for solving the debt problem, someone might come up with a winner. And if that idea gains popular support on the Internet, it frees politicians to consider it. I have no problem imagining that something along those lines can happen, and the thought feels delightful.

(emphasis mine)

Adams floats bad ideas all the time as "thought experiments" then goes back to writing comic strips for posting on cubicle walls. I tired of his approach years ago and this does nothing to improve my image of him.
posted by oneswellfoop at 1:40 PM on January 30, 2011 [12 favorites]

Why not ask them what we, as a nation, got in return for cutting the top marginal rate from 70% in 1980 to 35% today.

Fucked. Hard.
posted by five fresh fish at 1:40 PM on January 30, 2011 [24 favorites]

I wonder, is this Mr. Scott Adams wealthy?

Read the article, he addresses that specifically : )
posted by memebake at 1:41 PM on January 30, 2011 [2 favorites]

What they can have in return is not being eaten.
posted by fleetmouse

Eat a few first. Then make the offer.
posted by tspae at 1:42 PM on January 30, 2011 [30 favorites]

Why not ask them what we, as a nation, got in return for cutting the top marginal rate from 70% in 1980 to 35% today.

A kleptocracy.
posted by oneswellfoop at 1:43 PM on January 30, 2011 [11 favorites]

@OneSwellFoop -- I believe he was referring to the individual suggestions, not the core idea. Having social service hires write thank you notes to the rich is without a doubt a shitty idea, but the core idea that the rich are motivated by gratitude makes a ton of sense.
posted by bpm140 at 1:45 PM on January 30, 2011 [3 favorites]

And as 'foop notes, the ultra wealthy, who have more wealth than many nations, are citizens of the nation only because of inertia. They have more than enough money to become stateless.

Citizenship is for the little people.
posted by five fresh fish at 1:46 PM on January 30, 2011 [9 favorites]

I'm poor and I'd pay ten bucks to zoom to the head of the DMV line.
posted by Cool Papa Bell at 1:48 PM on January 30, 2011 [5 favorites]

When someone is laid off from a corporate job, do they receive a personal thank-you note regarding their time and service to that company? Because that's part of how that company is able to continue to make a profit that year. Most people are motivated by gratitude, but I would guess that only the better-off have some sort of expectation of it.
posted by bizzyb at 1:50 PM on January 30, 2011 [10 favorites]

"What if we did this? I mean, not this, obviously, but something like this."
posted by echo target at 1:52 PM on January 30, 2011 [10 favorites]

@bizzyb -- what behavior from the laid-off person are you expecting to induce by having the company send them a personal thank-you note? Perhaps you're missing the point of the article?
posted by bpm140 at 1:54 PM on January 30, 2011

How about putting it this way? "We need your help"? Period. If authentic messages can be made that play on the real empathic wiring that most people have in their makeup (even if dormant), then progress might be made. Yes, "help" may come with strings attached, but isn't that the essence of compromise? I think Adams has opened up a fruitful approach to novel action.
posted by Vibrissae at 1:57 PM on January 30, 2011

In Scott Adams' defence, although he likes to joke, I think he is honest in his belief that innovative thinking can help fix problems. Back before the 2008 US election, he was struck with the thought:

How does a voter who knows little or nothing about economics decide which candidate has the best economic plan? ... As you know, the media is worthless in solving this problem because they like to give equal time to both sides, no matter how ridiculous one of the sides might be. Or worse, some media outlets make no attempt to be unbiased...

So, he hired a professional survey company to poll professional economists and ask them about the presidential candidates economic plans (this was all happening before the 2008 crash, but the economy was still a big deal). The results were interesting, but largely ignored.
posted by memebake at 1:58 PM on January 30, 2011 [3 favorites]

bah.. Adams has long liked to dabble in theoretical economics and taxation, really the only reason people pay attention to what Adam's has to say on the issue is because he has a famous name.

So, we should use mouthwash before we fellate the rich now?
posted by edgeways at 1:59 PM on January 30, 2011 [1 favorite]

@bpm140: I primarily just wanted to point out that I doubt one group is any more motivated by gratitude than another, and that we don't currently have the understanding that if someone gives something up to help the larger financial situation, that they receive gratitude. To me, that can be the same from the rich individual to the poorer worker, with the difference being in scale.
posted by bizzyb at 2:01 PM on January 30, 2011 [1 favorite]

We already know how to make taxation amenable to them. We have several centuries of documented proof that guillotines, bayonets, and firing squads do wonders to improve the sense of civic responsibility among the very rich, and that even examples occurring in far away places (Russia, 1917; France, 1789) can remind them of their obligations to the state that protects them.

It'll likely be a while before things get to that point again, though; seems to run about 125 years between spells while everyone forgets for a while. And is a huge fucking horror all around when it goes down.
posted by dilettante at 2:09 PM on January 30, 2011 [20 favorites]

Scott Adams thinks it would be a good idea to give blowjobs with tax increases to the rich because he is one of the rich.
posted by Splunge at 2:10 PM on January 30, 2011 [1 favorite]

... really the only reason people pay attention to what Adam's has to say on the issue is because he has a famous name.

No, I pay attention because (imho) he's insightful and innovative and hilarious. The reason the Dilbert comics and books are successful is because they are insightful (mostly, insights about the ridiculousness of the cubicle world a lot of people live in). I read his blog a lot, and he often comes up with interesting ideas.
posted by memebake at 2:14 PM on January 30, 2011 [5 favorites]

A general rule of thumb in America: no one likes, wants to pay taxes, no matter what they are for.
To use an example of the salesman asking what he is getting in return for salary reduction is silly. Salesmen talk that way. Tell him he gets a nice job at a good firm. Take it or move elsewhere. In sum, call his bluff.
If my wife to be asked what she would get in return for my plan to marry her, I would say: You get me. And that will give us both a greater sense of well being.
posted by Postroad at 2:18 PM on January 30, 2011 [3 favorites]

It's easy to hate the generic overspending of the government. It's harder to begrudge medical care to someone who thanks you personally.

In another era, that meant tugging at one's forelock or curtsying to the laird or baron.
posted by Cranberry at 2:24 PM on January 30, 2011 [6 favorites]

I can think of five benefits that the country could offer to the rich in return for higher taxes: time, gratitude, incentives, shared pain and power.

So the rich would be able to use their money to buy better, more efficient government services and force the rest of the population to bow obsequiously before them? How is this different from "rampant corruption"?
posted by rkent at 2:25 PM on January 30, 2011 [3 favorites]

Warren Buffet needs to start making his not-so-wealthy fellow billionaires feel like un-manly wimps for spending time lobbying for lower taxes instead of working towards generating even more wealth. Play on their insecurities, make paying taxes what the real men do, and be merciless in mocking those who think they need to hard what they have instead of earning more, like men.*

* yeah yeah, sexist language. This is to take advantage of existing prejudices.
posted by Space Coyote at 2:43 PM on January 30, 2011 [12 favorites]

If we're going to approach things in this way, then it cuts both ways:

What has the country received in return for lowering the tax rates (in particular, on the rich) we had in the 1990s?

The promised revenue increases from Laffler curve devotees certainly didn't materialize. There's no objective standard by which we can posit that the economy functioned any better, in which we saw any kind of increase in real growth that would be tax-cutters.

In fact, the only thing I can see that's genuinely increased is a sense of entitlement to tax cuts that were supposed to be temporary and haven't bought society as a whole anything at all.
posted by weston at 2:45 PM on January 30, 2011 [5 favorites]

How do rich people get rich? Scott Adams is as rich as he is because the government will make you pay him money if you distribute his work without paying him. Yes he is funny, yes he is talented, and no that doesn't mean anything without the government keeping a newspaper from just copying yesterday's Dilbert from some other paper and telling him to fuck off. He would probably be able to make a fine living doing the equivalent of busquing in print absent the state but he wouldn't be rich.

It is idiotic for a person who only makes money because of a state enforced ban on the digital and mechanical reproduction of a cartoon to even muse that the people are insufficiently grateful to him for his contribution. Creating a world where people pay IP holders according to rates negotiated is not going to happen absent government, it is not a given, and it is not cheap. Creating a world where people generally think it is wrong to not pay IP holders is not a given and is not cheap.
posted by I Foody at 2:46 PM on January 30, 2011 [14 favorites]

I doubt that the rich will agree to higher taxes until some serious budget cutting is happening at the same time. That makes the sacrifice seem shared. The rich will feel unfairly singled out unless everyone is taking a hit. And budget cuts make the government seem better managed. That matters.

This is the bit that makes my blood pressure go off the charts. Um, sacrifice for the poor = things like not getting to live because the state won't pay for your organ transplant (hello Arizona!). Sacrifice for the rich = not buying a second yacht. How are these in any way equivalent and why would the rich feel "singled out" rather than damn fucking grateful to be where they are if that's all they have to give up?

And um, who got bailed out? Not the poor.
posted by Maias at 2:47 PM on January 30, 2011 [13 favorites]

I've read other editorials by Adams in the past. He never fails to come off as not very well informed, and usually finds a way to get completely turned around on these nuanced issues. I'll pass.
posted by clvrmnky at 2:53 PM on January 30, 2011 [1 favorite]

There will be no taxing of wealth. Wealth is firmly in control of all the levers, both governmental and societal, that could implement any changes. Their taxes will continue towards 0%. Their wealth will continue towards 100%. Your tax/debt burden will continue upwards. Your piece of the pie will continue to shrink. Get used to it...
posted by jim in austin at 2:54 PM on January 30, 2011 [2 favorites]

I actually found it really interesting and was hoping for some informed discussion.

No you weren't, or you would have gone first.
posted by cjorgensen at 2:56 PM on January 30, 2011 [1 favorite]

I am the point where I support trickle-up pitchforks.
posted by Benny Andajetz at 3:00 PM on January 30, 2011 [14 favorites]

The way our political system is designed, politicians are not free to float bad ideas.

They aren't? Somebody hasn't been paying attention.
posted by Kirth Gerson at 3:04 PM on January 30, 2011 [3 favorites]

As luck would have it, Making Light had a post on this subject today.

TL;DR version: Any capitalist system will invariably have a few winners and a lot of losers. What the rich get out of being in our capitalist system is the fact that they're rich. That's their perq, right there. The poor pay the cost of being in a capitalist system by being poor.

If it's fair to expect people who benefit from roads to pay tolls, or from parks to pay entrance fees, then it's fair for rich people to make up for the cost that the capitalist system imposes on the poor. Through higher taxes.

But go read the original, because I'm not summing it up very well.
posted by adamrice at 3:09 PM on January 30, 2011 [8 favorites]

The way our political system is designed, politicians are not free to float bad ideas.

Is he kidding?
posted by rtha at 3:11 PM on January 30, 2011 [4 favorites]

It's an interesting experiment, but I'm not sure I really buy the premise. What do the rich get in exchage for paying higher taxes? How about "Fuck you, it's time to pay higher taxes"? They aren't giving anything up when they get tax cuts and the thought that they should get some warm fuzzies when they get increased taxes (i.e. back to where they were) makes me ill. It would be better if they deserved the happy bonuses, but I think the premise is that they don't deserve them. It's just a spoonful of sugar to convince them to take the medicine that they were already taking a few years ago.

That said, one possible thought is to tax them but don't call it taxes. The GOP hates taxes and they aren't too wild about "fees" either, but sometimes you can pass legislation that mandates new "fees" but not new "taxes".
posted by It's Never Lurgi at 3:16 PM on January 30, 2011 [1 favorite]

I actually think it's a relatively insightful article.

I don't agree with the idea that the rest of us owe it to the rich to make them feel good about a tax hike. But they have been fighting tax hikes like hell and will probably continue to do so for the foreseeable future. In fact, i think the specific proposal Adams makes (give the rich something in return) is less important than the point that we have to do something to make the tax hike seem palatable.

I don't know what that is. Any ideas?
posted by HighTechUnderpants at 3:23 PM on January 30, 2011

@cjorgensen - Wow. I'm used to people not reading the linked article, but you win a special prize for not reading the "more".
posted by bpm140 at 3:26 PM on January 30, 2011 [3 favorites]

Adams demonstrates how excess wealth makes people into pyschopaths. It justifies selfishness, rewards the egocentric, makes people impatient, mean and entitled. For their own sake, for their mental health, for their salvation, we should tax them so that they won't become such utter A$$H01#$.
posted by john wilkins at 3:34 PM on January 30, 2011 [3 favorites]

It's Never Lurgi : They aren't giving anything up

Say, you don't really need that spare bedroom, so we've decided to confiscate it from you to store seasonal road signs off-season


It's an interesting experiment, but I'm not sure I really buy the premise.

The premise seems simple enough - "Not yours. Make me an offer".

It makes you sick that someone doesn't want to go from paying 10000x to paying 20000x what you and I do in taxes? Where do you get off thinking you have any sort of claim to that money?


john wilkins : Adams demonstrates how excess wealth makes people into pyschopaths.

...Says the crowd eying his fat wallet.


Adams has made a reasonable suggestion here, writing as a modern self-made member of The (lesser) Rich (regardless of your opinion of the IP law). He has money, has expressed willingness to part with more of it, and basically suggested a compromise both sides can live with. One side gets to live, literally, and he gets something we don't even have the luxury of highly valuing.

If you still want to take it from him by force, fine, just do it honestly and club him in a back alley. But don't pretend he has any "obligation" to a group of parasites that can only complain he doesn't bleed fast enough.
posted by pla at 3:42 PM on January 30, 2011 [7 favorites]

It is idiotic for a person who only makes money because of a state enforced ban on the digital and mechanical reproduction of a cartoon to even muse that the people are insufficiently grateful to him for his contribution. Creating a world where people pay IP holders according to rates negotiated is not going to happen absent government, it is not a given, and it is not cheap. Creating a world where people generally think it is wrong to not pay IP holders is not a given and is not cheap.
posted by I Foody at 3:46 PM on January 30 [+] [!]

I don't speak for all commercial artists, but I do feel safe in assuming that most are with me on this quote: Feel free to give patronage to those who distribute their work under Creative Commons or under flat public domain. Nothing we're doing, and nothing under US law, prevents you from doing that.

Copyright advances the public good of allowing the free marketplace to reward creative people and their expressions of art. Should copyright protection last 95 years? That was a bad idea when the last extension passed; it is a laughably bad idea in the era of ubiquitous Internet for nearly everyone.* But don't let your anger over the way copyright is structured convince others that art has no value to society.

We are better as a culture for our art. You can have the state pay for it, or the free market pay for it. But "neither" is a bad deal for society. Art is like the fruits and vegetables of society -- not needed for survival, but useful for a well-functioning body. (Or "body politic.")

/soapbox

* Nearly everyone in the US. Since we're talking about US law, I am talking about US people. Also, I am not a lawyer. Your mileage may vary. Ask your doctor if the free marketplace is right for you. Void in the District of Columbia.
posted by andreaazure at 3:43 PM on January 30, 2011 [2 favorites]

Time: top 2% don't have to do customs, top 25% can skip TSA.
Gratitude: For each xx million in taxes you get a building, street, or park named after you. Let people bid on them with their taxes.
Incentives: you can pass these benefits down to one generation of your progeny.
Shared pain: This doesn't work. You want to share pain? Make the uber-rich spend 12 hours in emergency and get a bil that is equivalent to 1-5 years of their current income.
Power: i think there's something already in place for that, let's just call a spade a spade.
posted by furtive at 3:46 PM on January 30, 2011 [9 favorites]

If you still want to take it from him by force, fine, just do it honestly and club him in a back alley. But don't pretend he has any "obligation" to a group of parasites that can only complain he doesn't bleed fast enough.

In America, the public prints and insures the money supply, so taking it back is part of the rules of the game; the cost of doing business. Most commerce takes place through a very high investment made by the public, where education, law, defense, and infrastructure are prime examples. Taxing wealth basically tells them to put it to good use or lose part of it to our default use. If a rich person proposes to tax the poor equally, they already lost their argument by proposing a regressive tax to the economy they prosper from. A progressive tax is equal under marginal rates.
posted by Brian B. at 4:04 PM on January 30, 2011 [3 favorites]

It makes you sick that someone doesn't want to go from paying 10000x to paying 20000x what you and I do in taxes?

That's just silly and not rooted in reality.


Where do you get off thinking you have any sort of claim to that money?

Taxes suck. They are just a punishment. No one should pay them. We should just wait for civil society to spring fully-formed from the air.
posted by Benny Andajetz at 4:09 PM on January 30, 2011 [5 favorites]

I am with the pitchfork crowd on this. Maybe I need to turn off CNN's coveage of Egypt....
posted by Katjusa Roquette at 4:13 PM on January 30, 2011 [5 favorites]

pla the plumber.
posted by Trochanter at 4:13 PM on January 30, 2011 [1 favorite]

It's Never Lurgi : They aren't giving anything up

Say, you don't really need that spare bedroom, so we've decided to confiscate it from you to store seasonal road signs off-season

It's an interesting experiment, but I'm not sure I really buy the premise.

The premise seems simple enough - "Not yours. Make me an offer".

It makes you sick that someone doesn't want to go from paying 10000x to paying 20000x what you and I do in taxes? Where do you get off thinking you have any sort of claim to that money?


I don't. Never claimed I did. Society is making that claim. I'm going to assume that taxes are morally justified and I'm working from there. If you disagree, the door is to your right.

The point I was making (well, one of them) is that the right gave up nothing when their taxes were dropped from 20,000x what I pay to 10,000x what I pay. Not a god-damn thing. The logic that says they should get something when they go back to what they were paying before (and amount that, let's be clear, was a drop from the previous 40,000x) makes no sense.

My health insurance costs went up, but I don't see anyone brain storming how they can make this worth my time (hey, maybe we can give Lurgi a pretty pretty nurse when he gets his checkup? He'll like that). Adams' isn't trying to figure out whether my tax burden would be a little more tolerable if IRS agents delivered some chocolate chip cookies, but when it's the rich? Wow, yeah, we'd better find a way to sell it to those guys.

No. They can be sold on taxes the same way I'm sold on them. They have wealth I can not conceive of and vastly more political power and influence. They vote, I vote. They don't always get what they want out of an election (although they have more influence than I do, so I'm sure they get better results) and neither do I. We deal with it. They are much better equipped to deal with it on every possible level, so why am I trying to come up with ways to make them happy about their lot in life?
posted by It's Never Lurgi at 4:13 PM on January 30, 2011 [9 favorites]

Where do you get off thinking you have any sort of claim to that money?

I personally have no claim to that money. The government and the infrastructure of the United States, on the other hand, certainly do. Or should the poor fend for themselves outside of the walled enclaves of the rich, feasting off of the scraps that they dump over the walls?
posted by Splunge at 4:18 PM on January 30, 2011 [1 favorite]

Make the uber-rich spend 12 hours in emergency and get a bil that is equivalent to 1-5 years of their current income.

See, here's another bad idea. Outlaw medical insurance entirely and bill all medical care at fixed (small) % of positive net worth.

This bad idea game is easy.
posted by meinvt at 4:18 PM on January 30, 2011 [5 favorites]

There is no good solution here unless the framing is changed. We live in a country where right now, in straight-faced seriousness, our legislators make the argument that letting temporary tax cuts lapse is RAISING taxes while cutting social security benefits that people have already payed into is NOT raising taxes. It's crazy. And letting shit like that go by without comment and derision is detrimental to our future.
posted by Benny Andajetz at 4:19 PM on January 30, 2011 [16 favorites]

I'm going to assume that taxes are morally justified and I'm working from there.

It's not that they're morally justified, it's that they're economically justified. The desire to acquire wealth is an economic good. The desire to keep wealth is an economic drag. Smith on landlords -- it's right there next to the magic hand.
posted by Trochanter at 4:21 PM on January 30, 2011 [8 favorites]

A long while ago, during a particularly heinous round of budget cutting, a good friend of mine came up with what I think is the perfect solution to this problem:

There's a problem that charities have with potential donors feeling helpless in the face of huge problems. People think 'what will my $20 do in the face of poverty in Africa?' So some charities started saying 'don't worry about poverty in Africa... but if you give us money we'll help one kid. You'll know their name, they'll write you letters saying how much better their life is because of your donation.' The help that you're providing becomes personal, and that's enough to get a lot of people giving to charity.

My friend suggested exploiting this. The rich get lots of tax... but they can't complain because they get to opt out.

"Take part in our special tax-cutting programme! For 1% off your taxes, we'll make a kid wait for eight hours in the emergency room with a broken leg in your name. Or why not get the 5% mega tax-back plan. For that amount, each month a destitute family of doe-eyed orphans will do without breakfast for 20 days in your name. For the premium 7% off your taxes, we'll cut short the physical therapy programme for a wounded war veteran, again in your name.

"Each of these recipients of tax-cut-funded government cutbacks will receive a special engraved card, letting them know who's tax cut contributed to their degradation and misery. You'll receive a photo of your sponsored cutback recipient, and they'll write you a special letter explaining how your tax cut affected their life.

"We all know that getting a tax cut feels good, but sometimes the benefits of tax cuts can seem too big to handle. With government tax-back sponsorships, you'll be able to see your tax cut at work... with a Personal Touch.™"
posted by Dreadnought at 4:30 PM on January 30, 2011 [111 favorites]

A good portion of what makes people rich is not based on their labor or any given "worth" other then by the dent of actually having money to give other people to invest and make more money.

Yeah... ok, normalize income tax of the rich to others, but capitol gains tax? Inheritance tax on value over a million bucks? Yeah, Peg those fuckers to 90%
posted by edgeways at 4:30 PM on January 30, 2011

Amazing how few people get what Adams is talking about it, his solely-in-jest policy proposals aside.

He is saying it is impossible, as a practical matter, to increase taxes upon the well-off in America without some measure of their consent, and that if one wishes to increase their taxes further, inducements to earn that consent, or strategic choices that reduce the number of non-consenters to a trivial quantity, are necessary, whether or not they are justified in some abstract sense.

The evidence supporting the premise seems good. You can see it most obviously in state and local taxes. Wealthier suburbs everywhere assess high taxes upon themselves because they directly get the benefit of those taxes -- they're more like membership dues than they are taxes in the ordinary sense. States with a high quotient of limousine liberals -- like New York and California -- have aggressive taxes on higher-income people, while states where there's a cleaner correlation between income and politics, like Texas and Florida, impose only flat or even regressive consumption taxes statewide.

I think that Democrats made a tactical error in how they went about the last round of tax increase attempts in Washington. They chose to focus all the pain on the striving upper middle class, while leaving the truly wealthy practically untouched. Whether or not the typical MeFite thinks they should, a mid-level lawyer or banker raising three kids is going to fight like hell against paying $20,000 or $30,000 more in taxes a year, and their are enough of them to make that fight meaningful. Had the increases been focused on (say) capital gains income of people with AGIs over $1 million, you would have suddenly trimmed the victim class down from the low millions to the mid-thousands, and probably half of them are dyed-in-the-wool cultural liberals who wouldn't line of with Mitch McConnell to save their lives.
posted by MattD at 4:40 PM on January 30, 2011 [8 favorites]

It's not really the rich who need to be convinced to be willing to pay taxes. It's those who vote with the rich against their own self interest. Those are the people we need to give something.
posted by Obscure Reference at 4:47 PM on January 30, 2011 [3 favorites]

If you still want to take it from him by force, fine, just do it honestly and club him in a back alley. But don't pretend he has any "obligation" to a group of parasites that can only complain he doesn't bleed fast enough.

The use of "parasites" to refer to poor people and those who insist that the rich pay taxes is one of the best ways to spot... well, I've probably said enough.
posted by Pope Guilty at 4:53 PM on January 30, 2011 [12 favorites]

MattD: "a mid-level lawyer or banker raising three kids is going to fight like hell against paying $20,000 or $30,000 more in taxes a year,"

Do you have a source for these numbers?
posted by maudlin at 4:53 PM on January 30, 2011

The Obama proposal was a ~5% higher tax rate on incomes over $250k. For example, $25K more in taxes for a family making $750k, maybe a little less depending upon the interplay with AMT. That's a family that's already paying six figures of federal income tax and quite possibly six figures (albeit very low six figures) of state and local tax. Enough of an increase for that family to strongly oppose it, certainly.
posted by MattD at 5:02 PM on January 30, 2011 [1 favorite]

Wondering if either of you actually, you know, read the article. Because I actually found it really interesting and was hoping for some informed discussion. Or is that what Meta is for?

It's weird that you say this, considering that you were the one who caused that initial response, by framing the post the way you did. But in any case, you can expect all kinds of responses on Metafilter.
posted by JHarris at 5:04 PM on January 30, 2011

If you still want to take it from him by force, fine, just do it honestly and club him in a back alley. But don't pretend he has any "obligation" to a group of parasites that can only complain he doesn't bleed fast enough.

You just referred to poor people, as a group, as 'parasites'. What the fuck is wrong with you?

Pop Guilty - you're a better person than I am.
posted by His thoughts were red thoughts at 5:14 PM on January 30, 2011 [4 favorites]

For example, $25K more in taxes for a family making $750k, maybe a little less depending upon the interplay with AMT.

This is why we can't reach any consensus. Raising the upper tax bracket from 35 to 38% would mean, at the most, an increase of $11,311 to someone with 750k in taxable income. (Tax at 35% - 143,278.00. Tax at 38%- $143,278.00.) That's an increase on income over 370k - no way the raise on the remaining 120k would be an additional 14 grand. And if you have 750k in taxable income, this is not onerous.
posted by Benny Andajetz at 5:18 PM on January 30, 2011 [4 favorites]

Are the people here arguing against a 2 or 3% tax hike for the 2% of the people who have 90% of the wealth serious? You have to be fucking with the rest of us? How is that a bad thing?

Please explain.
posted by Splunge at 5:20 PM on January 30, 2011 [1 favorite]

750K is a MID-LEVEL lawyer or banker? Mid-level where? The big coastal cities, the midwest, the south? WTF are the upper level lawyers/bankers earning?

If someone's earning $750K, and paying, say, $250K in taxes, then have to pay another $25K, dropping their take home from $500k to $475K: well, that still sounds like a pretty well-packed pay envelope.

I agree that targeting things like the capital gains tax makes more sense, but an additional $25K in taxes on someone within spitting distance of earning a million dollars a year doesn't seem that onerous. It's not as if rates like these are historically unprecedented, either.

(On preview: yeah, what Benny said. If your taxable income is $750K, then your total earnings are even closer to a million than I thought. Even in New York, I can't believe that "mid level" bankers and lawyers earn $1 million a year.)
posted by maudlin at 5:22 PM on January 30, 2011 [2 favorites]

My god, dreadnought, your friend is a goddamned genius.

pla: If you still want to take it from him by force, fine, just do it honestly and club him in a back alley. But don't pretend he has any "obligation" to a group of parasites that can only complain he doesn't bleed fast enough

Huh. That reminds me, did anyone else see this awesome story on boingboing? Friend of mine posted it on his FB wall yesterday; seems Ayn Rand took government aid to pay for her medical bills, despite her long history of decrying people on the government dole as "parasites".
posted by hincandenza at 5:27 PM on January 30, 2011 [4 favorites]

Benny Andajetz : That's just silly and not rooted in reality.

I pay, in straightforward income tax, on the order of $5k per year at 15%. At 35%, a person making $114 million literally pays ten thousand times as much tax as I do.

Now, in fairness, most of that would realistically come as long-term capital gains tax, at 15%. So I'll compromise and say "only" 5000 times - But as the flip side of that compromise, we then want to jack their taxes by 4x, not 2x, so the increase looks even worse.

Yes, really. Welcome to the reality you want a certain segment of the population to cheerfully bend over and take in exchange for "not eating them".


It's Never Lurgi : If you disagree, the door is to your right.

Normally, people say things like that as a non-serious option. In this case, though, you would see exactly that happen. A mass exodus of 90% of America's old wealth fleeing back to Europe, to South America, to anywhere that doesn't say "congrats, you made it, now get back in line, Citizen"....


His thoughts were red thoughts : You just referred to poor people, as a group, as 'parasites'.

... And do you know what happens to our "public good" after that mass exodus?

When the host dies, so too do any organisms dependent thereupon, whatever more charitable terms you'd prefer to call them.
posted by pla at 5:28 PM on January 30, 2011 [2 favorites]

I've come up with a similar system for making greater taxation amenable to the wealthy. Here's the summary:

All income taxes below $90,000 are eliminated. The tax rate for income over $90,000 is 100%, and the government provides tax credits so that salary + tax credits = $90,000. That would be for full time employment, approximately 1800 hours a year which allows for a sane 8 weeks of vacation. For fewer working hours, the tax credit is reduced proportionally.

To incentivize production, everyone making over $90,000 (approximately 11% of the population), their pretax salary would be used to assign them a national competitive status ranking that's publicly viewable. You could look up your friends, coworkers, boss and neighbors.

The rationale for this system is that we use money for two unrelated social purposes: reducing suffering and establishing status to incentivizes production. In my system, these purposes are less coupled. Income over $90k would still be used to purchase status just as it is today, the only difference is the government-run ranking ladder would be the only place you could buy it. This is a simpler, less wasteful and inefficient method for signaling status. There would be very little incentive to find tax loopholes - since everyone has the same salary, extreme displays of luxury would be an obvious sign of criminal behavior, in addition to lowering your overall score in the socially recognized status hierarchy.

The $90,000 number was calculated by dividing total US income by the number of workers, so this would be adjusted yearly.
posted by AlsoMike at 5:30 PM on January 30, 2011 [2 favorites]

pla Your disingenuous usage of numbers like 5000 times or such doesn't bother me a bit. I'm not a fan of this type of hyperbole. That is just bullshit. I don't understand why you'd argue the way you do. So I have to think that you're just here to stir the pot. Good work.
posted by Splunge at 5:33 PM on January 30, 2011 [2 favorites]

Someone has misidentified the host in their argument.....
posted by dglynn at 5:36 PM on January 30, 2011 [6 favorites]

Tax at 35% - 143,278.00

Sorry, mistyped. Tax at 35% - $131,967.00
posted by Benny Andajetz at 5:42 PM on January 30, 2011

I love the "the rich aren't going to agree to this..." like we're supposed to empathize with them. Most people don't get the ability to set their tax rate.
posted by Napierzaza at 5:46 PM on January 30, 2011 [4 favorites]

Splunge : pla Your disingenuous usage of numbers like 5000 times or such doesn't bother me a bit.

I supported that number. Argue with the math.


I don't understand why you'd argue the way you do.

Because I tend to believe in fairness, a tricky concept Adams discussed. And while I don't go so far as to insist on splitting that dollar 50/50, I can't call splitting it 99/1 as even remotely "fair".
posted by pla at 6:02 PM on January 30, 2011 [1 favorite]

Are you people insane? I think I would agree to almost all of his ideas. Even if they're bad. Can you imagine - America is debt free in 10 years if we just let rich people drive in the HOV lane? Hell yes!

I know we all want to get out our pitchforks and be all self-righteous and force them to pay more. The point is, we can't now and we won't ever, so small pointless sacrifices are certainly in order, if it will save the country. Because they won't do it.
posted by fungible at 6:04 PM on January 30, 2011 [4 favorites]

States with a high quotient of limousine liberals

Ha. ha. ha. ha. Get out of the 1980's, man. Admit that when you use the phrase "limousine liberal" (imaginary as it may be) you really mean "class traitor."
posted by octobersurprise at 6:05 PM on January 30, 2011 [1 favorite]

Oh please. You are comparing the amount of tax you pay to the amount of tax that someone who makes 5000 times as much as you. So of course they will pay 5000 times what you pay. Ans so good. They should.

Why shouldn't they?
posted by Splunge at 6:07 PM on January 30, 2011

Ha. ha. ha. ha. Get out of the 1980's, man. Admit that when you use the phrase "limousine liberal" (imaginary as it may be) you really mean "class traitor."

what

I work at a large corporate law firm. Most of my bosses are millionaires, comfortably. I haven't taken a survey or pried in detail into their political beliefs, but I am pretty confident most of them voted for Obama.

Maybe the wall street guys are different, but the concept certainly isn't dead, and this "class traitor" stuff is just trolling.
posted by eugenen at 6:11 PM on January 30, 2011 [3 favorites]

pla: the super rich pay less percentage of their income in taxes than the middle class. Warren Buffet pays under 18%. He even put a bet on the table:

"I’ll bet a million dollars against any member of the Forbes 400. . . that the average [federal tax rate including income and payroll taxes] for the Forbes 400 will be less than the average of their receptionists."

So far, no-one has taken him up on this bet.

And, if you think it's "unjust" to only keep 65% instead of 69% of 114 million dollars in yearly income while enjoying the liberties and security offered by our social services and infrastructure that helped you build your wealth... you need to hire a team of therapists because there is something wrong with you.

It's the equivalent of telling your parents, "Thanks for birthing me, raising me, feeding me, and paying for my college education... I'm really enjoying being a millionaire. But if your 401k got nailed, and you need a little help, it's not my problem to make sure parasites like you have a roof over your head. I have attached a PDF of coupons for cat food, and the boot straps are in the mail."
posted by notion at 6:16 PM on January 30, 2011 [25 favorites]

I pay, in straightforward income tax, on the order of $5k per year at 15%. At 35%, a person making $114 million literally pays ten thousand times as much tax as I do.

I still say it's not rooted in reality. According to the Census, in 2006 1.93% of US households made 250k or more. What percent of a percent of a percent do you think made 114 million?
posted by Benny Andajetz at 6:16 PM on January 30, 2011 [2 favorites]

Normally, people say things like that as a non-serious option. In this case, though, you would see exactly that happen. A mass exodus of 90% of America's old wealth fleeing back to Europe, to South America, to anywhere that doesn't say "congrats, you made it, now get back in line, Citizen"....

Oh, so that's where all the rich people went from the 1940s through the 1980s!

(Like Europe has lower taxes? Ha! And unless they're all willing to renounce their American citizenship, they're still going to be liable for taxes.)
posted by rtha at 6:18 PM on January 30, 2011 [3 favorites]

And I don't even have a problem with someone making $750,000 or more paying 200 times what I pay. Why? Because THEY CAN AFFORD IT.

Someone has to pay it.

I live in New York City.

This is where our billionaire mayor is telling us that he has to lay off 2100 teachers because the city has no money. They are closing firehouses. Laying off cops. We still have streets in this wonderful winter fucking wonderland where people are dying...

Let me repeat this for you, people are dying because they can't get to hospitals. They can't get dialysis.

People die because the money for moving fucking SNOW ran out.

Where, dear pla should this cash come from? Should the fucking poor keep dying so that eventually their pained screaming stops. When they freeze to death?

How will you collect the taxes from the poor when they can't get to the post office to pay?

Why is this so hard to figure out?
posted by Splunge at 6:18 PM on January 30, 2011 [3 favorites]

When the host dies, so too do any organisms dependent thereupon, whatever more charitable terms you'd prefer to call them.

pla, you know you're one of those organisms. Or if you don't, you should.
posted by dogrose at 6:21 PM on January 30, 2011

His thoughts were red thoughts : You just referred to poor people, as a group, as 'parasites'.

... And do you know what happens to our "public good" after that mass exodus?

When the host dies, so too do any organisms dependent thereupon, whatever more charitable terms you'd prefer to call them.

Don't put words in my mouth. It's rude and unwarranted. I said nothing about tax policy, I merely objected to your characterisation of poor people as sub-human.
posted by His thoughts were red thoughts at 6:23 PM on January 30, 2011

Sorry - there was an italics fail there. My last entry should read as follows:

His thoughts were red thoughts : You just referred to poor people, as a group, as 'parasites'.

... And do you know what happens to our "public good" after that mass exodus?

When the host dies, so too do any organisms dependent thereupon, whatever more charitable terms you'd prefer to call them.

Don't put words in my mouth. It's rude and unwarranted. I said nothing about tax policy, I merely objected to your characterisation of poor people as sub-human.
posted by His thoughts were red thoughts at 6:25 PM on January 30, 2011

"I’ll bet a million dollars against any member of the Forbes 400. . . that the average [federal tax rate including income and payroll taxes] for the Forbes 400 will be less than the average of their receptionists."
-Warren Buffet

So far, no-one has taken him up on this bet.

This? It's important.
posted by five fresh fish at 6:37 PM on January 30, 2011 [16 favorites]

Splunge : Why shouldn't they?

They should. And we want them to - we need them to - pay several times that much.

I may have gone a bit off track, but it amazes me that people would grudge them HOV lane access (or some similarly near-token concession) in exchange for that. Just that.

Arguments about whether or not the rest of us get to pick and choose our tax rates miss the point - You all feel comfortable taking people's money, disproportionately, at the threat of a government gun, nothing more and nothing less.

I don't feel good about that.


How will you collect the taxes from the poor when they can't get to the post office to pay?

And how will you collect the taxes from the rich when they can get to Bermuda, taking all their non-land assets with them?


dogrose : pla, you know you're one of those organisms.

Very much so. And I appreciate paying substantially less than my fair dollar-for-dollar tax burden as a result.

If Warren Buffet wants a friggin' thank-you card for donating BILLIONS of dollars a year above and beyond his tax liability, I'll even pay for the stamp. I won't, however, spit in his face and demand more.
posted by pla at 6:38 PM on January 30, 2011 [3 favorites]

This is where our billionaire mayor is telling us that he has to lay off 2100 teachers because the city has no money.

[(2100 x $100 000 total cost of employing & provisioning a teacher for a year)/1 billion dollars, the minimum wealth of The Mayor] = 21%.

A phenomenal amount of good could be done if the rich were fairly taxed.

Wealth accumulates exponentially. Taxes must counter that. Exponential growth is NEVER sustainable.
posted by five fresh fish at 6:46 PM on January 30, 2011 [1 favorite]

... And do you know what happens to our "public good" after that mass exodus?

When the host dies, so too do any organisms dependent thereupon, whatever more charitable terms you'd prefer to call them.

If you think that it's the poor who are the parasites, instead of looking at the ticks who have grown rich by drinking the blood of labor, you're either stupid or insane.
posted by Pope Guilty at 6:57 PM on January 30, 2011 [9 favorites]

And how will you collect the taxes from the rich when they can get to Bermuda, taking all their non-land assets with them?

I think that you think that most of the "rich" care about the taxes that they might pay. Most, I say MOST of the people in that tax bracket don't really care about income taxes. They have so many loopholes and lawyers that the argument that we are having here would be a joke to them.

The problem isn't the percentage of the basic income tax, it's closing the loopholes and getting the ultra rich to pay their FAIR portion.

You call fair. I call unfair! There is no fair when the people with the money can spend more money than they OWE to not pay their due.

How fucked is that?
posted by Splunge at 6:57 PM on January 30, 2011 [3 favorites]

NYC has approximately 70 billionaires worth an average $3 billionish. (I'm lowballing significantly.)

((2100 x 100000)/(70 x 3 billion)) = zero-fucking-decimal one percent.
posted by five fresh fish at 6:58 PM on January 30, 2011

You all feel comfortable taking people's money, disproportionately, at the threat of a government gun, nothing more and nothing less.

The rich disproportionately benefit from society. Why shouldn't they pay accordingly? Why shouldn't they pay the tax rate they did under that godless commie Reagan, or that lily-livered liberal Eisenhower?
posted by me & my monkey at 6:58 PM on January 30, 2011 [9 favorites]

If Warren Buffet wants a friggin' thank-you card for donating BILLIONS of dollars a year above and beyond his tax liability, I'll even pay for the stamp. I won't, however, spit in his face and demand more.

Exactly how is instructing him to pay the same effective tax rate as his receptionist spitting in his face?
posted by notion at 6:59 PM on January 30, 2011 [1 favorite]

Arguments about whether or not the rest of us get to pick and choose our tax rates miss the point - You all feel comfortable taking people's money, disproportionately, at the threat of a government gun, nothing more and nothing less.

You act like this is money they earned without help from said government. Refusing to accept this truth is going to lead you to make all sorts of silly conclusions.
posted by one more dead town's last parade at 7:04 PM on January 30, 2011 [5 favorites]

Fuck. Just, my fuck. That number re: billionaires vs education is just stunning in it's demonstration of WTFness. For, what?, a whopping 0.5% billionaires tax?, NYC could have an incredible school system.

But of course, no billionaire is an actual citizen of the city, state, or nation. They live in a world utterly disconnected from our own, save the fact that a billionaire's life wouldn't be shit with out the tens of millions of people who make it possible to even have a Billionaire's Life. But somehow, the ultra-wealthy disconnect from reality; NYC happens by magic.
posted by five fresh fish at 7:09 PM on January 30, 2011 [1 favorite]

NYC has approximately 70 billionaires

I don't think there are 70 billionaires in the country. Where billionaire = a single person with a personal net worth of more than one billion. I could be wrong, but they're rarer than you think.
posted by Cool Papa Bell at 7:11 PM on January 30, 2011 [1 favorite]

I don't think there are 70 billionaires in the country.

Our Forbes 400 list of the America's wealthiest people, published in September, includes 65 people living in New York. These moneyed New Yorkers possess a combined fortune $244 billion.
posted by Combustible Edison Lighthouse at 7:18 PM on January 30, 2011 [4 favorites]

I don't think there are 70 billionaires in the country

Yeah, there are.
posted by Trochanter at 7:19 PM on January 30, 2011 [1 favorite]

Sorry for the redundancy. When I was looking for the map I found this quote:

The world's billionaires have gained $1.2 trillion in collective net worth since 2009,
posted by Trochanter at 7:21 PM on January 30, 2011

Very much so. And I appreciate paying substantially less than my fair dollar-for-dollar tax burden as a result.

Why are you using such loaded language: "parasite"? "organism"?

I don't know what you mean by a "fair dollar-for-dollar tax burden." There is no such thing. "Fair" is wildly subjective. And please define "dollar-for-dollar." You can't be talking about marginal tax rates, which apply only to earnings past a certain level and so don't apply at all to anyone earning below that level. Nor to unearned, i.e., investment, income which is the bulk of truly rich people's income.

If Warren Buffet wants a friggin' thank-you card for donating BILLIONS of dollars a year above and beyond his tax liability, I'll even pay for the stamp. I won't, however, spit in his face and demand more.

Clearly Warren Buffett doesn't need your, or anyone's, toadying to induce him to do what he does. So not such a great example.
posted by dogrose at 7:25 PM on January 30, 2011

If Warren Buffet wants a friggin' thank-you card for donating BILLIONS of dollars a year above and beyond his tax liability, I'll even pay for the stamp. I won't, however, spit in his face and demand more.

Part of how Buffett (not buffet!!) makes his money is through multi-level marketing— AKA glorified ponzi schemes which rip off the ignorant for a chance to "get rich"— at least according to this New York Mag story about Donald Trump wanting in on that business.

Spit in his face? How about make what should be illegal illegal? I thought he was principled until I read about this. But he and Bill Gates have actually offered to pay more— because they know that their money depends on consumers actually being able to afford to buy things. If you have no middle class, you ultimately have no capitalism. Right now, the internationally wealthy are OK with getting rid of the American middle class because they have international customers. But if you have a world of 3 rich people and 100 poor people, essentially, how are the rich going to continue to make money?

They should be begging us to raise taxes so that they can continue to have a market for their products. In fact, that's why most of the most highly educated people in the country want higher taxes, a good regulatory system, national health care and a more equal society.
posted by Maias at 7:36 PM on January 30, 2011 [5 favorites]

@Cool Papa Bell: The lowest net worth in the Forbes 400 is $1 billion. 56 of the Forbes 400 live in NYC. Since #401 probably has a net worth of $1 billion, too, or at least not much less than that, I wouldn't be surprised if there were 70 billionaires in NYC.

Source: 400 Richest Americans.
posted by brianogilvie at 7:36 PM on January 30, 2011

Are you people insane? I think I would agree to almost all of his ideas. Even if they're bad.

If push comes to shove and there's no other way to practically do the job other than handing out perks to people who already benefit wildly (2+ standard deviations) above and beyond the average member of society, I suppose I might take the deal.

In the meanwhile, though, I have no problem with arguing pointedly and loudly about the sheer ridiculousness of the very premise that this particular group of people just needs to be offered something even more beyond their already impressive rewards in order to suffer a small reversal the tax decreases they've benefited from more than any other group in our public policy over the last 40 years.

I swear, it's like when you take a six year old to the waterpark, and then when you tell them they have to go home at the end of the day, they end up whining and crying like it's some insufferable injustice that you'd ever suggest such a thing.
posted by weston at 7:52 PM on January 30, 2011 [1 favorite]

The world's billionaires have gained $1.2 trillion in collective net worth since 2009

My numbers dated to 2008. So it's very likely that it would cost NYCs billionaires well under 0.07% to employ those teachers.

If one thinks about it too much, one starts to feel a little Egyptian about it.
posted by five fresh fish at 7:55 PM on January 30, 2011 [1 favorite]

dogrose : Why are you using such loaded language: "parasite"? "organism"?

Because we exist as organisms, and I can't think of a more accurate description of a relationship between two (or more) organisms where one contributes the vast majority of the shared resources required to keep both alive.


I don't know what you mean by a "fair dollar-for-dollar tax burden."

I mean if I pay $0.15 on the dollar, Bill Gates pays $0.15 on the dollar - Which doesn't happen. In theory, he pays $0.35 on the dollar, and this conversation seems to largely consist of people calling that not enough.

Now, if you want to close all the tax loopholes that let Billy G pay less that he "should", You have my complete agreement. But that differs from saying let's make the greedy bastards pay 70% or more.


Clearly Warren Buffett doesn't need your, or anyone's, toadying to induce him to do what he does. So not such a great example.

I chose him as an example of how we'd like the ultra-rich to behave. He doesn't need our incentives. Nor does Bill Gates. And the rest? A handful of benevolent billionaires, while more fabulously rich than we can even imagine, still can't save us from a yearly budget deficit greater than their combined net worth. We need to entice even the biggest Scrooges to say "yeah, okay, I can't spend my money fast enough to get rid of it anyway - You can have 70% if I don't need to drive in the slow lanes with the unwashed masses going to that work thing they do".
posted by pla at 8:17 PM on January 30, 2011

The desire to acquire wealth is an economic good. The desire to keep wealth is an economic drag.

This. The small number of wealthy families at the top of the economic pyramid do not see money the way you or I, or even pla see it. Earning more is no longer a necessary activity to maintain body and soul. It is a scorecard in a race with your fellow obscenely wealthy to see who's "better." If you spend it, or give it away, or allow taxes to increase you will lose ground and be less "good." This becomes more important the further down the lineage you go in a legacy. As they become more successful at hanging on to their wealth, the more society suffers.

Creating the illusion that they morally shouldn't pay any more than a plumber in taxes is a distortion created as part of the ongoing battle to lower taxes on the rich. If they really, REALLY believe that they receive no more benefit from the infrastructure paid for by taxes, viz., transportation, education, regulation, courts, law enforcement, fire and safety, and public administration, they are free to move to Kenya or Botswana and see if they can replicate their capitalist magic in those places free of much of our expensive and fine infrastructure here. There is a reason a Bill Gates, Warren Buffet, or Donald Trump arises in the US, and it's not because God likes us better. Since the rich benefit a gazillion times more from the infrastructure than a plumber does, they need to pay a lot more in taxes.

That Adam Smith knows this is good for the economy shows you just how disingenuous objections to forced recycling of wealth is. Those that suggest it is somehow unjustifiable to tax them at a much higher level is a pathetic indicator of weakminded slavishness to the arguments of the rich. If you make it, make sure they are paying you handsomely to do so.
posted by Mental Wimp at 8:21 PM on January 30, 2011 [12 favorites]

Because we exist as organisms, and I can't think of a more accurate description of a relationship between two (or more) organisms where one contributes the vast majority of the shared resources required to keep both alive.

If you want to go all ecosystem on it, it's a good time to point out that predation is just as accurate a descriptor as parasitism.
posted by verb at 8:30 PM on January 30, 2011

I mean if I pay $0.15 on the dollar, Bill Gates pays $0.15 on the dollar - Which doesn't happen.

It does happen, on the first to second group of 10,000 dollars anybody earns.... and, by the way, on capital gains as well (which means they're essentially taxed at the same or lower rate as a yearly income from a Teach For America position).
posted by weston at 8:37 PM on January 30, 2011

Why does the idea of a rich guy slaving away over in the corner by all by herself and earning millions without anyones help seem like a convenient fiction? Instead, I see her wealth stemming from her work and the work of hundreds or thousands, or tens of thousands of other workers, combined with a strong educational system, social support systems, interstate highways, high-tech airports, and reliable rail service to deliver goods, a robust and developed high-speed Internet and other communications infrastructure, fire and safety staffing and infrastructure, banking and legal infrastructure, and, yes, even a regulatory system that keeps an unscrupulous competitor from unfairly taking the business from her.
posted by Mental Wimp at 8:38 PM on January 30, 2011 [7 favorites]

Actually most of the wealthy. And I say most, not all. Got their money on the backs of the poor and downtrodden. Not Bill let's say, but many of the rest.

So I have no problem with making them pay it back. I am not calling for a night of blood and fire.

Just a couple of percent. How could you say, no it's ALL MINE!
posted by Splunge at 8:51 PM on January 30, 2011 [1 favorite]

Why does the idea of a rich guy slaving away over in the corner by all by herself and earning millions without anyones help seem like a convenient fiction?

Because the truth is rather inconvenient.

It's too bad someone's already made that movie. By which I mean Capitalism: A Love Story.
posted by one more dead town's last parade at 8:52 PM on January 30, 2011

Because I'm going to listen to a guy who stated in all seriousness that gravity could actually be caused by everything in the universe growing really quickly? So when you jump in the air, you don't fall - rather, the surface of the planet rises to meet you as your legs extend to meet it? He'll be telling us how water molecules hold psychic imprints next.

What is it with people who are successful in one field suddenly expecting to be treated like experts in other fields? "Why yes, I write comics about the frustrations of office life. Now, here's what I have to say about the economy and quantum physics."

I suppose the people who believe them and yearn for their opinions are worse. I'm looking at you, "oh, that guy on Top Gear says things I like about speed cameras so I'm going to believe everything he says" crowd.
posted by obiwanwasabi at 8:52 PM on January 30, 2011 [3 favorites]

And only 45% of fed income is from income taxes. About the same amount is from FICA taxes, which no one pays over $108k per year.
posted by dglynn at 8:53 PM on January 30, 2011

I mean if I pay $0.15 on the dollar, Bill Gates pays $0.15 on the dollar - Which doesn't happen. In theory, he pays $0.35 on the dollar, and this conversation seems to largely consist of people calling that not enough.

Now, if you want to close all the tax loopholes that let Billy G pay less that he "should", You have my complete agreement. But that differs from saying let's make the greedy bastards pay 70% or more.

So a flat tax. Okay, for someone making $20K a year (above minimum wage), 15% is $3K. (We'll ignore FICA, sales taxes, etc.) This someone would actually have $17K a year to live on, whereas another someone making $20 million a year would be reduced to $17 million.

How much difference in their daily lives would this 15% mean? Is that difference in effect fair? What if the whole $20 million was unearned income? Is it fair to tax that at the same rate as earned income?

We need to entice even the biggest Scrooges to say "yeah, okay, I can't spend my money fast enough to get rid of it anyway - You can have 70% if I don't need to drive in the slow lanes with the unwashed masses going to that work thing they do".

Two things:

* We do? Really? The biggest Scrooges are like the dumbest dogs I've ever known, who respond only to treats?

* I doubt anything as pedestrian (ha!) as a free pass to the HOV lane will do the trick, but let's say it does. Until it doesn't. What's next?
posted by dogrose at 9:02 PM on January 30, 2011

I mean if I pay $0.15 on the dollar, Bill Gates pays $0.15 on the dollar - Which doesn't happen. In theory, he pays $0.35 on the dollar, and this conversation seems to largely consist of people calling that not enough.


But the problem is, purchasing power doesn't scale to income. Which is to say, 15% of your income when you're making $10,000 a year is much more significant to you than if you're making $100,000, which in turn is different from $1,000,000,000. At $10,000, it's the difference between being able to live in a safe place, consistently afford nutritious food, etc. At $100,000, it's whether you can buy a new car every 5 years or 4. At $1,000,000,000, it's the difference between buying a high-end private jet or just a regular one.
posted by kagredon at 9:17 PM on January 30, 2011 [3 favorites]

There are a lot of ways to look at the fairness of taxation. But codifying aristocracy is a seriously poor idea.
posted by Xoebe at 9:26 PM on January 30, 2011 [2 favorites]

You call fair. I call unfair! There is no fair when the people with the money can spend more money than they OWE to not pay their due.

How fucked is that?

That's fairly fucked up.
posted by XhaustedProphet at 9:31 PM on January 30, 2011

Use of the term parasites in adult conversation re: equitable distribution of tax burden = thank you for saving me time from reading your gold standard zine.

GOOGLE REALITY.
posted by joe lisboa at 9:31 PM on January 30, 2011 [10 favorites]

You want the truth? You can't handle the truth!

IMO, this debate is pointless. I would venture to say that most people's (including my own) understanding of taxes in general is completely skewed. I don't believe that your common US citizen can explain anything to do with taxes except that they pay them and they don't like them. This is issue is so goddamn complicated when you start to try to analyze it. It's not as simple as "paying a percentage of your income" when there are so many ways to go about not paying your fair share, ie loopholes. So then our common US citizens vote according to their skewed facts and opinions, all because some wealthy person was able to convince them that taxes actually work in a different way then they really do. Such as they pay for everything we take for granted.

Some people can't afford to put food on the table, and we're asking them to read, contemplate, understand, and vote on an issue so convoluted? Ha. It blows my mind that there are people out there who are starving, but will vote against a tax-increase for the wealthy. Uhh, hello McFly?!
posted by XhaustedProphet at 9:48 PM on January 30, 2011

Because we exist as organisms, and I can't think of a more accurate description of a relationship between two (or more) organisms where one contributes the vast majority of the shared resources required to keep both alive.

The poor create the wealth through their labor, the rich take the lion's share of that wealth and declare themselves preyed upon by those who would stick a heated pin through them and give the poor treatment for Lyme disease.

The surest sign that you create nothing whatsoever- that you subsist by parasitism and predation rather than labor and creation- is wealth.
posted by Pope Guilty at 10:00 PM on January 30, 2011 [1 favorite]

> > Splunge : pla Your disingenuous usage of numbers like 5000 times or such doesn't bother me a bit.

> I supported that number. Argue with the math.

I have a degree in math. Your numbers are completely designed to be misleading. The fact is that taxes have a far, far greater impact on the poor and middle classes than the do on the rich.

You are comparing absolute payments. In fact, the person making 5000 times the Mefi-ite income is almost certainly paying less of their real income in taxes - though their nominal tax rate is greater, they hugely greater ability to shield that income from taxes. Moreover, there are numerous regressive taxes and societal costs that are, essentially, zero for the rich person and a huge cost for the average guy.

But more, the effect of those taxes is far greater on the poor than the rich. The difference in lifestyle between earning $20M a year and $25M a year is probably unnoticeable - the difference between earning $20K and $25K can literally mean the difference between getting proper medical and dental care and not.

It's completely obvious to anyone except a small number of mentally-ill Randites that the cards in America are heavily stacked in favor of the tiny number of rich families - in the educational system, in the courts, societally and every other way. I've lived all over the world and I've never lived in another country with less social mobility (and I say this as someone who is in fact retired before 50 on my own earnings, so it's not sour grapes). As a typical example, if you divide first year university students into three tiers based on performance, a rich student in the bottom third has marginally better employment prospects than a low-income student in the top third.

From Roosevelt to Reagan, we had a system where the rich paid numerically greater tax rates, to compensate for their ability to shield income, to deal with the ethical issue that they are in fact benefiting out of society by orders of magnitude greater than the poor - and guess what happened? The rich continued to preserve their wealth and increase it - the poor got richer and so did the rich - upward mobility meant generation after generation of entrepreneurship bubbling up from the bottom.

Then Reagan got in and "redistributed" the money back to the rich. Suddenly hunger reappeared in America (before the end of his first term). America had used that tax money to build great, productive institutions and national treasures - the road system, the power system, bridges, the trauma centers and emergency rooms that made American medicine in the 60s through 80s the envy of the world, FEMA, the EPA, the NEA, the NSF - and now the plutocrats started to systematically dismantle the government, "privatizing" it in many cases (which usually meant selling a dearly-won public asset at a fraction of its value to one of a very small number of rich, connected sources who would then turn around and sell back those services to the public at some multiple of its original cost... see "Chicago Parking" for a particularly egregious example.)

All good things flow from living in a stable, harmonious society. Strong, stable government providing essential services efficiently and compassionately is the bedrock of a stable, harmonious society. Prehistoric Zarzanian primitives aside, in today's world the lives of people living in countries with weak, ineffective governments really are nasty, brutish and short. Whether your measure of the good like is perceived happiness, longevity or health, these measures are correlated with strong, empowered central governments.

The rich decided they no longer want to pay. They decided to shrink and kill the government, because in their madness they believe that only only the poor and middle class need its services.

Taxes are the lifeblood of a civilized country. Trying to make a government more run more efficiently by cutting taxes is very much like trying to diet through blood-letting.

The ultra-rich have cleaned out society at every side. Goldman-Sack's market manipulations have zero social utility and add little even to such abstract measures as "liquidity." The trillions that a tiny number of Wall Street financiers have extracted from the rest of America in the last decade don't correspond to any corresponding gain to anyone else - this is money simply lost to the rest of Americans in exactly the same way that money is lost when you bet your rent check on an inside straight, they took our money and we received nothing in exchange - except, unlike a poker game, we had no choice as to whether to play, and we didn't even get to see the our real hand.

The rich did perfectly well for decades paying far greater taxes than they did now, they lived opulent lives, and society as a whole prospered. Then Reagan came along, all bets were off and the rich were free to use every bit of leverage they could to extract every excess penny from the remaining classes of American.

We see the result - broken schools, crumbling infrastructure, essential services like police, sanitation, libraries, even street lights slowly being turned off a bit at a time, millions of jobs sent abroad with no prospect of their ever returning.

Please note, pla, the repeated mentions of historical violence against oppressors in this thread. Look at the posting history of the people politely pointing out the French revolution and other such things. These aren't crazies - they are simply pointing out that there are an awful lot of people being systematically reduced to penury by a small number of ultra-greedy individuals who show greater and greater arrogance and less and less of a desire to contribute anything like their fair share to that society without which they would be some tiny warlord in Somalia or Turkmenistan with a 50-year life expectancy - and that the people have risen up and killed such evil, anti-social individuals before and might well again, if pressed.
posted by lupus_yonderboy at 10:13 PM on January 30, 2011 [64 favorites]

I'm about 80% sure pla is just trolling all of you.
posted by Bonzai at 10:14 PM on January 30, 2011

Parasites??

Isn't there some code word you can use for this? I mean, you're aware you're coming off like some villain in a B movie, yes?
posted by lupus_yonderboy at 10:18 PM on January 30, 2011 [1 favorite]

I'm about 80% sure pla is just trolling all of you.

god i hope so.
posted by kagredon at 10:20 PM on January 30, 2011 [2 favorites]

How to make the rich want to pay tax....hmmm...

Ok, lets start with this:

1. Each and every American should be in debt. Big time debt...like $8,000,000 in debt. Even babies born yesterday...ESPECIALLY corporations.

2. That debt is owed to the US govt.

3. Until that debt is paid off, one cannot buy a yacht, Bentley, a Hummer, or a piece of jewelry worth more than $25K.

4. Only those who pay it can invest more than $500,000 in stocks, funds, etc.

5. Only those who pay it will be able to shop at the mall without restrictions.

5. Once you pay it...you can do whatever you want in regards to the above.

Something along those lines, although the specifics can be changed according to facts that I don't have on me.

Most Americans cannot afford that stuff, and will never have it...so it doesn't really matter to most Americans (damn it...estate tax outrage!).

A Bentley is what...200K or something...way more 'affordable'. BUT...rather than it being a symbol of "Hey...I can spend 200K on a car", it would be a symbol of "I can spend $8,200,000 on a car".

Will most of the people who can afford the $8,000,000 tax shell out for it for the bling/consumer factor? I don't know...but its gotta be better than the shit we got going on right now.
posted by hal_c_on at 10:25 PM on January 30, 2011 [1 favorite]

I'm about 80% sure pla is just trolling all of you.

I was thinking he was drunk.
posted by Trochanter at 10:27 PM on January 30, 2011

Which doesn't negate your postulate.
posted by Trochanter at 10:28 PM on January 30, 2011

The poor create the wealth through their labor, the rich take the lion's share of that wealth and declare themselves preyed upon by those who would stick a heated pin through them and give the poor treatment for Lyme disease.

The surest sign that you create nothing whatsoever- that you subsist by parasitism and predation rather than labor and creation- is wealth.

Sigh.

I'm afraid this thread may be approaching the event horizon of crazy, but let me suggest that the following two propositions are not mutually exclusive:

- The wealthy can and should pay a larger proportion of their income in taxes.

- Attempting to use the tax code as some sort of great equalizer with 100% marginal tax rates or $25K spending caps or what have you is a really bad idea.
posted by eugenen at 10:29 PM on January 30, 2011 [5 favorites]

Which doesn't negate your postulate

Wait - you want to put your finger where?
posted by obiwanwasabi at 11:00 PM on January 30, 2011 [1 favorite]

Imho, the underlying issue is that income tax hasn't remained progressive, largely thanks to Reaganomics of course, yet the first mistake was much older.

The Sixteenth Amendment itself opens the door for non-progressive income taxes by not restricting them to the largest incomes. Initially only the richest people were paying income taxes anyways, meaning the amendment should have read more like :

The Congress shall have power to lay and collect taxes on the largest 15% of incomes, from whatever source derived, without apportionment among the several States. and without regard to any census or enumeration.

There would obviously be consequences for revenue eventually, but maybe not tell after WWII and not too severely until Reaganomics. In particular, the lowest tax bracket stayed below 5% until 1941 and the top tax brakets did not decline below 70% until 1981.
posted by jeffburdges at 11:05 PM on January 30, 2011 [1 favorite]

Wait - you want to put your finger where?

Close your eyes and think of England.
posted by Trochanter at 11:09 PM on January 30, 2011 [1 favorite]

In any case, I'm observing that ideally the 16th Amendment should've created precisely the sort of artificial line distinction between rich & poor required by any of Scott Adams proposed solutions. In fact, if income tax only applied to say the top 15% of incomes, then paying income tax might've become a point of pride, as that's how you'd know you're rich.
posted by jeffburdges at 11:17 PM on January 30, 2011

I'm just curious here... who agrees with taxing anyone at a rate of over 50%? As socialist as I like to imagine myself, I'm sure I would hate that too. I'm not saying anyone has suggested this yet, but I just wanted to mention that I think anything over 50% would be insane.
posted by XhaustedProphet at 11:31 PM on January 30, 2011 [1 favorite]

I think the reason you would tax over that amount is that we recognize that if you're making that much you're doing it wrong -- you're hurting the economy. Money that isn't moving isn't doing any good. So you tax at a high rate to encourage the rich to spend. And that's why there are loopholes.

I can see where a rich guy should absolutely have to pay a certain rate (whatever the percentage is) with no loopholes period. But above that rate he could make use of voluntary incentives.
posted by Trochanter at 11:49 PM on January 30, 2011 [1 favorite]

There are two main sorts of loopholes that prevent the rich from paying the highest tax bracket. First, you may simply hold the money in a corporation, which our tax system imagines means "Hey, I'll planning to use this money to create economic activity", whether that works in another question. Second, you may simply avoid paying the taxes on some income by giving that income away to charity. All very high tax brackets are meant to force the rich into using some such loophole.
posted by jeffburdges at 12:04 AM on January 31, 2011

I'm just curious here... who agrees with taxing anyone at a rate of over 50%

Well, for starters, Wilson, Harding, FDR, Truman, Eisenhower, Kennedy, Johnson, Nixon, and Carter.

What a fearsome bunch of socialists.
posted by kagredon at 12:25 AM on January 31, 2011 [10 favorites]

Apologies for not reading to the end of the thread. So many peope not getting this even the slightest little bit angered me to the point where I need to respond without getting my blood up any further.

1. His entire starting point here is that the rich need to be paying more taxes. That doing so is the only solution. More specifically, that the refusal of the rich to pay more taxes is making things worse. I think we can al agree with that.

2. His next step is that the rich have such a stranglehold on the government that rational arguments won't work. His ideas about the subjectivity of fairness aren't new, nor are they conservative values coming from a place of privilege. They originate with John Rawls. These presumptions are how we arrived at a progressive tax to begin with. It's just that here, instead of appealing to fair-minded philosophers with the "veil of ignorance," he is assuming the reality that the rich run the system and are running it for themselves, and thus the question is, "how do we manipulate the rich into being willing to give up the money that we need?"

3. That is honestly a decent question to be asking, especially when the ideas are mostly intangible benefits.

4. He jokingly proposed free rides in the carpool lane and express lanes at the DMV. We here have proposed cannibalism and guillotines. I'm with you all in believing that the rich don't deserve any reward for paying higher taxes, and I come from a rich family. But when someone is asking, "how do we make the rich pay more taxes when they're effectively blocking all attempts to do so?" and the response is, "fuck you for taking the side of the rich in a brainstorm," then we're far worse off than I even thought we were.
posted by Navelgazer at 12:35 AM on January 31, 2011 [8 favorites]

The ability to create wealth scales exponentially with wealth.

Taxes need to recognize that, and prevent the exponential accumulation of wealth.
posted by five fresh fish at 12:40 AM on January 31, 2011 [3 favorites]

Well, for starters, Wilson, Harding, FDR, Truman, Eisenhower, Kennedy, Johnson, Nixon, and Carter.

I understand that, but we don't live in that era anymore. The highest tax bracket will never be that high again, ever. And I don't think it should be. 70-90%?! Until recently, I had no idea taxes were that high. Had I lived when Reagan reduced taxes, I probably would have voted for him too.

Let's set the highest bracket at 49%. That way people will still receive the majority of their money, and if you're in that bracket, that's still going to be a whole lotta cash.
posted by XhaustedProphet at 2:09 AM on January 31, 2011

I disagree, stratospheric income tax rates coupled with loopholes simply forced rich people to spend money, either by keeping it tied up in corporations, or else by giving to charities. Regan's trickly-down economics seriously diminished the largest incentives to reinvestment by reducing the incentive for the rich to keep their money inside the corporations they owned.

Worse yet, corporations are basically allowed to print money for themselves through stocks and bonds. If the tax rates get too low, that exacerbates incentives for fraud, which we've witnessed wholesale ever since Regan. We must regulate financial industries more tightly when taxes are low.

I'd agree if that real income tax rates should not exceed 50%, hell they should lie much lower than that. We must now however allow the creation of a wealthy hereditary elite, which was the fundamental reason for creating an income tax, btw.

As I said up thread, we'd all fair far better today if the 16th amendment had seriously limited the income tax to only a small proportion of the population; in particular Reganomics would've been inviable constitutionally.
posted by jeffburdges at 3:11 AM on January 31, 2011

bdogrose : I doubt anything as pedestrian (ha!) as a free pass to the HOV lane will do the trick, but let's say it does. Until it doesn't. What's next?

Then we have the "night of blood and fire". Historically, it will come to that. But I'd entertain trying it a different way this round.


lupus_yonderboy : I have a degree in math.

Hey, me too! [gives the secret math-degree handshake]. Your point?

The fact is that taxes have a far, far greater impact on the poor and middle classes than the do on the rich.

So you don't have a problem with my numbers, you just don't like what they say because you feel that the rich should pay more. You, not I, need to massage the data to make 35% magically look like less than 15% (again, loopholes notwithstanding).

Please note, pla, the repeated mentions of historical violence against oppressors in this thread. Look at the posting history of the people politely pointing out the French revolution and other such things.

And please note that I said I have no problem with that approach, several times in this thread. Call a spade a spade, though. You'd rather we not need to pull the trigger, but have no problem doing it at virtual gunpoint.

Wait... Perhaps therein lies the problem. You all think I meant that sarcastically? Heh... First time for everything, a misunderstanding from people taking me as less crazy-sounding than I intended. ;)


Bonzai : I'm about 80% sure pla is just trolling all of you.

You could probably even weakly support that by looking at my usual stance on any tax-related issues. I framed my conversation here in the context of TFA, however, particularly in how everyone seems to consider it just awful that that mean ol' rich man (who got that way by whipping the backs of the workers with his funny government-protected words and pictures) would tell us how to take more of his money nonviolently.

I dunno, does tempering my usual stance of "up against the wall ASAP", in response to a reasonable alternative and for the sake of discussion, count as trolling?

We can always fall back to "up against the wall". And will. No worries there.
posted by pla at 3:46 AM on January 31, 2011

There's one in the spotlight! He don't like right!
posted by XhaustedProphet at 3:56 AM on January 31, 2011

*look
posted by XhaustedProphet at 4:52 AM on January 31, 2011

Pla, it seems to me that your whole position rests on the premise that flat taxes are "fair" and progressive taxes are "unfair." That foundational supposition is in turn supported by... what, exactly? Because it looks arbitrary. It looks like nothing more than an idea that appeals to you on some intuitive level. The arbitrariness of this notion, that flatness is the primary if not sole indicator of fairness in taxation, seems like an elephant in your room, and makes all this blustery hoo-ha you're dishing out seems like an effort do distract readers from noticing the utterly subjective foundations of what might otherwise be decently constructed arguments. There's no especially demanding math work behind anything you're written here.

XhaustedProphet: And I don't think it should be. 70-90%?! Until recently, I had no idea taxes were that high

Are you really suggesting that tax rates should be set according to what seems right? According to what you, out of ignorance of history, would be surprised by?
posted by jon1270 at 7:03 AM on January 31, 2011 [7 favorites]

Maybe the wall street guys are different, but the concept certainly isn't dead, and this "class traitor" stuff is just trolling.

Me? Pla is trolling, MattD is trolling, Scott Adams is trolling, the WSJ is trolling, this whole discussion is trolling! The whole idea, framed as it is, that rich people might cough up more cabbage if everyone else were nicer to them, or gave them prizes, or tugged their forelocks respectfully and said "Guv'nor" when speaking to them is nothing but a big, hairy, dimwitted beast squatting under a bridge; and this beast, sired on the world by a comic strip writer best known for his office "humor," is a half-witted dimwit. I look forward to a future op-ed advocating for the return of poorhouses by the author of Funky Winkerbean.

And, yes, the phrase "limousine liberal" is semantically equal to "class traitor." Republicans are just afraid to use that phrase. At the moment.
posted by octobersurprise at 7:06 AM on January 31, 2011 [4 favorites]

Screw Scott Adams, and screw all other evolution-deniers. He is not forgiven. He is not forgiven for the execrable "God's Debris" and "The Religion War", either.
posted by Decani at 7:18 AM on January 31, 2011 [4 favorites]

Hi. I pay 5 grand in taxes, yet I feel compelled to champion the rights of people who make enough to pay 10,000 times what I do. See: Stockholm Syndrome

( Maybe, just maybe, the fact that there exist people in this country that make enough to pay 10,000 times in taxes what you do while people die for want of food or medical care or lack of employment is the problem here.)
posted by Benny Andajetz at 8:02 AM on January 31, 2011

I think the best thing to do is point out that the rich have given us no options other than guillotines. They have bought our elections, bought our lawmakers, bought our media, bought the means of production through outsourcing, even bought our religion. This isn't class warfare, it's siege warfare, and they're pretty sure they can outlast us. If our rhetoric turns violent it's because they have shut down the controls on the more reasonable processes.
posted by Legomancer at 8:08 AM on January 31, 2011 [2 favorites]

I think the best thing to do is point out that the rich have given us no options other than guillotines.

Sure they have. We can vote for political candidates that say they will support and implement progressive taxation to fund public services. The problem is that the vast majority of people who aren't in the ridiculously wealthy category don't vote based on those things, or they vote based on lots of things and that is only one of them.
posted by verb at 8:34 AM on January 31, 2011

we have to do something to make the tax hike seem palatable

How about this: for the wealthy to enjoy their wealth, they need to live in a civil and peaceful society.

In poorer countries, the rich are prisoners of their own wealth. They can't leave their walled and guarded compounds, as they will be kidnapped or killed. And there's always the risk that one of their trusted servants or retainers could be bribed or could otherwise go rogue and harm either themselves or their children.
posted by tallmiddleagedgeek at 8:34 AM on January 31, 2011 [3 favorites]

A mass exodus of 90% of America's old wealth fleeing back to Europe, to South America, to anywhere that doesn't say "congrats, you made it, now get back in line, Citizen"

I'm not sure how you can conflate 'old wealth' with what you're actually describing as people finally reaching new wealth and then having to get back in line. The point of 'old wealth' is that they were never really in the line, except their ancestors a long long time ago.
posted by kingbenny at 8:43 AM on January 31, 2011

I think the best thing to do is point out that the rich have given us no options other than guillotines.

Because that's worked so well in the past. Sorry. I don't know what the best thing to do is, but "the rich," "the poor," and "the middles" mostly rise and fall together. Everyone's lost if things come to the point of guillotines.

If our rhetoric turns violent it's because they have shut down the controls on the more reasonable processes.

This is nonsense. "They" and "our." This is Glenn Beck-ism. "Oh, we don't have a choice! Oh, they made us do it!" Worse than useless. I hate this shit.
posted by octobersurprise at 8:44 AM on January 31, 2011

> We can vote for political candidates that say they will support and implement progressive taxation to fund public services.

Which candidates are these?

In order to get elected, candidates need massive donations from the ultra-rich. This will only get worse with the Citizens United decision. What viable candidate today could make any progress at all proposing progressive taxation?

If the rich didn't control the political process, this would be a very easy sell to almost everyone - "Which would you prefer - that we shut off your police and street lights, or that we marginally tax rich people a little more?" But it's never expressed that way. Instead, we only hear about the spending side, and how that has to go. The combination of the false dialog, and decades of brainwashing, means that people consistently vote against their best interests, and will continue to do so until it all comes crashing down.
posted by lupus_yonderboy at 8:49 AM on January 31, 2011 [2 favorites]

I don't know what the best thing to do is, but "the rich," "the poor," and "the middles" mostly rise and fall together.

I agree wholeheartedly with your comment that violence isn't a solution. We've got a reasonably serviceable democratic republic, and pretending that the levers of power are out of our reach is just that -- pretending. It's doable, just very slow, boring, unglamorous work.

However, the idea that the rich, the poor, and those in the middel rise and fall together is not a rule of nature. It's something that we have to encourage, and something that we have to make systemic provisions to support. When those provisions are dismantled, the result is a decoupling of the fortunes of the rich, the poor, and the middle class. That's what all the talk about "rising income disparity" is about.
posted by verb at 8:49 AM on January 31, 2011 [1 favorite]

I'm about 80% sure pla is just trolling all of you.

I'm sorry guys, this is my fault. I bet pla that he couldn't post 10,000 words worth of the most maliciously stupid bullshit conceivable by the time I finished my morning eclair. I was even chewing extra slow to let him really run with it - I should have considered the effects on the public. In the spirit of this post, if you give me another eclair, I'll call the bet off.
posted by FatherDagon at 8:50 AM on January 31, 2011 [4 favorites]

The combination of the false dialog, and decades of brainwashing, means that people consistently vote against their best interests, and will continue to do so until it all comes crashing down.

That's what I mean. The problem isn't that the rich are twirling their moustaches, keeping the poor and middle class from having any effect on public policy. The problem is that they've been convinced over time to vote against their best interests.

Convincing people not to do that has nothing to do with killing the rich or pitchforks and torches and so on.
posted by verb at 8:51 AM on January 31, 2011 [1 favorite]

octobersurprise:

First, guillotines did work in the past. Nasty, bloody and hugely unjust in many ways as the French Revolution was, it did in fact end the monarchy, transform France into a Republic, and more than that, provided an example of democracy to numerous nations, not the least of which is the United States itself.

> > If our rhetoric turns violent it's because they have shut down the controls on the more reasonable processes.
> This is nonsense. "They" and "our." This is Glenn Beck-ism. "Oh, we don't have a choice! Oh, they made us do it!" Worse than useless. I hate this shit.

Your emotional response isn't, in fact, a rebuttal to the claim that "they have shut down the controls on the more reasonable processes."

Take the very topic of this article - increasing taxes to prevent the government from shutting down. It would seem to any rational person that shutting the government down is a bad idea, and that continuing to cut services during an already-collapsing economy is almost as bad - and yet this is a conversation that simply never occurs amongst mainstream politicians - they all vie to see who can destroy the most, the fastest.

You claim there is a reasonable way for reasonable people to make their voices heard. What is that way?
posted by lupus_yonderboy at 8:56 AM on January 31, 2011 [1 favorite]

> Convincing people not to [vote against their best interests] has nothing to do with killing the rich or pitchforks and torches and so on.

Unfortunately, it has everything to do with that. Someone who's been voting Republican isn't going to calmly decide, "You know, I've been voting against my best interests for for the last 20 years, I think I'll switch my vote" and go back to reading the newspaper.

These things don't happen gradually - people are forced into the sudden realization that they were completely wrong, and make a conceptual jump, usually by the force of circumstances (losing a job, a house, a relative...) Inevitably, these jumps go too far, and people jump further to the other side than they were before. And once people realize that they have been taken advantage of for decades, they tend to get very angry...

If we can't convince people to actually get angry, nothing will change.
posted by lupus_yonderboy at 9:01 AM on January 31, 2011

...In this case, though, you would see exactly that happen. A mass exodus of 90% of America's old wealth fleeing back to Europe, to South America, to anywhere that doesn't say "congrats, you made it, now get back in line, Citizen"....

Europe? Now those guys know how to tax the crap out of the rich.

South America? Well, okay. What's stopping them now? They'd get an absolutely amazing standard of living. Big house, lots of servants. The reason why they don't go there right now is probably because they don't want to. High taxes are probably part of the reason.

I'm not suggesting that we raise the top marginal tax rate to 90% (as it was during the hellish years of the 50s. Dear God, that was an awful time. America's fortunes were at their lowest ebb. American businesses were shuttered as the rich moved to Europe. No wonder we called it "The Little Depression"). We are talking about an increase of a few percentage points.

BTW - Navelgazer, I think that most of us do understand the point that Adams is making. I just don't think he's right. First, the non-rich outnumber the rich. We can out-vote them. The argument that we can't change the policy without their buy-in is simply false. Second, I don't actually believe that getting their buy-in would help. It's a bait-n-switch. They'll keep the benefits and end up with lower taxes at the end of it. It's a distraction. It's like the GOP roaring in, saying that they are going to cut spending, and then slashing the National Endowment for the Arts. It's a waste of time and we shouldn't play the game.
posted by It's Never Lurgi at 9:12 AM on January 31, 2011 [1 favorite]

Which candidates are these?

This.

If we can't convince people to actually get angry, nothing will change.

And especially this.
posted by Benny Andajetz at 9:15 AM on January 31, 2011

We here have proposed cannibalism and guillotines.

Well, in fairness, that is more or less my default starting position; "You want a ride to work? Fine, just so long as you don't mind the idea of me eating your decapitated corpse... what? I said I'd give you a ride, why are you running away?!"

But as to taxing the rich, I don't know why this is even still a conversation; being extremely wealthy in this country means that you have been able to thrive due to the benefits of a strong nation protecting you, a robust infrastructure supporting you, and a healthy economy filling your accounts. You are rich because you live in an environment which has allowed you to become rich, and the cost of continuing to live in that environment is maintaining it.

Not doing so is unpatriotic and an insult to the system that allowed you to become rich in the first place.
posted by quin at 9:17 AM on January 31, 2011 [6 favorites]

> I don't know what the best thing to do is, but "the rich," "the poor," and "the middles" mostly rise and fall together.

Since Reagan, the rich have gotten MUCH richer, and the poor and the middles have gotten, effectively, poorer (yes, I know the official numbers put them "in the same place" but it simply isn't true in real terms, because huge quantities of their saved value has suddenly been destroyed, and many millions have already dropped off the bottom and out of the employment statistics already).
posted by lupus_yonderboy at 9:18 AM on January 31, 2011 [1 favorite]

Someone who's been voting Republican isn't going to calmly decide, "You know, I've been voting against my best interests for for the last 20 years, I think I'll switch my vote" and go back to reading the newspaper.

By the same token, someone who is voting for their best interests doesn't just calmly decide, "I'd like to pay for a much larger share of the nation's expenses, and cut my own services, while ensuring that the rich can make more money!"

Conservatives didn't sell this bill of goods with pitchforks and torches (Tea Party ire notwithstanding). Revolutionary shortcuts are seductive but they rarely this particular kind of problem.
posted by verb at 9:27 AM on January 31, 2011

Those who make peaceful revolution impossible, make violent revolution inevitable - JFK

All our taxes were originally designed so as to help achieve specific economic ends. Inheritance tax and income tax were designed to help us avoid being dominated by a wealthy hereditary elite.

If that's the only goal, we need not tax people who make less than $100k per year at all, but we must tax the super-rich until they are not super-rich.. or until they simply spend their money on projects instead of paying taxes, be that starting companies or supporting charities.

There are other goals in taxation like encouraging saving over spending (sales tax), encouraging local production (tariffs), etc., but none are quite so historically important as preventing the formation of a monied elite.

Imho, we should also reengineer corporate income tax, or perhaps an income adjusted VAT, to discourage mergers and monopolies. In fact, anti-compeditive behavior should be penalized in tax court with fines given as a percentage of the companies gross income over years. I'm not sure, but that might prove as important as preventing the formation of elites.
posted by jeffburdges at 9:33 AM on January 31, 2011 [1 favorite]

I'm amazed by people who believe that violence or revolution can make a better world where everyday representative politics fails. I don't say that representative politics doesn't fail; I don't say it always works. But if people are too ignorant or greedy or easily brainwashed or complacent or just plain dumb how can they make a revolution work? If this is true:

"The combination of the false dialog, and decades of brainwashing, means that people consistently vote against their best interests, and will continue to do so until it all comes crashing down."

then there's nothing to be done except work locally, do the best you can, take care of your own, and try to live through the smash-up.

it did in fact end the monarchy, transform France into a Republic, and more than that, provided an example of democracy to numerous nations, not the least of which is the United States itself.

Except that it did not, in fact, end "monarchy," which continued until 1870. I'm all for a little "Bliss was it in that dawn to be alive, But to be young was very heaven!" nostalgia now and then, but I think the French Revolution was pretty much a wash when it comes to the pros and cons.
posted by octobersurprise at 9:40 AM on January 31, 2011

Conservatives didn't sell this bill of goods with pitchforks and torches (Tea Party ire notwithstanding).

I just can't agree with this. Conservatives have always (and particularly in the last 40 years) presented their case as a class war for the heart and soul of our Republic. What do you think all the cry-and-hue has been about "Socialists" and "liberal elite" and "take our country back"? The irony is that the Tea Party ilk really think it is a class war, while the powerful conservatives have always realized that the class war is just cover for economic warfare.
posted by Benny Andajetz at 9:42 AM on January 31, 2011 [2 favorites]

provided an example of democracy to numerous nations, not the least of which is the United States itself.

An example. Not necessarily a positive one.
posted by electroboy at 9:48 AM on January 31, 2011 [1 favorite]

If rich folks in America think that taxes are too high, they probably have the means to move someplace where taxes are lower. Afghanistan and Somalia both have a tax burden less than 1/4 of the US!
posted by KathrynT at 10:50 AM on January 31, 2011 [1 favorite]

How original.
posted by electroboy at 11:24 AM on January 31, 2011

Nice post, bpm140. Scott Adams is a very insightful writer, and would deserve to be famous as such even if he'd never drawn a cartoon. His famous piece on personal finance is better than anything specialists in the field have ever managed, for example.
posted by w0mbat at 11:38 AM on January 31, 2011

I'm all for a little "Bliss was it in that dawn to be alive, But to be young was very heaven!" nostalgia now and then, but I think the French Revolution was pretty much a wash when it comes to the pros and cons.

Flexing one's extensive power may be just the thing to make, say, an 82-yr-old autocrat feel young one last time.

Oh, wait, what were we just talking about?
posted by perspicio at 12:07 PM on January 31, 2011

I have often commented that I pay more in taxes now than I earned (per year) in the lat 1980's. I do not think most people have a problem with paying their share of the tax burden, but the point is valid that income taxes (alone) is not going to touch the super-rich. The majority of their income is not 'income'. As others have pointed out, capital gains is one way to get at some of this and it has been kept down for a while (not personally complaining, I'll take advantage of it while it is) and is one thing that needs to be looked at.
posted by twidget at 12:59 PM on January 31, 2011 [1 favorite]

Confiscatory inheritance taxes are the only moral way to go. If conservatives really believe in a meritocracy, then prove it by making the children of the super rich earn their way back into that august group.
posted by Mental Wimp at 2:02 PM on January 31, 2011 [2 favorites]

I think the French Revolution was pretty much a wash when it comes to the pros and cons.

The people who lived through it may be forgiven for having felt otherwise.
posted by IndigoJones at 2:37 PM on January 31, 2011

Confiscatory inheritance taxes are the only moral way to go. If conservatives really believe in a meritocracy, then prove it by making the children of the super rich earn their way back into that august group.

Estate DEATH taxes. Now you're just talking plain ole commie there, son.
posted by Benny Andajetz at 2:37 PM on January 31, 2011

Conservatives have always (and particularly in the last 40 years) presented their case as a class war for the heart and soul of our Republic.

I'm not sure who you've been listening to for the last half a century, but conservatives have never pitched their message as a class war. They have accused progressives of conducting a class war against the rich. The talk about pitchforks and torches and the French Revolution only makes their message more believable.

It takes more than anger to make an honest, compelling case that greater wealth means greater responsibility -- a greater debt to society. That is the idea that conservatives successfully dismantled, and there are no shortcuts to convincing the public of its truth again.
posted by verb at 2:49 PM on January 31, 2011 [1 favorite]

The people who lived through it may be forgiven for having felt otherwise.

What about those who didn't?
posted by electroboy at 2:56 PM on January 31, 2011

Why focus on taxing the rich? I would respectfully suggest that in the medium term, the US should balance its budget by raising taxes on everyone, not just the rich. Let all the Bush tax cuts expire. The broader the tax base, the less sharp the necessary rate increases will be. If you want to raise taxes on the rich, do so as part of a package that also raises taxes on the broad middle class (even if the tax increases are higher for higher incomes). It'll be harder to argue that this is somehow unfair to rich people.

Part of the problem is that very few rich people feel that they're rich, because there's always people who are much richer than they are. Brad DeLong links to Catherine Rampall: Why So Many Rich People Don't Feel Very Rich.
posted by russilwvong at 3:17 PM on January 31, 2011 [1 favorite]

Part of the problem is that very few rich people feel that they're rich, because there's always people who are much richer than they are.

Perhaps that means that the top tax bracket should keep scaling up, so that the ridiculously wealthy are taxed at a ridiculous rate. Then, the only-moderately rich can be taxed moderately in comparison.
posted by verb at 3:34 PM on January 31, 2011

Am I the only one who thinks at times that even fairly intelligent people don't understand tax brackets, and thus don't get things like "90% tax burden" and the like? To be fair, it's a bit counterintuitive. So I guess I'll lay it out here for anyone who is secretly a little shaky on the matter. It's okay. We won't have judgment (or at least I won't).

Basically, tax brackets work like this. Let's say that the $1–20,000 bracket is taxed at 0%. $20,001–40,000 is taxed at 5%. So if you make $18,000, you pay no tax. Easy so far, and pretty intuitive.

BUT! If you make $20,100 — or $100 into the next bracket up — you pay $5 in taxes. WHAT? Basically, you pay each bracket's amount on that bracket's amounts. So the $20,100 example has the first $20,000 taxed at 0%, and the $100 in the $20,001–40,000 bracket taxed at 5%. So someone earning $40,000 pays 5% tax on the 20,001–40,000th dollars, meaning that that person pays $1,000 in taxes total. It also means that they're only paying 2.5% of their income when they max out the 5% tax bracket in this hypothetical case.

So basically, the system is set up so that you never make less when you earn more, and the "90% top tax bracket" thing simply meant that if you made more than, say, $250,000 in a year, then any dollar from the 250,001st on would be taxed at 90%, and not your total gross income.

Which is why tax brackets are a good idea that's not well understood. The tax burden is shifted to those most capable of paying it, and nobody ever makes less for earning more (despite the GRAR that you'll hear from mostly right-leaning folks who don't understand taxes beyond that "no taxation without representation" actually means "no taxation under any circumstances").

Hopefully at least one person will be like, "whoa, I didn't realize that," and make up for all of the other people who will feel condescended to by this brief explanation of tax brackets. Thanks for your time, folks.
posted by DoctorFedora at 3:52 PM on January 31, 2011 [10 favorites]

What has the country received in return for lowering the tax rates (in particular, on the rich) we had in the 1990s?

The promised revenue increases from Laffler curve devotees certainly didn't materialize.

Did, actually, at least since 1980. Just not enough to keep up with spending plus debt. And they fell as a percentage of GDP, which is another issue. Got no idea how receipts would have stacked up had the cuts not gone in place.

stratospheric income tax rates coupled with loopholes simply forced rich people to spend money, either by keeping it tied up in corporations, or else by giving to charities.

Spend it? They buried it. That's what keeping it tied up in corporations means. Why sell stocks if the capital gains is going to be outrageous? Once Kennedy lowered rates, things began to move again.

Here's the other side of the Time is Money incentive. Raise tax rates on your high earning cardiac surgeon to a certain point and he'll skip the extra fifty patients and go play golf. Is this the greater good? (Granted, the MD bit is intended as provocative, but you get the idea. People at all levels prefer to work for their own benefit.)
posted by IndigoJones at 5:09 PM on January 31, 2011

Raise tax rates on your high earning cardiac surgeon to a certain point and he'll skip the extra fifty patients and go play golf.

Which leaves room for another cardiac surgeon to pick up the slack.
posted by Mental Wimp at 5:15 PM on January 31, 2011 [2 favorites]

Also worth noting, when the top tax rate was 90%, the bottom tax bracket ($0-4000) was taxed at 20%.
posted by electroboy at 6:21 PM on January 31, 2011

One thing I wanted to mention was: It's come up in other threads on this general topic that there should be way more divisions of brackets in the top part of the income scale. I believe somebody said the top rate starts at two hundred grand? That's dumb. It lumps a surgeon who's doing well with a financier speculator paying himself seven million dollars in bonuses. They are entirely different economic animals.

Divide and conquer.
posted by Trochanter at 8:33 PM on January 31, 2011 [2 favorites]

Have taxes start at $1 million. At $1M you begin paying 10% and it increases to 100% at $1 billion.

If you need some way of marking your success above $1 billion, use something other than the currency we broke-ass common citizens rely upon.

I suggest charitable giving. Have a pissing contest on who can develop a cheap cure for malaria first.
posted by five fresh fish at 8:40 PM on January 31, 2011

Have a pissing contest on who can develop a cheap cure for malaria first.

That would just allow more broke-ass common citizens to live longer. Parasites, etc.
posted by ryoshu at 8:54 PM on January 31, 2011

DoctorFedora: So basically, the system is set up so that you never make less when you earn more, and the "90% top tax bracket" thing simply meant that if you made more than, say, $250,000 in a year, then any dollar from the 250,001st on would be taxed at 90%, and not your total gross income.

The concept is also known as the marginal tax rate.

A 90% marginal tax rate means that if you earn an extra $1000, you only get to keep $100, with the rest being taxed! That seems unreasonably high to me. Here in Soviet Canuckistan, the highest marginal tax rate including both federal and provincial income tax is about 50%, taking effect around $125,000. For the US, a top marginal tax rate of 40-50% (depending on the level of state income tax) would be much more reasonable than 90%. (Total US government spending is about 40% of GDP.)
posted by russilwvong at 11:18 PM on January 31, 2011

Is there any way to change the CSS to display the page background as #FF00FF?

It would better complement posts which propose 90% marginal tax rates in earnest, or imply that Scott Adams is somehow wrong in enforcing the copyright of his works.
posted by unigolyn at 12:07 AM on February 1, 2011

Nasty, bloody and hugely unjust in many ways as the French Revolution was, it did in fact end the monarchy, transform France into a Republic, and more than that, provided an example of democracy to numerous nations, not the least of which is the United States itself.

The French Revolution was 1798-1799. The American Revolution was 1775-1783. France did not provide an example to the US; it was the other way 'round.
posted by grubi at 6:42 AM on February 1, 2011

Latest idea to pry money from the wealthy actually assumes they are holding the economy hostage.
posted by Brian B. at 7:03 AM on February 1, 2011

France did not provide an example to the US; it was the other way 'round.

I assume he meant that the early years of the first French republic provided some object lessons to the Americans. Since the French supported the American revolution, a lot of the founding fathers supported the French revolution, even though we were ostensibly neutral. Jefferson was a huge supporter of the revolution, even though he cooled pretty quickly after the Reign of Terror, and later concluded that the French probably would've been better off with a constitutional monarchy.
posted by electroboy at 7:21 AM on February 1, 2011

Why does the idea of a rich guy slaving away over in the corner by all by herself and earning millions without anyones help seem like a convenient fiction?

Because it is - a complete and utter fiction.

There is NO ONE in the history of mankind who has made their wealth solely by their own effort and labour. Hunters and gatherers work in groups. Even the genious sitting around inventing stuff gets no money unless some schlub puts it together in a factory to sell to other people, and probably some woman to do his laundry and cook his meals while he sits around inventing stuff, too. Her labour is essential to his creation, just as the worker's is.

In other words -- Atlas Shrugged 2: One Hour Later.

If he's a "job creator", then so is she, and so is the person who buys the thing he just invented. Indeed, based on the history of the consumer and industrial revolutions, it is clearly the CONSUMER not the capitalist who is the job creator. The capitalist is just the person who owns the means of production. A society in which the majority of people don't have enough resources to consume will be poorer and poorer.
posted by jb at 8:32 AM on February 1, 2011 [3 favorites]

five fresh fish: Have taxes start at $1 million.

What the ....

You're saying that more than 99% of the population should pay no taxes at all? That a tiny fraction of 1% of the population should bear the entire responsibility of paying for public spending?

I'm happy to pay my taxes; here in Canada, I think public education, public health, and government institutions in general work reasonably well, and are worth supporting. It seems incredibly irresponsible to suggest that because I make less than $1 million a year (like almost 100% of the population), I should feel no obligation to pay taxes.

If nobody feels obligated to pay taxes, you're not going to have a functioning government for long. (See: Greece.)
posted by russilwvong at 9:41 AM on February 1, 2011

You're saying that more than 99% of the population should pay no taxes at all? That a tiny fraction of 1% of the population should bear the entire responsibility of paying for public spending?

Indeed. The arguments against progressive taxation often hinge on "There aren't enough rich people to fund the country alone," and while that's often used in a deceptive fashion, it is literally true. Confiscating every penny that anyone in the US makes over a million dollars wouldn't help us.

There's a difference between progressive and punitive taxation.
posted by verb at 9:56 AM on February 1, 2011

It's called the Overton window, guys.

Ten percent of the population has nearly fifty percent of the nation's wealth.

Ten percent of the population should bear nearly fifty percent of the nation's costs.
posted by five fresh fish at 10:02 AM on February 1, 2011

Ten percent of the population should bear nearly fifty percent of the nation's costs.

I think that's a more reasonable position than saying that a small fraction of 1% of the population should bear 100% of the nation's costs, which is what you said earlier. It's still arguable--a broader tax base would be more stable--but not completely crazy.
posted by russilwvong at 10:21 AM on February 1, 2011

there is actually a very good reason to have the revenue base of the government be dependent on the incomes of the majority of the population: it gives the government a powerful reason to worry about when those incomes (and thus tax revenue) fall. In many countries where the government is funded by rents on natural resources and/or foreign aid, there is no incentive to worry about the income of the majority of the people.
posted by jb at 11:38 AM on February 1, 2011 [2 favorites]

Except initially most countries will simply borrow money when tax revenues fall. And that'll suffice for the immediate needs & reelection. And countries issuing reserve currencies can borrow money nay indefinitely.

Regan reduced incentives for reinvestment by cutting taxes on the super-rich while simultaneously dramatically expanding the deficit.
posted by jeffburdges at 12:00 PM on February 1, 2011

Raise tax rates on your high earning cardiac surgeon to a certain point and he'll skip the extra fifty patients and go play golf.

Which leaves room for another cardiac surgeon to pick up the slack.

I'm guessing that that other cardiac surgeon is on the golf course with him and for the same reasons.
posted by IndigoJones at 1:44 PM on February 1, 2011

So basically, the system is set up so that you never make less when you earn more, and the "90% top tax bracket" thing simply meant that if you made more than, say, $250,000 in a year, then any dollar from the 250,001st on would be taxed at 90%, and not your total gross income.

The issue is that generally the difference between the low tax brackets are fairly irrelevant to the rich. If most of your income is already in the top bracket, that's essentially a flat tax, and increasing that top bracket's rate is pretty directly painful. For instance, if you are making $1 million taxable income, at the current brackets, your overall tax rate is 33% compared to the top marginal rate of 35%. Fairly meaningless.
posted by smackfu at 2:34 PM on February 1, 2011

Which leaves room for another cardiac surgeon to pick up the slack.

I'm guessing that that other cardiac surgeon is on the golf course with him and for the same reasons.

Which leaves room for another cardiac surgeon to pick up the slack.

Hah! Top that!
posted by Trochanter at 2:38 PM on February 1, 2011

I'm guessing that that other cardiac surgeon is on the golf course with him and for the same reasons.

So what you're saying is that even if there is significant demand, no one will supply those services?
posted by verb at 2:51 PM on February 1, 2011 [1 favorite]

Will some of the more well versed people in this thread please post a few links on some basic tax theory and how it relates to this thread? I'm very serious. I wish to be educated so that I may better approach this discussion, or discussions in the future.

TIA.
posted by Splunge at 3:53 PM on February 1, 2011

Here's some tax theory from a Canadian point of view:

A page I wrote up on Canadian tax facts. There's a graph showing total government revenues as a percentage of GDP (about 40%), and total government outlays (about the same). Since GDP per capita is about $40,000, that means government spending is about $15,000 per capita: about $5000 for social services, $5000 for health and education, and $5000 for everything else.

US expenditures (prior to the current financial crisis) are about the same, with a significant gap in revenue--something like 33% of GDP in revenue, 38% of GDP in expenditures. The expenditure mix is also different, obviously, with a lot more military spending, but not much less health spending (because Medicare already covers the most expensive patients).

In terms of how best to raise revenue, there's a famous quote by Colbert, minister of finance under Louis XIV: "The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing."

The three major types of taxes are income tax, sales tax, and property tax. The idea of simplifying the tax system by just using a single type of tax (e.g. a flat income tax) often comes up in Internet discussions. In practice, using all three taxes means that the rates for each tax don't have to be that high, and it's difficult to evade all of them. See this background paper on flat-tax proposals, from the Canadian Library of Parliament.

A 2007 proposal for tax reform (PDF) from the C. D. Howe Institute, a think tank with close ties to Canadian policymakers.

Some other theoretical concepts:

Deadweight loss.

Special-interest effects. If there's a benefit to a particular special interest, they'll lobby hard to keep it; even if the cost to the country as a whole far outweights the benefit, the cost is spread out over everyone else, so they don't have a strong incentive to get rid of it. A commonly cited example is the sugar lobby: according to an econ text, the domestic price of sugar in the US is two or three times the world price, which costs the average household $20/year, while the sugar industry (about 60,000 people) gains $1.9 billion/year.
posted by russilwvong at 5:05 PM on February 1, 2011 [1 favorite]

verb : So what you're saying is that even if there is significant demand, no one will supply those services?

If we had an infinite supply of intelligent, educated, medically-inclined professionals, you would have a good point.

In this world, with a highest tax bracket of a mere 35%, I can't even find a halfway decent GP in my area because they already all have more patients than they can handle.

_{...But that gets on to another controversial topic here (namely, "not every kid has the capacity to learn rocket science"), which I'd rather avoid for now}
posted by pla at 1:58 PM on February 2, 2011

In this world, with a highest tax bracket of a mere 35%, I can't even find a halfway decent GP in my area because they already all have more patients than they can handle.

Think a little bit about why this is true.
posted by Mental Wimp at 2:42 PM on February 2, 2011

pla, are you really saying that the high tax bracket is likely a significant factor in why there aren't more medical professionals? And if so, is there a reason you think it's more significant than the the barriers to entry in the profession?
posted by weston at 3:50 PM on February 2, 2011

"If we had an infinite supply of intelligent, educated, medically-inclined professionals, you would have a good point."

I'm pretty sure that I'm misreading you here, but it sounds like you're suggesting that the law of supply and demand only works when there is infinite supply.

I'm just going to stand here for a minute, and tilt my head like a dog that hears a whistle.
posted by verb at 4:18 PM on February 2, 2011

verb : I'm pretty sure that I'm misreading you here, but it sounds like you're suggesting that the law of supply and demand only works when there is infinite supply.

You postulated (albeit sarcastically) that supply would rise to meet the demand for more doctors if they chose to stop working once they effectively stop getting paid to work*. I pointed out that with the current top marginal rate of a mere 35%, a rate at which we might reasonably presume people will not stop working purely out of financial considerations, I cannot find a decent doctor in my area.

So explain, if you would, why giving cardiac surgeons (or apply this to any highly-paid, highly-skilled labor) less incentive to work would result in more of them than we have now?


_{* Would you keep working for a tenth of your normal take-home pay? I sure as hell wouldn't}
posted by pla at 5:47 PM on February 2, 2011

pla: " I pointed out that with the current top marginal rate of a mere 35%, a rate at which we might reasonably presume people will not stop working purely out of financial considerations, I cannot find a decent doctor in my area."

I'm surprised anyone got any medical care at all in the US in the 50s when doctors paid much higher taxes.

Gosh, you'd almost think the AMA's stranglehold on the number of medical school admissions might have nothing to do with doctor shortages. Yes, what medical schools exist in the States are fully of echoing, near-empty classrooms, with a scenic tumbleweed or two bouncing in cinematic slo-mo down the aisles.
posted by maudlin at 5:52 PM on February 2, 2011 [1 favorite]

maudlin : Gosh, you'd almost think the AMA's stranglehold on the number of medical school admissions might have nothing to do with doctor shortages.

Higher taxes on the rich will:
A) Decrease AMA quotas,
B) Increase AMA quotas, or
C) Have nothing at all to do with AMA quotas, school capacities, or the 1950s.
posted by pla at 6:28 PM on February 2, 2011

"You postulated (albeit sarcastically) that supply would rise to meet the demand for more doctors if they chose to stop working once they effectively stop getting paid to work*."

A 90% top marginal rate is not "effectively not getting paid to work." You're confusing top marginal rate with effective tax rate, something that's been discussed at great length in this thread. Whether that's a good or bad top marginal rate is a secondary discussion, but if you keep referring to it as "getting a tenth of your normal take-home pay" we can't really continue. You aren't understanding the relatively straightforward math that's involved.


"I pointed out that with the current top marginal rate of a mere 35%, a rate at which we might reasonably presume people will not stop working purely out of financial considerations, I cannot find a decent doctor in my area."

The plural of anecdote is not "data." You've taken your difficulty finding a good doctor and suggested that it must be because 35% is too high of a marginal tax rate without even bothering to draw the connection. You're completely ignoring the fact that this unacceptably high rate -- one that you think is causing doctors to just up and quit -- is in fact the lowest top marginal rate we've had in our lifetimes.

Now, I will spot you an interesting bit of data. over the past twenty years -- during which we had these historically low top marginal rates -- the ratio of doctors to patients in our country has climbed by roughly 30%. If anything, we can conclude that the current rates have been producing a veritable explosion of doctors, not a reduction in their numbers.

But, you might ask... Why can't you find a good doctor? Turns out, all those doctors coming in to fill the market aren't general practitioners -- the people you probably think of when you say, "Man, I need to find a good doctor." In fact, their numbers have been dropping in relation to the rest of the population as medical students work for higher-paying specialist jobs.

You attributed your difficulties finding a good GP to high marginal tax rates, but the data suggests that the opposite might be more likely. You might well have access to fewer GPs because low marginal tax rates made abandoning you for more lucrative specialist work much more attractive. Now, I wouldn't make that argument, because I think that incentivizing career choice is affected far less by top marginal tax rates than by other factors including barriers to entry, occupational demands, and so on.

You might consider the same.
posted by verb at 6:30 PM on February 2, 2011

pla: "Higher taxes on the rich will:
A) Decrease AMA quotas,
B) Increase AMA quotas, or
C) Have nothing at all to do with AMA quotas, school capacities, or the 1950s."

AMA quotas AND the linked page's demonstration of the competition for medical school spots work against your theory that taxes are discouraging people from becoming doctors. If becoming a well-paid doctor was so onerous because of taxes, why are people still applying to medical schools and fighting tooth and nail to get in? Years of school, several highly stressful and sleep-deprived years as interns and residents, massive loans to repay, a lot of family stress once they do make it -- and people are still fighting to get into medical school. Taxes, schmaxes.

Allow more people to become doctors and your chances of finding a good doctor in your area will be much better.
posted by maudlin at 6:39 PM on February 2, 2011

AMA quotas AND the linked page's demonstration of the competition for medical school spots work against your theory that taxes are discouraging people from becoming doctors.

In fact, to summarize my earlier post's rambling, if we're willing to pretend that the primary factor on number-of-doctors is the top marginal tax rate, current data suggests that lowering the top tax rate is what has caused the shortage of GPs that he complains about.
posted by verb at 6:43 PM on February 2, 2011

verb : A 90% top marginal rate is not "effectively not getting paid to work."

Yes, actually, it means exactly that, once you hit that bracket. You get to keep all the lower-taxed money up to that point, but any further work in that tax year might as well go to charity for all it will benefit you.


You attributed your difficulties finding a good GP to high marginal tax rates
...
maudlin : your theory that taxes are discouraging people from becoming doctors.

Seriously? Can either of you read? I did not say that taxes have caused the current shortage of doctors. I said that raising taxes won't alleviate it, simple as that.

I did say that raising taxes might worsen the current shortage. Might. But at best, higher taxes won't magically make more doctors.


I also said, and I quote myself, "or apply this to any highly-paid, highly-skilled labor". Does the IEEE have quotas on the number of engineering degrees awarded each year? Does the NABP keep the population of pharmacists down? Do all the skilled trades with no organizing body get together at their yearly secret conclave in Brussels to conspire to screw us all a little harder?
posted by pla at 6:49 PM on February 2, 2011

_{(Damn, hit "post" too soon...)}

I also also said, again quoting myself, "with the current top marginal rate of a mere 35%, a rate at which we might reasonably presume people will not stop working purely out of financial considerations".

What part of that do you read as "taxes are discouraging people from becoming doctors"?
posted by pla at 6:53 PM on February 2, 2011

I also also said, again quoting myself, "with the current top marginal rate of a mere 35%, a rate at which we might reasonably presume people will not stop working purely out of financial considerations".

Full stop! I absolutely misread your post and missed the 'not', and was so flabbergasted that I started sifting through economic and census data. You weren't arguing that we had hit that point, just that it might be hit at some point in the future. So, yes -- apologies for misreading you and reversing your meaning. I still disagree with your speculation, but I was totally mistaken about this. :-)

I did say that raising taxes might worsen the current shortage. Might. But at best, higher taxes won't magically make more doctors.

Higher taxes will not magically reduce the number of doctors, either. As I mentioned earlier, the real problem appears to be that fewer and fewer students are interested in the lower-paying GP jobs, and are gunning for the higher-paying specialist jobs. Trying to map that to tax policy -- rather than the host of other incentivising factors -- is silly. Even if it weren't silly, it would appear to point to the opposite conclusion than you're arguing: we should de-incentivise the higher paying specialist jobs.

verb: A 90% top marginal rate is not "effectively not getting paid to work."

pla: Yes, actually, it means exactly that, once you hit that bracket. You get to keep all the lower-taxed money up to that point, but any further work in that tax year might as well go to charity for all it will benefit you.

I can't help but think that you are either very, very confused about what the word "exactly" means. It is effectively not getting paid to work MORE than you were. If you think the distinction is meaningless, I'm not sure we can go much farther. It would imply that the rich are making such ridiculous gobs of money that all of the money they make beneath the top marginal rate ceiling is essentially a rounding error.
posted by verb at 7:22 PM on February 2, 2011

You're confusing top marginal rate with effective tax rate, something that's been discussed at great length in this thread.

This so many times over.
posted by five fresh fish at 8:19 PM on February 2, 2011

You get to keep all the lower-taxed money up to that point, but any further work in that tax year might as well go to charity for all it will benefit you.

You say that like it is a bad thing.

It appears you think extra dollar bill income is what motivates the best. $1 CEOs — there are some — are crazy people. Wage is where it is at. Money is all that matters.

I think you are very much mistaken.
posted by five fresh fish at 8:28 PM on February 2, 2011

The big problem with the taxation argument, especially the ones about past taxation rates and whether tax cuts make a difference are the huge confounding factors. We've basically had an income tax for the last century, and the highest rates were instituted to pay for WWI and WWII, some of the most expensive wars in history.

Of course those wars are also massive stimulus projects where the government employs pretty much everyone, so unraveling that is pretty unconvincing. Then along comes Reagan at the tail end of a terrible recession, makes some tax cuts and again pours massive amounts of money into a make-work defense project and the economy recovers (but it probably already was anyway). I guess that's why economists get paid the big bucks.
posted by electroboy at 7:33 AM on February 3, 2011