Chocolate cake and taxes
June 24, 2012 10:44 PM Subscribe
Tax avoidance isn't a left or right issue, it's a cancer eating our democracy - but why do people cheat in the first place?
"Now of course I am minimising my tax. And if anyone in this country doesn’t minimise their tax they want their heads read. Because as a government, I can tell you you’re not spending it so well that we should be donating extra."
Kerry Packer
posted by unliteral at 11:09 PM on June 24, 2012 [1 favorite]
Kerry Packer
posted by unliteral at 11:09 PM on June 24, 2012 [1 favorite]
It's a UK-centric article, but the same principles and issues with tax "avoidance" exist here in the US as well. Tax adherence is a bizarre spectrum to me: you're essentially chided to do your best to reduce your tax burden as much as possible, from all angles. Non-profit charities boast of their tax deductibility. H&R Block advances you your refund as a loan and promises to find as much of "your money" as possible. CPAs are paid large sums of money to establish complicated schemes that help you reduce your burden. Even the federal government themselves use tax deductions, credits, and other schemes to incentivize certain behavior.
So it becomes a game for everyone over a certain income threshold, who actually pays taxes. It's not endemic to millionaires or even billionaires. I earned a decent amount of money through a side project of mine on the web. It was in no way a job, in that I didn't put any appreciable time into the endeavor, advertise my services as a company, or even require the income for a significant portion of my earnings or livelihood. Nonetheless, the government would like me to report it as self-employment income (as opposed to, say, "hobby income" which doesn't really exist, though "hobby losses" does) and as such, pay 15% of self-employment tax on top of the income tax for these earnings.
I'm now paying a disproportionately insane rate of tax on some additional income that basically fell into my lap for "self-employment", even though, again, my "hobby" wasn't a going concern or advertised or made available to other customers, or any number of other things that would typically disqualify it from being considered a business.
Now, don't get me wrong. On the income itself, I fully expect it to be considered income that I need to pay income tax on. But the "self-employment" bit makes me bristle. I already have a full-time job for which I am W-2'd and pay in a significant portion of my earnings into the entitlement programs: social security, and medicare/medicaid. So when you're insisting I'm "self-employed" even though no other context of the term would back that up, it frustrates me.
Now we're presented with the labyrinthine tax code and its numerous ways for the clever citizen to reduce their burden. It frustrates me that this is a game we play, and so here comes the spectrum side of things I'm referring to. Of course, I'm not going to not report the income and hope for the best. The income had a 1099 attached to it, and that would probably come back to haunt me. However, if the claim is that I'm self-employed, then surely I can deduct some things as part of me running my "business". So I deduct my home office, since that's where I perform the work I do on the hobby. I deduct a portion of my utilities. I deduct my computer hardware, since it's an online hobby and I needed it in order for the hobby to operate. Et cetera. Now I've gotten down a good deal of my self-employment tax burden.
But where do I stop? Here we are on the spectrum again. I'm meant to identify where I feel morally sound with my contribution to the federal government. Is that with me paying an outrageous self-employment burden on income not really meant to be taxed that way? And to not avail myself of any of the opportunities available to me? Should I also not deduct my mortgage insurance, because, perhaps, the federal government needs the money more than I do? Both are strictly legal, but is one "avoidance"?
What if I go even further along the avoidance spectrum? What if I have an accountant create a shell corporation for the hobby to operate as and allow the hobby income to flow into that organization? And what if I use the organization's resources to, say, lease a car for me. Or pay for my utility bills? Now we're treading further into avoidance territory, and some might even call it "evasion" (evasion being the logical extreme of avoidance on our little spectrum here). Should I feel bad about doing this? If it's all by the letter of the law, it's easy to rationalize to a point, I suppose. But I also make use of government services and understand the government's place and the place of taxes. I also disagree with how the government uses large swaths of the money I send them, so where does it come out along this spectrum?
This is all by way of saying that to me, it's absurd to complain about tax avoidance unless you're speaking entirely to a comprehensive, hyper-simplified tax code that slams shut the absurd loopholes and makes straight and simple the serpentine logic that forces us all to consider where we land on the spectrum, forces a wince whenever we have it shoved in our face how so many people with such greater resources manage to game the system even more efficiently than we can even dream.
You might think it's easiest to just say that I should pay the most pessimistic interpretation of my tax burden, but I'll continue to insist that I shouldn't be meant to shoulder that much burden when there are clearly mechanisms in place to offer me relief.
Tax compliance should not be a moral riddle. It should be simple, even-handed, and straightforward.
But if wishes were horses, then beggars would ride. And pay the lowest possible marginal tax rate on their properly reported income.
posted by disillusioned at 11:11 PM on June 24, 2012 [43 favorites]
So it becomes a game for everyone over a certain income threshold, who actually pays taxes. It's not endemic to millionaires or even billionaires. I earned a decent amount of money through a side project of mine on the web. It was in no way a job, in that I didn't put any appreciable time into the endeavor, advertise my services as a company, or even require the income for a significant portion of my earnings or livelihood. Nonetheless, the government would like me to report it as self-employment income (as opposed to, say, "hobby income" which doesn't really exist, though "hobby losses" does) and as such, pay 15% of self-employment tax on top of the income tax for these earnings.
I'm now paying a disproportionately insane rate of tax on some additional income that basically fell into my lap for "self-employment", even though, again, my "hobby" wasn't a going concern or advertised or made available to other customers, or any number of other things that would typically disqualify it from being considered a business.
Now, don't get me wrong. On the income itself, I fully expect it to be considered income that I need to pay income tax on. But the "self-employment" bit makes me bristle. I already have a full-time job for which I am W-2'd and pay in a significant portion of my earnings into the entitlement programs: social security, and medicare/medicaid. So when you're insisting I'm "self-employed" even though no other context of the term would back that up, it frustrates me.
Now we're presented with the labyrinthine tax code and its numerous ways for the clever citizen to reduce their burden. It frustrates me that this is a game we play, and so here comes the spectrum side of things I'm referring to. Of course, I'm not going to not report the income and hope for the best. The income had a 1099 attached to it, and that would probably come back to haunt me. However, if the claim is that I'm self-employed, then surely I can deduct some things as part of me running my "business". So I deduct my home office, since that's where I perform the work I do on the hobby. I deduct a portion of my utilities. I deduct my computer hardware, since it's an online hobby and I needed it in order for the hobby to operate. Et cetera. Now I've gotten down a good deal of my self-employment tax burden.
But where do I stop? Here we are on the spectrum again. I'm meant to identify where I feel morally sound with my contribution to the federal government. Is that with me paying an outrageous self-employment burden on income not really meant to be taxed that way? And to not avail myself of any of the opportunities available to me? Should I also not deduct my mortgage insurance, because, perhaps, the federal government needs the money more than I do? Both are strictly legal, but is one "avoidance"?
What if I go even further along the avoidance spectrum? What if I have an accountant create a shell corporation for the hobby to operate as and allow the hobby income to flow into that organization? And what if I use the organization's resources to, say, lease a car for me. Or pay for my utility bills? Now we're treading further into avoidance territory, and some might even call it "evasion" (evasion being the logical extreme of avoidance on our little spectrum here). Should I feel bad about doing this? If it's all by the letter of the law, it's easy to rationalize to a point, I suppose. But I also make use of government services and understand the government's place and the place of taxes. I also disagree with how the government uses large swaths of the money I send them, so where does it come out along this spectrum?
This is all by way of saying that to me, it's absurd to complain about tax avoidance unless you're speaking entirely to a comprehensive, hyper-simplified tax code that slams shut the absurd loopholes and makes straight and simple the serpentine logic that forces us all to consider where we land on the spectrum, forces a wince whenever we have it shoved in our face how so many people with such greater resources manage to game the system even more efficiently than we can even dream.
You might think it's easiest to just say that I should pay the most pessimistic interpretation of my tax burden, but I'll continue to insist that I shouldn't be meant to shoulder that much burden when there are clearly mechanisms in place to offer me relief.
Tax compliance should not be a moral riddle. It should be simple, even-handed, and straightforward.
But if wishes were horses, then beggars would ride. And pay the lowest possible marginal tax rate on their properly reported income.
posted by disillusioned at 11:11 PM on June 24, 2012 [43 favorites]
Quite: The complete Tolley’s Tax Guide – the handbook of tax legislation – is now 11,520 pages long, more than double the 4,998 pages filled by the 1997 edition.
When a law becomes so large it is no longer comprehensible by any single human being, where does the principle of ignorance being no excuse go?
An acquaintance of my dad's, who is Swiss but spends a lot of time working in New York, wanted to buy an apartment there. His accountant and company lawyers informed him that in order to do so, he had to create a shell company in the Cayman islands, as this was the only safe and clean way to own property...
posted by Zarkonnen at 11:17 PM on June 24, 2012 [11 favorites]
When a law becomes so large it is no longer comprehensible by any single human being, where does the principle of ignorance being no excuse go?
An acquaintance of my dad's, who is Swiss but spends a lot of time working in New York, wanted to buy an apartment there. His accountant and company lawyers informed him that in order to do so, he had to create a shell company in the Cayman islands, as this was the only safe and clean way to own property...
posted by Zarkonnen at 11:17 PM on June 24, 2012 [11 favorites]
Wired: You write that people find it easier to rationalize stealing when they’re taking things rather than actual cash. You did an experiment where you left Coca-Colas in a dorm refrigerator along with a pile of dollar bills. People took the Cokes but left the cash. What’s going on there?Too late.
Ariely: This, I think, is one of the most worrisome experiments we’ve ever conducted, and it’s again about rationalization. There’s a story about a kid who gets in trouble at school for stealing a pencil from another kid, and the father comes home and says, ‘Johnny, that’s terrible, you never steal, and besides, if you need a pencil, let me know and I’ll bring you a box from the office.’
Why is that slightly amusing? Because we recognize that if we were taking the pencil from the office we would not have to confront that we are being immoral, in the way that we would if we took $10 from the petty cash box (even if we used that cash to buy pencils).
Now the reason this worries me is we’re moving to a cashless society; we’re soon going to have all kinds of electronic wallets. We have all kinds of esoteric financial instruments. We have lots of things that are multiple steps removed from money. We are moving to a situation which allows people to rationalize dishonesty to a much, much higher degree. And because of that whenever we have financial instruments that are further way from money, we just need to be more careful.
posted by vidur at 11:30 PM on June 24, 2012 [12 favorites]
Ariely has done lovely experiments, thanks.
posted by jeffburdges at 11:53 PM on June 24, 2012 [3 favorites]
posted by jeffburdges at 11:53 PM on June 24, 2012 [3 favorites]
So given the manifest unfairness of the tax system as documented in the first article ... is it wrong to cheat on your taxes if you're poor?
(Also: How wrong is it to lie about how many problems you solved in a psych experiment, compared to, say, implicitly lying to your subjects when you ask them how many they got right, the answer to which you actually already know? Or telling them some of the sunglasses were fake, but in truth all the eyewear was authentic?)
posted by chortly at 12:06 AM on June 25, 2012 [3 favorites]
(Also: How wrong is it to lie about how many problems you solved in a psych experiment, compared to, say, implicitly lying to your subjects when you ask them how many they got right, the answer to which you actually already know? Or telling them some of the sunglasses were fake, but in truth all the eyewear was authentic?)
posted by chortly at 12:06 AM on June 25, 2012 [3 favorites]
Wired: You write that people find it easier to rationalize stealing when they’re taking things rather than actual cash. You did an experiment where you left Coca-Colas in a dorm refrigerator along with a pile of dollar bills. People took the Cokes but left the cash. What’s going on there?Okay, I totally agree that there is too much dishonesty in the world, and that 'priming' people to be honest might be effective.
However, I don't really think this experiment shows what he's claiming at all. Instead I think he's just illustrating the different cultural expectations between soft drinks and money. Cash is hardly ever just given out to people. You would never go to a party and get free dollar bills. There would never be an expectation that cash in a common room was meant to be taken.
On the other hand, people give out soft drinks all the time. He seems to make this weird extension from "cash" and "pop" to "cash" and "not cash". But that's totally ridiculous. Why is that the valid partition rather then "soft drinks" and "not soft drinks". I mean, what happens if you put a little note on the pop asking people not to drink it? My guess is that people wouldn't, but without the note they might not realize that they weren't for common consumption.
I think if you were to test lots of different things: cash, cookies, pop, other cheap items as well as take steps to alter expectations you would probably get data that was all over the place, with perhaps some variables that had a clear effect and some that did not.
posted by delmoi at 12:13 AM on June 25, 2012 [19 favorites]
(Also: How wrong is it to lie about how many problems you solved in a psych experiment, compared to, say, implicitly lying to your subjects when you ask them how many they got right, the answer to which you actually already know? Or telling them some of the sunglasses were fake, but in truth all the eyewear was authentic?)
Not wrong at all. Or, perhaps terribly wrong. Depends on your individual moral framework, really. He talks about a lie that was the "right" thing to do in a specific situation. So, I guess if you are conducting a psych experiment, these kind of lies are quite okay in my books. YMMV.
posted by vidur at 12:15 AM on June 25, 2012
Not wrong at all. Or, perhaps terribly wrong. Depends on your individual moral framework, really. He talks about a lie that was the "right" thing to do in a specific situation. So, I guess if you are conducting a psych experiment, these kind of lies are quite okay in my books. YMMV.
posted by vidur at 12:15 AM on June 25, 2012
Also tax avoidance is really a non issue. in theory those tax breaks are put in to incentivize something or other. Part of the problem is that the republicans have been freaking out about government "spending" for years and so rather then spend money to do something, the government will instead do targeted tax cuts that do the same thing.
So the number of line items in the tax code may be going up but it's displacing "spending" in other areas.
There is a huge problem with people lobbying for special tax exemptions for themselves - in fact several companies now spend more on lobbying then they do on taxes (yes, really).
But that is just another expression of the same underlying problem with our government. If it wasn't tax breaks it would be some other nonsense they would be asking for.
posted by delmoi at 12:18 AM on June 25, 2012 [2 favorites]
So the number of line items in the tax code may be going up but it's displacing "spending" in other areas.
There is a huge problem with people lobbying for special tax exemptions for themselves - in fact several companies now spend more on lobbying then they do on taxes (yes, really).
But that is just another expression of the same underlying problem with our government. If it wasn't tax breaks it would be some other nonsense they would be asking for.
posted by delmoi at 12:18 AM on June 25, 2012 [2 favorites]
I think if you were to test lots of different things: cash, cookies, pop, other cheap items as well as take steps to alter expectations you would probably get data that was all over the place, with perhaps some variables that had a clear effect and some that did not.
I think there was an experiment with coffee, where payment was optional. People paid more often when there was a poster/sketch of eyes above the coffee machines. I think the conclusion was that we are more honest just by the idea of being reminded that we might be watched. Or something like that. I don't have the link handy, and my description of the experiment may be inaccurate.
posted by vidur at 12:18 AM on June 25, 2012 [1 favorite]
I think there was an experiment with coffee, where payment was optional. People paid more often when there was a poster/sketch of eyes above the coffee machines. I think the conclusion was that we are more honest just by the idea of being reminded that we might be watched. Or something like that. I don't have the link handy, and my description of the experiment may be inaccurate.
posted by vidur at 12:18 AM on June 25, 2012 [1 favorite]
I don't like it when people use cancer as a metaphor. Here's a link to The American Cancer Society. Here's another link to the World Health Organization Cancer Day
It's not "a cancer on Society". Please don't do that. It's not Society sitting in hospital room, getting up for chemo, trying to survive a killer. Please don't do that anymore, people. Please? Cancer is not funny.
posted by twoleftfeet at 12:29 AM on June 25, 2012 [2 favorites]
It's not "a cancer on Society". Please don't do that. It's not Society sitting in hospital room, getting up for chemo, trying to survive a killer. Please don't do that anymore, people. Please? Cancer is not funny.
posted by twoleftfeet at 12:29 AM on June 25, 2012 [2 favorites]
I didn't take the metaphor as an attempt at humor, although I will admit that there are times the wording seems wildly inappropriate -- but the idea here of a silent menace sapping strength seems rather apposite. Since the metaphor was used by Abraham Lincoln, I would suggest that ship has sailed.
posted by dhartung at 12:57 AM on June 25, 2012 [10 favorites]
posted by dhartung at 12:57 AM on June 25, 2012 [10 favorites]
Cannibalism is kind of hilarious, or at least less likely to emotionally impact the average reader. We could put it as, the behavior of individuals pursuing tax avoidance at any cost cannibalizes the rest of democracy and society.
posted by XMLicious at 12:59 AM on June 25, 2012 [2 favorites]
posted by XMLicious at 12:59 AM on June 25, 2012 [2 favorites]
Sometimes words have more than one definition.
posted by The Hamms Bear at 1:01 AM on June 25, 2012 [3 favorites]
posted by The Hamms Bear at 1:01 AM on June 25, 2012 [3 favorites]
Cannibalism is kind of hilarious
Cannibalism is the most hilarious thing ever and anyone who thinks otherwise should just bite their tongue.
posted by twoleftfeet at 1:08 AM on June 25, 2012 [11 favorites]
Cannibalism is the most hilarious thing ever and anyone who thinks otherwise should just bite their tongue.
posted by twoleftfeet at 1:08 AM on June 25, 2012 [11 favorites]
Sometimes words have more than one definition.
Tax avoidance is like a giant crab dismembering society with its mighty claws.
posted by Zarkonnen at 1:10 AM on June 25, 2012 [7 favorites]
Tax avoidance is like a giant crab dismembering society with its mighty claws.
posted by Zarkonnen at 1:10 AM on June 25, 2012 [7 favorites]
It's not Society sitting in hospital room, getting up for chemo, trying to survive a killer.
Yes, it is. It also is Society not being able to pay for things that could save the lives of cancer patients, among others, because some rich asshole needs a 90 ft yacht, rather than the more affordable 60 ft model. It is an absolutely appropriate metaphor, even if, yes, it isn't funny. It isn't meant to be.
posted by Skeptic at 1:18 AM on June 25, 2012 [25 favorites]
Yes, it is. It also is Society not being able to pay for things that could save the lives of cancer patients, among others, because some rich asshole needs a 90 ft yacht, rather than the more affordable 60 ft model. It is an absolutely appropriate metaphor, even if, yes, it isn't funny. It isn't meant to be.
posted by Skeptic at 1:18 AM on June 25, 2012 [25 favorites]
I have this mad idea that it'd be relatively easy and a little bit profitable to set up some kind of business that investigated, copied and then sold Tax Avoidance schemes as used by the rich to people with more middle range incomes.
I've a feeling that schemes like K2 would get closed down a lot quicker if 10m middle class people suddenly started slashing their tax bills with it.
posted by zoo at 1:20 AM on June 25, 2012 [3 favorites]
I've a feeling that schemes like K2 would get closed down a lot quicker if 10m middle class people suddenly started slashing their tax bills with it.
posted by zoo at 1:20 AM on June 25, 2012 [3 favorites]
However, it's clear that, despite the frantic attempts of assorted people to claim otherwise, there is no moral equivalence between cutting your bill by a few hundred pounds and offshoring your entire income to cut your tax by 99 per cent while chortling about it into a cigar. One is prudence; the other smacks of outrageous dishonesty, no matter how "legal and completely above board" it may technically be.
No moral equivalence? What happened to honor among thieves?
posted by three blind mice at 1:35 AM on June 25, 2012
No moral equivalence? What happened to honor among thieves?
posted by three blind mice at 1:35 AM on June 25, 2012
Political intransigence towards these schemes would be greatly reduced by a wholesale change in party financing, better pay for MPs and a far more severe restriction on MPs taking directorships during or just after their tenure.
posted by MuffinMan at 2:22 AM on June 25, 2012
posted by MuffinMan at 2:22 AM on June 25, 2012
I work freelance, and I don't really make that much money. I have a strong suspicion that these moves are specifically designed to make life more complicated, distressing and expensive for people like me rather than the people who are making huge amounts and paying very little in tax - after all, it's not as if Vodaphone were ever asked to stump up those billions in tax that they just didn't feel like paying. They are simply not going to antagonise their paymasters by cutting into their profits.
I suspect what will happen is that they'll outsource the currently under-resourced tax inspection department to the usual suspects on a commission basis, who will then just systematically go round harrassing all the individuals they can find in hopes of wringing a few extra pence out of them. The self-employed and small companies won't have the wherewithall to fight back, so it will be more cost effective to pick on us. Essentially the situation we've had with car clamping firms.
That's just how it seems to me off the top of my head. Fuckers.
On the other hand, the fact that there's now a clear class solidarity between a dithering bourgeois like me and people living on benefits (and, as a freelancer, it seems that the benefits system simply doesn't apply to me - friends in a similar position who attempted in times of difficulty to get help by that route reported back that there's simply no point) points to a clear opportunity for more revolutionary opportunists. Though I've never met a revolutionary organised enough to take advantage of such an opportunity.
posted by Grangousier at 2:30 AM on June 25, 2012 [3 favorites]
I suspect what will happen is that they'll outsource the currently under-resourced tax inspection department to the usual suspects on a commission basis, who will then just systematically go round harrassing all the individuals they can find in hopes of wringing a few extra pence out of them. The self-employed and small companies won't have the wherewithall to fight back, so it will be more cost effective to pick on us. Essentially the situation we've had with car clamping firms.
That's just how it seems to me off the top of my head. Fuckers.
On the other hand, the fact that there's now a clear class solidarity between a dithering bourgeois like me and people living on benefits (and, as a freelancer, it seems that the benefits system simply doesn't apply to me - friends in a similar position who attempted in times of difficulty to get help by that route reported back that there's simply no point) points to a clear opportunity for more revolutionary opportunists. Though I've never met a revolutionary organised enough to take advantage of such an opportunity.
posted by Grangousier at 2:30 AM on June 25, 2012 [3 favorites]
>I don't like it when people use cancer as a metaphor.
OK, but not to be too insensitive, most people are fine with this metaphor. I can't see it going away any time soon.
Anyway, I'm a bit flabbergasted at the tax policies of the UK and Ireland and the Netherlands. I'm not quite sure how civil society ever let it get this bad.
posted by wilful at 2:32 AM on June 25, 2012
OK, but not to be too insensitive, most people are fine with this metaphor. I can't see it going away any time soon.
Anyway, I'm a bit flabbergasted at the tax policies of the UK and Ireland and the Netherlands. I'm not quite sure how civil society ever let it get this bad.
posted by wilful at 2:32 AM on June 25, 2012
What happened to honor among thieves?
The same thing that happened to pearls among swine.
In case anyone was actually looking for an answer.
posted by wobh at 2:35 AM on June 25, 2012
The same thing that happened to pearls among swine.
In case anyone was actually looking for an answer.
posted by wobh at 2:35 AM on June 25, 2012
Tax avoidance isn't a left or right issue
Not in the UK, maybe. But in the USA there have been several Republican congressmen in the last decade who have gone on record praising tax-evading megacorporations for their tax evasion. Cheating the Internal Revenue Service is doubly good, you see, because it keeps money in the "market" where it can benefit entrepreneurial people, and it starves the evil thieving tyrannical blood-sucking beast called "the government." I guess y'all don't yet have people elected to run an organization who publicly hate that organization so much they'd like it burnt to the ground.
posted by Harvey Kilobit at 2:47 AM on June 25, 2012 [9 favorites]
Not in the UK, maybe. But in the USA there have been several Republican congressmen in the last decade who have gone on record praising tax-evading megacorporations for their tax evasion. Cheating the Internal Revenue Service is doubly good, you see, because it keeps money in the "market" where it can benefit entrepreneurial people, and it starves the evil thieving tyrannical blood-sucking beast called "the government." I guess y'all don't yet have people elected to run an organization who publicly hate that organization so much they'd like it burnt to the ground.
posted by Harvey Kilobit at 2:47 AM on June 25, 2012 [9 favorites]
The only reason that Tax Avoidance isn't a left or right issue is because we no longer have a left wing party.
posted by zoo at 3:11 AM on June 25, 2012 [7 favorites]
posted by zoo at 3:11 AM on June 25, 2012 [7 favorites]
The psychology of tax evasion isn't the same thing as the psychology petty theft vs stealing money. It's not even like the psychology if cheating on a test.
posted by JPD at 3:42 AM on June 25, 2012
posted by JPD at 3:42 AM on June 25, 2012
It's only bad when the little guys follow the rules the big guys made for themselves.
posted by seanmpuckett at 4:22 AM on June 25, 2012 [2 favorites]
posted by seanmpuckett at 4:22 AM on June 25, 2012 [2 favorites]
The tax code is central part of the "social contract." The citizens two biggest duties to society are obey the law and pay your taxes.
But the tax code also reveals where the soceity's priorities are. In America, the tax code is written by the powerful, and it is intended to protect the powerful. Income from stock dividends as taxed at 15% as capital gain, and income from flipping burgers at McDonalds is taxed at 30% as ordinary income. Just to cite one example.
The complexity of the tax code benefits those with lawyers and accountants who do their taxes. A complex tax code is not helping the average Joe on the street.
It is just another example of corporate take-over in America. And what is happening in America is coming soon to Europe.
posted by Flood at 4:36 AM on June 25, 2012 [1 favorite]
But the tax code also reveals where the soceity's priorities are. In America, the tax code is written by the powerful, and it is intended to protect the powerful. Income from stock dividends as taxed at 15% as capital gain, and income from flipping burgers at McDonalds is taxed at 30% as ordinary income. Just to cite one example.
The complexity of the tax code benefits those with lawyers and accountants who do their taxes. A complex tax code is not helping the average Joe on the street.
It is just another example of corporate take-over in America. And what is happening in America is coming soon to Europe.
posted by Flood at 4:36 AM on June 25, 2012 [1 favorite]
Flood: " In America, the tax code is written by the powerful, and it is intended to protect the powerful. Income from stock dividends as taxed at 15% as capital gain, and income from flipping burgers at McDonalds is taxed at 30% as ordinary income. Just to cite one example."
Or, investing in companies so they can grow will often times lose money. On those times your investment grows or you receive dividends you will be taxed at 15% as a means to encourage such investment and a acknowledgment of the risks involved. Millions of pensioners count on that growth and income. Meanwhile the income portion of multi-millions of dollars that the the CEO of McDonalds earns will be taxed at 35% as ordinary income. And the salary of that McDonalds employee? More like 15% instead of 30% isn't it?
posted by 2manyusernames at 4:52 AM on June 25, 2012 [1 favorite]
Or, investing in companies so they can grow will often times lose money. On those times your investment grows or you receive dividends you will be taxed at 15% as a means to encourage such investment and a acknowledgment of the risks involved. Millions of pensioners count on that growth and income. Meanwhile the income portion of multi-millions of dollars that the the CEO of McDonalds earns will be taxed at 35% as ordinary income. And the salary of that McDonalds employee? More like 15% instead of 30% isn't it?
posted by 2manyusernames at 4:52 AM on June 25, 2012 [1 favorite]
Now, don't get me wrong. On the income itself, I fully expect it to be considered income that I need to pay income tax on. But the "self-employment" bit makes me bristle. I already have a full-time job for which I am W-2'd and pay in a significant portion of my earnings into the entitlement programs: social security, and medicare/medicaid. So when you're insisting I'm "self-employed" even though no other context of the term would back that up, it frustrates me.If you had gotten that "extra" income as part of your regular full-time job, more tax would have been paid into social security and such from your paycheck than actually was*.
Why should less tax be paid on your income than would have been if you gained it all through your regular job? Because you bristle at the idea that the term "self-employed" is applied to you? If so, that doesn't seem like a particularly compelling reason to me.
I'm now paying a disproportionately insane rate of tax on some additional income that basically fell into my lap for "self-employment"It's not "disproportionately insane". It's essentially the same as you would have paid had you gotten this money from your regular job. That 15% is what would have been paid into social security and such, on this money, but was not.
You seem to be upset about what you perceive as an extra tax on you, but in fact you're actually upset (apparently unknowingly) about the fact that you're not getting a discount.
And incidentally, I don't really get why "self-employed" is such an obviously non-applicable term. You worked for this money, and did so for yourself as opposed to for some corporation who paid the money to you in exchange for that work. That's what "self-employed" means. They're not saying your self-employed in general; they're saying that this particular money came as a result of self-employment. And it did.
*: Unless you'd already made enough money that you hit the limits (which are absurdly regressive and should be removed), but in that case I don't think you would have had to pay the supposed "extra" anyway, would you have?
posted by Flunkie at 5:19 AM on June 25, 2012 [2 favorites]
Ariely says in the second link: By the way, there’s some really disturbing results showing that the best financial investment in the U.S. is lobbying.
I think he's referring to this paper: Alexander, Raquel Meyer, Mazza, Stephen W. and Scholz, Susan, Measuring Rates of Return for Lobbying Expenditures: An Empirical Case Study of Tax Breaks for Multinational Corporations (April 8, 2009). Journal of Law and Politics, Vol. 25, No. 401, 2009.
posted by stebulus at 5:35 AM on June 25, 2012 [3 favorites]
I think he's referring to this paper: Alexander, Raquel Meyer, Mazza, Stephen W. and Scholz, Susan, Measuring Rates of Return for Lobbying Expenditures: An Empirical Case Study of Tax Breaks for Multinational Corporations (April 8, 2009). Journal of Law and Politics, Vol. 25, No. 401, 2009.
posted by stebulus at 5:35 AM on June 25, 2012 [3 favorites]
MetaFilter: We have an impulsive nature that is basically saying, chocolate cake.
posted by Splunge at 5:47 AM on June 25, 2012
posted by Splunge at 5:47 AM on June 25, 2012
Sometimes words have more than one definition.
Tax avoidance is like a giant crab dismembering society with its mighty claws.
Tax avoidance was born between June 22nd and July 22nd.
posted by ricochet biscuit at 5:47 AM on June 25, 2012 [1 favorite]
Tax avoidance is like a giant crab dismembering society with its mighty claws.
Tax avoidance was born between June 22nd and July 22nd.
posted by ricochet biscuit at 5:47 AM on June 25, 2012 [1 favorite]
I have this mad idea that it'd be relatively easy and a little bit profitable to set up some kind of business that investigated, copied and then sold Tax Avoidance schemes as used by the rich to people with more middle range incomes.
Plenty of lawyers do this. Your main hurdles are education and being able to do the work profitably.
posted by michaelh at 5:52 AM on June 25, 2012
Plenty of lawyers do this. Your main hurdles are education and being able to do the work profitably.
posted by michaelh at 5:52 AM on June 25, 2012
Or, investing in companies so they can grow will often times lose money. On those times your investment grows or you receive dividends you will be taxed at 15% as a means to encourage such investment and a acknowledgment of the risks involved.
Yes, but if you invest like Bain Capital, the risks aren't even to your money; they're to other people's money. And somehow you get to reap the rewards for a risk you made other people take.
posted by one more dead town's last parade at 6:01 AM on June 25, 2012 [1 favorite]
Yes, but if you invest like Bain Capital, the risks aren't even to your money; they're to other people's money. And somehow you get to reap the rewards for a risk you made other people take.
posted by one more dead town's last parade at 6:01 AM on June 25, 2012 [1 favorite]
Or, investing in companies so they can grow will often times lose money. On those times your investment grows or you receive dividends you will be taxed at 15% as a means to encourage such investment and a acknowledgment of the risks involved.
But working a regular job is risky, too. Plenty of people move cross-country for a job that never materializes, or one that is eliminated after just a few weeks. Or they don't get the hours they were promised. Or their benefits and wages are cut year after year, either in absolute terms or just because of inflation.
If you look at the stock market since 1950 and you look at lower and middle class wages (adjusted for inflation), the former has grown more and more steadily than the latter, which have stagnated or even fallen slightly. Now who's taking the risk again: the capitalist investing in the company or the workers?
posted by jedicus at 6:06 AM on June 25, 2012 [7 favorites]
But working a regular job is risky, too. Plenty of people move cross-country for a job that never materializes, or one that is eliminated after just a few weeks. Or they don't get the hours they were promised. Or their benefits and wages are cut year after year, either in absolute terms or just because of inflation.
If you look at the stock market since 1950 and you look at lower and middle class wages (adjusted for inflation), the former has grown more and more steadily than the latter, which have stagnated or even fallen slightly. Now who's taking the risk again: the capitalist investing in the company or the workers?
posted by jedicus at 6:06 AM on June 25, 2012 [7 favorites]
Tax avoidance was born between June 22nd and July 22nd.
Today's celebrity birthdays for Monday, June 25:
Ricky Gervais - 51
Sonia Sotomayor - 58
Carly Simon - 67
Phyllis George - 63
Tax Avoidance - 378
Jimmie Walker - 63
posted by Strange Interlude at 6:10 AM on June 25, 2012 [10 favorites]
Today's celebrity birthdays for Monday, June 25:
Ricky Gervais - 51
Sonia Sotomayor - 58
Carly Simon - 67
Phyllis George - 63
Tax Avoidance - 378
Jimmie Walker - 63
posted by Strange Interlude at 6:10 AM on June 25, 2012 [10 favorites]
Zarkonnen: "Tax avoidance isn't a left or right issue"
When the right *literally* refers to all government spending as "waste," treats taxes as confiscatory, and spreads the illusion that all tax money really is wasted, I really don't think that you can make this argument. The right has made it a partisan issue. They openly support tax evasion for the 1%, and want to drive their point home by making taxes as painful as possible for the rest of us.
When the right *literally* refers to all government spending as "waste," treats taxes as confiscatory, and spreads the illusion that all tax money really is wasted, I really don't think that you can make this argument. The right has made it a partisan issue. They openly support tax evasion for the 1%, and want to drive their point home by making taxes as painful as possible for the rest of us.
“We can hardly sit in judgment of your losing two billion. We lose twice that every day here in Washington.” —Senator Jim DeMint (R,SC), consoling JP Morgan Chase CEO Jamie Dimon on his company's loss of $2 billion during a hearing investigating the matter.posted by schmod at 6:35 AM on June 25, 2012 [5 favorites]
In the Ariely interview he touched briefly on how longer prison sentences don't deter crime at all. I seem to recall reading years ago about how the fear of being caught was more of a deterrent than the punishment. Has anyone heard of something like this? It seems quite appropriate to the topic.
posted by dgran at 6:40 AM on June 25, 2012
posted by dgran at 6:40 AM on June 25, 2012
@schmod: Uh, it's not me who says "Tax avoidance isn't a left or right issue", it's Willard Foxton. For the record, I'd say that of course it is a left/right issue!
Given that you're not meant to editorialise in FPP descriptions, I didn't - but don't read that as me agreeing 100% with what I post! I thought it was a thought-provoking pair of articles, is all.
posted by Zarkonnen at 6:58 AM on June 25, 2012
Given that you're not meant to editorialise in FPP descriptions, I didn't - but don't read that as me agreeing 100% with what I post! I thought it was a thought-provoking pair of articles, is all.
posted by Zarkonnen at 6:58 AM on June 25, 2012
Sorry. Wasn't meaning to quote you directly per se. Just what you wrote in the FPP.
posted by schmod at 7:14 AM on June 25, 2012
posted by schmod at 7:14 AM on June 25, 2012
When the right *literally* refers to all government spending as "waste," treats taxes as confiscatory, and spreads the illusion that all tax money really is wasted,
Well, they're not doing a very good job of spreading the illusion if these respondents think only 56% is wasted. Moreover, it depends on how you define waste (which question the poll does not address, leaving it up to the respondent); Some consider Pentagon money wasted, some think Welfare wasted, some think bloated bureaucracy wasted. As to exact amounts, it's necessarily a wild guess for the man in the street.
Same poll (pdf), BTW, says 50% of American's support a flat tax, which suggests a wide yearning for simplicity if nothing else. Not enough to get Steve Forbes elected, of course, but then, tax policy never seems to get people excited, however much they decry the tax system.
posted by IndigoJones at 7:17 AM on June 25, 2012
Well, they're not doing a very good job of spreading the illusion if these respondents think only 56% is wasted. Moreover, it depends on how you define waste (which question the poll does not address, leaving it up to the respondent); Some consider Pentagon money wasted, some think Welfare wasted, some think bloated bureaucracy wasted. As to exact amounts, it's necessarily a wild guess for the man in the street.
Same poll (pdf), BTW, says 50% of American's support a flat tax, which suggests a wide yearning for simplicity if nothing else. Not enough to get Steve Forbes elected, of course, but then, tax policy never seems to get people excited, however much they decry the tax system.
posted by IndigoJones at 7:17 AM on June 25, 2012
dhartung: Since the metaphor was used by Abraham Lincoln, I would suggest that ship has sailed.
John Wilkes Booth didnt like cancer as metaphor either.
posted by dr_dank at 7:18 AM on June 25, 2012 [1 favorite]
John Wilkes Booth didnt like cancer as metaphor either.
posted by dr_dank at 7:18 AM on June 25, 2012 [1 favorite]
Why do people cheat on taxes? Looking at the article, it seems to be two types, really. There's the people who just outright put down bad numbers and such, and there's the people who attempt to game every deduction they can.
1) For those looking to game the deductions...well, it is enormously complicated enough that it does become like a game. "Of my expenses over the last year, what could count as tax-deductible?" The game is to have the lowest possible tax payment, because you've figured out each little intricacy of rules you can use to either pay less money, or have a larger refund check, depending on your withholding.
2) People have lost faith in the government to spend money morally or well. The left doesn't like paying for billions of dollars of a war they don't believe in and are morally opposed to. The right doesn't like paying for billions of dollars of "entitlements" that they don't believe in and are morally opposed to. And both hate the bloated, wasteful nature of government spending.
3) Taxes are quite simply too damn high, and cover far too much of life. We also engage in double taxation, which many people find immoral. You're taxed on your income. Then, if you buy stocks with it, you're taxed on those stocks. If you improve your house with it, the assessor assesses your house as more valuable and you pay higher property tax for the improvements. And when you die, if you don't take care, up to half of your net worth is taken away from your children and given to the government.
posted by corb at 7:36 AM on June 25, 2012 [1 favorite]
1) For those looking to game the deductions...well, it is enormously complicated enough that it does become like a game. "Of my expenses over the last year, what could count as tax-deductible?" The game is to have the lowest possible tax payment, because you've figured out each little intricacy of rules you can use to either pay less money, or have a larger refund check, depending on your withholding.
2) People have lost faith in the government to spend money morally or well. The left doesn't like paying for billions of dollars of a war they don't believe in and are morally opposed to. The right doesn't like paying for billions of dollars of "entitlements" that they don't believe in and are morally opposed to. And both hate the bloated, wasteful nature of government spending.
3) Taxes are quite simply too damn high, and cover far too much of life. We also engage in double taxation, which many people find immoral. You're taxed on your income. Then, if you buy stocks with it, you're taxed on those stocks. If you improve your house with it, the assessor assesses your house as more valuable and you pay higher property tax for the improvements. And when you die, if you don't take care, up to half of your net worth is taken away from your children and given to the government.
posted by corb at 7:36 AM on June 25, 2012 [1 favorite]
Tax avoidance isn't a left or right issue, it's a cancer eating our democracy
That really presumes that both left and right want a democracy.
posted by tyllwin at 7:48 AM on June 25, 2012 [1 favorite]
That really presumes that both left and right want a democracy.
posted by tyllwin at 7:48 AM on June 25, 2012 [1 favorite]
corb: "And both hate the bloated, wasteful nature of government spending."
....and more proof that everyone has bought into this mindset.
Although I won't deny that the government have some freaking weird purchasing practices (some of which do seem to be wasteful), I've never been thoroughly convinced that they're worse stewards of their bank accounts than private industry, or even individuals are.
posted by schmod at 7:53 AM on June 25, 2012 [2 favorites]
....and more proof that everyone has bought into this mindset.
Although I won't deny that the government have some freaking weird purchasing practices (some of which do seem to be wasteful), I've never been thoroughly convinced that they're worse stewards of their bank accounts than private industry, or even individuals are.
posted by schmod at 7:53 AM on June 25, 2012 [2 favorites]
We also engage in double taxation, which many people find immoral. You're taxed on your income. Then, if you buy stocks with it, you're taxed on those stocks.
And the company who takes your stock money uses it to buy office supplies, and pays sales taxes. So, it's triple taxation.
Then the company that got the money for the office supplies paid their employees, and so it's quadruple taxation. And they buy stocks and now it's quintuple taxation...
And now, I have shown through the power of INDUCTIVE REASONING that taxes apply to transactions and not money, and so any talk of "double taxation" is idiotic moronitude that any random 7 year old should recognize as complete bollocks.
posted by Pogo_Fuzzybutt at 8:10 AM on June 25, 2012 [19 favorites]
And the company who takes your stock money uses it to buy office supplies, and pays sales taxes. So, it's triple taxation.
Then the company that got the money for the office supplies paid their employees, and so it's quadruple taxation. And they buy stocks and now it's quintuple taxation...
And now, I have shown through the power of INDUCTIVE REASONING that taxes apply to transactions and not money, and so any talk of "double taxation" is idiotic moronitude that any random 7 year old should recognize as complete bollocks.
posted by Pogo_Fuzzybutt at 8:10 AM on June 25, 2012 [19 favorites]
And when you die, if you don't take care, up to half of your net worth is taken away from your children and given to the government.
This is just plain wrong. The highest estate tax bracket has only a 35 percent rate, and the first $5 million is exempt from any tax at all.
posted by ultraviolet catastrophe at 8:40 AM on June 25, 2012 [7 favorites]
This is just plain wrong. The highest estate tax bracket has only a 35 percent rate, and the first $5 million is exempt from any tax at all.
posted by ultraviolet catastrophe at 8:40 AM on June 25, 2012 [7 favorites]
disillusioned wrote: This is all by way of saying that to me, it's absurd to complain about tax avoidance unless you're speaking entirely to a comprehensive, hyper-simplified tax code that slams shut the absurd loopholes and makes straight and simple the serpentine logic that forces us all to consider where we land on the spectrum, forces a wince whenever we have it shoved in our face how so many people with such greater resources manage to game the system even more efficiently than we can even dream.
You get lots of favorites, but ignore that most tax "avoidance" is actually tax evasion with a million dollar opinion letter from a sleazy attorney claiming that it's OK. In the US, there is no penalty for this. That opinion letter means that if the IRS catches you, which they probably won't because they very rarely audit the rich, only recipients of EITC, you don't have to pay penalties and interest, just the tax. There is no disincentive to attempting to cheat.
Take our former President Bush as an example. He misclassified nearly $100 million in income, almost his entire fortune at the time, as a capital gain rather than the earned income it was. He was not caught within the three year limit, so he got away with underpaying at least $16 million. Funny how nobody talks about that, but there was a big uproar when Geithner failed to pay nanny tax or whatever it was he did.
posted by wierdo at 8:46 AM on June 25, 2012 [4 favorites]
You get lots of favorites, but ignore that most tax "avoidance" is actually tax evasion with a million dollar opinion letter from a sleazy attorney claiming that it's OK. In the US, there is no penalty for this. That opinion letter means that if the IRS catches you, which they probably won't because they very rarely audit the rich, only recipients of EITC, you don't have to pay penalties and interest, just the tax. There is no disincentive to attempting to cheat.
Take our former President Bush as an example. He misclassified nearly $100 million in income, almost his entire fortune at the time, as a capital gain rather than the earned income it was. He was not caught within the three year limit, so he got away with underpaying at least $16 million. Funny how nobody talks about that, but there was a big uproar when Geithner failed to pay nanny tax or whatever it was he did.
posted by wierdo at 8:46 AM on June 25, 2012 [4 favorites]
Although I won't deny that the government have some freaking weird purchasing practices (some of which do seem to be wasteful), I've never been thoroughly convinced that they're worse stewards of their bank accounts than private industry, or even individuals are..
Seem to be wasteful? Several trillion dollars to kill a bunch of Afghans and Iraqis?
The US government's possible excellence as financial stewards of our tax dollars ("their" bank accounts, indeed) pales in comparison to the financial and moral failings on the debacle alone.
posted by IndigoJones at 8:53 AM on June 25, 2012 [1 favorite]
Seem to be wasteful? Several trillion dollars to kill a bunch of Afghans and Iraqis?
The US government's possible excellence as financial stewards of our tax dollars ("their" bank accounts, indeed) pales in comparison to the financial and moral failings on the debacle alone.
posted by IndigoJones at 8:53 AM on June 25, 2012 [1 favorite]
The number of misconceptions about the US tax code displayed in this thread are an argument in themselves for a simpler tax code.
They also illustrate why tax evasion is such a problem - it's always some other guy doing something worse, amirite?
posted by stowaway at 8:58 AM on June 25, 2012
They also illustrate why tax evasion is such a problem - it's always some other guy doing something worse, amirite?
posted by stowaway at 8:58 AM on June 25, 2012
I've never been thoroughly convinced that they're worse stewards of their bank accounts than private industry, or even individuals are.
I think that is fair relative to size. If an individual had the budget and power of the federal government they would be similarly wasteful.
posted by michaelh at 9:10 AM on June 25, 2012
I think that is fair relative to size. If an individual had the budget and power of the federal government they would be similarly wasteful.
posted by michaelh at 9:10 AM on June 25, 2012
The number of misconceptions about the US tax code displayed in this thread are an argument in themselves for a simpler tax code.
Our core tax code really isn't all that complicated though, even with its progressive structure.
What's complicated are the various tax subsidy and credit schemes congress has enacted. It's all those special cases we've grafted onto or carved out of our base tax code for purely political reasons (specifically, so our politicians can avoid being labeled "tax and spend liberals" by the relentless right wing spin machine while still spending on unavoidable social issues or blatantly subsidizing certain favored industries or economic classes).
No, if we eliminated all the complicated deductions and credits but otherwise left the system the same (and raised the marginal rates at the upper end back to historical norms), and then actively spent the additional revenue on fully funding our current government and social support systems and on implementing programs designed to address any hardships these simplifications might cause the lower and middle classes (the well-to-do can suck it up, as they won't starve if they take a hit) then I think we'd stand a decent chance of getting back on track within a decade or so. Assuming the increased revenue collected didn't somehow ended up being used to keep more failed corporations afloat or to continue to enable Wall Street's expensive and socially destructive gambling habits.
posted by saulgoodman at 9:20 AM on June 25, 2012
Our core tax code really isn't all that complicated though, even with its progressive structure.
What's complicated are the various tax subsidy and credit schemes congress has enacted. It's all those special cases we've grafted onto or carved out of our base tax code for purely political reasons (specifically, so our politicians can avoid being labeled "tax and spend liberals" by the relentless right wing spin machine while still spending on unavoidable social issues or blatantly subsidizing certain favored industries or economic classes).
No, if we eliminated all the complicated deductions and credits but otherwise left the system the same (and raised the marginal rates at the upper end back to historical norms), and then actively spent the additional revenue on fully funding our current government and social support systems and on implementing programs designed to address any hardships these simplifications might cause the lower and middle classes (the well-to-do can suck it up, as they won't starve if they take a hit) then I think we'd stand a decent chance of getting back on track within a decade or so. Assuming the increased revenue collected didn't somehow ended up being used to keep more failed corporations afloat or to continue to enable Wall Street's expensive and socially destructive gambling habits.
posted by saulgoodman at 9:20 AM on June 25, 2012
This is just plain wrong. The highest estate tax bracket has only a 35 percent rate
Well, yeah, but in 2013 it goes up to 55%.
posted by Justinian at 9:46 AM on June 25, 2012 [1 favorite]
Well, yeah, but in 2013 it goes up to 55%.
posted by Justinian at 9:46 AM on June 25, 2012 [1 favorite]
This is just plain wrong. The highest estate tax bracket has only a 35 percent rate
Well, yeah, but in 2013 it goes up to 55%.
. . . barring congressional intervention. And it's almost inconceivable that they would let that happen.
posted by ultraviolet catastrophe at 9:54 AM on June 25, 2012 [1 favorite]
Well, yeah, but in 2013 it goes up to 55%.
. . . barring congressional intervention. And it's almost inconceivable that they would let that happen.
posted by ultraviolet catastrophe at 9:54 AM on June 25, 2012 [1 favorite]
The government's problem of tax avoidance is self inflicted. If there weren't all these loopholes in the tax code, things could be pretty simple and I think a lot fairer.
Stop cutting special deals. When loopholes exist, someone is probably going to figure out a way to benefit from them. If they do, it's not their fault.
Here we have a bunch of politicians trying to distract attention away from the actual problem - one of their own making.
posted by w.fugawe at 10:10 AM on June 25, 2012
Stop cutting special deals. When loopholes exist, someone is probably going to figure out a way to benefit from them. If they do, it's not their fault.
Here we have a bunch of politicians trying to distract attention away from the actual problem - one of their own making.
posted by w.fugawe at 10:10 AM on June 25, 2012
And when you die, if you don't take care, up to half of your net worth is taken away from your children and given to the government.
That's not true, but if estate tax really were that high, good.
What the hell did your kids do to deserve your money? People shouldn't expect to be rewarded for having been born rich.
posted by Sys Rq at 10:46 AM on June 25, 2012 [4 favorites]
That's not true, but if estate tax really were that high, good.
What the hell did your kids do to deserve your money? People shouldn't expect to be rewarded for having been born rich.
posted by Sys Rq at 10:46 AM on June 25, 2012 [4 favorites]
twoleftfeet: "Cannibalism is kind of hilarious
Cannibalism is the most hilarious thing ever and anyone who thinks otherwise should just bite their tongue."
Democraphage?
posted by symbioid at 10:46 AM on June 25, 2012
Cannibalism is the most hilarious thing ever and anyone who thinks otherwise should just bite their tongue."
Democraphage?
posted by symbioid at 10:46 AM on June 25, 2012
Pogo_Fuzzybutt wrote: And now, I have shown through the power of INDUCTIVE REASONING that taxes apply to transactions and not money, and so any talk of "double taxation" is idiotic moronitude that any random 7 year old should recognize as complete bollocks.
It also ignores the vast sums that are never taxed, or if they are taxed, taxed at favorable rates. Of course, you have to be super-rich or have income you can (questionably) argue should be imputed to a foreign subsidiary to do that. Or a C-level executive subject to deferred compensation agreements that don't actually defer your compensation for anything but tax purposes. Typically those are structured as loans from the company, thus stealing from shareholders (by making them pay tax on money that would otherwise be compensation and thus a tax deductible business expense) to aid tax avoidance on the part of executives.
Everyone interested in the subject of taxation in the US should read David Cay Johnston's books, or if money is an issue, his columns for tax.com and Reuters. (and the NYT, if you have access through your library) He explains a lot of the generally unknown tax loopholes and documents many cases of blatant tax evasion that were never prosecuted.
Regarding estate tax, it's interesting how every person whose name is signed at the bottom of the Declaration of Independence was appalled by the idea of dynastic wealth, yet here we are listening to arguments about how it's such a crying shame that we have an estate tax. Of course, most of our fellow countrymen think the Boston Tea Party was about taxes when it was really about preventing a monopoly on tea, so I shouldn't be surprised at the complete ignorance of history on display.
And before anyone goes on about family businesses being taken away by estate tax, you should know that in the debate over the estate tax in the early 2000s, the right wing think tanks could not come up with a single instance of that actually happening. Family farms are often sold, but because the family doesn't want to remain in the business, not because the evul government is taking it away from kids who want nothing more than to follow in their father's footsteps. It's a great story, but one that can't be verified despite much effort.
posted by wierdo at 10:55 AM on June 25, 2012 [1 favorite]
It also ignores the vast sums that are never taxed, or if they are taxed, taxed at favorable rates. Of course, you have to be super-rich or have income you can (questionably) argue should be imputed to a foreign subsidiary to do that. Or a C-level executive subject to deferred compensation agreements that don't actually defer your compensation for anything but tax purposes. Typically those are structured as loans from the company, thus stealing from shareholders (by making them pay tax on money that would otherwise be compensation and thus a tax deductible business expense) to aid tax avoidance on the part of executives.
Everyone interested in the subject of taxation in the US should read David Cay Johnston's books, or if money is an issue, his columns for tax.com and Reuters. (and the NYT, if you have access through your library) He explains a lot of the generally unknown tax loopholes and documents many cases of blatant tax evasion that were never prosecuted.
Regarding estate tax, it's interesting how every person whose name is signed at the bottom of the Declaration of Independence was appalled by the idea of dynastic wealth, yet here we are listening to arguments about how it's such a crying shame that we have an estate tax. Of course, most of our fellow countrymen think the Boston Tea Party was about taxes when it was really about preventing a monopoly on tea, so I shouldn't be surprised at the complete ignorance of history on display.
And before anyone goes on about family businesses being taken away by estate tax, you should know that in the debate over the estate tax in the early 2000s, the right wing think tanks could not come up with a single instance of that actually happening. Family farms are often sold, but because the family doesn't want to remain in the business, not because the evul government is taking it away from kids who want nothing more than to follow in their father's footsteps. It's a great story, but one that can't be verified despite much effort.
posted by wierdo at 10:55 AM on June 25, 2012 [1 favorite]
That's not true, but if estate tax really were that high, good.
What the hell did your kids do to deserve your money? People shouldn't expect to be rewarded for having been born rich.
That is extremely individualistic and assumes nothing good can happen in over one generation's time. At the same time you want to give money to an entity that can theoretically exist forever, and whose "children" in this case mostly appear to be defense contractors and so on, also deathless.
posted by michaelh at 11:26 AM on June 25, 2012 [2 favorites]
What the hell did your kids do to deserve your money? People shouldn't expect to be rewarded for having been born rich.
That is extremely individualistic and assumes nothing good can happen in over one generation's time. At the same time you want to give money to an entity that can theoretically exist forever, and whose "children" in this case mostly appear to be defense contractors and so on, also deathless.
posted by michaelh at 11:26 AM on June 25, 2012 [2 favorites]
I've never been thoroughly convinced that they're worse stewards of their bank accounts than private industry, or even individuals are.
So, for disclosure, I was in the military for a while, and worked closely with a bunch of three-letter agencies. During that time, I witnessed:
I think that people want to believe that people in public service are sound stewards of the public's money, but in fact, it's more like they're kids in a candy store, throwing it all in the air, and saying "Wheeeeeeeeee!"
posted by corb at 11:28 AM on June 25, 2012
So, for disclosure, I was in the military for a while, and worked closely with a bunch of three-letter agencies. During that time, I witnessed:
-an entire floor's worth of furniture (at least 60-70 units) smashed with sledgehammers and tossed in dumpsters, because they didn't want to be bothered carting and storing it elsewhere, and wanted to make sure no one was able to use it again.There was a lot more, too. The amount of waste was staggering.
-a couple of projects that cost a cool few billion apiece, and still weren't productive or operational after years. The government's response was to double their money and give them more time.
-completely incompetent people staying on payroll, because it was more trouble to fire them than just to find a corner to stick them in and get other people to do the work.
-Any project, and I mean any project, tagged with Iraq or Afghanistan, would essentially get buckets of money thrown at it, no matter how ridiculous. To the extent that people would just tag those words onto their projects whether or not it was legitimate, just so they could get the funding.
-Millions of dollars of technical equipment thrown away because it was too much bother to fix, and it would just be replaced anyway.
I think that people want to believe that people in public service are sound stewards of the public's money, but in fact, it's more like they're kids in a candy store, throwing it all in the air, and saying "Wheeeeeeeeee!"
posted by corb at 11:28 AM on June 25, 2012
I think that people want to believe that people in public service are sound stewards of the public's money, but in fact, it's more like they're kids in a candy store, throwing it all in the air, and saying "Wheeeeeeeeee!"
You've never worked for or with private organizations, have you ?
Scott Adams made a gazillion dollars lampooning the intelligence and efficiency of private enterprise.
posted by Pogo_Fuzzybutt at 11:38 AM on June 25, 2012 [2 favorites]
You've never worked for or with private organizations, have you ?
Scott Adams made a gazillion dollars lampooning the intelligence and efficiency of private enterprise.
posted by Pogo_Fuzzybutt at 11:38 AM on June 25, 2012 [2 favorites]
I've been trying to work out why there are always holes in Income Tax, and it's been a weird little journey.
Seems that the whole concept of taxing a persons income just doesn't work. Sales Tax is (in the UK) applied to all users, but you can claim back any Sales Tax you pay if you're going to charge Sales Tax yourself. It's not perfect, but holes seem to be covered.
Sales Tax isn't progressive though, so we have this thing called Income Tax that gets charged to individuals who sell their labour. So there isn't this huge retarding cycle of taxation, we're allowed to not pay that tax if we pay it to other people. This happens regardless of if they pay tax or not.
The bus sized hole in this logic seems unfixable. You can fix holes, but if you fix them too securely, you're in danger of introducing feedback loops that essentially pipe all income into the treasury, and completely damp down on the process of buying and selling of labour.
I'm not entirely sure what the solution is, but I'm pretty certain it's not as simple as some people would have us think. Everything I can think of is either non-progressive or logically inconsistent.
I'm sure this is Economics 101 rambling to the more learned metafilterites, but it's been a frustrating thing for me to think about.
posted by zoo at 11:39 AM on June 25, 2012
Seems that the whole concept of taxing a persons income just doesn't work. Sales Tax is (in the UK) applied to all users, but you can claim back any Sales Tax you pay if you're going to charge Sales Tax yourself. It's not perfect, but holes seem to be covered.
Sales Tax isn't progressive though, so we have this thing called Income Tax that gets charged to individuals who sell their labour. So there isn't this huge retarding cycle of taxation, we're allowed to not pay that tax if we pay it to other people. This happens regardless of if they pay tax or not.
The bus sized hole in this logic seems unfixable. You can fix holes, but if you fix them too securely, you're in danger of introducing feedback loops that essentially pipe all income into the treasury, and completely damp down on the process of buying and selling of labour.
I'm not entirely sure what the solution is, but I'm pretty certain it's not as simple as some people would have us think. Everything I can think of is either non-progressive or logically inconsistent.
I'm sure this is Economics 101 rambling to the more learned metafilterites, but it's been a frustrating thing for me to think about.
posted by zoo at 11:39 AM on June 25, 2012
So, for disclosure, I was in the military for a while, and worked closely with a bunch of three-letter agencies.I don't think anybody would disagree with you that military spending is incredibly wasteful and should be cut back. Indeed, if you suggested that welfare spending could be funded not with tax increases but with military cutbacks, you might more or less satisfy everybody on the left. Swords to plowshares sound positively...socialist.
...
There was a lot more, too. The amount of waste was staggering.
I think that people want to believe that people in public service are sound stewards of the public's money, but in fact, it's more like they're kids in a candy store, throwing it all in the air, and saying "Wheeeeeeeeee!"
posted by Jehan at 11:40 AM on June 25, 2012
zoo, sales tax is also avoided. How? Through giveaways to companies as an incentive to move between states and/or localities. Ironically, for all the Randian screaming about government redistributing wealth, in reality the government is redistributing wealth to large corporations at the expense of small businesses that don't get the subsidies but pay the taxes that support the subsidies for their competitors.
The issue isn't complexity, it's corruption. The sooner we can all get that through our thick skulls, the sooner we can start talking about the real issues and how to solve them.
posted by wierdo at 11:45 AM on June 25, 2012
The issue isn't complexity, it's corruption. The sooner we can all get that through our thick skulls, the sooner we can start talking about the real issues and how to solve them.
posted by wierdo at 11:45 AM on June 25, 2012
What the hell did your kids do to deserve your money? People shouldn't expect to be rewarded for having been born rich.
It's not about "what do my kids deserve?" It's about - what do /I/ deserve?
I work multiple sources of income, and my partner works really long hours, because we prioritize taking care of our children and eventually leaving them something worthwhile. Every bit of labor we expend is towards that ultimate goal of leaving it for them.
If we think one or more of them doesn't deserve it, then we'll disinherit them. But it's not about people expecting to be rewarded - it's about people like us expecting that we will be able to give the next generation a leg up.
Why does the government somehow "Deserve" that half of my estate more than my children? Why should the government gain money because I died?
Sales Tax is (in the UK) applied to all users, but you can claim back any Sales Tax you pay if you're going to charge Sales Tax yourself. It's not perfect, but holes seem to be covered.
Sales Tax isn't progressive though, so we have this thing called Income Tax that gets charged to individuals who sell their labour.
Well, some of us don't necessarily believe that progressive taxes are the best way to go. If we're going to be taxed, whether on income tax or on sales, I'd really support, say, a ten percent flat tax. No exemptions or deductions whatsoever. It's the simplest thing in the world.
I don't think anybody would disagree with you that military spending is incredibly wasteful and should be cut back. Indeed, if you suggested that welfare spending could be funded not with tax increases but with military cutbacks, you might more or less satisfy everybody on the left.
Yeah, my problem is I'm neither fish nor fowl nor good red herring... I want the military budget to have to be separated and slimmed down, but I also don't want to increase welfare spending. I get hated by everybody! :)
posted by corb at 11:46 AM on June 25, 2012 [2 favorites]
It's not about "what do my kids deserve?" It's about - what do /I/ deserve?
I work multiple sources of income, and my partner works really long hours, because we prioritize taking care of our children and eventually leaving them something worthwhile. Every bit of labor we expend is towards that ultimate goal of leaving it for them.
If we think one or more of them doesn't deserve it, then we'll disinherit them. But it's not about people expecting to be rewarded - it's about people like us expecting that we will be able to give the next generation a leg up.
Why does the government somehow "Deserve" that half of my estate more than my children? Why should the government gain money because I died?
Sales Tax is (in the UK) applied to all users, but you can claim back any Sales Tax you pay if you're going to charge Sales Tax yourself. It's not perfect, but holes seem to be covered.
Sales Tax isn't progressive though, so we have this thing called Income Tax that gets charged to individuals who sell their labour.
Well, some of us don't necessarily believe that progressive taxes are the best way to go. If we're going to be taxed, whether on income tax or on sales, I'd really support, say, a ten percent flat tax. No exemptions or deductions whatsoever. It's the simplest thing in the world.
I don't think anybody would disagree with you that military spending is incredibly wasteful and should be cut back. Indeed, if you suggested that welfare spending could be funded not with tax increases but with military cutbacks, you might more or less satisfy everybody on the left.
Yeah, my problem is I'm neither fish nor fowl nor good red herring... I want the military budget to have to be separated and slimmed down, but I also don't want to increase welfare spending. I get hated by everybody! :)
posted by corb at 11:46 AM on June 25, 2012 [2 favorites]
Well, some of us don't necessarily believe that progressive taxes are the best way to go. If we're going to be taxed, whether on income tax or on sales, I'd really support, say, a ten percent flat tax.
That's a fricking terrible idea. It will economically paralyze/ruin those who earn so little that a 10% tax burden makes it impossible to make ends meet, and it fails to account for the economic impact of the decreasing marginal utility of the dollar (not to mention, assumes that everyone gets the same benefit for their tax dollars when I can assure you, a CEO with a company that freely uses public roads to deliver a service is getting a much bigger value for their tax dollar than, say, a lower class urban-dweller who can't even afford a car.
In the absence of some other counterbalancing revenue capture mechanism, a flat tax is a terrible idea. Sorry. But IMO the only reason you or anyone else thinks it's a good idea is because it seems so easy to understand and seems so obvious (in reality, it's not, once you consider the economic realities of the decreasing marginal utility of the dollar and the harmful consequences of surplus wealth bubbles). Flat Tax is a political scam that incentivizes being extremely wealthy and ignores that surplus wealth hording has well known social and economic costs. It makes a complex thing seem simpler than it is, in order to skim off a little extra from the rubes. The same think tanks that trotted out the last two decades of failed supply-side economic theories also introduced the flat tax idea. And with exactly the same aims in mind.
posted by saulgoodman at 11:59 AM on June 25, 2012 [10 favorites]
That's a fricking terrible idea. It will economically paralyze/ruin those who earn so little that a 10% tax burden makes it impossible to make ends meet, and it fails to account for the economic impact of the decreasing marginal utility of the dollar (not to mention, assumes that everyone gets the same benefit for their tax dollars when I can assure you, a CEO with a company that freely uses public roads to deliver a service is getting a much bigger value for their tax dollar than, say, a lower class urban-dweller who can't even afford a car.
In the absence of some other counterbalancing revenue capture mechanism, a flat tax is a terrible idea. Sorry. But IMO the only reason you or anyone else thinks it's a good idea is because it seems so easy to understand and seems so obvious (in reality, it's not, once you consider the economic realities of the decreasing marginal utility of the dollar and the harmful consequences of surplus wealth bubbles). Flat Tax is a political scam that incentivizes being extremely wealthy and ignores that surplus wealth hording has well known social and economic costs. It makes a complex thing seem simpler than it is, in order to skim off a little extra from the rubes. The same think tanks that trotted out the last two decades of failed supply-side economic theories also introduced the flat tax idea. And with exactly the same aims in mind.
posted by saulgoodman at 11:59 AM on June 25, 2012 [10 favorites]
It's the simplest thing in the world.
Simple sounds fairer, but it isn't.
posted by JPD at 12:01 PM on June 25, 2012 [1 favorite]
Simple sounds fairer, but it isn't.
posted by JPD at 12:01 PM on June 25, 2012 [1 favorite]
Well, some of us don't necessarily believe that progressive taxes are the best way to go. If we're going to be taxed, whether on income tax or on sales, I'd really support, say, a ten percent flat tax. No exemptions or deductions whatsoever. It's the simplest thing in the world.
So, all I'd have to do is make sure that any income I make doesn't actually look like income, and then I won't have to pay any taxes at all!
Where I have seen that before ???
posted by Pogo_Fuzzybutt at 12:05 PM on June 25, 2012
So, all I'd have to do is make sure that any income I make doesn't actually look like income, and then I won't have to pay any taxes at all!
Where I have seen that before ???
posted by Pogo_Fuzzybutt at 12:05 PM on June 25, 2012
It's not that I'm not thinking this through. I just am coming at it from a different starting place than you are.
First, I think that everyone should have some form of tax burden. No matter how poor you are, there should be not a single voting citizen in this country that doesn't pay taxes. If you're a citizen, you're benefiting (in theory) from the government provided, and you should contribute back to it.
Second, no, I don't believe that people should contribute to the government proportionally to the benefits they're receiving from it. I think that completely subverts the purpose of taxation, which is supposedly that each person needs to contribute to the government they desire.
Third, I don't have a problem with wealth concentration. I'm not ignoring it - I simply don't see it as a social ill. If people want to keep their existing wealth and continue to accumulate new wealth, shepherd it wisely, and pass it down to their children, I say Mazel Tov! The idea that rich people get richer isn't the boogeyman to me that I think it is to some.
posted by corb at 12:09 PM on June 25, 2012 [1 favorite]
First, I think that everyone should have some form of tax burden. No matter how poor you are, there should be not a single voting citizen in this country that doesn't pay taxes. If you're a citizen, you're benefiting (in theory) from the government provided, and you should contribute back to it.
Second, no, I don't believe that people should contribute to the government proportionally to the benefits they're receiving from it. I think that completely subverts the purpose of taxation, which is supposedly that each person needs to contribute to the government they desire.
Third, I don't have a problem with wealth concentration. I'm not ignoring it - I simply don't see it as a social ill. If people want to keep their existing wealth and continue to accumulate new wealth, shepherd it wisely, and pass it down to their children, I say Mazel Tov! The idea that rich people get richer isn't the boogeyman to me that I think it is to some.
posted by corb at 12:09 PM on June 25, 2012 [1 favorite]
I think that completely subverts the purpose of taxation, which is supposedly that each person needs to contribute to the government they desire.
This is not the purpose of taxation.
posted by JPD at 12:12 PM on June 25, 2012
This is not the purpose of taxation.
posted by JPD at 12:12 PM on June 25, 2012
Third, I don't have a problem with wealth concentration.
It doesn't matter if you have a problem with it or not; the math works out such that wildly disproportionate wealth concentrations at the top ruins societies and cause economic turmoil. When only 500 people command enough wealth to move an entire nation the size of America's economy in whatever direction they choose, we've lost any supposed benefit of a free market! In practice, any market we allow to be increasingly dominated by a smaller and smaller proportion of our population is a less free market.
That's fact, whether it comports with some abstract ideal of how the world "ought" to work or not.
posted by saulgoodman at 12:13 PM on June 25, 2012 [4 favorites]
It doesn't matter if you have a problem with it or not; the math works out such that wildly disproportionate wealth concentrations at the top ruins societies and cause economic turmoil. When only 500 people command enough wealth to move an entire nation the size of America's economy in whatever direction they choose, we've lost any supposed benefit of a free market! In practice, any market we allow to be increasingly dominated by a smaller and smaller proportion of our population is a less free market.
That's fact, whether it comports with some abstract ideal of how the world "ought" to work or not.
posted by saulgoodman at 12:13 PM on June 25, 2012 [4 favorites]
ugh. kindly forgive all the subject-verb agreement typos.
posted by saulgoodman at 12:15 PM on June 25, 2012
posted by saulgoodman at 12:15 PM on June 25, 2012
It doesn't matter if you have a problem with it or not; the math works out such that wildly disproportionate wealth concentrations at the top ruins societies and cause economic turmoil.
Define.
I think the problem I have with this kind of language is it's never really specific. What do you mean when you say "ruins societies"? What do you mean when you say "causes economic turmoil"? I don't know if I might be persuaded to agree with you, because I don't really know what precisely you're talking about.
posted by corb at 12:16 PM on June 25, 2012
Define.
I think the problem I have with this kind of language is it's never really specific. What do you mean when you say "ruins societies"? What do you mean when you say "causes economic turmoil"? I don't know if I might be persuaded to agree with you, because I don't really know what precisely you're talking about.
posted by corb at 12:16 PM on June 25, 2012
I've been trying to work out why there are always holes in Income Tax...
Do you think there are holes? It works pretty well for the vast majority of people, it's relatively cheap to collect, it's progressive, and it raises a significant amount of revenue. I would agree that it was simpler when everyone worked for a big company, but it's still pretty good as taxes go for most people.
It falls down for highly-mobile people and for people paying a great deal of income tax and have control over how they are paid (e.g. company owners). For those few people these avoidance schemes make sense. But that's a small minority. If Osborne manages to get rid of the higher 45%/50% band entirely then this will also help reduce the use of the schemes.
The point is not that any one tax, in isolation, must be all of an efficient source of revenue and progressive and logical and free from gaming and meet policy objectives and so on. It's that the whole basket of taxes should kind of work. Some on sales, some on property, some on inheritance, some service fees, some on income...
What should be in the basket of taxes, though? That's tricky, and opinions tend to reflect the personal wealth (or lack of it) of the commentator. I've increasingly thought, myself, that we should tax property - especially land - more highly, since it's largely immobile and you can't take it offshore. Also, rich people tend to have property. And rent is unearned and unproductive.
Some rich people, however, have assets but not income - older people with fixed pension incomes but big houses, for example. Obviously they think we should tax income, not property. I'll be strongly tempted to agree when I'm retired, but at the moment I have a big salary and a small house and I'd like the same opportunity to move up the property ladder as they had, thank you very much. Who's right? Don't know.
It's all very dispiriting. The only thing we all agree on is that that guy, over there, he should definitely be paying more!
posted by alasdair at 12:23 PM on June 25, 2012
Do you think there are holes? It works pretty well for the vast majority of people, it's relatively cheap to collect, it's progressive, and it raises a significant amount of revenue. I would agree that it was simpler when everyone worked for a big company, but it's still pretty good as taxes go for most people.
It falls down for highly-mobile people and for people paying a great deal of income tax and have control over how they are paid (e.g. company owners). For those few people these avoidance schemes make sense. But that's a small minority. If Osborne manages to get rid of the higher 45%/50% band entirely then this will also help reduce the use of the schemes.
The point is not that any one tax, in isolation, must be all of an efficient source of revenue and progressive and logical and free from gaming and meet policy objectives and so on. It's that the whole basket of taxes should kind of work. Some on sales, some on property, some on inheritance, some service fees, some on income...
What should be in the basket of taxes, though? That's tricky, and opinions tend to reflect the personal wealth (or lack of it) of the commentator. I've increasingly thought, myself, that we should tax property - especially land - more highly, since it's largely immobile and you can't take it offshore. Also, rich people tend to have property. And rent is unearned and unproductive.
Some rich people, however, have assets but not income - older people with fixed pension incomes but big houses, for example. Obviously they think we should tax income, not property. I'll be strongly tempted to agree when I'm retired, but at the moment I have a big salary and a small house and I'd like the same opportunity to move up the property ladder as they had, thank you very much. Who's right? Don't know.
It's all very dispiriting. The only thing we all agree on is that that guy, over there, he should definitely be paying more!
posted by alasdair at 12:23 PM on June 25, 2012
I'm finding it... interesting that we've gone from "Google UK pays a fraction of the tax you'd expect" and "speedboats are VAT-free" to an argument about inheritance tax and use of tax money and so on. How about agreeing that not paying your share is wrong - if nothing else because of the market-distorting effects? While you're arguing about politics, entities who have more money in their little finger than you will ever possess continue to dodge their responsibilities.
posted by Zarkonnen at 12:27 PM on June 25, 2012
posted by Zarkonnen at 12:27 PM on June 25, 2012
It's all very dispiriting. The only thing we all agree on is that that guy, over there, he should definitely be paying more!
That reminds me of my proposal to tax Reddit karma.
posted by michaelh at 12:27 PM on June 25, 2012 [1 favorite]
That reminds me of my proposal to tax Reddit karma.
posted by michaelh at 12:27 PM on June 25, 2012 [1 favorite]
corb: I believe saulgoodman is talking about the Gini Coeffecient. I'd link, but am on my mobile. But look it up.
posted by zoo at 12:30 PM on June 25, 2012
posted by zoo at 12:30 PM on June 25, 2012
corb wrote: First, I think that everyone should have some form of tax burden. No matter how poor you are, there should be not a single voting citizen in this country that doesn't pay taxes. If you're a citizen, you're benefiting (in theory) from the government provided, and you should contribute back to it.
You're in luck! Everyone pays something. I know folks who think like you appear to think often refuse to acknowledge it, but everybody pays. The bottom fifth pay about 17.5%. The top fifth pay about 17.5%. The middle three fifths pay about 17.5%. You may quit whining at your leisure.
If you'd like to know how it is wealth concentration is bad for society, I suggest you read the books I recommended above. They explain quite nicely how it is that the tax system we have now is reducing the wealth of the middle class while vastly increasing the wealth of the upper classes. And when I say reducing, I mean reducing in absolute terms, not relative. The average American family makes more than $2000 less today than they did in 1980, adjusted for inflation.
IMO, that guy over there, the one who has been evading millions of dollars in tax every year for the last 20 should indeed pay more. That may mean you get to pay less tax since he's now paying what he owes rather than skipping out. People refuse to believe it, but here in the US our tax compliance is as bad as Greece. The difference is that those of us who have taxes withheld directly from our paychecks don't get the chance to avoid and/or evade taxation like those in the owner/donor class.
In the US, the lower classes have already been paying more than their fair share for 30 years. That's what the Social Security trust fund represents. Not only that, but every dollar unnecessarily taxed in the 80s could have made the lower classes over $2 richer today. Why is it that rich people get to pay tax at their pleasure while poor people have to pay it when they make it? A tax deferred is a tax avoided, after all.
posted by wierdo at 12:32 PM on June 25, 2012 [4 favorites]
You're in luck! Everyone pays something. I know folks who think like you appear to think often refuse to acknowledge it, but everybody pays. The bottom fifth pay about 17.5%. The top fifth pay about 17.5%. The middle three fifths pay about 17.5%. You may quit whining at your leisure.
If you'd like to know how it is wealth concentration is bad for society, I suggest you read the books I recommended above. They explain quite nicely how it is that the tax system we have now is reducing the wealth of the middle class while vastly increasing the wealth of the upper classes. And when I say reducing, I mean reducing in absolute terms, not relative. The average American family makes more than $2000 less today than they did in 1980, adjusted for inflation.
IMO, that guy over there, the one who has been evading millions of dollars in tax every year for the last 20 should indeed pay more. That may mean you get to pay less tax since he's now paying what he owes rather than skipping out. People refuse to believe it, but here in the US our tax compliance is as bad as Greece. The difference is that those of us who have taxes withheld directly from our paychecks don't get the chance to avoid and/or evade taxation like those in the owner/donor class.
In the US, the lower classes have already been paying more than their fair share for 30 years. That's what the Social Security trust fund represents. Not only that, but every dollar unnecessarily taxed in the 80s could have made the lower classes over $2 richer today. Why is it that rich people get to pay tax at their pleasure while poor people have to pay it when they make it? A tax deferred is a tax avoided, after all.
posted by wierdo at 12:32 PM on June 25, 2012 [4 favorites]
I work multiple sources of income, and my partner works really long hours, because we prioritize taking care of our children and eventually leaving them something worthwhile. Every bit of labor we expend is towards that ultimate goal of leaving it for them.
1. If you have to work that hard, you're probably not rich enough to pay much, if any, estate tax.
2. You know your money can benefit your kids while you're alive, right? They get better educations, which get them better jobs, which reduces the need for an inheritance.
posted by Sys Rq at 12:41 PM on June 25, 2012
1. If you have to work that hard, you're probably not rich enough to pay much, if any, estate tax.
2. You know your money can benefit your kids while you're alive, right? They get better educations, which get them better jobs, which reduces the need for an inheritance.
posted by Sys Rq at 12:41 PM on June 25, 2012
What do you mean when you say "ruins societies"?
Living conditions in the US from the early 1900s through the pre-WWII era and during other periods in US history (never mind world history) when income inequality swelled out of rational proportion offer a pretty good illustration of what I mean. There was nearly all out economic warfare in the US for a long stretch in the early part of the 20th century and there's little room for doubt it was directly related to historically high rates of income inequality.
Read this, too, if you're really interested. And this. It's an involved subject, but the whole point of free markets is supposed to be that decentralizing and crowd sourcing decision making leads to better economic decisions. Concentrating disproportionate economic decision-making power in fewer and fewer hands doesn't seem like a recipe for a robust and healthy free market to me, even accepting all that conventional economic wisdom.
posted by saulgoodman at 12:52 PM on June 25, 2012
Living conditions in the US from the early 1900s through the pre-WWII era and during other periods in US history (never mind world history) when income inequality swelled out of rational proportion offer a pretty good illustration of what I mean. There was nearly all out economic warfare in the US for a long stretch in the early part of the 20th century and there's little room for doubt it was directly related to historically high rates of income inequality.
Read this, too, if you're really interested. And this. It's an involved subject, but the whole point of free markets is supposed to be that decentralizing and crowd sourcing decision making leads to better economic decisions. Concentrating disproportionate economic decision-making power in fewer and fewer hands doesn't seem like a recipe for a robust and healthy free market to me, even accepting all that conventional economic wisdom.
posted by saulgoodman at 12:52 PM on June 25, 2012
1. If you have to work that hard, you're probably not rich enough to pay much, if any, estate tax.
If the current projected 2013 tax brackets hold, I will pay estate tax. The life insurance policies of myself and my partner alone add up to about a mil, not counting anything else that might come on top of that through saving and purchasing land.
2. You know your money can benefit your kids while you're alive, right? They get better educations, which get them better jobs, which reduces the need for an inheritance.
Yes, and we do spend for education. But better educations leading to better jobs does not reduce the need for an inheritance at all. The point of an inheritance is to cushion children's mistakes, not just to give them better chances. To make sure it's not really so much of a risk. The point of having a family home /not/ burdened by crippling taxes is so that your family will always be able to live there, no matter what happens. So that if they lose their great job, or the economy takes a downturn, they can always live in the family home and not have to worry about expenses. So that they can afford to do internships that they find rewarding, rather than having to start with a job, any job, right away just so that they can afford to live.
posted by corb at 12:58 PM on June 25, 2012 [2 favorites]
If the current projected 2013 tax brackets hold, I will pay estate tax. The life insurance policies of myself and my partner alone add up to about a mil, not counting anything else that might come on top of that through saving and purchasing land.
2. You know your money can benefit your kids while you're alive, right? They get better educations, which get them better jobs, which reduces the need for an inheritance.
Yes, and we do spend for education. But better educations leading to better jobs does not reduce the need for an inheritance at all. The point of an inheritance is to cushion children's mistakes, not just to give them better chances. To make sure it's not really so much of a risk. The point of having a family home /not/ burdened by crippling taxes is so that your family will always be able to live there, no matter what happens. So that if they lose their great job, or the economy takes a downturn, they can always live in the family home and not have to worry about expenses. So that they can afford to do internships that they find rewarding, rather than having to start with a job, any job, right away just so that they can afford to live.
posted by corb at 12:58 PM on June 25, 2012 [2 favorites]
corb: I believe saulgoodman is talking about the Gini Coeffecient.
They explain quite nicely how it is that the tax system we have now is reducing the wealth of the middle class while vastly increasing the wealth of the upper classes.
Read this, too, if you're really interested. And this.
Looking at all of these, they're all perfect examples of what I was talking about. I accept that income inequality exists in moderate-to-high levels in the United States. But whether or not that is bad is a subjective experience. What makes societies with a high Gini Coefficient bad? What makes income inequality morally wrong? What makes a society without a largely wealthy middle class bad?
If taxation didn't exist, you would still have high levels of inequality. There were high levels of inequality before we attempted to implement the income tax, and there are high levels of inequality now, while we do have an income tax. The only argument for changing taxation to alter that fact is a personal belief that economic inequality is a bad thing. Which is fine - I mean, I think it's a legitimate thing to feel - but saying that everyone must agree is refusing to accept that this is a subjective position that not everyone shares.
posted by corb at 1:05 PM on June 25, 2012 [1 favorite]
They explain quite nicely how it is that the tax system we have now is reducing the wealth of the middle class while vastly increasing the wealth of the upper classes.
Read this, too, if you're really interested. And this.
Looking at all of these, they're all perfect examples of what I was talking about. I accept that income inequality exists in moderate-to-high levels in the United States. But whether or not that is bad is a subjective experience. What makes societies with a high Gini Coefficient bad? What makes income inequality morally wrong? What makes a society without a largely wealthy middle class bad?
If taxation didn't exist, you would still have high levels of inequality. There were high levels of inequality before we attempted to implement the income tax, and there are high levels of inequality now, while we do have an income tax. The only argument for changing taxation to alter that fact is a personal belief that economic inequality is a bad thing. Which is fine - I mean, I think it's a legitimate thing to feel - but saying that everyone must agree is refusing to accept that this is a subjective position that not everyone shares.
posted by corb at 1:05 PM on June 25, 2012 [1 favorite]
What makes societies with a high Gini Coefficient bad?
corb, here's a TED talk tailor-made just for you: How Economic Inequality Harms Societies
posted by ultraviolet catastrophe at 1:49 PM on June 25, 2012 [1 favorite]
corb, here's a TED talk tailor-made just for you: How Economic Inequality Harms Societies
posted by ultraviolet catastrophe at 1:49 PM on June 25, 2012 [1 favorite]
What makes societies with a high Gini Coefficient bad?
Lots of class related tension, literal violence and human suffering (from lack of access to adequate food, health care, opportunity), and the fact that most people in such societies feel (and in fact are) relatively powerless to improve or affect their own economic circumstances.
If your idea of a functioning (or "good") society isn't something intended to share prosperity broadly and increase the general welfare of its people as much as possible then, yeah, I suppose a society where almost everyone is completely socially and economically at the mercy of a few is just as good as any other.
There were high levels of inequality before we attempted to implement the income tax, and there are high levels of inequality now, while we do have an income tax.
You're conveniently ignoring that under our more historically recent progressive tax code (and in particular, post-New Deal) until the 80s and the Reagan tax revolution we steadily saw income inequality decreasing in the US. Until we started rolling back those tax policies that served us so well during the mid-part of the 20th century, income inequality underwent dramatic declines in the US. We've been getting much worse off in that area--and in all measures of social mobility--since the Reagan revolution and the supply-side oriented changes in national tax policy in the 80s.
posted by saulgoodman at 1:51 PM on June 25, 2012 [1 favorite]
Lots of class related tension, literal violence and human suffering (from lack of access to adequate food, health care, opportunity), and the fact that most people in such societies feel (and in fact are) relatively powerless to improve or affect their own economic circumstances.
If your idea of a functioning (or "good") society isn't something intended to share prosperity broadly and increase the general welfare of its people as much as possible then, yeah, I suppose a society where almost everyone is completely socially and economically at the mercy of a few is just as good as any other.
There were high levels of inequality before we attempted to implement the income tax, and there are high levels of inequality now, while we do have an income tax.
You're conveniently ignoring that under our more historically recent progressive tax code (and in particular, post-New Deal) until the 80s and the Reagan tax revolution we steadily saw income inequality decreasing in the US. Until we started rolling back those tax policies that served us so well during the mid-part of the 20th century, income inequality underwent dramatic declines in the US. We've been getting much worse off in that area--and in all measures of social mobility--since the Reagan revolution and the supply-side oriented changes in national tax policy in the 80s.
posted by saulgoodman at 1:51 PM on June 25, 2012 [1 favorite]
The rapid escalation of income inequality in the US since the 80's is often known as The Great Divergence, and is very well documented.
posted by saulgoodman at 1:53 PM on June 25, 2012 [2 favorites]
posted by saulgoodman at 1:53 PM on June 25, 2012 [2 favorites]
The Great Compression, on the other side of it, refers to the period when income inequality in the US declined most rapidly through the 30's and 40s.
posted by saulgoodman at 1:55 PM on June 25, 2012 [1 favorite]
posted by saulgoodman at 1:55 PM on June 25, 2012 [1 favorite]
corb wrote: Yes, and we do spend for education. But better educations leading to better jobs does not reduce the need for an inheritance at all. The point of an inheritance is to cushion children's mistakes, not just to give them better chances.
Which is why you now get and will continue to get the chance to leave them plenty of money tax free. Also, your life insurance is irrelevant if your children are named as beneficiaries. The money goes directly to them, not through the estate, so it is not subject to estate tax. If you're going to complain, at least complain about things that actually happen, not shit you make up in your head.
The problem with income inequality in my mind is less that it's unfair and more that it's bad for everyone, including the rich. It increases economic instability, reduces the total possible output of the economy, generally promotes stagnation over expansion, and makes it harder to have a functional market economy. It's bad for everyone, not in solely moral terms, but in straight economic terms.
People at the bottom spend most everything they get, so it ends up back in your pocket eventually anyway. However, it manages to do some good for the wider economy while it's moving back where it came from.
posted by wierdo at 2:17 PM on June 25, 2012
Which is why you now get and will continue to get the chance to leave them plenty of money tax free. Also, your life insurance is irrelevant if your children are named as beneficiaries. The money goes directly to them, not through the estate, so it is not subject to estate tax. If you're going to complain, at least complain about things that actually happen, not shit you make up in your head.
The problem with income inequality in my mind is less that it's unfair and more that it's bad for everyone, including the rich. It increases economic instability, reduces the total possible output of the economy, generally promotes stagnation over expansion, and makes it harder to have a functional market economy. It's bad for everyone, not in solely moral terms, but in straight economic terms.
People at the bottom spend most everything they get, so it ends up back in your pocket eventually anyway. However, it manages to do some good for the wider economy while it's moving back where it came from.
posted by wierdo at 2:17 PM on June 25, 2012
If the current projected 2013 tax brackets hold, I will pay estate tax. The life insurance policies of myself and my partner alone add up to about a mil, not counting anything else that might come on top of that through saving and purchasing land.
There are ways to avoid having life insurance proceeds count as part of the estate. Talk to your lawyer or accountant.
posted by jedicus at 2:37 PM on June 25, 2012
There are ways to avoid having life insurance proceeds count as part of the estate. Talk to your lawyer or accountant.
posted by jedicus at 2:37 PM on June 25, 2012
You're conveniently ignoring that under our more historically recent progressive tax code (and in particular, post-New Deal) until the 80s and the Reagan tax revolution we steadily saw income inequality decreasing in the US. Until we started rolling back those tax policies that served us so well during the mid-part of the 20th century, income inequality underwent dramatic declines in the US. We've been getting much worse off in that area--and in all measures of social mobility--since the Reagan revolution and the supply-side oriented changes in national tax policy in the 80s.
Oh no, I'm not ignoring that at all. I'm not saying that there isn't a level of taxation where inequality would diminish. I'm saying that absent taxation, inequality exists, and one of the few ways to alter that inequality is by taxes designed specifically to change that, which I morally don't believe in.
Which is why you now get and will continue to get the chance to leave them plenty of money tax free. Also, your life insurance is irrelevant if your children are named as beneficiaries. The money goes directly to them, not through the estate, so it is not subject to estate tax. If you're going to complain, at least complain about things that actually happen, not shit you make up in your head.
Under current code, in 2013 the tax-free level will only be 1,000,000, including property, at a 55% rate, as noted above by Justinian. And if you're going to call people out and try to say they're making stuff up, you may want to look into incidents of ownership first and make sure you have your facts straight. If you retain the right even to change the beneficiaries of your life insurance, whether or not they are your children, the money is counted as part of your estate and is subject to estate tax. And if you don't retain the right to change your beneficiaries, then you're screwed when Little Billy turns out to be a psychopath, and you'd rather change it over to Little Sally, who's working with autistic children or whatever.
posted by corb at 2:45 PM on June 25, 2012
Oh no, I'm not ignoring that at all. I'm not saying that there isn't a level of taxation where inequality would diminish. I'm saying that absent taxation, inequality exists, and one of the few ways to alter that inequality is by taxes designed specifically to change that, which I morally don't believe in.
Which is why you now get and will continue to get the chance to leave them plenty of money tax free. Also, your life insurance is irrelevant if your children are named as beneficiaries. The money goes directly to them, not through the estate, so it is not subject to estate tax. If you're going to complain, at least complain about things that actually happen, not shit you make up in your head.
Under current code, in 2013 the tax-free level will only be 1,000,000, including property, at a 55% rate, as noted above by Justinian. And if you're going to call people out and try to say they're making stuff up, you may want to look into incidents of ownership first and make sure you have your facts straight. If you retain the right even to change the beneficiaries of your life insurance, whether or not they are your children, the money is counted as part of your estate and is subject to estate tax. And if you don't retain the right to change your beneficiaries, then you're screwed when Little Billy turns out to be a psychopath, and you'd rather change it over to Little Sally, who's working with autistic children or whatever.
posted by corb at 2:45 PM on June 25, 2012
In both Australia and the UK we have had accountants look at us like freaks when our first statement about 'doing our taxes' is that we don't want to skip paying our fair share of tax as we see it as a civic duty, we just don't want to make any mistakes filing our returns.
That's like telling your plumber you want your water to run to support public works, but you want to make sure none of it drips on the floor.
posted by michaelh at 2:50 PM on June 25, 2012
That's like telling your plumber you want your water to run to support public works, but you want to make sure none of it drips on the floor.
posted by michaelh at 2:50 PM on June 25, 2012
I basically understood everything about corporate taxation during a professional talk with a team of high-flying tax specialists who had asked my technical advice on a specific tax break which had been recently introduced in a Northern European country. When I read the law, I was flabbergasted, as it created a Titanic-sized loophole which a particular industry could use to exempt literally all of its profits. When I told those tax lawyers that the law seemed tailor-made for that industry, they had a hearty laugh and said:
"Oh, no, this has not been written for those companies. It was written by them!"
posted by Skeptic at 2:54 PM on June 25, 2012 [1 favorite]
"Oh, no, this has not been written for those companies. It was written by them!"
posted by Skeptic at 2:54 PM on June 25, 2012 [1 favorite]
corb, you're basically saying that because you have to give something up in exchange for a tax benefit, it doesn't count. That's ridiculous.
Also, it is the inequality in the tax system that is itself increasing income inequality. The lower end of the 1%, which do not get the massive tax breaks the upper end gets, while still getting the minor tax break inherent in making enough to exceed the SS tax cap, are the only group standing still in real terms. Inequality very clearly began to increase when the tax system began to be rigged in favor of the very highest earners.
Once again, read Johnston's books. Or even some of his columns. (the books have more citations, which I presume you would appreciate) Also, consult a tax attorney well versed in inheritance matters if you're so concerned. Every one of your issues are easily avoided. Hell, read a Nolo book and you'll have better information than you appear to have at present.
posted by wierdo at 3:13 PM on June 25, 2012
Also, it is the inequality in the tax system that is itself increasing income inequality. The lower end of the 1%, which do not get the massive tax breaks the upper end gets, while still getting the minor tax break inherent in making enough to exceed the SS tax cap, are the only group standing still in real terms. Inequality very clearly began to increase when the tax system began to be rigged in favor of the very highest earners.
Once again, read Johnston's books. Or even some of his columns. (the books have more citations, which I presume you would appreciate) Also, consult a tax attorney well versed in inheritance matters if you're so concerned. Every one of your issues are easily avoided. Hell, read a Nolo book and you'll have better information than you appear to have at present.
posted by wierdo at 3:13 PM on June 25, 2012
I'm saying that absent taxation, inequality exists, and one of the few ways to alter that inequality is by taxes designed specifically to change that, which I morally don't believe in.
Good lord. Well, at least you're up front about it.
posted by smoke at 3:19 PM on June 25, 2012 [3 favorites]
Good lord. Well, at least you're up front about it.
posted by smoke at 3:19 PM on June 25, 2012 [3 favorites]
You're in luck! Everyone pays something. I know folks who think like you appear to think often refuse to acknowledge it, but everybody pays. The bottom fifth pay about 17.5%. The top fifth pay about 17.5%. The middle three fifths pay about 17.5%. You may quit whining at your leisure.
Could you please explain this?
My understanding is that the U.S., in 2011, ~46% of families did not pay Federal Income Tax to the IRS. I believe that sales taxes, etc. take a higher percentage from low income families proportionally, but I thought this thread was about Federal Income Tax?
When you cite your figures, are you maybe referring to incomes in the UK rather than the US? What income ranges do you consider the bottom, middle and top third, and how are you arriving at those percentages?
I'm not trying to stir anything up. For the record, I don't agree with corb's 10% flat income tax position. I'm just confused!
posted by misha at 4:28 PM on June 25, 2012 [1 favorite]
Could you please explain this?
My understanding is that the U.S., in 2011, ~46% of families did not pay Federal Income Tax to the IRS. I believe that sales taxes, etc. take a higher percentage from low income families proportionally, but I thought this thread was about Federal Income Tax?
When you cite your figures, are you maybe referring to incomes in the UK rather than the US? What income ranges do you consider the bottom, middle and top third, and how are you arriving at those percentages?
I'm not trying to stir anything up. For the record, I don't agree with corb's 10% flat income tax position. I'm just confused!
posted by misha at 4:28 PM on June 25, 2012 [1 favorite]
Limiting the taxation discussion to the federal income tax is a tool used by the right to distract from the fact that they already have what they claim is their ideal tax system and get further favors in the name of "fairness." Does it really matter which tax a given person is subject to, when it's a tax either way?
I am talking about the US, and you may note I said quintiles. That is, fifths. Obviously, some individuals pay more or less depending on their circumstances, but each fifth pays within one percent of 17.5%. This comes from one of Johnston's books. I forget which.
FWIW, even at the federal level alone, a person making around $61,500 a year pays 10% more than the average for the top 400. The folks at the very top are getting it over on everyone else, including those we generally think of as well off.
posted by wierdo at 4:42 PM on June 25, 2012 [4 favorites]
I am talking about the US, and you may note I said quintiles. That is, fifths. Obviously, some individuals pay more or less depending on their circumstances, but each fifth pays within one percent of 17.5%. This comes from one of Johnston's books. I forget which.
FWIW, even at the federal level alone, a person making around $61,500 a year pays 10% more than the average for the top 400. The folks at the very top are getting it over on everyone else, including those we generally think of as well off.
posted by wierdo at 4:42 PM on June 25, 2012 [4 favorites]
Also, consult a tax attorney well versed in inheritance matters if you're so concerned. Every one of your issues are easily avoided. Hell, read a Nolo book and you'll have better information than you appear to have at present.
So the interesting thing is, this thread started as someone talking about why people were avoiding taxes, and people were asking why someone might want to. I explained that some of the reasons why people might want to avoid taxes are because they are crippling and morally unjust.
Your response to this was to explain that if I saw a good lawyer, I could avoid paying inheritance taxes.
This is true - and goes back to the heart of the original question. Why are people offended by paying these taxes? Why do they avoid them as best they can? Because they find them immoral and burdensome.
Well, at least you're up front about it.
I'll check out the TED talk later, but yes, at the moment I don't believe that economic inequality is inherently unjust. I believe in allowing valves to allow for upward mobility, but I don't think that downward mobility is a good thing, and I think it should be avoided at all costs.
This is why I'm saying that I just don't think we can agree, because we're coming from two entirely different places.
posted by corb at 5:17 PM on June 25, 2012
So the interesting thing is, this thread started as someone talking about why people were avoiding taxes, and people were asking why someone might want to. I explained that some of the reasons why people might want to avoid taxes are because they are crippling and morally unjust.
Your response to this was to explain that if I saw a good lawyer, I could avoid paying inheritance taxes.
This is true - and goes back to the heart of the original question. Why are people offended by paying these taxes? Why do they avoid them as best they can? Because they find them immoral and burdensome.
Well, at least you're up front about it.
I'll check out the TED talk later, but yes, at the moment I don't believe that economic inequality is inherently unjust. I believe in allowing valves to allow for upward mobility, but I don't think that downward mobility is a good thing, and I think it should be avoided at all costs.
This is why I'm saying that I just don't think we can agree, because we're coming from two entirely different places.
posted by corb at 5:17 PM on June 25, 2012
I don't believe that economic inequality is inherently unjust. I believe in allowing valves to allow for upward mobility, but I don't think that downward mobility is a good thing, and I think it should be avoided at all costs.
Hmm, but that doesn't reflect any kind of economic orthodoxy at all. We already have when everyone gets richer: it's called inflation; it can be difficult, and it doesn't resolve inequality because rich people get richer than poor people get richer - more often than not because they have more assets than cash compared to poor people, and assets' value also inflates.
Upward mobility in the way that you're talking about is contingent on downward mobility. You may not like the argument that inequality is bad for society's but it's got an awful lot of evidence backing it up. Here's another TED talk worth checking out. His book, Spirit Level is pretty good.
posted by smoke at 5:53 PM on June 25, 2012 [1 favorite]
Hmm, but that doesn't reflect any kind of economic orthodoxy at all. We already have when everyone gets richer: it's called inflation; it can be difficult, and it doesn't resolve inequality because rich people get richer than poor people get richer - more often than not because they have more assets than cash compared to poor people, and assets' value also inflates.
Upward mobility in the way that you're talking about is contingent on downward mobility. You may not like the argument that inequality is bad for society's but it's got an awful lot of evidence backing it up. Here's another TED talk worth checking out. His book, Spirit Level is pretty good.
posted by smoke at 5:53 PM on June 25, 2012 [1 favorite]
I'll check out the TED talk later, but yes, at the moment I don't believe that economic inequality is inherently unjust.
Then it's up to you to explain how any system that by definition privileges a few over all others on an a systematic basis--a self-consciously, willfully elitist system in the most literal sense--could ever be more just than its alternatives.
But to be clear, the issue is not simply the existence of economic inequality per se. I doubt anyone here's suggesting all income should be equal--the idea is that income should increase rationally and proportionally as we progress up the income ladder or else inequality has seriously negative practical economic and social consequences.
Look at it this way: most people on the other side of this issue from you aren't saying there shouldn't be a ladder up; what they're saying is that if the upper rungs of that ladder are spaced too far from the rungs that precede them, the ladder becomes impossible to climb under your own power after a certain point (unless you get the benefit of a hand up from someone already at the top). And while arguably such a system cannot in any meaningful sense be called just at all, even more importantly, history shows such systems yield so much social resentment and stagnation over time they lead to self-loathing, demoralized populations and rampant economic exploitation (as in feudal and monarchical systems) and eventually they become unstable.
posted by saulgoodman at 6:15 PM on June 25, 2012 [1 favorite]
Then it's up to you to explain how any system that by definition privileges a few over all others on an a systematic basis--a self-consciously, willfully elitist system in the most literal sense--could ever be more just than its alternatives.
But to be clear, the issue is not simply the existence of economic inequality per se. I doubt anyone here's suggesting all income should be equal--the idea is that income should increase rationally and proportionally as we progress up the income ladder or else inequality has seriously negative practical economic and social consequences.
Look at it this way: most people on the other side of this issue from you aren't saying there shouldn't be a ladder up; what they're saying is that if the upper rungs of that ladder are spaced too far from the rungs that precede them, the ladder becomes impossible to climb under your own power after a certain point (unless you get the benefit of a hand up from someone already at the top). And while arguably such a system cannot in any meaningful sense be called just at all, even more importantly, history shows such systems yield so much social resentment and stagnation over time they lead to self-loathing, demoralized populations and rampant economic exploitation (as in feudal and monarchical systems) and eventually they become unstable.
posted by saulgoodman at 6:15 PM on June 25, 2012 [1 favorite]
I'll check out the TED talk later, but yes, at the moment I don't believe that economic inequality is inherently unjust.
I hope that someday you have to do a shitty job for under $10 per hour. Your tune will change right quick.
Progressive income taxes that ideally pay for public services for those less fortunate than you shouldn't feel like a burden. Instead, you should wake up thankful every day that you only have to pay 17.5% for your guillotine insurance. Well that and roads.
posted by thsmchnekllsfascists at 7:06 PM on June 25, 2012 [1 favorite]
I hope that someday you have to do a shitty job for under $10 per hour. Your tune will change right quick.
Progressive income taxes that ideally pay for public services for those less fortunate than you shouldn't feel like a burden. Instead, you should wake up thankful every day that you only have to pay 17.5% for your guillotine insurance. Well that and roads.
posted by thsmchnekllsfascists at 7:06 PM on June 25, 2012 [1 favorite]
corb, people avoid taxes for the same reason they feel the need to amass fortunes so large that they and ten generations of their progeny couldn't spend it all even with lavish spending. It's called greed. To some degree that's a fine thing, but when you take it to the point that you and your ilk are depriving our government of so much revenue that we are presently increasing our debt a trillion dollars a year, often using blatantly illegal means as former President GW Bush did.
Not only that, but there is a constant war against the IRS in much the same way as survivalists work to demean the FBI, so there is no money or interest in performing enough audits to deter tax evasion. That's probably the biggest shame of all. I've seen estimates of between $250 billion and a trillion dollars a year in evasion, not avoidance. Obviously it's hard to tell since unreported income is by definition unreported.
I simply don't buy the argument that taxes are immoral in the general sense, much less the estate tax. Maybe read the federalist papers if you'd like to understand why I feel that way. Also, when you're whining about possibly having to pay tax on an estate larger than what most people make in a lifetime it's pretty hard to not consider it childish petulance. After all, your poor grandchildren may be forced to work for a living. (maybe your children, too, should they choose not to live frugally) What a crying shame.
I guess I ought to be arguing for lower taxes given my family's station in life and the strong likelihood of it improving further in the next 5 years, but I look at our tax bill every year and think how fortunate we are to have made so much that the bill is so high. I guess I'm strange that way. It boggles my mind that people who make more than we do and yet pay a lower rate complain, especially given their historically low tax rate.
Lastly, as I said earlier, whether or not you believe in the injustice of extreme inequality is irrelevant. Increasing inequality is to your detriment in the long run, even if you are near the top. (I find it unlikely you're high enough on the scale for it to not matter)
posted by wierdo at 8:07 PM on June 25, 2012 [2 favorites]
Not only that, but there is a constant war against the IRS in much the same way as survivalists work to demean the FBI, so there is no money or interest in performing enough audits to deter tax evasion. That's probably the biggest shame of all. I've seen estimates of between $250 billion and a trillion dollars a year in evasion, not avoidance. Obviously it's hard to tell since unreported income is by definition unreported.
I simply don't buy the argument that taxes are immoral in the general sense, much less the estate tax. Maybe read the federalist papers if you'd like to understand why I feel that way. Also, when you're whining about possibly having to pay tax on an estate larger than what most people make in a lifetime it's pretty hard to not consider it childish petulance. After all, your poor grandchildren may be forced to work for a living. (maybe your children, too, should they choose not to live frugally) What a crying shame.
I guess I ought to be arguing for lower taxes given my family's station in life and the strong likelihood of it improving further in the next 5 years, but I look at our tax bill every year and think how fortunate we are to have made so much that the bill is so high. I guess I'm strange that way. It boggles my mind that people who make more than we do and yet pay a lower rate complain, especially given their historically low tax rate.
Lastly, as I said earlier, whether or not you believe in the injustice of extreme inequality is irrelevant. Increasing inequality is to your detriment in the long run, even if you are near the top. (I find it unlikely you're high enough on the scale for it to not matter)
posted by wierdo at 8:07 PM on June 25, 2012 [2 favorites]
Hmm, but that doesn't reflect any kind of economic orthodoxy at all. We already have when everyone gets richer: it's called inflation; it can be difficult, and it doesn't resolve inequality because rich people get richer than poor people get richer - more often than not because they have more assets than cash compared to poor people, and assets' value also inflates.
Upward mobility in the way that you're talking about is contingent on downward mobility
Hmmm. You make a point - I suppose I should say, I'm not opposed to people being downwardly mobile if they do it on their own and aren't aided along by the government, but I certainly believe that parents should be able to attempt to shield their children from that downward mobility without being thwarted by people who think there should be more economic shakeup. So, yes, consolidation of wealth will occur, but then there will also come irresponsible stewards of that wealth who will throw a ton of it away and end up lower than they started initially. Yes, they may not go from rich to poor, but they may go from rich to upper-middle-class, or upper-middle-class to middle-class.
Look at it this way: most people on the other side of this issue from you aren't saying there shouldn't be a ladder up; what they're saying is that if the upper rungs of that ladder are spaced too far from the rungs that precede them, the ladder becomes impossible to climb under your own power after a certain point (unless you get the benefit of a hand up from someone already at the top).
I suppose the question for me about this whole ladder thing is: how are you attempting to respace the ladder? Are you trying to bring people up, or are you trying to bring others down or stop others from getting higher? The first I can understand to some degree, and possibly think even admirable. The second I have a strong antipathy for. But it seems the second is what most people are arguing for. They want higher taxes on the rich so they can't get richer at the same rate; they want high estate taxes to break up the concentration of wealth and to ensure that it shrinks or remains constant, rather than growing over time. They don't seem to want to allow those who are well off to remain so - there's a lot of moralizing about "more money than they and ten generations could ever spend" without acknowledging that first, it's factually untrue, and secondly, if someone wants to protect their progeny as best they can up to the tenth generation, why not? Why is that morally wrong?
I hope that someday you have to do a shitty job for under $10 per hour. Your tune will change right quick.
See, this is the other argument that is always raised, and never makes sense. That if people were only poor, they'd understand why we need to take from the rich. But that is flat out not true. I've worked shitty jobs for less than $10 an hour. I wasn't always financially stable in any sense. I've been poor. And that is one of the reasons why I argue that people should be able to increase their wealth. Because I want to be able to have my family rise through the generations, rather than have to struggle the way I did. I clawed my way up to a point where my household income is comfortable and allows a lot of discretionary spending and saving, but I don't want my children to have to claw. I want to accumulate land, and I want my children not to have to worry about how they'll hold onto that land, but be able to add to that land, so that their children can have the combined amount.
I simply don't buy the argument that taxes are immoral in the general sense, much less the estate tax. Maybe read the federalist papers if you'd like to understand why I feel that way. Also, when you're whining about possibly having to pay tax on an estate larger than what most people make in a lifetime it's pretty hard to not consider it childish petulance. After all, your poor grandchildren may be forced to work for a living. (maybe your children, too, should they choose not to live frugally) What a crying shame.
I think the best way I can explain this, given your love of the federalists, is this quotation. But I will say that people's reluctance to think about the generations to come is absolutely puzzling to me.
Upward mobility in the way that you're talking about is contingent on downward mobility
Hmmm. You make a point - I suppose I should say, I'm not opposed to people being downwardly mobile if they do it on their own and aren't aided along by the government, but I certainly believe that parents should be able to attempt to shield their children from that downward mobility without being thwarted by people who think there should be more economic shakeup. So, yes, consolidation of wealth will occur, but then there will also come irresponsible stewards of that wealth who will throw a ton of it away and end up lower than they started initially. Yes, they may not go from rich to poor, but they may go from rich to upper-middle-class, or upper-middle-class to middle-class.
Look at it this way: most people on the other side of this issue from you aren't saying there shouldn't be a ladder up; what they're saying is that if the upper rungs of that ladder are spaced too far from the rungs that precede them, the ladder becomes impossible to climb under your own power after a certain point (unless you get the benefit of a hand up from someone already at the top).
I suppose the question for me about this whole ladder thing is: how are you attempting to respace the ladder? Are you trying to bring people up, or are you trying to bring others down or stop others from getting higher? The first I can understand to some degree, and possibly think even admirable. The second I have a strong antipathy for. But it seems the second is what most people are arguing for. They want higher taxes on the rich so they can't get richer at the same rate; they want high estate taxes to break up the concentration of wealth and to ensure that it shrinks or remains constant, rather than growing over time. They don't seem to want to allow those who are well off to remain so - there's a lot of moralizing about "more money than they and ten generations could ever spend" without acknowledging that first, it's factually untrue, and secondly, if someone wants to protect their progeny as best they can up to the tenth generation, why not? Why is that morally wrong?
I hope that someday you have to do a shitty job for under $10 per hour. Your tune will change right quick.
See, this is the other argument that is always raised, and never makes sense. That if people were only poor, they'd understand why we need to take from the rich. But that is flat out not true. I've worked shitty jobs for less than $10 an hour. I wasn't always financially stable in any sense. I've been poor. And that is one of the reasons why I argue that people should be able to increase their wealth. Because I want to be able to have my family rise through the generations, rather than have to struggle the way I did. I clawed my way up to a point where my household income is comfortable and allows a lot of discretionary spending and saving, but I don't want my children to have to claw. I want to accumulate land, and I want my children not to have to worry about how they'll hold onto that land, but be able to add to that land, so that their children can have the combined amount.
I simply don't buy the argument that taxes are immoral in the general sense, much less the estate tax. Maybe read the federalist papers if you'd like to understand why I feel that way. Also, when you're whining about possibly having to pay tax on an estate larger than what most people make in a lifetime it's pretty hard to not consider it childish petulance. After all, your poor grandchildren may be forced to work for a living. (maybe your children, too, should they choose not to live frugally) What a crying shame.
I think the best way I can explain this, given your love of the federalists, is this quotation. But I will say that people's reluctance to think about the generations to come is absolutely puzzling to me.
I must study Politicks and War that my sons may have liberty to study Mathematicks and Philosophy. My sons ought to study Mathematicks and Philosophy, Geography, natural History, Naval Architecture, navigation, Commerce, and Agriculture, in order to give their Children a right to study Painting, Poetry, Musick, Architecture, Statuary, Tapestry, and Porcelaine.posted by corb at 5:19 AM on June 26, 2012 [1 favorite]
John Adams, Letter to Abigail Adams, May 12, 1780
I suppose the question for me about this whole ladder thing is: how are you attempting to respace the ladder?
No one wants to replace the ladder--at least, I don't. I want you to stop moving the top rungs further apart from the rest of them. That's what the tax reforms and other "supply-side" reforms since the 80s have effectively been doing: that ladder was actually starting to work pretty well until the Movement Conservative revolutionaries started "conservatively" radically reforming every aspect of the US tax and regulatory systems they could to their advantage--from relaxing rules meant to limit media consolidation and protect regional media markets, to literally
Here's more from Joseph Stiglitz in a recent interview about the social costs of inequality.
I think the best way I can explain this, given your love of the federalists, is this quotation. But I will say that people's reluctance to think about the generations to come is absolutely puzzling to me.
That's no explanation. It's a lazy attempt to feign profundity and make a hand-wavy appeal to some people's prejudices about "how spoiled the kids today are." Or something even less coherent.
That if people were only poor, they'd understand why we need to take from the rich.
Progressive income taxation is not "taking from the rich"; it's helping ensure the wealth of the nation isn't sequestered away and horded for the benefit of few at the expense of the rest of us and the welfare of the nation.
Since you're not big on government taxation, what do you think about rents? Do you think its moral to "take from the poor" when they have no choice in the matter but pay or starve or live on the streets?
Besides, we literally don't tax the rich as a class any differently than anyone else. We tax different ranges of income level in accordance with sound economic realities and everyone with income that falls into the range pays at exactly the same rate. It seems to me that unless you're implicitly assuming there is and will always be some permanent class of rich people in the US who pay taxes at these higher rates--that is, only if you assume that we already have some permanent upper class who is unfairly targeted by high upper bracket tax rates. If you believe America is not a class-based society (or shouldn't be at least), then progressive income taxation is completely fair, as anyone who makes revenue within a given threshold range pays the same rate on that income.
posted by saulgoodman at 6:54 AM on June 26, 2012 [2 favorites]
No one wants to replace the ladder--at least, I don't. I want you to stop moving the top rungs further apart from the rest of them. That's what the tax reforms and other "supply-side" reforms since the 80s have effectively been doing: that ladder was actually starting to work pretty well until the Movement Conservative revolutionaries started "conservatively" radically reforming every aspect of the US tax and regulatory systems they could to their advantage--from relaxing rules meant to limit media consolidation and protect regional media markets, to literally
Here's more from Joseph Stiglitz in a recent interview about the social costs of inequality.
I think the best way I can explain this, given your love of the federalists, is this quotation. But I will say that people's reluctance to think about the generations to come is absolutely puzzling to me.
That's no explanation. It's a lazy attempt to feign profundity and make a hand-wavy appeal to some people's prejudices about "how spoiled the kids today are." Or something even less coherent.
That if people were only poor, they'd understand why we need to take from the rich.
Progressive income taxation is not "taking from the rich"; it's helping ensure the wealth of the nation isn't sequestered away and horded for the benefit of few at the expense of the rest of us and the welfare of the nation.
Since you're not big on government taxation, what do you think about rents? Do you think its moral to "take from the poor" when they have no choice in the matter but pay or starve or live on the streets?
Besides, we literally don't tax the rich as a class any differently than anyone else. We tax different ranges of income level in accordance with sound economic realities and everyone with income that falls into the range pays at exactly the same rate. It seems to me that unless you're implicitly assuming there is and will always be some permanent class of rich people in the US who pay taxes at these higher rates--that is, only if you assume that we already have some permanent upper class who is unfairly targeted by high upper bracket tax rates. If you believe America is not a class-based society (or shouldn't be at least), then progressive income taxation is completely fair, as anyone who makes revenue within a given threshold range pays the same rate on that income.
posted by saulgoodman at 6:54 AM on June 26, 2012 [2 favorites]
No one wants to replace the ladder--at least, I don't. I want you to stop moving the top rungs further apart from the rest of them.
Re-SPACE, not replace. I.e. - the distance between the rungs is increasing. How do you want to shorten it?
That's no explanation. It's a lazy attempt to feign profundity and make a hand-wavy appeal to some people's prejudices about "how spoiled the kids today are." Or something even less coherent.
*sigh* Okay, I'll try to explain the concept of generational class mobility, though it seems really self-evident to me. (Though the ladder metaphor helps.) Let's suppose, in fact, that the lowest of the lower class is the bottom rung of the ladder, and the highest of the upper class is the top rung of the ladder. I don't think that many people manage to climb from the bottom to the top in one lifetime, unassisted. If it happens to occur: mazel tov! But I don't think it's necessarily something to be striving for.
For me, I want to start climbing the ladder. And when I get tired and can't go any further (die), I want to reach a hand down to my kids, still waiting at the bottom, and pull them up to my level, so that when they start climbing, they have less far to go. It's pretty heavy lifting, so I (my resources) may be exhausted after pulling one kid up, or two kids, and may not be able to lift my grandkids. But if I can, I will - because that means that maybe, by the time their parents are tired and stop climbing (die), they may be able not just to have the strength (resources) to pull them up to their level, they may be able to push them a little past it.
To me, it doesn't matter how tall the ladder is, or how long it takes to climb. As long as I'm able to do the best I can to make sure I'm climbing as high as I can, and pulling my kids on up, that's fine by me. I'm not mad at the people at the top, even if their kids never have to climb. I would love a world where my kids never had to climb the ladder - because it's really tiring.
Since you're not big on government taxation, what do you think about rents? Do you think its moral to "take from the poor" when they have no choice in the matter but pay or starve or live on the streets?
Rent is a private transaction, not a governmental one. But yes, I think it's moral. The private individual owns the building/apartment. They are under no obligation to let people live in it - in which case, they are still facing the starve-in-the-street or live-with-family problem. But if they're going to let people live in it, they should be able to ask the prices they want for the privilege.
Besides, we literally don't tax the rich as a class any differently than anyone else. We tax different ranges of income level in accordance with sound economic realities and everyone with income that falls into the range pays at exactly the same rate. It seems to me that unless you're implicitly assuming there is and will always be some permanent class of rich people in the US who pay taxes at these higher rates--that is, only if you assume that we already have some permanent upper class who is unfairly targeted by high upper bracket tax rates.
First, I don't agree that these are "sound economic realities." Secondly, I don't think there's a "permanent" class of rich people, but there's certainly an upper class, who are a minority in terms of votes, and thus an easy target for people in a democratic system to do with them what they will. They are the only class it's still totally fine to discriminate against, for many people.
If you believe America is not a class-based society (or shouldn't be at least), then progressive income taxation is completely fair, as anyone who makes revenue within a given threshold range pays the same rate on that income.
When did I ever say that America is not a class-based society? America, like most other countries, has a class system. It's just not a rigid class system - it's one that allows for mobility between classes, and it doesn't have a clear delineation between them. But it absolutely has a class system.
However, even if I didn't, the percentage of people making over that threshhold range is always a minority, and so no, I don't support them having their money forcibly taken from them to support the majority.
posted by corb at 7:15 AM on June 26, 2012 [1 favorite]
Re-SPACE, not replace. I.e. - the distance between the rungs is increasing. How do you want to shorten it?
That's no explanation. It's a lazy attempt to feign profundity and make a hand-wavy appeal to some people's prejudices about "how spoiled the kids today are." Or something even less coherent.
*sigh* Okay, I'll try to explain the concept of generational class mobility, though it seems really self-evident to me. (Though the ladder metaphor helps.) Let's suppose, in fact, that the lowest of the lower class is the bottom rung of the ladder, and the highest of the upper class is the top rung of the ladder. I don't think that many people manage to climb from the bottom to the top in one lifetime, unassisted. If it happens to occur: mazel tov! But I don't think it's necessarily something to be striving for.
For me, I want to start climbing the ladder. And when I get tired and can't go any further (die), I want to reach a hand down to my kids, still waiting at the bottom, and pull them up to my level, so that when they start climbing, they have less far to go. It's pretty heavy lifting, so I (my resources) may be exhausted after pulling one kid up, or two kids, and may not be able to lift my grandkids. But if I can, I will - because that means that maybe, by the time their parents are tired and stop climbing (die), they may be able not just to have the strength (resources) to pull them up to their level, they may be able to push them a little past it.
To me, it doesn't matter how tall the ladder is, or how long it takes to climb. As long as I'm able to do the best I can to make sure I'm climbing as high as I can, and pulling my kids on up, that's fine by me. I'm not mad at the people at the top, even if their kids never have to climb. I would love a world where my kids never had to climb the ladder - because it's really tiring.
Since you're not big on government taxation, what do you think about rents? Do you think its moral to "take from the poor" when they have no choice in the matter but pay or starve or live on the streets?
Rent is a private transaction, not a governmental one. But yes, I think it's moral. The private individual owns the building/apartment. They are under no obligation to let people live in it - in which case, they are still facing the starve-in-the-street or live-with-family problem. But if they're going to let people live in it, they should be able to ask the prices they want for the privilege.
Besides, we literally don't tax the rich as a class any differently than anyone else. We tax different ranges of income level in accordance with sound economic realities and everyone with income that falls into the range pays at exactly the same rate. It seems to me that unless you're implicitly assuming there is and will always be some permanent class of rich people in the US who pay taxes at these higher rates--that is, only if you assume that we already have some permanent upper class who is unfairly targeted by high upper bracket tax rates.
First, I don't agree that these are "sound economic realities." Secondly, I don't think there's a "permanent" class of rich people, but there's certainly an upper class, who are a minority in terms of votes, and thus an easy target for people in a democratic system to do with them what they will. They are the only class it's still totally fine to discriminate against, for many people.
If you believe America is not a class-based society (or shouldn't be at least), then progressive income taxation is completely fair, as anyone who makes revenue within a given threshold range pays the same rate on that income.
When did I ever say that America is not a class-based society? America, like most other countries, has a class system. It's just not a rigid class system - it's one that allows for mobility between classes, and it doesn't have a clear delineation between them. But it absolutely has a class system.
However, even if I didn't, the percentage of people making over that threshhold range is always a minority, and so no, I don't support them having their money forcibly taken from them to support the majority.
posted by corb at 7:15 AM on June 26, 2012 [1 favorite]
Ach. Misread "respace" as "replace".
Look: it's relatively simple from where I sit. We just need to go back to taxing at historical rates and providing services to people who need them as best we can. We also need to do a better job reigning in anti-competitive/monopolistic/exploitative business practices and to reestablish the idea that work is worth something again by actually economically valuing work and rewarding it instead of trying to exploit as much free labor as possible. And since the constant demands for workforce flexibility have destroyed the social cohesion of our neighborhoods and communities, I think it's up to those who've brought us to this point in achieving their historically unprecedented levels of personal wealth to pony up as much as possible to set things back in order.
sorry. missed your response on preview. have to go now.
posted by saulgoodman at 7:40 AM on June 26, 2012 [3 favorites]
Look: it's relatively simple from where I sit. We just need to go back to taxing at historical rates and providing services to people who need them as best we can. We also need to do a better job reigning in anti-competitive/monopolistic/exploitative business practices and to reestablish the idea that work is worth something again by actually economically valuing work and rewarding it instead of trying to exploit as much free labor as possible. And since the constant demands for workforce flexibility have destroyed the social cohesion of our neighborhoods and communities, I think it's up to those who've brought us to this point in achieving their historically unprecedented levels of personal wealth to pony up as much as possible to set things back in order.
sorry. missed your response on preview. have to go now.
posted by saulgoodman at 7:40 AM on June 26, 2012 [3 favorites]
However, even if I didn't, the percentage of people making over that threshhold range is always a minority, and so no, I don't support them having their money forcibly taken from them to support the majority.
But the law doesn't only apply to the minority. It applies uniformly to anyone. That's as fair as law can ever be.
posted by saulgoodman at 7:41 AM on June 26, 2012
But the law doesn't only apply to the minority. It applies uniformly to anyone. That's as fair as law can ever be.
posted by saulgoodman at 7:41 AM on June 26, 2012
If your point is taxes always disproportionately impact a statistical minority, and that's a problem for you, then I suppose laws against murder--which likewise always only impact a statistical minority--are immoral, too.
posted by saulgoodman at 7:43 AM on June 26, 2012
posted by saulgoodman at 7:43 AM on June 26, 2012
corb, I think one of our fundamental disconnects is that to me there is a difference between providing your children opportunity (some of which is bought with taxes) and providing them a fat pile of cash, while to you, the fat wad of cash seems to be the important bit.
posted by wierdo at 7:46 AM on June 26, 2012
posted by wierdo at 7:46 AM on June 26, 2012
corb, I think one of our fundamental disconnects is that to me there is a difference between providing your children opportunity (some of which is bought with taxes) and providing them a fat pile of cash, while to you, the fat wad of cash seems to be the important bit.
I think that's true. It's really hard for me to understand you, and I think really hard for you to understand me.
For me, land and money are freedom - money more so. Because money is liquid, mobile. If you are suddenly facing persecution and need to pack up your bags and move to a foreign country, you can't take educational opportunities bought with taxes with you. You can, however, take cash. If you're facing a trial, the opportunties bought with taxes won't help you - but the ability to hire a really top-notch lawyer will. So yeah, it is really, really important to me that you be able to pass on that liquid freedom to your children, rather than exchanging it for dubious opportunities that could be voted out in the next election.
posted by corb at 8:02 AM on June 26, 2012
I think that's true. It's really hard for me to understand you, and I think really hard for you to understand me.
For me, land and money are freedom - money more so. Because money is liquid, mobile. If you are suddenly facing persecution and need to pack up your bags and move to a foreign country, you can't take educational opportunities bought with taxes with you. You can, however, take cash. If you're facing a trial, the opportunties bought with taxes won't help you - but the ability to hire a really top-notch lawyer will. So yeah, it is really, really important to me that you be able to pass on that liquid freedom to your children, rather than exchanging it for dubious opportunities that could be voted out in the next election.
posted by corb at 8:02 AM on June 26, 2012
For me, land and money are freedom
Yeah, but, see, they're not. In the real world, land and money are taxable.
And that's a good thing, because not everyone has a whole lot of either.
If you are suddenly facing persecution and need to pack up your bags and move to a foreign country, you can't take educational opportunities bought with taxes with you. You can, however, take cash.
Pro tip: Attempting to flee the country with a large amount of cash is a great way to get caught.
posted by Sys Rq at 9:13 AM on June 26, 2012
Yeah, but, see, they're not. In the real world, land and money are taxable.
And that's a good thing, because not everyone has a whole lot of either.
If you are suddenly facing persecution and need to pack up your bags and move to a foreign country, you can't take educational opportunities bought with taxes with you. You can, however, take cash.
Pro tip: Attempting to flee the country with a large amount of cash is a great way to get caught.
posted by Sys Rq at 9:13 AM on June 26, 2012
Oh, wait. I just realized what your point is.
It's not about "what do my kids deserve?" It's about - what do /I/ deserve?
[...]
For me, land and money are freedom - money more so.
The rich dsereve more freedom than the poor. Got it.
posted by Sys Rq at 9:36 AM on June 26, 2012 [1 favorite]
It's not about "what do my kids deserve?" It's about - what do /I/ deserve?
[...]
For me, land and money are freedom - money more so.
The rich dsereve more freedom than the poor. Got it.
posted by Sys Rq at 9:36 AM on June 26, 2012 [1 favorite]
Sys Rq, corb said "persecution." Not prosecution; his family would not be fleeing the country because of legal issues. He is not suggesting they should embezzle money and then abscond with it, no matter how intent this thread seems to be to paint him as a bad guy for wanting security for his kids. He's saying that if we had a military coup or a zombie outbreak on our shores, he'd want his kids to have the resources to pack up and get the hell out. makes sense to me.
Wierdo: corb, I think one of our fundamental disconnects is that to me there is a difference between providing your children opportunity (some of which is bought with taxes) and providing them a fat pile of cash, while to you, the fat wad of cash seems to be the important bit.
But that's interesting, because if you were to round up any random group of Mefites and ask them if wealth constituted privilege, they'd give a resounding shout of, "Of course!" and take it as a given that being born into wealth alone provides opportunities that the impoverished do not have. So why wouldn't you associate the two?
posted by misha at 9:38 AM on June 26, 2012 [1 favorite]
Wierdo: corb, I think one of our fundamental disconnects is that to me there is a difference between providing your children opportunity (some of which is bought with taxes) and providing them a fat pile of cash, while to you, the fat wad of cash seems to be the important bit.
But that's interesting, because if you were to round up any random group of Mefites and ask them if wealth constituted privilege, they'd give a resounding shout of, "Of course!" and take it as a given that being born into wealth alone provides opportunities that the impoverished do not have. So why wouldn't you associate the two?
posted by misha at 9:38 AM on June 26, 2012 [1 favorite]
Oh, and Sys Rq, your comment was lazy and deliberately inflammatory.
You are taking, "I would like to be able to provide security for my children, so I am working hard to earn my money, saving and living within my means, neither evading nor avoiding my taxes, and I feel taxing my estate at 55%--more than half of what I have saved--is an unfair burden," and turning it into, "The rich deserve more freedom than the poor."
That's ludicrous , and you know it.
posted by misha at 9:52 AM on June 26, 2012 [1 favorite]
You are taking, "I would like to be able to provide security for my children, so I am working hard to earn my money, saving and living within my means, neither evading nor avoiding my taxes, and I feel taxing my estate at 55%--more than half of what I have saved--is an unfair burden," and turning it into, "The rich deserve more freedom than the poor."
That's ludicrous , and you know it.
posted by misha at 9:52 AM on June 26, 2012 [1 favorite]
I really, honestly don't think it is ludicrous at all. Many people believe that. It is called "the American dream."
What I do think is ludicrous is someone wanting to keep their money after they die.
and I feel taxing my estate at 55%--more than half of what I have saved--is an unfair burden
Not just unfair -- also imaginary.
posted by Sys Rq at 10:02 AM on June 26, 2012
What I do think is ludicrous is someone wanting to keep their money after they die.
and I feel taxing my estate at 55%--more than half of what I have saved--is an unfair burden
Not just unfair -- also imaginary.
posted by Sys Rq at 10:02 AM on June 26, 2012
misha, wealth buys some things, but it doesn't buy a good life except in the material sense. (at least beyond a certain point, and nobody is advocating making the estate tax exemption zero, so the whole thing is something of a straw man)
posted by wierdo at 11:15 AM on June 26, 2012
posted by wierdo at 11:15 AM on June 26, 2012
Sys Rq, you really feel that, "The rich deserve more freedom than the poor," is just a restatement of the "American Dream"?
Wow, I don't feel that way at all, and I think that's the disconnect here, if you are sincere and not engaging in hyperbole, as I thought you were.
If I got that wrong, and you are sincere, I apologize for feeling like you were not arguing in good faith, but I disagree strongly with your interpretation of the "American Dream."
posted by misha at 11:29 AM on June 26, 2012 [1 favorite]
Wow, I don't feel that way at all, and I think that's the disconnect here, if you are sincere and not engaging in hyperbole, as I thought you were.
If I got that wrong, and you are sincere, I apologize for feeling like you were not arguing in good faith, but I disagree strongly with your interpretation of the "American Dream."
posted by misha at 11:29 AM on June 26, 2012 [1 favorite]
Sys Rq, you really feel that, "The rich deserve more freedom than the poor," is just a restatement of the "American Dream"?
To a sizable portion of society, yes. Libertarians, Republicans, and the suckers who buy their lies.
Wow, I don't feel that way at all
I don't feel that way either. That's kind of my point. Was that not clear?
Also: You just put forward the "fact" of 55% estate tax, and I'm arguing in bad faith?
posted by Sys Rq at 11:53 AM on June 26, 2012
To a sizable portion of society, yes. Libertarians, Republicans, and the suckers who buy their lies.
Wow, I don't feel that way at all
I don't feel that way either. That's kind of my point. Was that not clear?
Also: You just put forward the "fact" of 55% estate tax, and I'm arguing in bad faith?
posted by Sys Rq at 11:53 AM on June 26, 2012
The estate tax kicks in at 55% starting in 2013. I'm not sure why people are arguing against this figure.
Misha is quite correct: I'm talking military coup/zombie outbreak time, not "I've done something illegal and want to avoid jail time."
posted by corb at 1:21 PM on June 26, 2012
Misha is quite correct: I'm talking military coup/zombie outbreak time, not "I've done something illegal and want to avoid jail time."
posted by corb at 1:21 PM on June 26, 2012
The top marginal rate of the estate tax is 55% in 2013 if by some miracle the Bush tax cuts are preserved and we don't go back to the rates we used to have.
And that's 55% after the first million of the estate is exempted. So you get the first million completely free and clear, and then have to pay 55% on the excess above a million.
As someone who, like the vast majority of Americans, is doomed to die still owing probably at least a couple of grand on the only significant piece of property I "own" while I guess you'll be worrying about how to divvy up your millions, that doesn't bother me. Unless you have thousands of hopeless dependent kids, a million plus 45% of however many millions you've got to share on top of that is still plenty to provide a hell of a better future for your kids than my kids will ever have unless the income inequality gap in this country starts to reverse again soon.
posted by saulgoodman at 1:58 PM on June 26, 2012 [2 favorites]
And that's 55% after the first million of the estate is exempted. So you get the first million completely free and clear, and then have to pay 55% on the excess above a million.
As someone who, like the vast majority of Americans, is doomed to die still owing probably at least a couple of grand on the only significant piece of property I "own" while I guess you'll be worrying about how to divvy up your millions, that doesn't bother me. Unless you have thousands of hopeless dependent kids, a million plus 45% of however many millions you've got to share on top of that is still plenty to provide a hell of a better future for your kids than my kids will ever have unless the income inequality gap in this country starts to reverse again soon.
posted by saulgoodman at 1:58 PM on June 26, 2012 [2 favorites]
So, to be clear on this, you're saying, "I don't care if you get robbed, because I won't ever make enough money to be robbed."
Whereas I'm saying, "I want all of us to have the same right to not have our property stolen."
And you're accusing me of not thinking about other people?
posted by corb at 1:50 PM on June 27, 2012 [2 favorites]
Whereas I'm saying, "I want all of us to have the same right to not have our property stolen."
And you're accusing me of not thinking about other people?
posted by corb at 1:50 PM on June 27, 2012 [2 favorites]
Equating taxation with robbery is where you go off the rails. Far off the rails. Like 7000 years off the rails.
posted by wierdo at 1:02 AM on June 28, 2012 [1 favorite]
posted by wierdo at 1:02 AM on June 28, 2012 [1 favorite]
Equating excessive taxation with robbery is not the same as saying, "I don't want to pay my taxes," though, wierdo. Some of us are happy to pay our taxes, have even lobbied for higher local taxes for emergency services, but feel that taking more than half of someone's income is excessive.
I doubt I'll have this issue of having millions in my personal "estate" to pass on, let alone be taxed, but I think it is fair for a reasonable person not to expect to lose more than half of what that person has to taxation.
Now, if the laws don't change, and the rate never becomes 55%, the point is moot. But I think some here are losing sight of the forest for the trees. Not liking corb's motivation behind the argument or disagreeing with corb's personal morals has nothing to do with this. The question is, is paying 55% tax okay?
I'm seeing arguments that this is about values. I agree that we all owe something back to the community in the form of taxation. I haven't seen anyone here, corb included, argue otherwise. It's pretty clear that the actual sentiment in this thread is that people who make x money, where x = amount you personally feel is "too much", should be taxed to hell and back, because screw them.
That's not economics, that's just plain resentment.
Would anyone in this thread be okay with giving away half of what they own? Think about that realistically for a minute, and don't let rhetoric get in the way, or whether you think people should rent or own, drive a car or ride a bike, because none of that is relevant. Do you feel you should be required to give more than half of what you personally have acquired over the years to the government? Would you want less than half of that to go to your children? I doubt it.
posted by misha at 2:49 PM on July 2, 2012 [1 favorite]
I doubt I'll have this issue of having millions in my personal "estate" to pass on, let alone be taxed, but I think it is fair for a reasonable person not to expect to lose more than half of what that person has to taxation.
Now, if the laws don't change, and the rate never becomes 55%, the point is moot. But I think some here are losing sight of the forest for the trees. Not liking corb's motivation behind the argument or disagreeing with corb's personal morals has nothing to do with this. The question is, is paying 55% tax okay?
I'm seeing arguments that this is about values. I agree that we all owe something back to the community in the form of taxation. I haven't seen anyone here, corb included, argue otherwise. It's pretty clear that the actual sentiment in this thread is that people who make x money, where x = amount you personally feel is "too much", should be taxed to hell and back, because screw them.
That's not economics, that's just plain resentment.
Would anyone in this thread be okay with giving away half of what they own? Think about that realistically for a minute, and don't let rhetoric get in the way, or whether you think people should rent or own, drive a car or ride a bike, because none of that is relevant. Do you feel you should be required to give more than half of what you personally have acquired over the years to the government? Would you want less than half of that to go to your children? I doubt it.
posted by misha at 2:49 PM on July 2, 2012 [1 favorite]
The question is, is paying 55% tax okay?
a) Yes, absolutely, if you're in the top bracket, and b) Once again, that is not remotely what that number means.
posted by Sys Rq at 3:24 PM on July 2, 2012
a) Yes, absolutely, if you're in the top bracket, and b) Once again, that is not remotely what that number means.
posted by Sys Rq at 3:24 PM on July 2, 2012
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posted by smoke at 11:08 PM on June 24, 2012 [1 favorite]