The holidays are over!
January 2, 2013 9:58 AM Subscribe
So you make less than $250,000 $450,000 and think the fiscal cliff deal doesn't affect you? Think again: the payroll tax holiday has been allowed to expire. Here's a helpful table outlining how much more you'll be paying this year. (Previously)
My understanding is that the payroll tax was going to revert to old rates, deal or no deal.
posted by Hypnotic Chick at 10:01 AM on January 2, 2013 [7 favorites]
posted by Hypnotic Chick at 10:01 AM on January 2, 2013 [7 favorites]
Does this mean I might actually get Social Security when I retire? If not: GRRR! If so: Huzzah!
posted by The 10th Regiment of Foot at 10:02 AM on January 2, 2013 [3 favorites]
posted by The 10th Regiment of Foot at 10:02 AM on January 2, 2013 [3 favorites]
Oh, you'll get Social Security, 10th regiment. Your monthly stipend will buy a pea and a thimble of water, but you'll get it.
posted by Malor at 10:03 AM on January 2, 2013 [5 favorites]
posted by Malor at 10:03 AM on January 2, 2013 [5 favorites]
Yay for the reinstitution of this particularly regressive form of taxation!
posted by Mister_A at 10:04 AM on January 2, 2013 [17 favorites]
posted by Mister_A at 10:04 AM on January 2, 2013 [17 favorites]
NPR on the expiration of the tax holiday
CORNISH: But the idea behind the payroll tax holiday was to stimulate the economy. And by that measure, did it work?posted by exogenous at 10:07 AM on January 2, 2013 [14 favorites]
YDSTIE: Yeah. I think most economists would agree it did... [it] raised take-home pay by around $100 billion a year. The economic research firm, Moody's Analytics, says for every dollar workers were able to keep in their pockets, $1.27 was added to U.S. GDP....
CORNISH: So help us understand, if most economists agree the payroll tax holiday has actually helped the economy, isn't allowing it to expire going to hurt the economy when the government starts taking this money out of people's pockets again?
YDSTIE: You're right. It very likely will hurt the economy. Economists say it could trim more than a half a percentage point off of growth in 2013. And when you're only growing in the range of around 2 percent or a little more than that a year, that's significant.
As per usual, the poor and middle class get taxed in ways that are unavoidable. Yet even when we raise the rates on the wealthy we allow them to avoid them in many creative ways.
posted by postel's law at 10:10 AM on January 2, 2013 [41 favorites]
posted by postel's law at 10:10 AM on January 2, 2013 [41 favorites]
Yeah, this was never really part of the fiscal cliff negotiations. It was meant to be a temporary measure and neither party wanted to extend it further at this point.
posted by Drinky Die at 10:11 AM on January 2, 2013 [2 favorites]
posted by Drinky Die at 10:11 AM on January 2, 2013 [2 favorites]
My understanding is that the payroll tax was going to revert to old rates, deal or no deal.
Yes everyone can agree to let regressive taxes on the middle class rise, it's whether to blow hundreds of billions of dollars on permanent tax cuts for the 98th->99th percenters, or trillions on permanent tax cuts for the 98th->99.8th percenters that concerns our political system.
posted by crayz at 10:17 AM on January 2, 2013 [15 favorites]
Yes everyone can agree to let regressive taxes on the middle class rise, it's whether to blow hundreds of billions of dollars on permanent tax cuts for the 98th->99th percenters, or trillions on permanent tax cuts for the 98th->99.8th percenters that concerns our political system.
posted by crayz at 10:17 AM on January 2, 2013 [15 favorites]
Another issue on the periphery of the fiscal cliff is the vote on relief for victims of Hurricane Sandy being delayed possibly because of the dispute between Boehner and Cantor. Republicans like Peter King and Chris Christie are very, very pissed.
And of course, we are going to do the whole fiscal cliff/debt ceiling thing all over again in February.
posted by Drinky Die at 10:17 AM on January 2, 2013 [4 favorites]
And of course, we are going to do the whole fiscal cliff/debt ceiling thing all over again in February.
posted by Drinky Die at 10:17 AM on January 2, 2013 [4 favorites]
Yay for the reinstitution of this particularly regressive form of taxation!
Well, yes and no. It directly funds some of our more progressive policies (medicare and social security). Cuttting the payroll tax was going to seriously hurt the long term viability of the programs.
posted by empath at 10:18 AM on January 2, 2013 [12 favorites]
Well, yes and no. It directly funds some of our more progressive policies (medicare and social security). Cuttting the payroll tax was going to seriously hurt the long term viability of the programs.
posted by empath at 10:18 AM on January 2, 2013 [12 favorites]
I get that, empath - the thing of it is, this tax is regressive because high earners only pay this tax on the first 100K or so of their income. I actually pay more of this payroll tax than a high roller like Mitt Romney (anyone remember him?), who probably takes little or no salary.
posted by Mister_A at 10:23 AM on January 2, 2013 [4 favorites]
posted by Mister_A at 10:23 AM on January 2, 2013 [4 favorites]
Mister_A: Yay for the reinstitution of this particularly regressive form of taxation!
The expiring cuts were a payroll tax holiday and called that from day one. Now, I would want them to be extended for another year since growth is slow, but they were always going to end sometime.
Rather than cutting payroll taxes, we need to raise the cap on which income they are levied. Double the current cap and Social Secuirty is saved.
posted by spaltavian at 10:27 AM on January 2, 2013 [29 favorites]
The expiring cuts were a payroll tax holiday and called that from day one. Now, I would want them to be extended for another year since growth is slow, but they were always going to end sometime.
Rather than cutting payroll taxes, we need to raise the cap on which income they are levied. Double the current cap and Social Secuirty is saved.
posted by spaltavian at 10:27 AM on January 2, 2013 [29 favorites]
Now, I would want them to be extended for another year since growth is slow, but they were always going to end sometime.
The only better option would have been to draw it down (or back up, depending on perspective) in steps.
posted by dhartung at 10:28 AM on January 2, 2013
The only better option would have been to draw it down (or back up, depending on perspective) in steps.
posted by dhartung at 10:28 AM on January 2, 2013
Rather than cutting payroll taxes, we need to raise the cap on which income they are levied.
Amen to that. This would make the payroll tax overall significantly more progressive.
posted by mr_roboto at 10:28 AM on January 2, 2013 [5 favorites]
Amen to that. This would make the payroll tax overall significantly more progressive.
posted by mr_roboto at 10:28 AM on January 2, 2013 [5 favorites]
Yeah. I'm not thrilled about having to pay more taxes, in light of the tax break that the $250,000 crowd got.
However, I also understand the importance of paying down the deficit, and ensuring the long-term viability of medicare and social security. Nudging the payroll tax upward is a step in the right direction of achieving those goals, and I will gladly do my part.
Even though I consider myself fairly liberal, the thought of actually going off of the cliff was somewhat enticing, given that it would have automatically implemented some policies that would have paid off the national debt really quickly. It would have been disastrous in the short-term, but I think we'd be much better off 10 years from now.
posted by schmod at 10:29 AM on January 2, 2013 [5 favorites]
However, I also understand the importance of paying down the deficit, and ensuring the long-term viability of medicare and social security. Nudging the payroll tax upward is a step in the right direction of achieving those goals, and I will gladly do my part.
Even though I consider myself fairly liberal, the thought of actually going off of the cliff was somewhat enticing, given that it would have automatically implemented some policies that would have paid off the national debt really quickly. It would have been disastrous in the short-term, but I think we'd be much better off 10 years from now.
posted by schmod at 10:29 AM on January 2, 2013 [5 favorites]
Rather than cutting payroll taxes, we need to raise the cap on which income they are levied.
Spaltavian, if you read my other comment you'll see the same sentiment expressed.
posted by Mister_A at 10:32 AM on January 2, 2013
Spaltavian, if you read my other comment you'll see the same sentiment expressed.
posted by Mister_A at 10:32 AM on January 2, 2013
Burhanistan: I don't think it's particularly "regressive", especially since it's a flat rate.A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases.
(EDIT: sorry, I didn't make my point.)
Technically, you're correct. I think most people use the term to mean "increases the burden on the poor more than the rich", but that's not the definition.
posted by IAmBroom at 10:34 AM on January 2, 2013 [6 favorites]
Rather than cutting payroll taxes, we need to raise the cap on which income they are levied.
High popalorum, meet low popahiram.
posted by The 10th Regiment of Foot at 10:35 AM on January 2, 2013
High popalorum, meet low popahiram.
posted by The 10th Regiment of Foot at 10:35 AM on January 2, 2013
It would have been disastrous in the short-term, but I think we'd be much better off 10 years from now.
Probably but you'd accomplish this by clearing out the old, the poor and the sick from society.
And by clearing out I mean leaving to die.
posted by Talez at 10:37 AM on January 2, 2013 [1 favorite]
Probably but you'd accomplish this by clearing out the old, the poor and the sick from society.
And by clearing out I mean leaving to die.
posted by Talez at 10:37 AM on January 2, 2013 [1 favorite]
I friggin' won! I retired two weeks ago (well, technically laid off, but whose worried about the semantics), try and get more taxes out of me now, fool!
posted by HuronBob at 10:45 AM on January 2, 2013 [12 favorites]
posted by HuronBob at 10:45 AM on January 2, 2013 [12 favorites]
try and get more taxes out of me now, fool
So long as you don't buy or own anything you're set!
posted by The 10th Regiment of Foot at 10:46 AM on January 2, 2013 [5 favorites]
So long as you don't buy or own anything you're set!
posted by The 10th Regiment of Foot at 10:46 AM on January 2, 2013 [5 favorites]
"So long as you don't buy or own anything you're set!"
I stocked up on computers, bought my last car, the house is in the wife's name... I'm good on the major stuff!
posted by HuronBob at 10:49 AM on January 2, 2013
I stocked up on computers, bought my last car, the house is in the wife's name... I'm good on the major stuff!
posted by HuronBob at 10:49 AM on January 2, 2013
Isn't this "payroll tax" the Social Security tax? Does this mean we were underfunding social security for two years?
posted by smackfu at 10:49 AM on January 2, 2013
posted by smackfu at 10:49 AM on January 2, 2013
Yeah, you can argue that the word holiday means it was temporary, but in light of the fact that people who make $399,000 got a huge deal out of this, I’m not impressed.
posted by roomthreeseventeen at 10:50 AM on January 2, 2013 [2 favorites]
posted by roomthreeseventeen at 10:50 AM on January 2, 2013 [2 favorites]
I don't think it's particularly "regressive", especially since it's a flat rate.
Flat taxes are regressive with respect to the only thing that matters: utility. I favor flat taxes with respect to utility, but such taxes are progressive with respect to raw dollars.
posted by Jonathan Livengood at 10:51 AM on January 2, 2013 [4 favorites]
Flat taxes are regressive with respect to the only thing that matters: utility. I favor flat taxes with respect to utility, but such taxes are progressive with respect to raw dollars.
posted by Jonathan Livengood at 10:51 AM on January 2, 2013 [4 favorites]
Sometimes I think maybe the government of the USA is not really all that concerned with the well being of the middle class.
posted by Mister_A at 10:52 AM on January 2, 2013 [14 favorites]
posted by Mister_A at 10:52 AM on January 2, 2013 [14 favorites]
Sometimes I think maybe the government of the USA is not really all that concerned with the well being of the middle class.
and why would they be? none of them are members of the middle class.
posted by quonsar II: smock fishpants and the temple of foon at 10:55 AM on January 2, 2013 [14 favorites]
and why would they be? none of them are members of the middle class.
posted by quonsar II: smock fishpants and the temple of foon at 10:55 AM on January 2, 2013 [14 favorites]
Talez: "Probably but you'd accomplish this by clearing out the old, the poor and the sick from society.
And by clearing out I mean leaving to die."
Which of the fiscal cliff's effects would have actually done this?
The Budget Control Act would have made small cuts to Medicare providers (which is bad, but a tiny slice of the pie in the overall picture), and was explicitly written to prevent so that social security, medicaid, veterans benefits, or military pay were off-limits to cuts. Medicare cuts would not have exceeded 2%.
This debate was about extending the Bush tax cuts, and preventing cuts to the DoD. Anything else was a red herring.*
*Although I'm irked that we're not debating the extension of the farm bill that was part of the bill that just passed. Our agricultural policy is in desperate need of an overhaul, and nobody's willing to have that debate on honest terms.
posted by schmod at 10:56 AM on January 2, 2013
And by clearing out I mean leaving to die."
Which of the fiscal cliff's effects would have actually done this?
The Budget Control Act would have made small cuts to Medicare providers (which is bad, but a tiny slice of the pie in the overall picture), and was explicitly written to prevent so that social security, medicaid, veterans benefits, or military pay were off-limits to cuts. Medicare cuts would not have exceeded 2%.
This debate was about extending the Bush tax cuts, and preventing cuts to the DoD. Anything else was a red herring.*
*Although I'm irked that we're not debating the extension of the farm bill that was part of the bill that just passed. Our agricultural policy is in desperate need of an overhaul, and nobody's willing to have that debate on honest terms.
posted by schmod at 10:56 AM on January 2, 2013
Isn't this "payroll tax" the Social Security tax? Does this mean we were underfunding social security for two years?
More or less, yes. See, Social Security was actually in fairly good shape, so certain members of Congress felt something had to be done to remedy that dire situation.
posted by Thorzdad at 10:57 AM on January 2, 2013 [4 favorites]
More or less, yes. See, Social Security was actually in fairly good shape, so certain members of Congress felt something had to be done to remedy that dire situation.
posted by Thorzdad at 10:57 AM on January 2, 2013 [4 favorites]
It would have been disastrous in the short-term, but I think we'd be much better off 10 years from now.
The thing with long term solutions is that they are anything but.
You could elect me emperor for a year, and I could solve all the problems. And then next year, the new congress would undo all of it.
This is how throughout my entire life SS has always been going bankrupt at some point 15 years in the future.
posted by Pogo_Fuzzybutt at 10:58 AM on January 2, 2013 [5 favorites]
The thing with long term solutions is that they are anything but.
You could elect me emperor for a year, and I could solve all the problems. And then next year, the new congress would undo all of it.
This is how throughout my entire life SS has always been going bankrupt at some point 15 years in the future.
posted by Pogo_Fuzzybutt at 10:58 AM on January 2, 2013 [5 favorites]
Main details of the compromise:
-Tax rates on income, capital gains and dividends will be raised for individuals/families making more than $400k/$450k. The Bush tax cuts were made permanent on all the people below that.
- New (long term) capital gains and dividend tax rates are 20% plus an additional 3.8% for ACA, so 23.8% for those earning above $400k/$450k
- AMT patch was passed with a permanent increase tied to inflation every year
- Estate tax was raised from 35% to 40% but the threshold stays at $5m (Obama wanted to lower the threshold). The exemption is also indexed to inflation.
- Extended unemployment benefits were renewed for another year
- The payroll tax holiday (which was always meant to be temporary) expired. This means people making $50k who get paid twice a month will get paid around $42 less in each paycheck.
Virtually nothing has been done on the sequesteration, aka spending cuts and we will face another showdown over that (as well as raising the debt ceiling) in two months. It is also very likely that the US credit rating will be downgraded by Moody's and Fitch (it was already downgraded by S&P in 2011).
posted by young sister beacon at 10:58 AM on January 2, 2013 [5 favorites]
-Tax rates on income, capital gains and dividends will be raised for individuals/families making more than $400k/$450k. The Bush tax cuts were made permanent on all the people below that.
- New (long term) capital gains and dividend tax rates are 20% plus an additional 3.8% for ACA, so 23.8% for those earning above $400k/$450k
- AMT patch was passed with a permanent increase tied to inflation every year
- Estate tax was raised from 35% to 40% but the threshold stays at $5m (Obama wanted to lower the threshold). The exemption is also indexed to inflation.
- Extended unemployment benefits were renewed for another year
- The payroll tax holiday (which was always meant to be temporary) expired. This means people making $50k who get paid twice a month will get paid around $42 less in each paycheck.
Virtually nothing has been done on the sequesteration, aka spending cuts and we will face another showdown over that (as well as raising the debt ceiling) in two months. It is also very likely that the US credit rating will be downgraded by Moody's and Fitch (it was already downgraded by S&P in 2011).
posted by young sister beacon at 10:58 AM on January 2, 2013 [5 favorites]
Reading the responses here, it's discouraging to see how many soi-disant progressives believe this fiscal cliff/deficit disaster nonsense. The whole drama was internally inconsistent. The "fiscal cliff" was severe austerity, which most rational people understand will cause a severe economic downturn. In order to save ourselves from this austerian disaster, we were told, we must implement austerity. hrm.
So now we have the odd phenomenon of 'progressives' cheering regressive tax hikes just as they will cheer, I must assume, Social Security and Medicare cuts when they are decided upon in the next three months. Why? Their team, their president is for them! Tribalism ho!
"But shared sacrifice!", the neo-liberals cry. Really? When the poor have less money, they eat cat food, or don't buy clothes. When the uber rich have less money they buy a $50,000 watch instead of that $500,000 model. It's assymetrical. Social Security has a 2.7 TRILLION dollar surpllus and medicare just needs to be allowed to offer a government option and to bargain with drug companies like any other insurance plan.
Dick Cheney wasn't right very often, but he was spot on when he said that Ronald Reagan proved that deficits don't matter (caveat: in monetarily sovereign nations). This self-imposed austerity is utterly foolish nonsense that will send us back into recession. Any additional revenue gained from
suggested reading:
Deprogramming Progressives Indoctrinated Into Supporting Austerity
America's Deceptive Fiscal Cliff Part 1 ** Part 2 ** Part 3
posted by Treeline at 10:58 AM on January 2, 2013 [45 favorites]
So now we have the odd phenomenon of 'progressives' cheering regressive tax hikes just as they will cheer, I must assume, Social Security and Medicare cuts when they are decided upon in the next three months. Why? Their team, their president is for them! Tribalism ho!
"But shared sacrifice!", the neo-liberals cry. Really? When the poor have less money, they eat cat food, or don't buy clothes. When the uber rich have less money they buy a $50,000 watch instead of that $500,000 model. It's assymetrical. Social Security has a 2.7 TRILLION dollar surpllus and medicare just needs to be allowed to offer a government option and to bargain with drug companies like any other insurance plan.
Dick Cheney wasn't right very often, but he was spot on when he said that Ronald Reagan proved that deficits don't matter (caveat: in monetarily sovereign nations). This self-imposed austerity is utterly foolish nonsense that will send us back into recession. Any additional revenue gained from
suggested reading:
Deprogramming Progressives Indoctrinated Into Supporting Austerity
America's Deceptive Fiscal Cliff Part 1 ** Part 2 ** Part 3
posted by Treeline at 10:58 AM on January 2, 2013 [45 favorites]
quonsar II: smock fishpants and the temple of foon: "and why would they be? none of them are members of the middle class."
Joe Biden comes pretty close.
posted by schmod at 10:59 AM on January 2, 2013 [2 favorites]
Joe Biden comes pretty close.
posted by schmod at 10:59 AM on January 2, 2013 [2 favorites]
plenty of folks who make high salaries will definitely feel the pinch as they are already living at or beyond their means
Objection, speculation.
posted by adamdschneider at 11:03 AM on January 2, 2013
Objection, speculation.
posted by adamdschneider at 11:03 AM on January 2, 2013
Well I am heartened that the capital gains rate went up. Still seems a bit silly this cut-off at 450K; that's a huge amount of income, and no one in that bracket ought to be crying hardship.
posted by Mister_A at 11:05 AM on January 2, 2013
posted by Mister_A at 11:05 AM on January 2, 2013
I've always been told by "fiscal conservatives" that there's no such thing as a temporary tax increase -- they always become permanent.
I've learned from watching this exercise that strangely, there is also no such thing as a temporary tax cut either. Because as their expiration approaches, they are rhetorically transformed into a tax increase, which one must assume will be permanent if one accepts the original premise. So, we have a measure that is oddly both temporary and permanent, and both a cut and an increase.
Weird, but a lot like life itself, I suppose.
posted by weston at 11:05 AM on January 2, 2013 [20 favorites]
I've learned from watching this exercise that strangely, there is also no such thing as a temporary tax cut either. Because as their expiration approaches, they are rhetorically transformed into a tax increase, which one must assume will be permanent if one accepts the original premise. So, we have a measure that is oddly both temporary and permanent, and both a cut and an increase.
Weird, but a lot like life itself, I suppose.
posted by weston at 11:05 AM on January 2, 2013 [20 favorites]
You don't think that there are legions of Americans making $80k+ that are barely covering their lifestyles?
It doesn't matter what I think. All that matters is if that is a true statement, something you have not shown.
posted by adamdschneider at 11:10 AM on January 2, 2013 [3 favorites]
It doesn't matter what I think. All that matters is if that is a true statement, something you have not shown.
posted by adamdschneider at 11:10 AM on January 2, 2013 [3 favorites]
Joe Biden comes pretty close.
Joe Biden earns ~ $240,000 a year, and was on $174,000 when he was in the Senate. Upon retirement he will receive a pension of 80% of his final salary, or $192,000.
That's not middle class.
posted by Fnarf at 11:11 AM on January 2, 2013 [19 favorites]
Joe Biden earns ~ $240,000 a year, and was on $174,000 when he was in the Senate. Upon retirement he will receive a pension of 80% of his final salary, or $192,000.
That's not middle class.
posted by Fnarf at 11:11 AM on January 2, 2013 [19 favorites]
My buddy, a muckraker for the Huffpost, wrote about this issue this morning under the headline: Payroll Tax Hike Erases Paycheck Gains For Minimum Wage Workers
posted by Potomac Avenue at 11:11 AM on January 2, 2013
posted by Potomac Avenue at 11:11 AM on January 2, 2013
You don't think that there are legions of Americans making $80k+ that are barely covering their lifestyles
The problem, then, isn't the small increase in taxes but rather their lifestyles.
posted by Justinian at 11:14 AM on January 2, 2013 [2 favorites]
The problem, then, isn't the small increase in taxes but rather their lifestyles.
posted by Justinian at 11:14 AM on January 2, 2013 [2 favorites]
That's not middle class.
But it's all regular income derived from a job. It's not like he's the landed gentry simply collecting rent or, as modern gentry do, collecting dividends. Biden works for a living which is pretty much the definition of middle-class. If he stopped working he'd lose that income and if he stops working before retirement would lose some of that pension.
The "upper class" is not just everyone with more money than you.
posted by GuyZero at 11:14 AM on January 2, 2013 [26 favorites]
But it's all regular income derived from a job. It's not like he's the landed gentry simply collecting rent or, as modern gentry do, collecting dividends. Biden works for a living which is pretty much the definition of middle-class. If he stopped working he'd lose that income and if he stops working before retirement would lose some of that pension.
The "upper class" is not just everyone with more money than you.
posted by GuyZero at 11:14 AM on January 2, 2013 [26 favorites]
adamdschneider, my partner and I make a combined $105k, and we live paycheck to paycheck.
posted by roomthreeseventeen at 11:14 AM on January 2, 2013 [6 favorites]
posted by roomthreeseventeen at 11:14 AM on January 2, 2013 [6 favorites]
That people with high incomes manage to somehow spend all of their money is not news nor is it speculation. They'll definitely complain about it. But they won't exactly be forced into the streets eating garbage either.
posted by GuyZero at 11:17 AM on January 2, 2013 [6 favorites]
posted by GuyZero at 11:17 AM on January 2, 2013 [6 favorites]
adamdschneider, my partner and I make a combined $105k, and we live paycheck to paycheck.
I would bet that you live in NYC, LA, or Boston, then. I'm in Boston, and we take in just a little bit more than you guys, but feel the pinch often enough. That same salary in, say, Idaho? I imagine we would live like kings. There's a lot of regionalism to what a particular salary makes, and I imagine that adamdschneider is coming from an area of the US where cost of living is much lower than it is in the major cities.
posted by ellF at 11:20 AM on January 2, 2013 [4 favorites]
I would bet that you live in NYC, LA, or Boston, then. I'm in Boston, and we take in just a little bit more than you guys, but feel the pinch often enough. That same salary in, say, Idaho? I imagine we would live like kings. There's a lot of regionalism to what a particular salary makes, and I imagine that adamdschneider is coming from an area of the US where cost of living is much lower than it is in the major cities.
posted by ellF at 11:20 AM on January 2, 2013 [4 favorites]
roomthreeseventeen - Be careful, I said something akin to this, and live in the most expensive area in the world and was eviscerated.
posted by sfts2 at 11:21 AM on January 2, 2013 [2 favorites]
posted by sfts2 at 11:21 AM on January 2, 2013 [2 favorites]
I just don't think the votes were there. The Ds only got the payroll holiday extended last time because 2012 was a huge election year. Moreover, this was a stimulus measure -- and the economy is bouncing back now.
I, too, would like a more progressive structure which shifts the burden of social security taxes more to wealthier payers, but means testing for entitlements has been something the Ds have stoutly resisted, as it would quickly lead to huge cuts in these benefits for middle class beneficiaries.
posted by bearwife at 11:21 AM on January 2, 2013 [1 favorite]
I, too, would like a more progressive structure which shifts the burden of social security taxes more to wealthier payers, but means testing for entitlements has been something the Ds have stoutly resisted, as it would quickly lead to huge cuts in these benefits for middle class beneficiaries.
posted by bearwife at 11:21 AM on January 2, 2013 [1 favorite]
Burhanistan: "> Eh? You don't think that there are legions of Americans making $80k+ that are barely covering their lifestyles?"
That framing seems to imply that people who are making decent money are just spending it like there's no tomorrow! It's important to remember that many people making nominally good salaries - 75k-100K, for instance - are strapped because their incomes have not risen in any material way since 2007 or earlier. For example, my income has increased about 4% since 2006; the consumer price index is up about 10% over the same time period. Clearly, my compensation is not keeping pace with inflation. Other expenses, like healthcare, have risen particularly sharply, and have taken a steep toll on my family. In the past few years I've gone from saving for retirement to downsizing my house, cashing in 401K funds instead of investing or saving, toiling away all the while - not a day on unemployment or public assistance, mind! Many people are in the same bind. I don't live extravagantly, and I'm still coming up short because my pay is not keeping pace with inflation.
posted by Mister_A at 11:21 AM on January 2, 2013 [20 favorites]
That framing seems to imply that people who are making decent money are just spending it like there's no tomorrow! It's important to remember that many people making nominally good salaries - 75k-100K, for instance - are strapped because their incomes have not risen in any material way since 2007 or earlier. For example, my income has increased about 4% since 2006; the consumer price index is up about 10% over the same time period. Clearly, my compensation is not keeping pace with inflation. Other expenses, like healthcare, have risen particularly sharply, and have taken a steep toll on my family. In the past few years I've gone from saving for retirement to downsizing my house, cashing in 401K funds instead of investing or saving, toiling away all the while - not a day on unemployment or public assistance, mind! Many people are in the same bind. I don't live extravagantly, and I'm still coming up short because my pay is not keeping pace with inflation.
posted by Mister_A at 11:21 AM on January 2, 2013 [20 favorites]
If [Biden] stopped working he'd lose that income and if he stops working before retirement would lose some of that pension.
If you have been elected to the U.S. Senate even once, you will never go hungry thanks to lobbying firms, boards of directors and speaking fees. As much as I like the guy personally, Joe Biden has not been middle class by any reasonable definition for decades.
posted by Etrigan at 11:21 AM on January 2, 2013 [5 favorites]
If you have been elected to the U.S. Senate even once, you will never go hungry thanks to lobbying firms, boards of directors and speaking fees. As much as I like the guy personally, Joe Biden has not been middle class by any reasonable definition for decades.
posted by Etrigan at 11:21 AM on January 2, 2013 [5 favorites]
ellF, we live in NYC. Our apartment is rent controlled from 1974. My husband's work requires us to live here. We are not spending for the sake of spending.
posted by roomthreeseventeen at 11:22 AM on January 2, 2013
posted by roomthreeseventeen at 11:22 AM on January 2, 2013
New York City's per capita income in 2000 was $22,402; men and women had a median income of $37,435 and $32,949 respectively.
posted by Drinky Die at 11:24 AM on January 2, 2013 [11 favorites]
posted by Drinky Die at 11:24 AM on January 2, 2013 [11 favorites]
You can judge your lifestyle thru the lens of 'minimally required' or based upon what you've accomplished and been sold throughout your life.
posted by sfts2 at 11:26 AM on January 2, 2013
posted by sfts2 at 11:26 AM on January 2, 2013
Joe Biden has not been middle class by any reasonable definition for decades.
Sure, but it's not like he's John Kerry or Mitt Romney either (at least to my knowledge) - he is not sitting on hundreds of millions of dollars of assets either. He can't simply pull a Howard Hughes and live in his mansions peeing into jars for the next 20 years either.
There are lots of wealthy people in the middle class these days.
posted by GuyZero at 11:26 AM on January 2, 2013
Sure, but it's not like he's John Kerry or Mitt Romney either (at least to my knowledge) - he is not sitting on hundreds of millions of dollars of assets either. He can't simply pull a Howard Hughes and live in his mansions peeing into jars for the next 20 years either.
There are lots of wealthy people in the middle class these days.
posted by GuyZero at 11:26 AM on January 2, 2013
Your republic appears to be broken.
posted by KokuRyu at 11:28 AM on January 2, 2013 [12 favorites]
posted by KokuRyu at 11:28 AM on January 2, 2013 [12 favorites]
Drinky Die, my income is below the median. It's my husband's income (which will be null and void once he retires in 2017ish) that drives us up.
posted by roomthreeseventeen at 11:28 AM on January 2, 2013
posted by roomthreeseventeen at 11:28 AM on January 2, 2013
Quibbles over the fine points notwithstanding, the biggest problem I, personally, face these days is the utter failure to keep up with inflation, despite being gainfully employed throughout these past several years. I am not alone in this trouble, and getting a little extra tax lump on top of it all is certainly not going to help matters.
posted by Mister_A at 11:28 AM on January 2, 2013 [4 favorites]
posted by Mister_A at 11:28 AM on January 2, 2013 [4 favorites]
I friggin' won! I retired two weeks ago (well, technically laid off, but whose worried about the semantics), try and get more taxes out of me now, fool!
posted by HuronBob at 10:45 AM on January 2 [2 favorites]
Hate to burst your bubble, but Social Security, your 401k, IRA, and even your savings account interest are all still quite taxable.
posted by Gungho at 11:29 AM on January 2, 2013
posted by HuronBob at 10:45 AM on January 2 [2 favorites]
Hate to burst your bubble, but Social Security, your 401k, IRA, and even your savings account interest are all still quite taxable.
posted by Gungho at 11:29 AM on January 2, 2013
Mister_A: "the biggest problem I, personally, face these days is the utter failure to keep up with inflation"
Inflation is at or near historic lows, and investors expect this trend to continue.
posted by tonycpsu at 11:35 AM on January 2, 2013
Inflation is at or near historic lows, and investors expect this trend to continue.
posted by tonycpsu at 11:35 AM on January 2, 2013
Inflation is weird lately and I am not a sufficient econometrician to explain it. Gas prices are generally up vs a few years ago, food seems flat, but medical expense costs are exploding. Housing is down in aggregate unless you focus on places where people actually want to live, in which case prices are still pretty high and in some locales, still increasing. Education costs are also growing.
Overall I don't know what to think about inflation except that it doesn't always seem to reflect reality very well.
posted by GuyZero at 11:39 AM on January 2, 2013 [2 favorites]
Overall I don't know what to think about inflation except that it doesn't always seem to reflect reality very well.
posted by GuyZero at 11:39 AM on January 2, 2013 [2 favorites]
If you have been elected to the U.S. Senate even once, you will never go hungry thanks to lobbying firms, boards of directors and speaking fees. As much as I like the guy personally, Joe Biden has not been middle class by any reasonable definition for decades.
But if you consider personal relationships with those in power to be experience and knowledge of how the system works to be skills, then Joe Biden is another guy who exchanges work for wages. Granted, his talents are very much in demand and command a very high salary because there aren't many people with his skillset, but his income is entirely dependent on his activities.
That's a huge difference from someone like Mitt Romney who owns a ton of capital and makes money each day whether he gets out of bed or not. Mitt Romney could even hire a professional to manage his capital and retreat to New Hampshire for the rest of his life and he'd still make a crapload of money.
I think GuyZero is right. We shouldn't let the amount of income someone makes distract us from the actual class differences at play here. Biden probably has more in common with the rest of us than people like Romney and Kerry who are basically our nation's equivalent of landed gentry.
posted by RonButNotStupid at 11:40 AM on January 2, 2013 [9 favorites]
But if you consider personal relationships with those in power to be experience and knowledge of how the system works to be skills, then Joe Biden is another guy who exchanges work for wages. Granted, his talents are very much in demand and command a very high salary because there aren't many people with his skillset, but his income is entirely dependent on his activities.
That's a huge difference from someone like Mitt Romney who owns a ton of capital and makes money each day whether he gets out of bed or not. Mitt Romney could even hire a professional to manage his capital and retreat to New Hampshire for the rest of his life and he'd still make a crapload of money.
I think GuyZero is right. We shouldn't let the amount of income someone makes distract us from the actual class differences at play here. Biden probably has more in common with the rest of us than people like Romney and Kerry who are basically our nation's equivalent of landed gentry.
posted by RonButNotStupid at 11:40 AM on January 2, 2013 [9 favorites]
GuyZero: "Gas prices are generally up vs a few years ago,"
And down since a few more years ago. Gas prices are far too volatile to be included in an index that purports to be a broad measure of inflation.
posted by tonycpsu at 11:40 AM on January 2, 2013
And down since a few more years ago. Gas prices are far too volatile to be included in an index that purports to be a broad measure of inflation.
posted by tonycpsu at 11:40 AM on January 2, 2013
Still waiting for someone to give me a job so I can pay a higher payroll tax...
posted by ennui.bz at 11:42 AM on January 2, 2013 [11 favorites]
posted by ennui.bz at 11:42 AM on January 2, 2013 [11 favorites]
I don't think it's particularly "regressive", especially since it's a flat rate. However, yeah, people who derive yearly income from capital gains are in a different situation.It is pretty much the dictionary definition of regressive since the payroll tax is 6.2% of your income up to 113k and 0% of your income above that threshhold.
posted by Lame_username at 11:43 AM on January 2, 2013 [14 favorites]
I don't know what it's like in the States, but food prices have increased dramatically in Canada over the past decade (or even the past 3 years) far outpacing inflation. Electricity rates (where I live power is provided by hydro dams) has also outpaced inflation. User-pay taxes have increased over the past decade.
posted by KokuRyu at 11:44 AM on January 2, 2013 [1 favorite]
posted by KokuRyu at 11:44 AM on January 2, 2013 [1 favorite]
Inflation is at or near historic lows, and investors expect this trend to continue.
Sure, but real wages are still at a downtrend. Low inflation + zero wage growth = negative real wage growth.
posted by zvs at 11:46 AM on January 2, 2013 [2 favorites]
Sure, but real wages are still at a downtrend. Low inflation + zero wage growth = negative real wage growth.
posted by zvs at 11:46 AM on January 2, 2013 [2 favorites]
It is pretty much the dictionary definition of regressive since the payroll tax is 6.2% of your income up to 113k and 0% of your income above that threshhold.
In halfhearted defense of this regressivity, your Social Security benefits are capped based on how much of your income you paid SS taxes on -- someone who made $500K gets the same benefit as someone who made $113K.
posted by zvs at 11:47 AM on January 2, 2013 [3 favorites]
In halfhearted defense of this regressivity, your Social Security benefits are capped based on how much of your income you paid SS taxes on -- someone who made $500K gets the same benefit as someone who made $113K.
posted by zvs at 11:47 AM on January 2, 2013 [3 favorites]
I think GuyZero is right. We shouldn't let the amount of income someone makes distract us from the actual class differences at play here. Biden probably has more in common with the rest of us than people like Romney and Kerry who are basically our nation's equivalent of landed gentry.
I'd be in favor of "working class" for the distinction you're talking about and "middle class" for people whose incomes are actually in the middle two quartiles for the nation, except it seems weird for "working class" to include lots of people who are much richer than the "middle class."
posted by straight at 11:48 AM on January 2, 2013
I'd be in favor of "working class" for the distinction you're talking about and "middle class" for people whose incomes are actually in the middle two quartiles for the nation, except it seems weird for "working class" to include lots of people who are much richer than the "middle class."
posted by straight at 11:48 AM on January 2, 2013
It is pretty much the dictionary definition of regressive since the payroll tax is 6.2% of your income up to 113k and 0% of your income above that threshhold.
OK, I have a question. If you are married and filing jointly, is your income considered to be the joint income then for this math?
posted by roomthreeseventeen at 11:49 AM on January 2, 2013
OK, I have a question. If you are married and filing jointly, is your income considered to be the joint income then for this math?
posted by roomthreeseventeen at 11:49 AM on January 2, 2013
zvs: " Sure, but real wages are still at a downtrend. Low inflation + zero wage growth = negative real wage growth."
Yes, so the problem for most working folks is stagnant wages (or nonexistent wages due to unemployment), not inflation, which Mister_A suggested is his major problem with the economy right now.
posted by tonycpsu at 11:49 AM on January 2, 2013 [1 favorite]
Yes, so the problem for most working folks is stagnant wages (or nonexistent wages due to unemployment), not inflation, which Mister_A suggested is his major problem with the economy right now.
posted by tonycpsu at 11:49 AM on January 2, 2013 [1 favorite]
If you make six figures, and you are living pay check to pay check, the thing to remember is that even in an expensive city like New York City, the median household income is about $56,951. This doesn't mean that living off $100k is easy, but you have to put it in perspective: half of one of the most expensive cities in the world lives off about half of that 100k or less.
As for what "middle class" means: most people don't mean middle class in the Marxist sense (not landed or proletariat) but people in the middle of the income spread. The handy Quick Facts from Census.gov says that between 2007 and 2011, the median household income in the USA was $52,762 (not much below that for NYC).
posted by jb at 11:51 AM on January 2, 2013 [9 favorites]
As for what "middle class" means: most people don't mean middle class in the Marxist sense (not landed or proletariat) but people in the middle of the income spread. The handy Quick Facts from Census.gov says that between 2007 and 2011, the median household income in the USA was $52,762 (not much below that for NYC).
posted by jb at 11:51 AM on January 2, 2013 [9 favorites]
In halfhearted defense of this regressivity, your Social Security benefits are capped based on how much of your income you paid SS taxes on -- someone who made $500K gets the same benefit as someone who made $113K.
sure, but SS has never been about getting out what you paid in.
Expiring the tax holiday would have been fine with me if they hadn't moved the Bush Breaks up to 400K.
Frankly, it's offensive that the President conceeded on that point and didn't demand this holiday be extended. Even better, the amount taxable for SS should have been tied to the point where the Bush Breaks were extended. I'd wager that 4.2% for the first 400K would make up for the 2% missing on the first 113...
posted by twjordan at 11:53 AM on January 2, 2013 [2 favorites]
sure, but SS has never been about getting out what you paid in.
Expiring the tax holiday would have been fine with me if they hadn't moved the Bush Breaks up to 400K.
Frankly, it's offensive that the President conceeded on that point and didn't demand this holiday be extended. Even better, the amount taxable for SS should have been tied to the point where the Bush Breaks were extended. I'd wager that 4.2% for the first 400K would make up for the 2% missing on the first 113...
posted by twjordan at 11:53 AM on January 2, 2013 [2 favorites]
Sure, but real wages are still at a downtrend. Low inflation + zero wage growth = negative real wage growth.
Pretty much this - I'm making less in real terms (pay cut, plus increased costs of benefits) and less in inflationary terms (big-macs and power tools costing more).
Now, I make more than twice the median income - so, don't get me wrong, I know how good I've got it. I'm not even really middle class - hell, I think 110 per year is 95th percentile.
Still, this shit sucks.
posted by Pogo_Fuzzybutt at 11:54 AM on January 2, 2013 [2 favorites]
Pretty much this - I'm making less in real terms (pay cut, plus increased costs of benefits) and less in inflationary terms (big-macs and power tools costing more).
Now, I make more than twice the median income - so, don't get me wrong, I know how good I've got it. I'm not even really middle class - hell, I think 110 per year is 95th percentile.
Still, this shit sucks.
posted by Pogo_Fuzzybutt at 11:54 AM on January 2, 2013 [2 favorites]
and very uncontroversial, thank you very much to Perry Mason up there
The problem is not so much whether or not your statement is "controversial" but that it is totally contentless. It really doesn't say anything at all.
Anyway, wage stagnation is a big issue. It doesn't matter how much niflation increases if your wages don't increase at least as quickly.
posted by adamdschneider at 11:55 AM on January 2, 2013
The problem is not so much whether or not your statement is "controversial" but that it is totally contentless. It really doesn't say anything at all.
Anyway, wage stagnation is a big issue. It doesn't matter how much niflation increases if your wages don't increase at least as quickly.
posted by adamdschneider at 11:55 AM on January 2, 2013
Mod note: A few comments removed. Absolutely do not go around posting gotcha dossiers on other mefites to make a point.
posted by cortex (staff) at 11:58 AM on January 2, 2013 [9 favorites]
posted by cortex (staff) at 11:58 AM on January 2, 2013 [9 favorites]
tonycpsu, I think I was pretty straightforward throughout in pointing to wage stagnation as the big problem I face these days: the biggest problem I, personally, face these days is the utter failure to keep up with inflation
I'm not saying inflation per se is the problem, I'm saying explicitly that failure to keep pace with inflation is the problem.
posted by Mister_A at 12:00 PM on January 2, 2013 [1 favorite]
I'm not saying inflation per se is the problem, I'm saying explicitly that failure to keep pace with inflation is the problem.
posted by Mister_A at 12:00 PM on January 2, 2013 [1 favorite]
Mister_A: " I'm not saying inflation per se is the problem, I'm saying explicitly that failure to keep pace with inflation is the problem."
Fair enough, but I think the problem is better expressed as "wages are stagnant" because that's the one variable in your equation that's significantly changed since before the great recession. Framing it as "keeping up with inflation" suggests that perhaps inflation could be lower, and really it can't, given the fact that the Fed always targets low single-digits inflation to spur investment.
posted by tonycpsu at 12:06 PM on January 2, 2013 [1 favorite]
Fair enough, but I think the problem is better expressed as "wages are stagnant" because that's the one variable in your equation that's significantly changed since before the great recession. Framing it as "keeping up with inflation" suggests that perhaps inflation could be lower, and really it can't, given the fact that the Fed always targets low single-digits inflation to spur investment.
posted by tonycpsu at 12:06 PM on January 2, 2013 [1 favorite]
Fair enough, but I think the problem is better expressed as "wages are stagnant" because that's the one variable in your equation that's significantly changed since before the great recession. Framing it as "keeping up with inflation" suggests that perhaps inflation could be lower, and really it can't, given the fact that the Fed always targets low single-digits inflation to spur investment.
No, the problem is that discussions about economics are entirely framed in terms of concepts like "inflation" which are only meaningful to the investor class.
{Food, Gas, Rent, Health care, Income} Lets talk about that. Any of these suffering from deflation? Which of these has increased or decreased over the last 10 years?
posted by ennui.bz at 12:09 PM on January 2, 2013 [3 favorites]
No, the problem is that discussions about economics are entirely framed in terms of concepts like "inflation" which are only meaningful to the investor class.
{Food, Gas, Rent, Health care, Income} Lets talk about that. Any of these suffering from deflation? Which of these has increased or decreased over the last 10 years?
posted by ennui.bz at 12:09 PM on January 2, 2013 [3 favorites]
If you are married and filing jointly, is your income considered to be the joint income then for this math?
In my experience, this is always applied separately. Of course my experience is limited to W-2 wages; I don't know how this will play out when/if applied to investment income held in both names (but my even more-limited experience there is that interest from a jointly-held bank account is still reported under only one SSN).
posted by achrise at 12:12 PM on January 2, 2013
In my experience, this is always applied separately. Of course my experience is limited to W-2 wages; I don't know how this will play out when/if applied to investment income held in both names (but my even more-limited experience there is that interest from a jointly-held bank account is still reported under only one SSN).
posted by achrise at 12:12 PM on January 2, 2013
Sorry, I made a mistake -- I posted the New York State median household income.
The New York City median income is lower than the median New York State income: $51,270 (again from Quick Facts at Census.Gov).
posted by jb at 12:14 PM on January 2, 2013
The New York City median income is lower than the median New York State income: $51,270 (again from Quick Facts at Census.Gov).
posted by jb at 12:14 PM on January 2, 2013
Middle class, upper class, class class class, why don't we just distinguish the two groups according to their preferred method of accounting?
There are those who primarily utilize accrual accounting and those who just settle on a cash basis.
I don't use accrual, and Warren Buffett's accountants sure as hell don't rely on cash accounting. These are two utterly different ways to understand money, and are, accordingly, a stronger indicator of any such thing we could call a difference in class.
posted by TwelveTwo at 12:21 PM on January 2, 2013 [5 favorites]
There are those who primarily utilize accrual accounting and those who just settle on a cash basis.
I don't use accrual, and Warren Buffett's accountants sure as hell don't rely on cash accounting. These are two utterly different ways to understand money, and are, accordingly, a stronger indicator of any such thing we could call a difference in class.
posted by TwelveTwo at 12:21 PM on January 2, 2013 [5 favorites]
There are those who primarily utilize accrual accounting and those who just settle on a cash basis.
So where do those majority of people that "own" a house or car fall in your categorization scheme?
posted by The 10th Regiment of Foot at 12:31 PM on January 2, 2013
So where do those majority of people that "own" a house or car fall in your categorization scheme?
posted by The 10th Regiment of Foot at 12:31 PM on January 2, 2013
Well, at least the GOP made a step in the right direction when it comes to fixing the kinks in our budget.
posted by Slackermagee at 12:36 PM on January 2, 2013
posted by Slackermagee at 12:36 PM on January 2, 2013
Joe Biden earns ~ $240,000 a year, and was on $174,000 when he was in the Senate. Upon retirement he will receive a pension of 80% of his final salary, or $192,000.
That's not middle class.
For a guy who is 70? That's pretty middle class to my eyes. That's right in the range of white collar professional near the end of his or her career. Middle class is everything between poor and rich. If you still have to show up for work and can't afford a private jet, you aren't rich.
posted by gjc at 12:41 PM on January 2, 2013 [3 favorites]
That's not middle class.
For a guy who is 70? That's pretty middle class to my eyes. That's right in the range of white collar professional near the end of his or her career. Middle class is everything between poor and rich. If you still have to show up for work and can't afford a private jet, you aren't rich.
posted by gjc at 12:41 PM on January 2, 2013 [3 favorites]
That's right in the range of white collar professional near the end of his or her career. Middle class is everything between poor and rich. If you still have to show up for work and can't afford a private jet, you aren't rich.
Man, I'd like to hear what people the vast majority of the planet who are making making <$100 a month have to say about that division.
posted by empath at 12:44 PM on January 2, 2013 [10 favorites]
Man, I'd like to hear what people the vast majority of the planet who are making making <$100 a month have to say about that division.
posted by empath at 12:44 PM on January 2, 2013 [10 favorites]
~Joe Biden earns ~ $240,000 a year, and was on $174,000 when he was in the Senate.
~For a guy who is 70? That's pretty middle class to my eyes. That's right in the range of white collar professional near the end of his or her career.
No. No, it isn't. Most white collar professionals will work their entire lives and never come anywhere close to $240k/year, let alone $174k.
posted by Thorzdad at 12:45 PM on January 2, 2013 [30 favorites]
~For a guy who is 70? That's pretty middle class to my eyes. That's right in the range of white collar professional near the end of his or her career.
No. No, it isn't. Most white collar professionals will work their entire lives and never come anywhere close to $240k/year, let alone $174k.
posted by Thorzdad at 12:45 PM on January 2, 2013 [30 favorites]
Double the current cap and Social Secuirty is saved.
It really is amazing how many simple solutions there are to these financial "problems." Seriously, just pick a real one, fellas.
No, the problem is that discussions about economics are entirely framed in terms of concepts like "inflation" which are only meaningful to the investor class.
{Food, Gas, Rent, Health care, Income} Lets talk about that. Any of these suffering from deflation? Which of these has increased or decreased over the last 10 years?
You've pretty much nailed the problem with "inflation" statistics. By design, they ignore
That's not middle class.
For a guy who is 70?
Repeat: That's not middle class. I make far less than that, and I am rich.
Anything in the 80%+ is RICH. Like me. :p
If you still have to show up for work and can't afford a private jet, you aren't rich.
Ridiculous.
posted by mrgrimm at 12:45 PM on January 2, 2013 [11 favorites]
It really is amazing how many simple solutions there are to these financial "problems." Seriously, just pick a real one, fellas.
No, the problem is that discussions about economics are entirely framed in terms of concepts like "inflation" which are only meaningful to the investor class.
{Food, Gas, Rent, Health care, Income} Lets talk about that. Any of these suffering from deflation? Which of these has increased or decreased over the last 10 years?
You've pretty much nailed the problem with "inflation" statistics. By design, they ignore
That's not middle class.
For a guy who is 70?
Repeat: That's not middle class. I make far less than that, and I am rich.
Anything in the 80%+ is RICH. Like me. :p
If you still have to show up for work and can't afford a private jet, you aren't rich.
Ridiculous.
posted by mrgrimm at 12:45 PM on January 2, 2013 [11 favorites]
If you don't own a ten foot tall diamond sculpture of your favorite Beastie Boy, you are poor.
posted by Drinky Die at 12:48 PM on January 2, 2013 [14 favorites]
posted by Drinky Die at 12:48 PM on January 2, 2013 [14 favorites]
mrgrimm: " You've pretty much nailed the problem with "inflation" statistics. By design, they ignore "
Please finish this point.
posted by tonycpsu at 12:48 PM on January 2, 2013
Please finish this point.
posted by tonycpsu at 12:48 PM on January 2, 2013
Here's a decent chart of income distribution.
You're inching into 'rich' territory once you hit 100k, and once you hit 150k, you're well into it.
posted by empath at 12:50 PM on January 2, 2013 [2 favorites]
You're inching into 'rich' territory once you hit 100k, and once you hit 150k, you're well into it.
posted by empath at 12:50 PM on January 2, 2013 [2 favorites]
Repeat: That's not middle class. I make far less than that, and I am rich.
No. The basis of the the middle class vs upper class distinction is the relationship to the means of production. You can be quite rich but still be middle-class. That we use the terms lower, middle and upper has nothing to do with income levels, at least not directly. At least that's the historical basis of the terms. You descriptivists are welcome to use them to mean whatever you want I guess.
posted by GuyZero at 12:51 PM on January 2, 2013 [4 favorites]
No. The basis of the the middle class vs upper class distinction is the relationship to the means of production. You can be quite rich but still be middle-class. That we use the terms lower, middle and upper has nothing to do with income levels, at least not directly. At least that's the historical basis of the terms. You descriptivists are welcome to use them to mean whatever you want I guess.
posted by GuyZero at 12:51 PM on January 2, 2013 [4 favorites]
If you don't own a ten foot tall diamond sculpture of your favorite Beastie Boy, you are poor.
If they're not made out of Michael Diamond, then you're just not doing it right.
posted by zombieflanders at 12:51 PM on January 2, 2013 [2 favorites]
If they're not made out of Michael Diamond, then you're just not doing it right.
posted by zombieflanders at 12:51 PM on January 2, 2013 [2 favorites]
Inflation is weird lately and I am not a sufficient econometrician to explain it. Gas prices are generally up vs a few years ago, food seems flat, but medical expense costs are exploding. Housing is down in aggregate unless you focus on places where people actually want to live, in which case prices are still pretty high and in some locales, still increasing. Education costs are also growing.
Overall I don't know what to think about inflation except that it doesn't always seem to reflect reality very well.
Inflation is technically an oversupply of money. Meaning, every dollar becomes worth a little less and everything costs more no matter what the sector. This is hard to measure using prices alone, because the market effects of every marketplace are hard to correct for. In other words, all the prices can go up and there can still be low inflation, if the cause of the price increases is increased scarcity in those goods.
Gas is up over the last few years only because it was way down during the recession.
posted by gjc at 12:51 PM on January 2, 2013 [2 favorites]
Overall I don't know what to think about inflation except that it doesn't always seem to reflect reality very well.
Inflation is technically an oversupply of money. Meaning, every dollar becomes worth a little less and everything costs more no matter what the sector. This is hard to measure using prices alone, because the market effects of every marketplace are hard to correct for. In other words, all the prices can go up and there can still be low inflation, if the cause of the price increases is increased scarcity in those goods.
Gas is up over the last few years only because it was way down during the recession.
posted by gjc at 12:51 PM on January 2, 2013 [2 favorites]
Gas is up over the last few years only because it was way down during the recession.
Huh? It was never more than ~$1.60/gallon before Katrina. It has not gone below ~$3.00/gallon since then.
posted by Melismata at 12:55 PM on January 2, 2013 [2 favorites]
Huh? It was never more than ~$1.60/gallon before Katrina. It has not gone below ~$3.00/gallon since then.
posted by Melismata at 12:55 PM on January 2, 2013 [2 favorites]
That's right in the range of white collar professional near the end of his or her career.
As a white collar professional near the end of her career, I wish you would have a word with my manager/HR department/company. Because I do not come close to that amount in compensation.
posted by caryatid at 12:57 PM on January 2, 2013 [1 favorite]
As a white collar professional near the end of her career, I wish you would have a word with my manager/HR department/company. Because I do not come close to that amount in compensation.
posted by caryatid at 12:57 PM on January 2, 2013 [1 favorite]
MetaFilter: Perry Mason pees in jars so that he can afford his Michael Diamond statue. So not rich.
posted by Brak at 12:59 PM on January 2, 2013
posted by Brak at 12:59 PM on January 2, 2013
Huh? It was never more than ~$1.60/gallon before Katrina. It has not gone below ~$3.00/gallon since then.
Are you implying that a bunch of oil barrons running the executive branch of government of the world's largest consumer nation would somehow not try their hardest to keep oil prices low? For shame, Melismata!
posted by The 10th Regiment of Foot at 1:00 PM on January 2, 2013
Are you implying that a bunch of oil barrons running the executive branch of government of the world's largest consumer nation would somehow not try their hardest to keep oil prices low? For shame, Melismata!
posted by The 10th Regiment of Foot at 1:00 PM on January 2, 2013
Social Security is quite progressive as is. Benefits are capped, as noted above. Higher income people work -- and pay Social Security tax -- for longer than lower income people. Gross benefits are weighted in favor of lower-income people, even with the cap considered. Net benefits are much lower proportionately because higher-income are taxed on their Social Security benefits. Far more disability and survivor benefits are paid for lower income people than higher income.
Being the devil's advocate here, but for a class warrior there are far more regressive components of the fiscal system, including most tax expenditures (mortgage interest deduction, 401k and IRA exemptions and deductions), as well as the exemption of the imputed rental of property one owns for personal use.
posted by MattD at 1:00 PM on January 2, 2013
Being the devil's advocate here, but for a class warrior there are far more regressive components of the fiscal system, including most tax expenditures (mortgage interest deduction, 401k and IRA exemptions and deductions), as well as the exemption of the imputed rental of property one owns for personal use.
posted by MattD at 1:00 PM on January 2, 2013
"Do you have a ten foot statue of Michael Diamond?"
"No, mine's Clarence."
posted by cortex at 1:00 PM on January 2, 2013 [17 favorites]
"No, mine's Clarence."
posted by cortex at 1:00 PM on January 2, 2013 [17 favorites]
"Do you have a ten foot statue of Michael Diamond?"
"No, mine's Clarence."
At least it's not Dustin.
posted by RonButNotStupid at 1:04 PM on January 2, 2013
"No, mine's Clarence."
At least it's not Dustin.
posted by RonButNotStupid at 1:04 PM on January 2, 2013
MetaFilter: Perry Mason pees in jars so that he can afford his Michael Diamond statue. So not rich.
Maybe they should be canning their shit instead?
posted by The 10th Regiment of Foot at 1:05 PM on January 2, 2013
Maybe they should be canning their shit instead?
posted by The 10th Regiment of Foot at 1:05 PM on January 2, 2013
No. The basis of the the middle class vs upper class distinction is the relationship to the means of production. You can be quite rich but still be middle-class. That we use the terms lower, middle and upper has nothing to do with income levels, at least not directly. At least that's the historical basis of the terms. You descriptivists are welcome to use them to mean whatever you want I guess.
If we're using different definitions for the same words, then we're not having the same discussion. By your definition, the heavy majority of the government (the assertion that touched all this off, recall, was "none of [the government of the USA] are members of the middle class.") is middle class.
posted by Etrigan at 1:05 PM on January 2, 2013
If we're using different definitions for the same words, then we're not having the same discussion. By your definition, the heavy majority of the government (the assertion that touched all this off, recall, was "none of [the government of the USA] are members of the middle class.") is middle class.
posted by Etrigan at 1:05 PM on January 2, 2013
No. No, it isn't. Most white collar professionals will work their entire lives and never come anywhere close to $240k/year, let alone $174k.
Look up the median incomes of doctors, lawyers and public service administrators. And that's just the median.
I'm not interested in starting an argument about where the cutoff between rich and not rich is, because that's irrelevant. OK, so maybe Joe makes a little more than the average white collar professional, so what? He still makes two to four orders of magnitude less than a lot of rich people, and only one order of magnitude more than the poverty line. That's close enough. Christ.
posted by gjc at 1:06 PM on January 2, 2013
Look up the median incomes of doctors, lawyers and public service administrators. And that's just the median.
I'm not interested in starting an argument about where the cutoff between rich and not rich is, because that's irrelevant. OK, so maybe Joe makes a little more than the average white collar professional, so what? He still makes two to four orders of magnitude less than a lot of rich people, and only one order of magnitude more than the poverty line. That's close enough. Christ.
posted by gjc at 1:06 PM on January 2, 2013
If we're using different definitions for the same words, then we're not having the same discussion. By your definition, the heavy majority of the government (the assertion that touched all this off, recall, was "none of [the government of the USA] are members of the middle class.") is middle class.
Actually I managed to miss that somehow, so my bad. There are a lot of upper-class people in government, I don't know if I would guess what portion is middle-class. Probably most of them. And I'm assuming you mean elected officials - last I checked the vast majority of the government were civil servants who are some blend of middle-class and the working poor depending on who you're counting.
posted by GuyZero at 1:10 PM on January 2, 2013
Actually I managed to miss that somehow, so my bad. There are a lot of upper-class people in government, I don't know if I would guess what portion is middle-class. Probably most of them. And I'm assuming you mean elected officials - last I checked the vast majority of the government were civil servants who are some blend of middle-class and the working poor depending on who you're counting.
posted by GuyZero at 1:10 PM on January 2, 2013
There are those who primarily utilize accrual accounting and those who just settle on a cash basis.
So where do those majority of people that "own" a house or car fall in your categorization scheme?
Cash probably, unless like us you write checks for bills as soon as they show up, enter them in the checkbook register, but don't mail them until they are due. That's a little bit accrual.
posted by achrise at 1:10 PM on January 2, 2013
So where do those majority of people that "own" a house or car fall in your categorization scheme?
Cash probably, unless like us you write checks for bills as soon as they show up, enter them in the checkbook register, but don't mail them until they are due. That's a little bit accrual.
posted by achrise at 1:10 PM on January 2, 2013
There are those who primarily utilize accrual accounting and those who just settle on a cash basis.
So where do those majority of people that "own" a house or car fall in your categorization scheme?
Cash probably, unless like us you write checks for bills as soon as they show up, enter them in the checkbook register, but don't mail them until they are due. That's a little bit accrual.
Wouldn't most of those people count their home and car(s) as "assets" rather than the massive debts they actually are currently by a cash accounting? Only the very wealthy (or excrutiatingly frugal, were talking Chinese grandparent level of savings here!) are able to plunk down the full cost of a house at the time of purchase in this day and age.
posted by The 10th Regiment of Foot at 1:16 PM on January 2, 2013
So where do those majority of people that "own" a house or car fall in your categorization scheme?
Cash probably, unless like us you write checks for bills as soon as they show up, enter them in the checkbook register, but don't mail them until they are due. That's a little bit accrual.
Wouldn't most of those people count their home and car(s) as "assets" rather than the massive debts they actually are currently by a cash accounting? Only the very wealthy (or excrutiatingly frugal, were talking Chinese grandparent level of savings here!) are able to plunk down the full cost of a house at the time of purchase in this day and age.
posted by The 10th Regiment of Foot at 1:16 PM on January 2, 2013
Huh? It was never more than ~$1.60/gallon before Katrina. It has not gone below ~$3.00/gallon since then.
Maybe it's different where I live in the midwest. My records generally agree with the prices in this chart. (Click the 8 year view.)
posted by gjc at 1:16 PM on January 2, 2013
Maybe it's different where I live in the midwest. My records generally agree with the prices in this chart. (Click the 8 year view.)
posted by gjc at 1:16 PM on January 2, 2013
Look up the median incomes of doctors, lawyers
If you had a family feud category for "Professions of Rich People" what do you think would be on the top?
posted by empath at 1:18 PM on January 2, 2013 [7 favorites]
If you had a family feud category for "Professions of Rich People" what do you think would be on the top?
posted by empath at 1:18 PM on January 2, 2013 [7 favorites]
My husband and I, as DINKs living well within our means, are far from strapped. Still, I honestly can't remember the last time I got a raise or even a simple COLA, and even $50 per paycheck less is going to be felt. We won't be starving, but it'll definitely have an impact.
I can't help but feel a little discouraged, as while my taxes will be going up, a ridiculously wealthy client of mine is laughing his ass off at all the Fiscal Cliff hullabaloo, while he (and his attorneys) have carefully crafted his finances so that he has a near-zero tax liability. He actually cackled (I thought he was going to jump in the air and click his heels together, perhaps) as he gleefully told me what while enjoying his multi-million-dollar waterfront home and million-dollar motoryacht, he pays less in taxes than I do.
This is not about poor people or the working wanting something for nothing. This is about wanting rich people to pay their goddamn fucking share.
posted by xedrik at 1:19 PM on January 2, 2013 [33 favorites]
I can't help but feel a little discouraged, as while my taxes will be going up, a ridiculously wealthy client of mine is laughing his ass off at all the Fiscal Cliff hullabaloo, while he (and his attorneys) have carefully crafted his finances so that he has a near-zero tax liability. He actually cackled (I thought he was going to jump in the air and click his heels together, perhaps) as he gleefully told me what while enjoying his multi-million-dollar waterfront home and million-dollar motoryacht, he pays less in taxes than I do.
This is not about poor people or the working wanting something for nothing. This is about wanting rich people to pay their goddamn fucking share.
posted by xedrik at 1:19 PM on January 2, 2013 [33 favorites]
No. No, it isn't. Most white collar professionals will work their entire lives and never come anywhere close to $240k/year, let alone $174k.Look up the median incomes of doctors, lawyers and public service administrators. And that's just the median
Huh? The 2010 Median income for physicians and surgeons was $166,400.
posted by Jahaza at 1:20 PM on January 2, 2013 [1 favorite]
Expiring the tax holiday would have been fine with me if they hadn't moved the Bush Breaks up to 400K. Frankly, it's offensive that the President conceeded on that point and didn't demand this holiday be extended.
The cutoff for marginal rate increases moved to $400,000 instead of $250,000 not just because of Republican pressure, but because several Democratics in Congress were pushing for the cutoff to be as high as $1,000,000. Those earning $250K to $400K are being hit with new deduction limits even though their marginal rates are staying the same.
posted by maudlin at 1:20 PM on January 2, 2013 [1 favorite]
The cutoff for marginal rate increases moved to $400,000 instead of $250,000 not just because of Republican pressure, but because several Democratics in Congress were pushing for the cutoff to be as high as $1,000,000. Those earning $250K to $400K are being hit with new deduction limits even though their marginal rates are staying the same.
posted by maudlin at 1:20 PM on January 2, 2013 [1 favorite]
Wouldn't most of those people count their home and car(s) as "assets" rather than the massive debts they actually are currently by a cash accounting? Only the very wealthy (or excrutiatingly frugal, were talking Chinese grandparent level of savings here!) are able to plunk down the full cost of a house at the time of purchase in this day and age.
It would be an asset of the value of the house, offset by the liability of the mortgage loan.
posted by gjc at 1:21 PM on January 2, 2013
It would be an asset of the value of the house, offset by the liability of the mortgage loan.
posted by gjc at 1:21 PM on January 2, 2013
Huh? The 2010 Median income for physicians and surgeons was $166,400.
I think the point here is that the named professions (as "white collar professionals") are, while at the higher (upper-) end of middle class, both (a) still often considered middle class and (b) comparable in earnings to Mr. Biden.
posted by psoas at 1:26 PM on January 2, 2013
I think the point here is that the named professions (as "white collar professionals") are, while at the higher (upper-) end of middle class, both (a) still often considered middle class and (b) comparable in earnings to Mr. Biden.
posted by psoas at 1:26 PM on January 2, 2013
Huh? The 2010 Median income for physicians and surgeons was $166,400.
Click the "pay" tab.
Then click the "similar professions" tab, and note that those are just the medians. Half of all of them make more than that, and one can assume that people at the top of their professions are going to be making well over the median.
posted by gjc at 1:26 PM on January 2, 2013
Click the "pay" tab.
Then click the "similar professions" tab, and note that those are just the medians. Half of all of them make more than that, and one can assume that people at the top of their professions are going to be making well over the median.
posted by gjc at 1:26 PM on January 2, 2013
mrgrimm: " You've pretty much nailed the problem with "inflation" statistics. By design, they ignore "
Please finish this point.
I was going to get into it, but I am far from an expert, so I figured I should shut up, then I forgot to delete it. OOPS.
Here's one take on what changed in CPI calculation in the '90s.
posted by mrgrimm at 1:29 PM on January 2, 2013
Please finish this point.
I was going to get into it, but I am far from an expert, so I figured I should shut up, then I forgot to delete it. OOPS.
Here's one take on what changed in CPI calculation in the '90s.
posted by mrgrimm at 1:29 PM on January 2, 2013
Here's a decent chart of income distribution.
You're inching into 'rich' territory once you hit 100k,
For a household? I'm qutting my job tomorrow, I'm rich!
posted by spaltavian at 1:29 PM on January 2, 2013 [2 favorites]
You're inching into 'rich' territory once you hit 100k,
For a household? I'm qutting my job tomorrow, I'm rich!
posted by spaltavian at 1:29 PM on January 2, 2013 [2 favorites]
Click the "pay" tab.
Then click the "similar professions" tab, and note that those are just the medians. Half of all of them make more than that, and one can assume that people at the top of their professions are going to be making well over the median.
I clicked the pay tab. Do you know what it says?
"Wages of physicians and surgeons are among the highest of all occupations."
How about that?
For a household? I'm qutting my job tomorrow, I'm rich!
Do people really think "rich" means you can buy whatever you want, quit your job, and never work again? That's almost NO ONE. And yet there are rich people ... like me.
posted by mrgrimm at 1:31 PM on January 2, 2013 [4 favorites]
Then click the "similar professions" tab, and note that those are just the medians. Half of all of them make more than that, and one can assume that people at the top of their professions are going to be making well over the median.
I clicked the pay tab. Do you know what it says?
"Wages of physicians and surgeons are among the highest of all occupations."
How about that?
For a household? I'm qutting my job tomorrow, I'm rich!
Do people really think "rich" means you can buy whatever you want, quit your job, and never work again? That's almost NO ONE. And yet there are rich people ... like me.
posted by mrgrimm at 1:31 PM on January 2, 2013 [4 favorites]
gjc:
The median annual wage of lawyers was $112,760 in May 2010.
the top 10 percent earned more than $166,400.
Source
posted by craven_morhead at 1:31 PM on January 2, 2013
The median annual wage of lawyers was $112,760 in May 2010.
the top 10 percent earned more than $166,400.
Source
posted by craven_morhead at 1:31 PM on January 2, 2013
The whole point of being wealthy is not having to pay for what you buy. If you have to pay for everything, or really anything, if you can't pass your debts on to who owes you then you aren't wealthy but you might still be rich. The wealthy can be broke as fuck and do fine, they are as they say 'good for it.' But if they have to pay a nickel then of course they'll scream and yell and kick and cry, all wealth is is the capacity to not have to pay. If you take that away from them then all they'll be, at best, is rich!
posted by TwelveTwo at 1:32 PM on January 2, 2013 [1 favorite]
posted by TwelveTwo at 1:32 PM on January 2, 2013 [1 favorite]
For a household? I'm qutting my job tomorrow, I'm rich!
You should see what real poverty looks like. I make significantly less than 100k, and I consider myself preposterously well-off compared to most of the world.
posted by empath at 1:32 PM on January 2, 2013 [11 favorites]
You should see what real poverty looks like. I make significantly less than 100k, and I consider myself preposterously well-off compared to most of the world.
posted by empath at 1:32 PM on January 2, 2013 [11 favorites]
Expiring the tax holiday would have been fine with me if they hadn't moved the Bush Breaks up to 400K.
Not entirely, they're getting new limits on deductions; I think the new revnue from that is non-trivial.
posted by spaltavian at 1:32 PM on January 2, 2013
Not entirely, they're getting new limits on deductions; I think the new revnue from that is non-trivial.
posted by spaltavian at 1:32 PM on January 2, 2013
Can we establish that there's a difference between being comfortable and rich? $100,000 isn't rich.
posted by roomthreeseventeen at 1:33 PM on January 2, 2013 [2 favorites]
posted by roomthreeseventeen at 1:33 PM on January 2, 2013 [2 favorites]
Only the very wealthy (or excrutiatingly frugal, were talking Chinese grandparent level of savings here!) are able to plunk down the full cost of a house at the time of purchase in this day and age.
Hey, what's wrong with South Dakota?
posted by mrgrimm at 1:33 PM on January 2, 2013 [2 favorites]
Hey, what's wrong with South Dakota?
posted by mrgrimm at 1:33 PM on January 2, 2013 [2 favorites]
Can we establish that there's a difference between being comfortable and rich?
Comfortable in reality means a place to sleep, food to eat, clothes to wear, and human companionship.
"Comfortable" as defined by people when talking about rich people ... is a polite word for "rich." I've never heard anyone differentiate the two terms.
But sure, you can call me and my family "comfortable" if you want. I prefer "rich."
posted by mrgrimm at 1:36 PM on January 2, 2013 [3 favorites]
Comfortable in reality means a place to sleep, food to eat, clothes to wear, and human companionship.
"Comfortable" as defined by people when talking about rich people ... is a polite word for "rich." I've never heard anyone differentiate the two terms.
But sure, you can call me and my family "comfortable" if you want. I prefer "rich."
posted by mrgrimm at 1:36 PM on January 2, 2013 [3 favorites]
empath, a couple of points:
-I'm doing a lot better now than when I grew up; I've seen poverty up close, thanks. \
-I also make substantially less than $100k, which is why I said "household?". I'm "comfortable" in the "are you warmer than a Cro-Magnon?" sense mrgrimm is using, but that's it.
-Not sure "the rest of the world" is a meaningful comparison to anything anyone in this thread is talking about. If you want me to be sad about the desperately poor in middle and lower income nations, that's just fine, but telling me that "you have running water, praise the gods" is kind of beyond the scope of what's happening to the American middle class and contemporary tax policy.
posted by spaltavian at 1:37 PM on January 2, 2013
-I'm doing a lot better now than when I grew up; I've seen poverty up close, thanks. \
-I also make substantially less than $100k, which is why I said "household?". I'm "comfortable" in the "are you warmer than a Cro-Magnon?" sense mrgrimm is using, but that's it.
-Not sure "the rest of the world" is a meaningful comparison to anything anyone in this thread is talking about. If you want me to be sad about the desperately poor in middle and lower income nations, that's just fine, but telling me that "you have running water, praise the gods" is kind of beyond the scope of what's happening to the American middle class and contemporary tax policy.
posted by spaltavian at 1:37 PM on January 2, 2013
Sad trombone for the fiscal cliff. :(
posted by jeffburdges at 1:42 PM on January 2, 2013
posted by jeffburdges at 1:42 PM on January 2, 2013
This is all kind of like arguing NBA superstars are not rich because, well, look how much richer the owners are! You can still be rich even if other people are absurdly more rich than you.
posted by Drinky Die at 1:43 PM on January 2, 2013 [4 favorites]
posted by Drinky Die at 1:43 PM on January 2, 2013 [4 favorites]
Comfortable in reality means a place to sleep, food to eat, clothes to wear, and human companionship.
Curious why that last one makes the list, unless you're paying for it.
posted by achrise at 1:44 PM on January 2, 2013 [3 favorites]
Curious why that last one makes the list, unless you're paying for it.
posted by achrise at 1:44 PM on January 2, 2013 [3 favorites]
Wait, I'm rich? Somehow I thought it was going to involve having more money.
posted by selfmedicating at 1:44 PM on January 2, 2013 [1 favorite]
posted by selfmedicating at 1:44 PM on January 2, 2013 [1 favorite]
This sucks.
I haven't gotten a raise in four years (like many people, I suspect) and I don't make anything close to what I should be in my field. Hell, people that have worked where I work for less time than I do make more than me.
$800 a year is a pretty substantial sum out of my pocket, and I know the government is just going to piss it away on a new fighter jet or something while I pay more in taxes than Mitt Romney. Seriously, fuck this country.
posted by Fister Roboto at 1:45 PM on January 2, 2013 [3 favorites]
I haven't gotten a raise in four years (like many people, I suspect) and I don't make anything close to what I should be in my field. Hell, people that have worked where I work for less time than I do make more than me.
$800 a year is a pretty substantial sum out of my pocket, and I know the government is just going to piss it away on a new fighter jet or something while I pay more in taxes than Mitt Romney. Seriously, fuck this country.
posted by Fister Roboto at 1:45 PM on January 2, 2013 [3 favorites]
I'm not interested in starting an argument about where the cutoff between rich and not rich is, because that's irrelevant.
Irrelevant in a discussion regarding tax policy?
The "one order of magnitude" that separates Joe Biden from the poverty level is vastly more significant in terms of quality of life (i.e., the ability to pay for food, shelter, education, and other essentials) than the "two to four orders of magnitude" between his income and a lot of other rich folks.
As said above: this is about wanting rich people to pay their goddamn fucking share.
Some shared understanding of where "middle class" ends and "rich" begins is essential.
posted by she's not there at 1:46 PM on January 2, 2013 [4 favorites]
Irrelevant in a discussion regarding tax policy?
The "one order of magnitude" that separates Joe Biden from the poverty level is vastly more significant in terms of quality of life (i.e., the ability to pay for food, shelter, education, and other essentials) than the "two to four orders of magnitude" between his income and a lot of other rich folks.
As said above: this is about wanting rich people to pay their goddamn fucking share.
Some shared understanding of where "middle class" ends and "rich" begins is essential.
posted by she's not there at 1:46 PM on January 2, 2013 [4 favorites]
Not sure "the rest of the world" is a meaningful comparison to anything anyone in this thread is talking about. If you want me to be sad about the desperately poor in middle and lower income nations, that's just fine, but telling me that "you have running water, praise the gods" is kind of beyond the scope of what's happening to the American middle class and contemporary tax policy.
Yeah, but the fact is that America has a lot of people that the rest of the world would consider filthy rich. And you're talking about, with someone making 100k a year, someone who is in the top 10 percent in the US. In the world, you're in the top .1%. I'm sorry, but if you make 100k a year, you are filthy stinking rich by any objective measure.
posted by empath at 1:46 PM on January 2, 2013 [9 favorites]
Yeah, but the fact is that America has a lot of people that the rest of the world would consider filthy rich. And you're talking about, with someone making 100k a year, someone who is in the top 10 percent in the US. In the world, you're in the top .1%. I'm sorry, but if you make 100k a year, you are filthy stinking rich by any objective measure.
posted by empath at 1:46 PM on January 2, 2013 [9 favorites]
It really is shocking the extent to which self-described progressives have been drinking neo-liberal kool-aid and and acquiescing to the entire framework of the debate on fiscal policy:
There will be no direct action at all on employment and growth. The US government is still dead in the water as the prosperity of the country is eroded, so mass unemployment will continue to be a recessionary drag on the US economy. The unemployed will have their benefits extended, of course, along with their hopelessness and crushed dreams, as they learn to live permanently beneath the bus under which Obama and the Republicans have thrown them.posted by crayz at 1:48 PM on January 2, 2013 [2 favorites]
So to me, this deal is a recession package. Welcome to the double dip! I guess Obama has learned nothing from the experience of his Tory pal, David Cameron, or from the other countries in Euro Austerityland who have engineered a second punishing recession for their people. Or maybe Obama is doing it to us on purpose, to inflict more conservative shock treatment on the US social contract that Pete Peterson, Erskine Bowles and Alan Simpson have convinced him we can’t afford.
But we're not talking about people who make more than 100k, we're talking about families.
posted by roomthreeseventeen at 1:48 PM on January 2, 2013
posted by roomthreeseventeen at 1:48 PM on January 2, 2013
Where the line gets drawn for progressive income tax tiers is interesting but ultimately not that big a deal. The changes in capital gains tax and dividends are a much bigger deal and it will be interesting to see what effect those have on the rentier class of the US.
posted by GuyZero at 1:48 PM on January 2, 2013 [2 favorites]
posted by GuyZero at 1:48 PM on January 2, 2013 [2 favorites]
mrgrimm: " Here's one take on what changed in CPI calculation in the '90s."
I'm afraid I'm going to need more than just a conspiracy theory about the CPI being changed to show that there's something untoward going on. Yes, they change what goes into these indexes from time to time to better reflect reality, but broader indexes like the MIT billion price index show a remarkable similarity to the official CPI numbers.
If you have an inflation metric that you think is more accurate than CPI, please to be citing.
posted by tonycpsu at 1:49 PM on January 2, 2013
I'm afraid I'm going to need more than just a conspiracy theory about the CPI being changed to show that there's something untoward going on. Yes, they change what goes into these indexes from time to time to better reflect reality, but broader indexes like the MIT billion price index show a remarkable similarity to the official CPI numbers.
If you have an inflation metric that you think is more accurate than CPI, please to be citing.
posted by tonycpsu at 1:49 PM on January 2, 2013
It all comes down to this:
Person in flyover country: DAMN RICHIES UPPER CLASS INCOME STARTS AT $100K
Person in South Bay: I don't feel rich.
Person in flyover country: How can you not feel rich?
Person in South Bay: Well the government takes almost a third since my only deduction is my mortgage interest and my mortgage is $3,500/mo unless I want to live in a shoebox or more than an hour each way from work. The rest gets soaked up by regularly paying >$4/gal for gasoline in an area that doesn't have BART and living in one of the highest cost of living areas in the country.
Person in flyover country: Well... you're still rich.
How to tell if someone is "rich"? You're not rich unless you're deriving a good proportion of your income from dividends and capital gains. Until that happens you're just another upper middle class sap that actually pays a decent share of your income in taxes.
posted by Talez at 1:51 PM on January 2, 2013 [7 favorites]
Person in flyover country: DAMN RICHIES UPPER CLASS INCOME STARTS AT $100K
Person in South Bay: I don't feel rich.
Person in flyover country: How can you not feel rich?
Person in South Bay: Well the government takes almost a third since my only deduction is my mortgage interest and my mortgage is $3,500/mo unless I want to live in a shoebox or more than an hour each way from work. The rest gets soaked up by regularly paying >$4/gal for gasoline in an area that doesn't have BART and living in one of the highest cost of living areas in the country.
Person in flyover country: Well... you're still rich.
How to tell if someone is "rich"? You're not rich unless you're deriving a good proportion of your income from dividends and capital gains. Until that happens you're just another upper middle class sap that actually pays a decent share of your income in taxes.
posted by Talez at 1:51 PM on January 2, 2013 [7 favorites]
Yeah, but the fact is that America has a lot of people that the rest of the world would consider filthy rich. And you're talking about, with someone making 100k a year, someone who is in the top 10 percent in the US. In the world, you're in the top .1%. I'm sorry, but if you make 100k a year, you are filthy stinking rich by any objective measure.
posted by empath
Right, but usually people talk about an ideal where rest of the world 'rises' to something close to our standard of living, not the other way around. I am not going to defend every excess in "the West," but this whole line of argument seems really strange to me.
posted by rosswald at 1:52 PM on January 2, 2013 [1 favorite]
posted by empath
Right, but usually people talk about an ideal where rest of the world 'rises' to something close to our standard of living, not the other way around. I am not going to defend every excess in "the West," but this whole line of argument seems really strange to me.
posted by rosswald at 1:52 PM on January 2, 2013 [1 favorite]
Talez, that's exactly it. Unless you are saving a substantial portion of the 100k, you are not rich. You might not even be upper middle class.
posted by roomthreeseventeen at 1:52 PM on January 2, 2013 [2 favorites]
posted by roomthreeseventeen at 1:52 PM on January 2, 2013 [2 favorites]
Person in flyover country: DAMN RICHIES UPPER CLASS INCOME STARTS AT $100K
Person in South Bay: I don't feel rich.
Person in flyover country: How can you not feel rich?
Person in South Bay making the median South Bay income: Yeah, how can you not feel rich when I survive on half of what you make?
posted by Drinky Die at 1:54 PM on January 2, 2013 [8 favorites]
Person in South Bay: I don't feel rich.
Person in flyover country: How can you not feel rich?
Person in South Bay making the median South Bay income: Yeah, how can you not feel rich when I survive on half of what you make?
posted by Drinky Die at 1:54 PM on January 2, 2013 [8 favorites]
Empath, with the numbers you're using, you are essentially ruling out home ownership for the middle class. Since homeownership has been considered a bedrock foundational trait for the middle class in the American context for what, a century, you're using what amounts to a personal definition.
Yes, Americans are, per-capita a lot richer than most other nations. What do you want to do, scrap social security and put it all towards foreign aide?
posted by spaltavian at 1:54 PM on January 2, 2013
Yes, Americans are, per-capita a lot richer than most other nations. What do you want to do, scrap social security and put it all towards foreign aide?
posted by spaltavian at 1:54 PM on January 2, 2013
"Rich" is loaded enough of a word that arguing what is and isn't it in a group setting seems like a recipe for frustration. It probably makes a lot more sense to frame the conversation in terms of discrete issues of needs and wants and the degree of disruption different kinds of financial disruption are likely to have on your life.
Do people really think "rich" means you can buy whatever you want, quit your job, and never work again? That's almost NO ONE. And yet there are rich people ... like me.
I think for a lot of people, "rich" means not having to worry about some of the money-related issues that occupy a lot of their headspace in their actual life, which, again, break that into parts and look at what it means practically if you want to get more at the nut of the issue in a meaningful way.
Are you totally fucked if your car breaks down? There are people with enough money that that's not a big problem for them. Are you fucked in a systemic way if you get seriously ill? Some folks can afford to minimize the impact of an illness to the actual illness itself. If you lose your job, are you gonna eat okay until you find a new one? Some folks have enough money that losing a job is a logistical frustration rather than an existential crisis. Etc. There are a lot of specific angles of disparity between need and want, between crisis and inconvenience, between catastrophe and setback.
And I've always seen "quit your job and never work again" as a desirable daydream regardless of whether it means rich or not. "Buy whatever you want" not required; I just want the Fuck You money, because I enjoy doing things I enjoying a lot more than I enjoy having to have a job but getting more money for it. (This is something that has become less of a recurring train of thought for me since I started working here, because bizarrely enough I actually genuinely like this job. I haven't liked others. I don't think most people do.)
posted by cortex at 1:55 PM on January 2, 2013 [5 favorites]
Do people really think "rich" means you can buy whatever you want, quit your job, and never work again? That's almost NO ONE. And yet there are rich people ... like me.
I think for a lot of people, "rich" means not having to worry about some of the money-related issues that occupy a lot of their headspace in their actual life, which, again, break that into parts and look at what it means practically if you want to get more at the nut of the issue in a meaningful way.
Are you totally fucked if your car breaks down? There are people with enough money that that's not a big problem for them. Are you fucked in a systemic way if you get seriously ill? Some folks can afford to minimize the impact of an illness to the actual illness itself. If you lose your job, are you gonna eat okay until you find a new one? Some folks have enough money that losing a job is a logistical frustration rather than an existential crisis. Etc. There are a lot of specific angles of disparity between need and want, between crisis and inconvenience, between catastrophe and setback.
And I've always seen "quit your job and never work again" as a desirable daydream regardless of whether it means rich or not. "Buy whatever you want" not required; I just want the Fuck You money, because I enjoy doing things I enjoying a lot more than I enjoy having to have a job but getting more money for it. (This is something that has become less of a recurring train of thought for me since I started working here, because bizarrely enough I actually genuinely like this job. I haven't liked others. I don't think most people do.)
posted by cortex at 1:55 PM on January 2, 2013 [5 favorites]
"Wages of physicians and surgeons are among the highest of all occupations."
How about that?
I guess I looked more at "among the highest" and "occupation". The mere fact that they work and probably have to continue working means that they really aren't rich for the purposes of the topic at hand: income and taxation in the US.
As said above: this is about wanting rich people to pay their goddamn fucking share.
Some shared understanding of where "middle class" ends and "rich" begins is essential.
Seems like the line might be when you make so much money that your effective tax rate goes down. Why does Joe Biden (and so many others) have to pay 40+% on his $270k when Mitt Romney, et al, only has to pay 14% on his $23m? *THAT'S* rich, in my book.
posted by gjc at 1:56 PM on January 2, 2013 [3 favorites]
How about that?
I guess I looked more at "among the highest" and "occupation". The mere fact that they work and probably have to continue working means that they really aren't rich for the purposes of the topic at hand: income and taxation in the US.
As said above: this is about wanting rich people to pay their goddamn fucking share.
Some shared understanding of where "middle class" ends and "rich" begins is essential.
Seems like the line might be when you make so much money that your effective tax rate goes down. Why does Joe Biden (and so many others) have to pay 40+% on his $270k when Mitt Romney, et al, only has to pay 14% on his $23m? *THAT'S* rich, in my book.
posted by gjc at 1:56 PM on January 2, 2013 [3 favorites]
Here's one take on what changed in CPI calculation in the '90s.
Traditional rebuttal article to Shadowstats here.
posted by kithrater at 1:57 PM on January 2, 2013 [1 favorite]
Traditional rebuttal article to Shadowstats here.
posted by kithrater at 1:57 PM on January 2, 2013 [1 favorite]
For most people, "rich" means "has more money than I do."
posted by brain_drain at 1:57 PM on January 2, 2013 [5 favorites]
posted by brain_drain at 1:57 PM on January 2, 2013 [5 favorites]
It really is shocking the extent to which self-described progressives have been drinking neo-liberal kool-aid and and acquiescing to the entire framework of the debate on fiscal policy:
How is that shocking? They drank the neo-conservative kool-aid in regards to foreign policy. Not gonna belabor the point, just don't understand how anyone can be "shocked" when "self described progressives" roll over when they are told.
posted by AElfwine Evenstar at 2:01 PM on January 2, 2013
How is that shocking? They drank the neo-conservative kool-aid in regards to foreign policy. Not gonna belabor the point, just don't understand how anyone can be "shocked" when "self described progressives" roll over when they are told.
posted by AElfwine Evenstar at 2:01 PM on January 2, 2013
Also on the rich vs. not rich category debate; I find it easier to differentiate between Capitalists and non-capitalists.
posted by AElfwine Evenstar at 2:05 PM on January 2, 2013
posted by AElfwine Evenstar at 2:05 PM on January 2, 2013
AElfwine Evenstar: " How is that shocking? They drank the neo-conservative kool-aid in regards to foreign policy. Not gonna belabor the point, just don't understand how anyone can be "shocked" when "self described" progressives roll over when they are told."
What is your counterfactual that ends up with a better deal? I would have loved a better deal, and I think it's possible that Obama left some money on the table, but the way you and crayz are talking about this, it sounds like you guys think he got totally rolled. How would he have gotten a much better deal? Going over the cliff would have created some leverage, but the GOP showed they were willing to shoot hostages before -- why would they stop now?
I wanted more out of this deal, but Obama can't force the House of Representatives to take a deal they don't like with the sheer force of his will.
posted by tonycpsu at 2:06 PM on January 2, 2013
What is your counterfactual that ends up with a better deal? I would have loved a better deal, and I think it's possible that Obama left some money on the table, but the way you and crayz are talking about this, it sounds like you guys think he got totally rolled. How would he have gotten a much better deal? Going over the cliff would have created some leverage, but the GOP showed they were willing to shoot hostages before -- why would they stop now?
I wanted more out of this deal, but Obama can't force the House of Representatives to take a deal they don't like with the sheer force of his will.
posted by tonycpsu at 2:06 PM on January 2, 2013
Obama also had the unenviable position of having to protect the fragile recovery. A severe blow to labor market harms the little guy as much (if not more) than not taxing the rich enough or social welfare cuts.
I kind of wish Obama could have just taken us over the cliff, but that would have meant suffering for some of the most vulnerable in our country.
posted by rosswald at 2:09 PM on January 2, 2013
I kind of wish Obama could have just taken us over the cliff, but that would have meant suffering for some of the most vulnerable in our country.
posted by rosswald at 2:09 PM on January 2, 2013
you guys think he got totally rolled.
Oh someone got rolled alright, but it sure as hell wasn't Obama.
posted by AElfwine Evenstar at 2:12 PM on January 2, 2013
Oh someone got rolled alright, but it sure as hell wasn't Obama.
posted by AElfwine Evenstar at 2:12 PM on January 2, 2013
I wanted more out of this deal, but Obama can't force the House of Representatives to take a deal they don't like with the sheer force of his will.
It's not like they'll be kicked out either if they go over the cliff. The house has been gerrymandered to hell and 191 Republicans that are in there will stay there without a historically massive swing to the Ds. Their concern is being primaried from the right not raced against from the left.
posted by Talez at 2:16 PM on January 2, 2013 [1 favorite]
It's not like they'll be kicked out either if they go over the cliff. The house has been gerrymandered to hell and 191 Republicans that are in there will stay there without a historically massive swing to the Ds. Their concern is being primaried from the right not raced against from the left.
posted by Talez at 2:16 PM on January 2, 2013 [1 favorite]
roomthreeseventeen: Talez, that's exactly it. Unless you are saving a substantial portion of the 100k, you are not rich. You might not even be upper middle class.
That is exactly not it. Savings is more about how smart you are than how rich.
cortex: I think for a lot of people, "rich" means not having to worry about some of the money-related issues that occupy a lot of their headspace in their actual life,
Kind of an oxymoron then? Almost anyone we could qualify as rich occupies a huge amount of their head space with ways to become more rich. Even for people like pro athletes, you see them have banner years just before they are up for contract negotiations and crappy years after landing the big bucks. Tell me they aren't thinking about the money..
Or to put it simply.. More money, more problems.
posted by Chuckles at 2:16 PM on January 2, 2013
That is exactly not it. Savings is more about how smart you are than how rich.
cortex: I think for a lot of people, "rich" means not having to worry about some of the money-related issues that occupy a lot of their headspace in their actual life,
Kind of an oxymoron then? Almost anyone we could qualify as rich occupies a huge amount of their head space with ways to become more rich. Even for people like pro athletes, you see them have banner years just before they are up for contract negotiations and crappy years after landing the big bucks. Tell me they aren't thinking about the money..
Or to put it simply.. More money, more problems.
posted by Chuckles at 2:16 PM on January 2, 2013
AElfwine Evenstar: " Oh someone got rolled alright, but it sure as hell wasn't Obama."
Oh, so you're saying Obama was itching to give away the store on progressive priorities the whole time?
posted by tonycpsu at 2:20 PM on January 2, 2013
Oh, so you're saying Obama was itching to give away the store on progressive priorities the whole time?
posted by tonycpsu at 2:20 PM on January 2, 2013
Almost anyone we could qualify as rich occupies a huge amount of their head space with ways to become more rich.
Whether someone with enough money to not have to worry about food or shelter or keeping their shitty job spends their free time thinking about how to make more money is pretty much immaterial to the guy worrying about food and shelter and his shitty job and wishing he could get away from that. He sees his problems, he sees people who can afford not to have those problems, and he thinks, okay, they have got it made.
Having enough money to have to worry about having a lot of money is a sort of problem, but it's not the same sort of problem that people who really have to worry about money are dealing with and not one I think they'd mind suddenly having thanks to some miracle swap. These are two pretty different issues.
posted by cortex at 2:24 PM on January 2, 2013 [1 favorite]
Whether someone with enough money to not have to worry about food or shelter or keeping their shitty job spends their free time thinking about how to make more money is pretty much immaterial to the guy worrying about food and shelter and his shitty job and wishing he could get away from that. He sees his problems, he sees people who can afford not to have those problems, and he thinks, okay, they have got it made.
Having enough money to have to worry about having a lot of money is a sort of problem, but it's not the same sort of problem that people who really have to worry about money are dealing with and not one I think they'd mind suddenly having thanks to some miracle swap. These are two pretty different issues.
posted by cortex at 2:24 PM on January 2, 2013 [1 favorite]
Kind of an oxymoron then? Almost anyone we could qualify as rich occupies a huge amount of their head space with ways to become more rich.
As someone who is probably "rich" by this thread's standards (if Joe Biden is rich, I guess I am too), and who knows a lot of people worth 10M+ (since I've worked at a couple of companies that went crazy big and made a bunch of millionaires), this is really not true.
For a certain kind of person, it is, and entrepenuer types for example are often that way. Or the kind of celebrities who want to be able to spend 10M a year.
But people who get rich as a sort of side-effect of a job like programming? Plenty of the ones I know really do stop worrying about money. They are the rich ones who support rolling back Bush tax cuts, removing SS payroll tax cap, etc, because they are smart enough to know that the burden on them of such a move is trivial compared to the benefit to society.
posted by wildcrdj at 2:35 PM on January 2, 2013 [2 favorites]
As someone who is probably "rich" by this thread's standards (if Joe Biden is rich, I guess I am too), and who knows a lot of people worth 10M+ (since I've worked at a couple of companies that went crazy big and made a bunch of millionaires), this is really not true.
For a certain kind of person, it is, and entrepenuer types for example are often that way. Or the kind of celebrities who want to be able to spend 10M a year.
But people who get rich as a sort of side-effect of a job like programming? Plenty of the ones I know really do stop worrying about money. They are the rich ones who support rolling back Bush tax cuts, removing SS payroll tax cap, etc, because they are smart enough to know that the burden on them of such a move is trivial compared to the benefit to society.
posted by wildcrdj at 2:35 PM on January 2, 2013 [2 favorites]
I think for a lot of people, "rich" means not having to worry about some of the money-related issues that occupy a lot of their headspace in their actual life,
And to address this directly: I think thats a fair definition. As someone who is lucky enough not to worry about money, I feel this is a HUGE difference between me and everyone I know who does (which is most but not all). It really is a whole different state of being, and while I can't live the "lifestyles of the rich and famous" kind of life, I also can spend all my anxiety and worry points on things other than money.
I do tend to think of the "rich" as people who don't have to work for a living, but there is something between "middle class" people who generally have to worry about bills and mortgages and stuff, "medium-rich" people who don't have to worry about money but still have to work and can't go crazy with spending, and "rich-rich" people like Warren Buffet or Mitt Romney.
posted by wildcrdj at 2:40 PM on January 2, 2013 [4 favorites]
And to address this directly: I think thats a fair definition. As someone who is lucky enough not to worry about money, I feel this is a HUGE difference between me and everyone I know who does (which is most but not all). It really is a whole different state of being, and while I can't live the "lifestyles of the rich and famous" kind of life, I also can spend all my anxiety and worry points on things other than money.
I do tend to think of the "rich" as people who don't have to work for a living, but there is something between "middle class" people who generally have to worry about bills and mortgages and stuff, "medium-rich" people who don't have to worry about money but still have to work and can't go crazy with spending, and "rich-rich" people like Warren Buffet or Mitt Romney.
posted by wildcrdj at 2:40 PM on January 2, 2013 [4 favorites]
as well as the exemption of the imputed rental of property one owns for personal use.
I've heard this argument before, but just how does it work on a practical level? Pretty much any asset can be leased or rented instead of owned. Why shouldn't I also be taxed on the imputed rental of my car when I drive it to the market, the imputed rental of my laptop when I surf MeFi, or the imputed rental of my mattress when I go to sleep? Taxing the personal use of one's own property (separate from its acquisition or transfer and separate from community maintenance in the form of property taxes) doesn't seem to achieve anything beyond discouraging people from using their assets.
posted by zachlipton at 2:49 PM on January 2, 2013
I've heard this argument before, but just how does it work on a practical level? Pretty much any asset can be leased or rented instead of owned. Why shouldn't I also be taxed on the imputed rental of my car when I drive it to the market, the imputed rental of my laptop when I surf MeFi, or the imputed rental of my mattress when I go to sleep? Taxing the personal use of one's own property (separate from its acquisition or transfer and separate from community maintenance in the form of property taxes) doesn't seem to achieve anything beyond discouraging people from using their assets.
posted by zachlipton at 2:49 PM on January 2, 2013
The money the payroll tax cut took from the SS Trust Fund was replaced with money from the General Fund.
Social Security is fine; going forward it needs only minor tweaks. It's Medicare that is a problem.
posted by professor plum with a rope at 2:55 PM on January 2, 2013 [2 favorites]
Social Security is fine; going forward it needs only minor tweaks. It's Medicare that is a problem.
posted by professor plum with a rope at 2:55 PM on January 2, 2013 [2 favorites]
I don't know how much gerrymandering affects House results vs. voluntary clustering of those with like political views.
posted by professor plum with a rope at 2:57 PM on January 2, 2013
posted by professor plum with a rope at 2:57 PM on January 2, 2013
professor plum with a rope: "I don't know how much gerrymandering affects House results vs. voluntary clustering of those with like political views."
There's some good research going on to answer these questions:
More Evidence on How Democrats Won the Popular Vote but Lost the Congress
Gerrymanders, Part 1: Busting the both-sides-do-it myth
The first post seems to be making the case that "structural" factors (clustering) are doing a lot of work, while the second one shows that in many cases, the gerrymandering really is responsible for a majority of the difference between raw vote totals and seats.
posted by tonycpsu at 3:10 PM on January 2, 2013 [8 favorites]
There's some good research going on to answer these questions:
More Evidence on How Democrats Won the Popular Vote but Lost the Congress
Gerrymanders, Part 1: Busting the both-sides-do-it myth
The first post seems to be making the case that "structural" factors (clustering) are doing a lot of work, while the second one shows that in many cases, the gerrymandering really is responsible for a majority of the difference between raw vote totals and seats.
posted by tonycpsu at 3:10 PM on January 2, 2013 [8 favorites]
Gerrymanders, Part 1: Busting the both-sides-do-it myth
Part 2 of Sam Wang's series on gerrymandering is worth reading as well.
posted by tonycpsu at 3:12 PM on January 2, 2013 [4 favorites]
Part 2 of Sam Wang's series on gerrymandering is worth reading as well.
posted by tonycpsu at 3:12 PM on January 2, 2013 [4 favorites]
You're not rich unless you're deriving a good proportion of your income from dividends and capital gains. Until that happens you're just another upper middle class sap that actually pays a decent share of your income in taxes.
By your definition Alex Rodriguez is not rich.
The real problem with the deal is that the whole "fiscal cliff" thing was supposed to prevent the circus of stupid that accompanied the last raising of the debt ceiling. Except we still got the stupidity circus and we get to have another one when we really do try to raise the debt ceiling. All we did was add an extra dose of elephant crap.
posted by dirigibleman at 3:33 PM on January 2, 2013 [5 favorites]
By your definition Alex Rodriguez is not rich.
The real problem with the deal is that the whole "fiscal cliff" thing was supposed to prevent the circus of stupid that accompanied the last raising of the debt ceiling. Except we still got the stupidity circus and we get to have another one when we really do try to raise the debt ceiling. All we did was add an extra dose of elephant crap.
posted by dirigibleman at 3:33 PM on January 2, 2013 [5 favorites]
Unless you are saving a substantial portion of the 100k, you are not rich
You'd be amazed at how little discretionary income a lot of relatively high income people have. They are often neck deep in idiotic payments- on their third house, on their 5th car, on their boat, because they don't bother to pay their credit cards on time and are therefore paying 35% interest, or because they take outlandish vacations. All of these things are apparently mandatory and completely not extravagant because Chuck across the street blows twice the money we do!
There are whole industries and advertising campaigns dedicated to getting people to rachet up their lifestyle without feeling like they're living the life of Reilly. THAT'S why you get people who make $500k who will tell you in complete sincerity that they're "barely scraping by."
I knew people who making $80k per year who would save way more than people I knew making $450k. This was before the real estate crash, so maybe things have changed.
posted by small_ruminant at 3:51 PM on January 2, 2013 [4 favorites]
You'd be amazed at how little discretionary income a lot of relatively high income people have. They are often neck deep in idiotic payments- on their third house, on their 5th car, on their boat, because they don't bother to pay their credit cards on time and are therefore paying 35% interest, or because they take outlandish vacations. All of these things are apparently mandatory and completely not extravagant because Chuck across the street blows twice the money we do!
There are whole industries and advertising campaigns dedicated to getting people to rachet up their lifestyle without feeling like they're living the life of Reilly. THAT'S why you get people who make $500k who will tell you in complete sincerity that they're "barely scraping by."
I knew people who making $80k per year who would save way more than people I knew making $450k. This was before the real estate crash, so maybe things have changed.
posted by small_ruminant at 3:51 PM on January 2, 2013 [4 favorites]
Dunno about you, but I'd love more links to solid, interesting analysis and less arguing over the semantics of the word 'rich.'
posted by mediareport at 3:56 PM on January 2, 2013 [10 favorites]
posted by mediareport at 3:56 PM on January 2, 2013 [10 favorites]
How about we define middle class as having enough money to disqualify your family from receiving government assistance for the poor, but not enough wealth to qualify for government assistance for the rich? (Such as having 95% of your income falling beyond the cap, or owning a Senator or two.)
posted by bashos_frog at 4:13 PM on January 2, 2013 [5 favorites]
posted by bashos_frog at 4:13 PM on January 2, 2013 [5 favorites]
I'm in the top 10% income-wise, but I've barely gotten to the point where I can be looking to purchase a home and get me that sweet, sweet mortgage deduction. Meanwhile, my commute is an hour, and my rent is over $2,000/month.
posted by bashos_frog at 4:15 PM on January 2, 2013 [1 favorite]
posted by bashos_frog at 4:15 PM on January 2, 2013 [1 favorite]
This tax hike will mean the difference between owning the life-size Anubis from SkyMall and leaving my Egyptian palace unguarded.
posted by horsewithnoname at 4:20 PM on January 2, 2013 [5 favorites]
posted by horsewithnoname at 4:20 PM on January 2, 2013 [5 favorites]
You know what wealth is? It is having the ability to commute from a low tax area to a high paying job within 30 minutes.
posted by Renoroc at 4:27 PM on January 2, 2013 [1 favorite]
posted by Renoroc at 4:27 PM on January 2, 2013 [1 favorite]
I'm afraid Anubis already got torched by a bunch of hippies, horsewithnoname. It's less expensive to own the SkyMall imitation though.
posted by jeffburdges at 4:30 PM on January 2, 2013
posted by jeffburdges at 4:30 PM on January 2, 2013
I'm in the top 10% income-wise, but I've barely gotten to the point where I can be looking to purchase a home and get me that sweet, sweet mortgage deduction. Meanwhile, my commute is an hour, and my rent is over $2,000/month.
Ah, the joys of San Francisco. There's a whole geographic distinction in this thread, separate but related to the class and wealth discussions, that bears notice. It's not as though bashos_frog or I deserve a government handout for living in an expensive city, or I want to stick it to my grandfather in the midwest because the rent and gas are cheaper, but difference in perspectives here is part of the reason nobody can seem to agree on anything politically.
posted by zachlipton at 4:30 PM on January 2, 2013 [4 favorites]
Ah, the joys of San Francisco. There's a whole geographic distinction in this thread, separate but related to the class and wealth discussions, that bears notice. It's not as though bashos_frog or I deserve a government handout for living in an expensive city, or I want to stick it to my grandfather in the midwest because the rent and gas are cheaper, but difference in perspectives here is part of the reason nobody can seem to agree on anything politically.
posted by zachlipton at 4:30 PM on January 2, 2013 [4 favorites]
Comfortable in reality means a place to sleep, food to eat, clothes to wear, and human companionship.
Curious why that last one makes the list, unless you're paying for it.
I guess because this living situation doesn't seem "comfortable" in any sense. You cannot live without human companionship. Perhaps I use the wrong term. Replace with "human contact." There are a few other things that someone might argue you need to be "comfortable" -- mind-altering substances, for one. Art for another. ... Religious conviction? Anyway, by "companionship" I mean someone to talk to every now and then. Yeah, I think that's necessary for most people to be comfortable.
tl;dr get your mind out of the gutter.
I'm in the top 10% income-wise, but I've barely gotten to the point where I can be looking to purchase a home and get me that sweet, sweet mortgage deduction. Meanwhile, my commute is an hour, and my rent is over $2,000/month.
...
This is rich. $100,000 is not rich.
It's all relative and it all needs more context. $100,000 alone with no prospects for employment, no wealthy relatives, no savings (aside from the hundred grand), is not rich. $100,000 making $100,000/year at age 30 with $100,000+ worth of education plus a wealthy (again relative) family in case of troubles, etc. is certainly "rich."
The top 10% person: Much of your "wealth" comes in the value of your location, i.e. that awesome place everyone wants to live in. So no, you don't seem rich yet. But you seem pretty close to it and you might get there.
I will warn you you won't feel any better when you do. Give as much as you can away - I say this to myself as much as anyone.
posted by mrgrimm at 4:49 PM on January 2, 2013
Curious why that last one makes the list, unless you're paying for it.
I guess because this living situation doesn't seem "comfortable" in any sense. You cannot live without human companionship. Perhaps I use the wrong term. Replace with "human contact." There are a few other things that someone might argue you need to be "comfortable" -- mind-altering substances, for one. Art for another. ... Religious conviction? Anyway, by "companionship" I mean someone to talk to every now and then. Yeah, I think that's necessary for most people to be comfortable.
tl;dr get your mind out of the gutter.
I'm in the top 10% income-wise, but I've barely gotten to the point where I can be looking to purchase a home and get me that sweet, sweet mortgage deduction. Meanwhile, my commute is an hour, and my rent is over $2,000/month.
...
This is rich. $100,000 is not rich.
It's all relative and it all needs more context. $100,000 alone with no prospects for employment, no wealthy relatives, no savings (aside from the hundred grand), is not rich. $100,000 making $100,000/year at age 30 with $100,000+ worth of education plus a wealthy (again relative) family in case of troubles, etc. is certainly "rich."
The top 10% person: Much of your "wealth" comes in the value of your location, i.e. that awesome place everyone wants to live in. So no, you don't seem rich yet. But you seem pretty close to it and you might get there.
I will warn you you won't feel any better when you do. Give as much as you can away - I say this to myself as much as anyone.
posted by mrgrimm at 4:49 PM on January 2, 2013
Isn't this "payroll tax" the Social Security tax? Does this mean we were underfunding social security for two years?
No. The payroll tax holiday does not cause underfunding. The Social Security trust fund is credited with the exact amount of the tax holiday by money from the general fund. The payroll tax holiday is just an accounting convenience. They could have mailed a check to each person with money from the general fund, but instead, it was easier to just use the built in mechanism of bi-weekly paychecks. The money for the holiday doesn't come out of Social Security, so continuing the payroll tax holiday for another year or two would not have threatened the solvency of the program by one penny.
You may recall the Bush tax rebate checks in 2001. Just the administration and mailing of these checks cost $100 million. Using the payroll tax mechanism instead to just put the money in your regular paychecks saves all of those wasted costs. Social Security collects the same amount as they always did.
posted by JackFlash at 4:50 PM on January 2, 2013 [6 favorites]
No. The payroll tax holiday does not cause underfunding. The Social Security trust fund is credited with the exact amount of the tax holiday by money from the general fund. The payroll tax holiday is just an accounting convenience. They could have mailed a check to each person with money from the general fund, but instead, it was easier to just use the built in mechanism of bi-weekly paychecks. The money for the holiday doesn't come out of Social Security, so continuing the payroll tax holiday for another year or two would not have threatened the solvency of the program by one penny.
You may recall the Bush tax rebate checks in 2001. Just the administration and mailing of these checks cost $100 million. Using the payroll tax mechanism instead to just put the money in your regular paychecks saves all of those wasted costs. Social Security collects the same amount as they always did.
posted by JackFlash at 4:50 PM on January 2, 2013 [6 favorites]
It's also worth noting that the Bush method of tax rebate checks bought him a lot of political capital because each check was mailed with a letter pointing out that they were receiving this check courtesy of George W. Bush. The Obama method using the payroll tax holiday saved more than $100 million of wasted expense for those letters, but I bet not one person in 100 could tell you that Obama had given them a big tax cut two years ago. Doing the responsible thing doesn't necessarily get you the credit it should.
posted by JackFlash at 4:59 PM on January 2, 2013 [6 favorites]
posted by JackFlash at 4:59 PM on January 2, 2013 [6 favorites]
Using the payroll tax mechanism instead to just put the money in your regular paychecks saves all of those wasted costs.
On the other hand, doing it the Bush way maximized the political benefit of showing taxpayers that you're doing something for them (there's your "gifts from the government", Mitt). Doing it in the payroll tax is the right thing to do, but I'd be lying if I denied that there were times during the election that I found myself wishing Obama had done it the showy, more expensive way.
posted by tonycpsu at 5:01 PM on January 2, 2013
On the other hand, doing it the Bush way maximized the political benefit of showing taxpayers that you're doing something for them (there's your "gifts from the government", Mitt). Doing it in the payroll tax is the right thing to do, but I'd be lying if I denied that there were times during the election that I found myself wishing Obama had done it the showy, more expensive way.
posted by tonycpsu at 5:01 PM on January 2, 2013
To put the necessity of "human companionship/contact" in context...
I have a close friend with a mental illness who was forced to move back into the circumstances that gave them mental illness in order to save money. Coincidentally the reason they don't have money is pretty clearly because they have mental illness.
The ability to have agency over where you live and who you have contact with can be of vital importance.
(This something I wanted to say in this thread, but apparently we're happily derailed there)
posted by tychotesla at 5:06 PM on January 2, 2013 [1 favorite]
I have a close friend with a mental illness who was forced to move back into the circumstances that gave them mental illness in order to save money. Coincidentally the reason they don't have money is pretty clearly because they have mental illness.
The ability to have agency over where you live and who you have contact with can be of vital importance.
(This something I wanted to say in this thread, but apparently we're happily derailed there)
posted by tychotesla at 5:06 PM on January 2, 2013 [1 favorite]
The Obama method using the payroll tax holiday saved more than $100 million of wasted expense for those letters
Not necessarily - the cost simply gets pushed from the government to business, who now need to update their systems to cope with the change in payroll tax rates. Granted, it probably works out cheaper overall (hard to imagine it would be more than a couple of hours of work and testing of the payroll system for each business with employees), but those costs don't absolutely vanish. In a country the size of the US, $100m to implement a nation-wide policy affecting and informing all tax-payers is pretty cheap.
posted by kithrater at 5:11 PM on January 2, 2013
Not necessarily - the cost simply gets pushed from the government to business, who now need to update their systems to cope with the change in payroll tax rates. Granted, it probably works out cheaper overall (hard to imagine it would be more than a couple of hours of work and testing of the payroll system for each business with employees), but those costs don't absolutely vanish. In a country the size of the US, $100m to implement a nation-wide policy affecting and informing all tax-payers is pretty cheap.
posted by kithrater at 5:11 PM on January 2, 2013
Not necessarily - the cost simply gets pushed from the government to business, who now need to update their systems to cope with the change in payroll tax rates.
They already have to do that anyway. Every year there are changes to payroll and income tax rates at federal, state and local levels, inflation indexed ceilings, 401(k) contributions, health insurance, W-4 allowances, unemployment insurance, disability insurance, etc. Changing one one number in a table for payroll tax is trivial.
posted by JackFlash at 5:30 PM on January 2, 2013 [3 favorites]
They already have to do that anyway. Every year there are changes to payroll and income tax rates at federal, state and local levels, inflation indexed ceilings, 401(k) contributions, health insurance, W-4 allowances, unemployment insurance, disability insurance, etc. Changing one one number in a table for payroll tax is trivial.
posted by JackFlash at 5:30 PM on January 2, 2013 [3 favorites]
> It was meant to be a temporary measure
The Entitlements Debate We Should Be Having by Jame Surowiecki @ The New Yorker
We could gradually decrease the payroll tax and fund Social Security and Medicare with income tax. When F.D.R. and L.B.J. created them, making "entitlements" rather than a "welfare" to protect them, but by now, there's strong support to keep them.
posted by morganw at 7:27 PM on January 2, 2013
The Entitlements Debate We Should Be Having by Jame Surowiecki @ The New Yorker
We could gradually decrease the payroll tax and fund Social Security and Medicare with income tax. When F.D.R. and L.B.J. created them, making "entitlements" rather than a "welfare" to protect them, but by now, there's strong support to keep them.
posted by morganw at 7:27 PM on January 2, 2013
This "rich vs. not rich" thread is so beside the point. So is comparing yourself to the starving poor in other countries.
The point is tax policy, and tax policy should be based on income levels. If you're in the top ten percent, you can argue all day long whether you're "rich" or not but you can't possibly argue that you're not better able to pay tax than someone in the bottom ten percent. Most households in America earn $50,000 or less; the middle fifth quintile in 2006 was $34,738 to $55,331. That's what I call "middle class" -- it's the middle. Oh, and the median for African-Americans is barely $30,000.
To hear people earning $80,000 or $100,000 or $200,000 in household income to complain about their economic troubles is just ignorant. It represents a real misunderstanding of where you fit in the economic spectrum in this country. $200,000 puts you in the top two percent or so. If you're "middle class" in the top two percent, the term has no meaning.
posted by Fnarf at 7:34 PM on January 2, 2013 [9 favorites]
The point is tax policy, and tax policy should be based on income levels. If you're in the top ten percent, you can argue all day long whether you're "rich" or not but you can't possibly argue that you're not better able to pay tax than someone in the bottom ten percent. Most households in America earn $50,000 or less; the middle fifth quintile in 2006 was $34,738 to $55,331. That's what I call "middle class" -- it's the middle. Oh, and the median for African-Americans is barely $30,000.
To hear people earning $80,000 or $100,000 or $200,000 in household income to complain about their economic troubles is just ignorant. It represents a real misunderstanding of where you fit in the economic spectrum in this country. $200,000 puts you in the top two percent or so. If you're "middle class" in the top two percent, the term has no meaning.
posted by Fnarf at 7:34 PM on January 2, 2013 [9 favorites]
I don't like the regressive nature of the payroll taxes, but one good thing they do is show people what their money is paying for. Removing the dedicated funding stream, even if accounting gimmicks routinely muck with the separation between the programs and the general fund, would probably lead to the programs being destroyed.
posted by tonycpsu at 7:35 PM on January 2, 2013 [1 favorite]
posted by tonycpsu at 7:35 PM on January 2, 2013 [1 favorite]
Removing the dedicated funding stream, even if accounting gimmicks routinely muck with the separation between the programs and the general fund, would probably lead to the programs being destroyed.
This is why FDR wanted the Trust Fund. I'm really surprised, I have to say, at how many people (see even earlier in this thread) think that Social Security is broke, even though it's funded fully out 20+ years (which is forever in budget terms).
posted by professor plum with a rope at 8:31 PM on January 2, 2013 [4 favorites]
This is why FDR wanted the Trust Fund. I'm really surprised, I have to say, at how many people (see even earlier in this thread) think that Social Security is broke, even though it's funded fully out 20+ years (which is forever in budget terms).
posted by professor plum with a rope at 8:31 PM on January 2, 2013 [4 favorites]
You're rich if you don't have to fly with the rest of us plebs on Southwest.
posted by professor plum with a rope at 8:32 PM on January 2, 2013
posted by professor plum with a rope at 8:32 PM on January 2, 2013
If you're "middle class" in the top two percent, the term has no meaning.
No, it just doesn't have the meaning you think it does. Median/middle income and middle class are two different things. Middle class is between working class and upper class. It's not just about income, it's about wealth and power and lifestyle. Downton Abby is the upper class, not some doctor making $350k.
posted by gjc at 8:46 PM on January 2, 2013 [2 favorites]
No, it just doesn't have the meaning you think it does. Median/middle income and middle class are two different things. Middle class is between working class and upper class. It's not just about income, it's about wealth and power and lifestyle. Downton Abby is the upper class, not some doctor making $350k.
posted by gjc at 8:46 PM on January 2, 2013 [2 favorites]
Nouriel Roubini: A deal that extends unsustainable tax cuts for 98 per cent of Americans is no victory
The longer-term picture is bleaker still. The reality is that America is yet to wake up to the full extent of its fiscal nightmare. Even the typical Republican voter is not – being on average older and poorer than a Democrat voter – in favour of gutting the welfare state. Tea Party extremists are more noise than signal. That is why the plans of Mitt Romney and Paul Ryan, the Republicans’ losing presidential ticket, postponed all the tough spending cuts on Social Security and Medicare by a decade.
Neither Democrats nor Republicans recognise that maintaining a basic welfare state, which is right and necessary in our age of globalisation, rapid technological change and demographic pressure, implies higher taxes for the middle class as well as for the rich. A deal that extends unsustainable tax cuts for 98 per cent of Americans is therefore a pyrrhic victory for Mr Obama.
posted by mediareport at 9:20 PM on January 2, 2013
The longer-term picture is bleaker still. The reality is that America is yet to wake up to the full extent of its fiscal nightmare. Even the typical Republican voter is not – being on average older and poorer than a Democrat voter – in favour of gutting the welfare state. Tea Party extremists are more noise than signal. That is why the plans of Mitt Romney and Paul Ryan, the Republicans’ losing presidential ticket, postponed all the tough spending cuts on Social Security and Medicare by a decade.
Neither Democrats nor Republicans recognise that maintaining a basic welfare state, which is right and necessary in our age of globalisation, rapid technological change and demographic pressure, implies higher taxes for the middle class as well as for the rich. A deal that extends unsustainable tax cuts for 98 per cent of Americans is therefore a pyrrhic victory for Mr Obama.
posted by mediareport at 9:20 PM on January 2, 2013
That's ridiculous. Downton Abbey is fiction, and in another country, and another century. The redefining of "upper class" to mean "imaginary people earning in the top 0.5%" is not a tenable argument, and it's certainly not germane to a discussion of US tax policy.
(Doctors don't earn $350k either, very often).
Forget the terms "middle class" altogether, since you're having so much trouble with it, and concentrate on who should pay taxes. The middle is the middle; the top 5% is the top 5%. There is no imaginary Downton Abbey that's going to come rescue us.
Saying "I can't pay more, I can barely get by on my $150K" is an insult to those of us -- the overwhelming majority of us -- who get by on half that, or less -- much less. 40% of the population in the US has less than $38K of household income. Twenty percent have a household income LESS THAN $18,500. Think about that for a minute. People have trouble "maintaining their lifestyle" at ten times the income of the poorest fifth. These people are suffering from a confused perspective on life and its expected rewards.
posted by Fnarf at 9:22 PM on January 2, 2013 [16 favorites]
(Doctors don't earn $350k either, very often).
Forget the terms "middle class" altogether, since you're having so much trouble with it, and concentrate on who should pay taxes. The middle is the middle; the top 5% is the top 5%. There is no imaginary Downton Abbey that's going to come rescue us.
Saying "I can't pay more, I can barely get by on my $150K" is an insult to those of us -- the overwhelming majority of us -- who get by on half that, or less -- much less. 40% of the population in the US has less than $38K of household income. Twenty percent have a household income LESS THAN $18,500. Think about that for a minute. People have trouble "maintaining their lifestyle" at ten times the income of the poorest fifth. These people are suffering from a confused perspective on life and its expected rewards.
posted by Fnarf at 9:22 PM on January 2, 2013 [16 favorites]
(If the FT.com link doesn't work for you, just Google "roubini us has been let down by its leadership" and click from there; it should let you in.)
posted by mediareport at 9:23 PM on January 2, 2013 [1 favorite]
posted by mediareport at 9:23 PM on January 2, 2013 [1 favorite]
A deal that extends unsustainable tax cuts for 98 per cent of Americans is therefore a pyrrhic victory for Mr Obama.
Yeah, I don't know why all these Democrats are patting themselves on the back. They've just gutted the safety net. Oh, not yet. And they'll get on TV and wail and gnash their teeth when the evil Republicans want to cut it this year. But make no mistake; by passing these tax cuts, the Democrats are just as complicit in that future gutting. They're just lying about it. The Republicans are bastards, but at least they're bastards who look you in the eye when they stab you. The Democrats will tell you they're protecting you right up until the knife goes in your back, and probably even afterwards.
You can't have social security, welfare, disability protection, medicare, and so on without paying for it with higher taxes for everyone. You could take the rich at 70% and it wouldn't remotely pay for this stuff.
Now watch them talk about how the defense budget shouldn't be included in any cuts. So we're going to cut taxes, increase defense spending, and protect social security, medicare, and the welfare system, all while getting the deficit under control.
Also ponies.
posted by Justinian at 11:26 PM on January 2, 2013 [1 favorite]
Yeah, I don't know why all these Democrats are patting themselves on the back. They've just gutted the safety net. Oh, not yet. And they'll get on TV and wail and gnash their teeth when the evil Republicans want to cut it this year. But make no mistake; by passing these tax cuts, the Democrats are just as complicit in that future gutting. They're just lying about it. The Republicans are bastards, but at least they're bastards who look you in the eye when they stab you. The Democrats will tell you they're protecting you right up until the knife goes in your back, and probably even afterwards.
You can't have social security, welfare, disability protection, medicare, and so on without paying for it with higher taxes for everyone. You could take the rich at 70% and it wouldn't remotely pay for this stuff.
Now watch them talk about how the defense budget shouldn't be included in any cuts. So we're going to cut taxes, increase defense spending, and protect social security, medicare, and the welfare system, all while getting the deficit under control.
Also ponies.
posted by Justinian at 11:26 PM on January 2, 2013 [1 favorite]
(Yes, I'm still going to vote Democratic. I've just got my eyes open about it.)
posted by Justinian at 11:27 PM on January 2, 2013
posted by Justinian at 11:27 PM on January 2, 2013
Wow, nice circular firing squad, everyone.
Yeah, if you make $100k+ a year, complaining about paying an extra $2k in taxes isn't likely to win much sympathy. But that doesn't change the fact that it's a terrible policy change:
- Macroeconomically, the critical question is whether that extra $2k in taxes will result in $2k less spending. Regardless of whether you want to label these people as "rich" or "comfortable" or "purple-horned snorkelburgers" it seems pretty clear that many will respond by tightening their budgets. And if you take the general consensus (and, to me, blindingly obvious) position that we are in a demand-driven recession, the result is this tax works directly counter to any recovery.
- This change affects everyone's payroll tax, including the people making a lot less than $100k who I think everyone can agree will feel a lot of pain.
Mostly, it makes me sad to see people fighting about whether $80k or $100k or $200k counts as "rich" when Congress just basically shafted all of you while dropping a huge gift on the $250k-$400k bracket (and leaving the equally important spending questions to be "resolved" through a debt ceiling fight that hugely advantages the GOP).
It brings to mind the wisdom of Dark Helmet:
"So you see, evil will always triumph because good is dumb."
posted by bjrubble at 1:51 AM on January 3, 2013 [1 favorite]
Yeah, if you make $100k+ a year, complaining about paying an extra $2k in taxes isn't likely to win much sympathy. But that doesn't change the fact that it's a terrible policy change:
- Macroeconomically, the critical question is whether that extra $2k in taxes will result in $2k less spending. Regardless of whether you want to label these people as "rich" or "comfortable" or "purple-horned snorkelburgers" it seems pretty clear that many will respond by tightening their budgets. And if you take the general consensus (and, to me, blindingly obvious) position that we are in a demand-driven recession, the result is this tax works directly counter to any recovery.
- This change affects everyone's payroll tax, including the people making a lot less than $100k who I think everyone can agree will feel a lot of pain.
Mostly, it makes me sad to see people fighting about whether $80k or $100k or $200k counts as "rich" when Congress just basically shafted all of you while dropping a huge gift on the $250k-$400k bracket (and leaving the equally important spending questions to be "resolved" through a debt ceiling fight that hugely advantages the GOP).
It brings to mind the wisdom of Dark Helmet:
"So you see, evil will always triumph because good is dumb."
posted by bjrubble at 1:51 AM on January 3, 2013 [1 favorite]
I think that the problem is the idea that there's "poor" and "rich" and everybody else is by definition "middle class", when there's really at least as twice as many levels of wealth. One person says that people in groups A, B and C are "poor" and only group H is rich; another may think that everybody who is in groups C, D and E are middle class, and F, G and H are rich. And group F has as little in common with H as it does with D, but people who view D as the middle of the middle income think that people in F have no idea how life is for most people; people who say only H is rich think about how people in F have categorically less power than the rich.
So here's my attempt at a definition of the clearly rich; there are groups below that people may say are rich, and depending on what we're talking about, it may be a useful metric or it may not. (Talking about Bangladeshis living on $2 a day is really important in a discussion on global health issues and a total derail if the subject is US tax policy, for instance.)
The dinner that Mitt Romney made his intemperate 47% comments at was just that; a fundraising dinner. 50 to 150 people from Florida attended, and this wasn't the only fundraiser Romney held in this one state. If you think about it, these people would have gotten less attention than you can get from your cousin the bride at her small-to-midsize wedding reception (which lasts longer and has shorter, and better, speeches than this fundraiser).
This fundraiser cost $50,000 per plate. And it would have put you barely on the edge of the radar of this candidate, and there's another election in 2 years and another Presidential in 4, so this isn't likely to be a once-in-a-lifetime donation. Anybody who can afford to casually fork over $50,000 for a little face time and some rubber chicken is clearly rich. That is the cost of political access in America, and it's not households earning $100K, or $200K.
posted by Homeboy Trouble at 1:53 AM on January 3, 2013
So here's my attempt at a definition of the clearly rich; there are groups below that people may say are rich, and depending on what we're talking about, it may be a useful metric or it may not. (Talking about Bangladeshis living on $2 a day is really important in a discussion on global health issues and a total derail if the subject is US tax policy, for instance.)
The dinner that Mitt Romney made his intemperate 47% comments at was just that; a fundraising dinner. 50 to 150 people from Florida attended, and this wasn't the only fundraiser Romney held in this one state. If you think about it, these people would have gotten less attention than you can get from your cousin the bride at her small-to-midsize wedding reception (which lasts longer and has shorter, and better, speeches than this fundraiser).
This fundraiser cost $50,000 per plate. And it would have put you barely on the edge of the radar of this candidate, and there's another election in 2 years and another Presidential in 4, so this isn't likely to be a once-in-a-lifetime donation. Anybody who can afford to casually fork over $50,000 for a little face time and some rubber chicken is clearly rich. That is the cost of political access in America, and it's not households earning $100K, or $200K.
posted by Homeboy Trouble at 1:53 AM on January 3, 2013
As a numerical aside, there's relatively well-known research from Princeton that puts the "line of happiness" at an income of $75,000. This number must be somewhere in the middle of "middle class" incomes. I would posit that the 80-20 rule applies, and again using the 80-20 rule on the total income distribution; we can draw the line between "poor" and "middle class" at ~$20,000, and thus the line between "rich" and "middle class" at ~$300,000. Or, you could use the $250,000 number that's been thrown around a lot lately, and you get a lower bound on "middle class"-ness at ~$32,000.
Obviously, you can use your own width factor, but $75,000 household income is clearly an important defining characteristic of "middle-class"-ness.
posted by Xyanthilous P. Harrierstick at 8:16 AM on January 3, 2013 [1 favorite]
Obviously, you can use your own width factor, but $75,000 household income is clearly an important defining characteristic of "middle-class"-ness.
posted by Xyanthilous P. Harrierstick at 8:16 AM on January 3, 2013 [1 favorite]
I think this was a pretty decent deal.
Obama campaigned on raising taxes on income above $250k and managed to get $400k, which isn't exactly what he wanted. But the people making between $250k and $400k are really small potatoes to the folks with income in the millions, who are now subject to higher capital gains and estate taxes, which is a massive win. And extended unemployment benefits for another year.
But most importantly, we've finally seen the split in the Republican Caucus that we've been expecting for years now. This bill passed in the House without Tea Party support- it was a coalition of Democrats and (relatively) moderate Republicans, and now the genie is out of the bottle: Boehner knows he can actually pass legislation without having to kowtow to the anarchist wing of his own party. If he survives today's Speaker vote, this could be the moment he becomes the Bizarro Tip O'neil to Obama's Bizarro Reagan.
posted by Uncle Ira at 9:33 AM on January 3, 2013 [2 favorites]
Obama campaigned on raising taxes on income above $250k and managed to get $400k, which isn't exactly what he wanted. But the people making between $250k and $400k are really small potatoes to the folks with income in the millions, who are now subject to higher capital gains and estate taxes, which is a massive win. And extended unemployment benefits for another year.
But most importantly, we've finally seen the split in the Republican Caucus that we've been expecting for years now. This bill passed in the House without Tea Party support- it was a coalition of Democrats and (relatively) moderate Republicans, and now the genie is out of the bottle: Boehner knows he can actually pass legislation without having to kowtow to the anarchist wing of his own party. If he survives today's Speaker vote, this could be the moment he becomes the Bizarro Tip O'neil to Obama's Bizarro Reagan.
posted by Uncle Ira at 9:33 AM on January 3, 2013 [2 favorites]
I don't see how income is at all a useful value to talk about because it is modified so much by other factors.
How much is your rent/mortgage?
Do you have kids?
Do you have debt?
Do you have a spouse and do they have income or are they supported by the same income?
Do you have a pension or do you have to save some income for retirement?
Do you have to pay a lot for health care or not?
posted by smackfu at 9:39 AM on January 3, 2013 [2 favorites]
How much is your rent/mortgage?
Do you have kids?
Do you have debt?
Do you have a spouse and do they have income or are they supported by the same income?
Do you have a pension or do you have to save some income for retirement?
Do you have to pay a lot for health care or not?
posted by smackfu at 9:39 AM on January 3, 2013 [2 favorites]
Uncle Ira: "Boehner knows he can actually pass legislation without having to kowtow to the anarchist wing of his own party"
You're implying he wants to pass legislation. He's not some wanna-be moderate who got mau-maued by the Tea Party into pursuing a maximalist agenda. He is, in fact, a country club Republican who genuinely believes in starve the beast, supply-side economics, tax cuts for the wealthy, etc. The only thing he differs with the Cantor wing on is tactics. I cannot see how he's going to transform into a willing partner with the White House a la "bizarro Tip O'Neill." I would expect continued intransigence, more do-nothing-ism, and another trip to the brink of default when the debt ceiling fight happens in a couple of months.
posted by tonycpsu at 10:51 AM on January 3, 2013 [1 favorite]
You're implying he wants to pass legislation. He's not some wanna-be moderate who got mau-maued by the Tea Party into pursuing a maximalist agenda. He is, in fact, a country club Republican who genuinely believes in starve the beast, supply-side economics, tax cuts for the wealthy, etc. The only thing he differs with the Cantor wing on is tactics. I cannot see how he's going to transform into a willing partner with the White House a la "bizarro Tip O'Neill." I would expect continued intransigence, more do-nothing-ism, and another trip to the brink of default when the debt ceiling fight happens in a couple of months.
posted by tonycpsu at 10:51 AM on January 3, 2013 [1 favorite]
Boehner Wins New Term as Speaker, in Maximally Humiliating Fashion
posted by tonycpsu at 11:22 AM on January 3, 2013
posted by tonycpsu at 11:22 AM on January 3, 2013
The Next Fiscal Cliff: Don’t celebrate yet—the next budget crisis is just two months away.
President Obama Just Lost His Leverage on the Debt Ceiling
posted by homunculus at 11:50 AM on January 3, 2013 [1 favorite]
President Obama Just Lost His Leverage on the Debt Ceiling
posted by homunculus at 11:50 AM on January 3, 2013 [1 favorite]
The Infantile Brat Party
posted by tonycpsu at 11:57 AM on January 3, 2013
House Republicans Thursday are rolling partisan welcome mat for newly elected Democrats, circulating a tongue-in-cheek guide for being the perfect "lap dog" for Minority Leader Nancy Pelosi....Yeah, these are just the kind of results-oriented partners you want to be forging bipartisan deals with.
In releases targeting all of Pelosi's new colleagues, the National Republican Congressional Committee is welcoming new members "to Washington with his very own official Nancy Pelosi Obedience School Lap Dog Kit." ...
According to a draft of the release accompanying the "kit," it comes "complete with a 'Yes, Nancy Pelosi' stamp and an official Lap Dog membership card ... [so new members] will be prepared to rubber stamp her tax and spend, big-government policies and support Democrats' failed agenda."
posted by tonycpsu at 11:57 AM on January 3, 2013
Yeah, forget what I said in my last post. They're all a bunch of mean girls.
posted by tonycpsu at 12:01 PM on January 3, 2013
posted by tonycpsu at 12:01 PM on January 3, 2013
There is no way the president could've killed the debt ceiling here, that's dreamland. I'm pleased that sequesteration was separated form the tax issues by kicking it two months down the line, well sequesteration was always Obama's real leverage anyways.
posted by jeffburdges at 1:09 PM on January 3, 2013
posted by jeffburdges at 1:09 PM on January 3, 2013
The sequestration was not the leverage, the sunset on the tax cuts was. Obama is going to have a tough time with the debt ceiling. He has very little leverage to make a favorable grand bargain with but refusing to deal is going to be some real brinksmanship he may not have the stomach for.
posted by Drinky Die at 1:20 PM on January 3, 2013 [1 favorite]
posted by Drinky Die at 1:20 PM on January 3, 2013 [1 favorite]
jeffburdges: "There is no way the president could've killed the debt ceiling here, that's dreamland."
He can make the debt ceiling moot by directing Treasury to mint trillion dollar platinum coins as necessary, but he appears unwilling to do this because it looks like dirty pool, when in fact, it's much dirtier pool for Congress to pass spending legislation and then balk at paying the bill when it arrives in the mail.
posted by tonycpsu at 1:20 PM on January 3, 2013
He can make the debt ceiling moot by directing Treasury to mint trillion dollar platinum coins as necessary, but he appears unwilling to do this because it looks like dirty pool, when in fact, it's much dirtier pool for Congress to pass spending legislation and then balk at paying the bill when it arrives in the mail.
posted by tonycpsu at 1:20 PM on January 3, 2013
I disagree, if middle class voters taxes increased they'd simply believe whatever party they're predisposed to believe, no political loss for either side. An across the board 10% spending cut pisses off the constituents who actually pay for representatives' campaigns though.
posted by jeffburdges at 2:00 PM on January 3, 2013
posted by jeffburdges at 2:00 PM on January 3, 2013
Josh Barro: Why We Must Go Off the Platinum Coin Cliff
If Republicans start issuing a list of demands that must be met before they will raise the debt ceiling, Obama should simply say that he will issue platinum coins as necessary to pay government bills if he cannot borrow. But, to avoid causing long-term inflation expectations to skyrocket, he should pledge that he will have the Treasury issue enough bonds to buy back all the newly issued currency as soon as it is allowed to do so.posted by tonycpsu at 2:19 PM on January 3, 2013 [1 favorite]
And then he should offer to sign a bill revoking his authority to issue platinum coins -- so long as that bill also abolishes the debt ceiling. The executive branch will give up its unwarranted power to print if the legislative branch will give up its unwarranted restriction on borrowing to cover already appropriated obligations.
What's the argument against the Trillion-Dollar Coin defense? It seems fairly inscrutable to me (but then again IANAE and the whole bloody financial system seems pretty ridiculous.)
I suppose when PR is the deciding factor, logic and rules don't always apply.
Ah. Here's perhaps one argument: "Obama can't use the platinum coin without admitting his entire view on economics is incorrect."
Here is the original post on "Proof Platinum Coin Seigniorage" ("seigniorage" is a great word):
Coin Seigniorage and the Irrelevance of the Debt Limit
posted by mrgrimm at 2:49 PM on January 3, 2013
I suppose when PR is the deciding factor, logic and rules don't always apply.
Ah. Here's perhaps one argument: "Obama can't use the platinum coin without admitting his entire view on economics is incorrect."
Here is the original post on "Proof Platinum Coin Seigniorage" ("seigniorage" is a great word):
Coin Seigniorage and the Irrelevance of the Debt Limit
posted by mrgrimm at 2:49 PM on January 3, 2013
mrgrimm: " Ah. Here's perhaps one argument: "Obama can't use the platinum coin without admitting his entire view on economics is incorrect.""
What the hell is that supposed to even mean?
posted by tonycpsu at 2:56 PM on January 3, 2013
What the hell is that supposed to even mean?
posted by tonycpsu at 2:56 PM on January 3, 2013
I suppose it's a variation of "He's using a dirty trick," i.e. going outside "the officially condoned playbook."
posted by mrgrimm at 3:25 PM on January 3, 2013
posted by mrgrimm at 3:25 PM on January 3, 2013
when in fact, it's much dirtier pool for Congress to pass spending legislation and then balk at paying the bill when it arrives in the mail.
World's highest stakes dine-and-dash?
posted by indubitable at 3:29 PM on January 3, 2013 [2 favorites]
World's highest stakes dine-and-dash?
posted by indubitable at 3:29 PM on January 3, 2013 [2 favorites]
Atlantic: 2 Tax Charts Tell You Exactly Who Won the Fiscal-Cliff Deal
The upper middle class ($200k-$500k) won. >$1M were big losers (relatively speaking). I am a small loser.
posted by Golden Eternity at 7:38 PM on January 3, 2013
The upper middle class ($200k-$500k) won. >$1M were big losers (relatively speaking). I am a small loser.
posted by Golden Eternity at 7:38 PM on January 3, 2013
>$1M were big losers (relatively speaking).
People making >$1M as income?
Now I alluded to this in my first comment but the point has been sorely missed. And this is why us liberals always fucking lose. We have shitfights about where top tax rates are, think we've won if we tax people who meet our personal definition of "rich" while those same people take all of their capital gains and dividends at half the fucking rate we pay.
There isn't even a national dialogue to treat capital gains and dividends as income. There's not a continous drive by liberal commentators to drum this into the national psyche when it really should be priority #1. You want to restore the Richie Riches paying a greater % than their god damn secretary? Start this god damn conversation. And keep having it. Because right now it's just a tax on people too stupid to have most of their "income" not classified as "income". And that's not a lot of people making >$1M. And that's why we really lost this battle and will continue to lose the war.
posted by Talez at 8:11 PM on January 3, 2013 [3 favorites]
People making >$1M as income?
Now I alluded to this in my first comment but the point has been sorely missed. And this is why us liberals always fucking lose. We have shitfights about where top tax rates are, think we've won if we tax people who meet our personal definition of "rich" while those same people take all of their capital gains and dividends at half the fucking rate we pay.
There isn't even a national dialogue to treat capital gains and dividends as income. There's not a continous drive by liberal commentators to drum this into the national psyche when it really should be priority #1. You want to restore the Richie Riches paying a greater % than their god damn secretary? Start this god damn conversation. And keep having it. Because right now it's just a tax on people too stupid to have most of their "income" not classified as "income". And that's not a lot of people making >$1M. And that's why we really lost this battle and will continue to lose the war.
posted by Talez at 8:11 PM on January 3, 2013 [3 favorites]
People making >$1M as income?
yes
think we've won if we tax people who meet our personal definition of "rich" while those same people take all of their capital gains and dividends at half the fucking rate we pay.
The deal also brought back limits on deductions and exemptions for high-earners, known as Pease and PEP, for income of individual/joint filers over $250,000/$300,000 and $375,000/$425,000, respectively. But taxes are higher than they were under Clinton when it comes to capital gains and dividends -- rates rise from 15 to 23.8 percent, with the last 3.8 percent due to the Obamacare surtax, for individual/joint filers making $400,000/$450,000. Remember, the top 0.1 percent of households account for half of all capital gains, so this is no small thing.
Excellent.
posted by Golden Eternity at 8:28 PM on January 3, 2013
yes
think we've won if we tax people who meet our personal definition of "rich" while those same people take all of their capital gains and dividends at half the fucking rate we pay.
The deal also brought back limits on deductions and exemptions for high-earners, known as Pease and PEP, for income of individual/joint filers over $250,000/$300,000 and $375,000/$425,000, respectively. But taxes are higher than they were under Clinton when it comes to capital gains and dividends -- rates rise from 15 to 23.8 percent, with the last 3.8 percent due to the Obamacare surtax, for individual/joint filers making $400,000/$450,000. Remember, the top 0.1 percent of households account for half of all capital gains, so this is no small thing.
Excellent.
posted by Golden Eternity at 8:28 PM on January 3, 2013
The upper middle class ($200k-$500k) won. >$1M were big losers.
The hit to the very rich is more significant than you may think. For example, Mitt Romney's effective tax rate goes up 33%. He will pay about $1 million more in taxes next year than this year.
The Atlantic's analysis of the upper middle class (200K-500K) doesn't include the tax increases from the 2010 Affordable Care Act that also go into effect this year -- 0.9% in extra Medicare taxes and 3.8% on unearned income. If you add these two taxes, that anomaly in the Atlantic chart for the upper middle class pretty much goes away.
posted by JackFlash at 8:36 PM on January 3, 2013 [1 favorite]
The hit to the very rich is more significant than you may think. For example, Mitt Romney's effective tax rate goes up 33%. He will pay about $1 million more in taxes next year than this year.
The Atlantic's analysis of the upper middle class (200K-500K) doesn't include the tax increases from the 2010 Affordable Care Act that also go into effect this year -- 0.9% in extra Medicare taxes and 3.8% on unearned income. If you add these two taxes, that anomaly in the Atlantic chart for the upper middle class pretty much goes away.
posted by JackFlash at 8:36 PM on January 3, 2013 [1 favorite]
Platinum Coin Petition, if you support that route.
posted by Drinky Die at 8:58 PM on January 3, 2013
posted by Drinky Die at 8:58 PM on January 3, 2013
Excellent.
Excellent that their millions of income derived from dividends and capital gains now get taxed at the equivalent rate of someone earning $85K instead of $8,700?
It should all be treated the same as earned income. Romney didn't pay 13% by deducting horses. He paid 13% by deriving large swathes of his income from sources with obscenely low tax rates to begin with.
posted by Talez at 10:37 PM on January 3, 2013
Excellent that their millions of income derived from dividends and capital gains now get taxed at the equivalent rate of someone earning $85K instead of $8,700?
It should all be treated the same as earned income. Romney didn't pay 13% by deducting horses. He paid 13% by deriving large swathes of his income from sources with obscenely low tax rates to begin with.
posted by Talez at 10:37 PM on January 3, 2013
For example, Mitt Romney's effective tax rate goes up 33%.
Not that you're trying to obfuscate, but "from 13% to 17.3%" sounds a lot less "significant" for a billionaire than "up 33%."
posted by Etrigan at 7:47 AM on January 4, 2013
Not that you're trying to obfuscate, but "from 13% to 17.3%" sounds a lot less "significant" for a billionaire than "up 33%."
posted by Etrigan at 7:47 AM on January 4, 2013
It should all be treated the same as earned income.
What's the theory for it being different anyways?
posted by smackfu at 8:50 AM on January 4, 2013
What's the theory for it being different anyways?
posted by smackfu at 8:50 AM on January 4, 2013
What's the theory for it being different anyways?
That people won't invest if they have to pay taxes on investment income.
Just like how people don't work because they have to pay taxes on earned income.
posted by jb at 9:10 AM on January 4, 2013
That people won't invest if they have to pay taxes on investment income.
Just like how people don't work because they have to pay taxes on earned income.
posted by jb at 9:10 AM on January 4, 2013
Just like how people don't work because they have to pay taxes on earned income.
People usually have to work (if they have to work). People with money don't have to invest it. They could just spend it.
You're right that taxing investment income probably wouldn't really reduce investment very much because wealthy people want to invest. But that little gotcha line doesn't make much sense.
posted by straight at 9:27 AM on January 4, 2013
People usually have to work (if they have to work). People with money don't have to invest it. They could just spend it.
You're right that taxing investment income probably wouldn't really reduce investment very much because wealthy people want to invest. But that little gotcha line doesn't make much sense.
posted by straight at 9:27 AM on January 4, 2013
It should all be treated the same as earned income.
What's the theory for it being different anyways?
Double taxation plays in to this also-the corporations have already paid tax on this income (theoretically) prior to distributing the remaining income via dividends, etc.
posted by beaning at 9:41 AM on January 4, 2013
What's the theory for it being different anyways?
Double taxation plays in to this also-the corporations have already paid tax on this income (theoretically) prior to distributing the remaining income via dividends, etc.
posted by beaning at 9:41 AM on January 4, 2013
I realize you're not advocating it, beaning, but "double taxation" is the biggest steaming pile of horseshit that the low-tax crowd has ever foisted on the public. It's not "double taxation" when any dollar bill ever gets taxed more than once between the printing press and shredding. Money is taxed once when it is income for a corporation, and once when it is redistributed as dividends to stockholders. That's not "double" -- the money is changing hands, so the money gets taxed.
posted by Etrigan at 9:48 AM on January 4, 2013 [1 favorite]
posted by Etrigan at 9:48 AM on January 4, 2013 [1 favorite]
We the trouble is that if it essentially starts costing companies ten cents on the dollar to issue dividends then a bunch of them are going to stop issuing dividends which is extremely disruptive in the short term.
Tax rules are very, very far from perfect but it's not for a lack of people working through them or examining their consequences.
posted by GuyZero at 10:13 AM on January 4, 2013
Tax rules are very, very far from perfect but it's not for a lack of people working through them or examining their consequences.
posted by GuyZero at 10:13 AM on January 4, 2013
We the trouble is that if it essentially starts costing companies ten cents on the dollar to issue dividends then a bunch of them are going to stop issuing dividends which is extremely disruptive in the short term.
It's not "starting" taxing to increase the current tax rates on investment income so they are on par with current tax rates on wages.
posted by Etrigan at 10:22 AM on January 4, 2013
It's not "starting" taxing to increase the current tax rates on investment income so they are on par with current tax rates on wages.
posted by Etrigan at 10:22 AM on January 4, 2013
GuyZero: We the trouble is that if it essentially starts costing companies ten cents on the dollar to issue dividends then a bunch of them are going to stop issuing dividends which is extremely disruptive in the short term.
Interesting theory, but guess what, we have actual data to test that theory, compiled by the Federal Reserve.
Dividend taxes were raised by Clinton in 1993. Did companies change the amount of dividends they paid? The Federal Reserve found the effect to be little or none. And the economy boomed.
Dividend taxes were lowered to record levels by Bush in 2003. Did companies change the amount of dividends they paid? The Federal Reserve found the effect to be little or none. And the economy tanked shortly after.
posted by JackFlash at 10:31 AM on January 4, 2013 [3 favorites]
Interesting theory, but guess what, we have actual data to test that theory, compiled by the Federal Reserve.
Dividend taxes were raised by Clinton in 1993. Did companies change the amount of dividends they paid? The Federal Reserve found the effect to be little or none. And the economy boomed.
Dividend taxes were lowered to record levels by Bush in 2003. Did companies change the amount of dividends they paid? The Federal Reserve found the effect to be little or none. And the economy tanked shortly after.
posted by JackFlash at 10:31 AM on January 4, 2013 [3 favorites]
Money is taxed once when it is income for a corporation, and once when it is redistributed as dividends to stockholders. That's not "double" -- the money is changing hands, so the money gets taxed.
The tricky bit is that as a shareholder, I own part of that corporation already. When the corporation decides to take a small percentage of that ownership and give it back to me as cash, no actual asset is really changing hands.
posted by smackfu at 11:32 AM on January 4, 2013
The tricky bit is that as a shareholder, I own part of that corporation already. When the corporation decides to take a small percentage of that ownership and give it back to me as cash, no actual asset is really changing hands.
posted by smackfu at 11:32 AM on January 4, 2013
Double taxation plays in to this also-the corporations have already paid tax on this income (theoretically) prior to distributing the remaining income via dividends, etc.
Did we wake up in a world without dividend imputation?
Every corporation issues franking credits which are used to offset the tax on earned dividends that the corporation has already paid to the government. Tax rate higher than corporate rate? You have a tax bill. Tax rate lower than the corporate rate? Get a tax refund.
posted by Talez at 11:37 AM on January 4, 2013
Did we wake up in a world without dividend imputation?
Every corporation issues franking credits which are used to offset the tax on earned dividends that the corporation has already paid to the government. Tax rate higher than corporate rate? You have a tax bill. Tax rate lower than the corporate rate? Get a tax refund.
posted by Talez at 11:37 AM on January 4, 2013
The tricky bit is that as a shareholder, I own part of that corporation already. When the corporation decides to take a small percentage of that ownership and give it back to me as cash, no actual asset is really changing hands.
Actually it is changing hands. You and the corporation are separate entities. That is the definition of corporation -- it is a separate body. The legal concept of corporate personhood is why corporations have the same rights as individuals such as due process and free speech. Most importantly, the corporation is legally separated from you so that you, as a shareholding owner, cannot be sued personally for acts the corporation is liable for (e.g. BP oil spill). There is a cost to this protection.
There are other business forms available that avoid corporate taxation such as S-corps and partnerships, but the company has chosen the C-corp entity for its various legal advantages. As a result of that choice, the corporation must pay taxes separately from the owners.
posted by JackFlash at 11:59 AM on January 4, 2013 [3 favorites]
Actually it is changing hands. You and the corporation are separate entities. That is the definition of corporation -- it is a separate body. The legal concept of corporate personhood is why corporations have the same rights as individuals such as due process and free speech. Most importantly, the corporation is legally separated from you so that you, as a shareholding owner, cannot be sued personally for acts the corporation is liable for (e.g. BP oil spill). There is a cost to this protection.
There are other business forms available that avoid corporate taxation such as S-corps and partnerships, but the company has chosen the C-corp entity for its various legal advantages. As a result of that choice, the corporation must pay taxes separately from the owners.
posted by JackFlash at 11:59 AM on January 4, 2013 [3 favorites]
The whole 'double taxation' thing makes no sense to me? Who cares? Money doesn't have rights, people do. Either we have the right to tax people or we don't.
posted by empath at 12:22 PM on January 4, 2013
posted by empath at 12:22 PM on January 4, 2013
Taxes are not just about raising money, they're incentives. Changing tax rules will changes peoples' behaviour and while I'm not going to trot out the laffer curve, raising rates does not always translate into raising revenues. It does most of the time, but all I'm saying is that you can't just crank a knob and get more money.
posted by GuyZero at 2:17 PM on January 4, 2013
posted by GuyZero at 2:17 PM on January 4, 2013
GuyZero: "but all I'm saying is that you can't just crank a knob and get more money."
Taxes as a percentage of GDP are historically low, so we actually could crank just about any knob and get more money at this point. Any double taxation that does or does not exist is not getting us anywhere close to the point where further taxation would create a disincentive to work, especially with a lot of idle capacity in the economy (companies hoarding cash, people out of work.)
posted by tonycpsu at 2:23 PM on January 4, 2013
Taxes as a percentage of GDP are historically low, so we actually could crank just about any knob and get more money at this point. Any double taxation that does or does not exist is not getting us anywhere close to the point where further taxation would create a disincentive to work, especially with a lot of idle capacity in the economy (companies hoarding cash, people out of work.)
posted by tonycpsu at 2:23 PM on January 4, 2013
Changing tax rules will changes peoples' behaviour and while I'm not going to trot out the laffer curve, raising rates does not always translate into raising revenues. It does most of the time, but all I'm saying is that you can't just crank a knob and get more money.
Can you give me an example of any time in american history when raising taxes has not increased revenue?
posted by empath at 3:11 PM on January 4, 2013
Can you give me an example of any time in american history when raising taxes has not increased revenue?
posted by empath at 3:11 PM on January 4, 2013
Well I'm not saying it happens a lot, but they raised cigarette taxes in canada and the only thing that went up was cigarette smuggling from the US. In theory a major increase in dividend taxes could cause corporation to stop issuing dividends, but as was pointed out at current rates you'd have to propose a really insane increase to get to that point.
I'm not against tax increases I just like to see them proposed with a bit more nuance and analysis than "up! up! up!"
posted by GuyZero at 4:58 PM on January 4, 2013
I'm not against tax increases I just like to see them proposed with a bit more nuance and analysis than "up! up! up!"
posted by GuyZero at 4:58 PM on January 4, 2013
On my FB wall today:
Apparently subtlety and dry delivery may cause a point to be completely passed by.
posted by weston at 5:35 PM on January 4, 2013 [3 favorites]
Employees have been calling and texting our accountant today concerned because their paycheck was smaller... REALLY?!?!!! You put "O" on your bumper and encouraged friends to vote, and think I cut your pay??! Sorry, YOU cut your pay, and mine, don't get mad at the accountant. Welcome to the new America.My response:
I don't suppose any of them bothered to thank you when the payroll tax break started, either.In return, he liked my comment and I got several amen, Obama's fault, what are we coming to, etc.
Apparently subtlety and dry delivery may cause a point to be completely passed by.
posted by weston at 5:35 PM on January 4, 2013 [3 favorites]
Employees have been calling and texting our accountant today concerned because their paycheck was smaller... REALLY?!?!!!
I'd believe this a lot more (which is to say, at all) if anyone was getting paid for work conducted in 2013 yet. Well, except for day laborers, who I suspect are not getting payroll taxes withheld.
posted by Etrigan at 8:39 PM on January 4, 2013
I'd believe this a lot more (which is to say, at all) if anyone was getting paid for work conducted in 2013 yet. Well, except for day laborers, who I suspect are not getting payroll taxes withheld.
posted by Etrigan at 8:39 PM on January 4, 2013
I believe it has to do with the date of payment in some cases and not necessarily the time worked. Also, people who pass the social security deduction cap or disability tax cap go back to square one - the first paycheck of the year is always smaller than the last one of the previous year because of that. Anyway, mine was smaller than the previous one, but liek I said, that always happens.
posted by GuyZero at 9:00 PM on January 4, 2013 [1 favorite]
posted by GuyZero at 9:00 PM on January 4, 2013 [1 favorite]
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posted by Etrigan at 10:01 AM on January 2, 2013 [4 favorites]