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Some may close up shop if their kids are grown and they are at the stage of life where they have enough to live comfortably, they may just retire. Others may do as my boss does, she just stopped marketing for new clients since she makes enough to live her lifestyle comfortably.
They are going to close up shop and retire because higher marginal taxes? Right.... Once a business starts making its owners $250k+ in profit the business has gone well beyond being attached to their labor (with the possible exception of some professionals). Also, your boss limiting growth does not really hurt the economy as a whole, someone else will pick up the demand.
And just to note, I think the $250k figure is to low to start soaking with taxes. Taxes on income greater than $250k should just go up a few percent. It is once families (individuals) start to get into the $400k ($300) range that marginal income should be taxed heavily.
But what you are trying to do here is similar to the other poster, namely pretend that the rich are actually working for their income. They aren't, they are generating most of their income from rents on capital/land.
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Originally Posted by hilgi
I am confused, are you talking about taxes on the wealthy or taxes on high income wage earners?
As I mentioned, I'd prefer a land-value tax/passive capital gain tax rather than an income tax, but we have an income tax so any realistic tax policy is going to have to target income. And yes using income as a proxy for wealth is not perfect, but its also pretty reliable.
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Originally Posted by hilgi
California was hit hardest from this because much of their budget is based on receiving an ever increasing amount of revenue from “the rich”.
California's problems are not its high marginal taxes, rather Prop 13 and running away government spending. Silicon Valley is the start-up capital of the US and home to numerous rich individuals.
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Originally Posted by hilgi
What better way to guarantee that a startup firm won’t ever have the funding to compete with them then by taxes one time events such as options or real estate sales.
This is gibberish, investors in businesses don't get stock options nor do they generate returns from real estate. Investors get an equity stake in the businesses and pay capital gains taxes when they sell the equity.
You've yet to explain how high marginal taxes prevent start-ups.
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Originally Posted by hilgi
The top 10% of income earners fluctuates wildly and creating a funding system that assumes their incomes will continually increase is guaranteed to fail.
This is easily demonstrated as false. For 40+ years the US had high marginal tax rates and this period saw more growth and stability than the economy after the marginal rates were reduced. The working-class/middle-class also enjoyed good wage growth, etc during this period as well.
This is easily demonstrated as false. For 40+ years the US had high marginal tax rates and this period saw more growth and stability than the economy after the marginal rates were reduced. The working-class/middle-class also enjoyed good wage growth, etc during this period as well.
What's to say that it wasn't related to the recent phenomenon of globalization, a decrease in power of private-sector labor unions and the offshoring of previous manufacturing jobs with a transition to a service-based economy?
California's problems are not its high marginal taxes, rather Prop 13 and running away government spending.
It's well-know that income taxes are a volatile source of revenue. CA (and the US) is finding that out the hard way. Revenue is great when things are good, but quickly plummets when the economy falters.
Prop 13 didn't freeze taxes, but only limited their increase. CA continues to have some the highest value property and property taxes in the country, not to mention some of the highest income-tax and sales-tax levels as well. I'd argue that the six-figure corrections officer lobby and a state that spends as much on prison as it does on education deserves much more of the blame than Prop 13.
I know a few doctors, lawyers and small-business owners who might disagree with that assessment. You do consider $250 K a year "wealthy" right?
Might disagree with what? I said that most, not all. Most doctors, lawyers, etc are from upper-middle class families though. You don't have many working-class kids become doctors. Also the median Physician pay is around $150k, where as the median for a lawyer is is around $120k.
Anyhow, as I said before I don't think someone with an income of $250k is wealthy. But I'm also not against increasing the marginal tax rate on income above $250k a few percent.
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Originally Posted by chopchop0
But hey, if it makes you feel better, keep up with the class warfare.
Yes it is in a sense class warfare, I'm not fond of having an elite class that is allowed to extract wealth from productive society. What I find amusing is the degree to which this class has convinced people that will never come close to becoming wealthy to agree with their agenda. It demonstrates well the effectiveness of modern propaganda/marketing.
It's well-know that income taxes are a volatile source of revenue. CA (and the US) is finding that out the hard way.
Yes its volatile, but you can deal with the volatility in a number of ways. Furthermore I mentioned prop 13 for a reason, property taxes should be higher in California.
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Originally Posted by chopchop0
Prop 13 didn't freeze taxes, but only limited their increase.
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It limits their increase below the rate of inflation. Prop 13 is just a transfer of wealth to established residents from new/young residents. I have an older relative in Los Angeles that is paying $600/year in property taxes where as if someone purchased the property today they'd be paying around $3,500/year.
Might disagree with what? I said that most, not all. Most doctors, lawyers, etc are from upper-middle class families though. You don't have many working-class kids become doctors. Also the median Physician pay is around $150k, where as the median for a lawyer is is around $120k.
My family physician is one. I've read anecdotes of others.
It's well-known that a good chunk of students take out six-figure loans (79% of graduates have done that according to the AMA) to finance medical school, so, no, it's a fallacy that having rich parents is required to go medical school.
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Anyhow, as I said before I don't think someone with an income of $250k is wealthy.
Well that's good because most MDs are making closer to that than they are to $150 K
Yes it is in a sense class warfare, I'm not fond of having an elite class that is allowed to extract wealth from productive society.
If you'd like, Venezuela is that way ------->
Chavez came to power to fight the exact thing you're complaining about, so in essence, you should be a fan of communism or socialism, no?
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What I find amusing is the degree to which this class has convinced people that will never come close to becoming wealthy to agree with their agenda. It demonstrates well the effectiveness of modern propaganda/marketing.
What's amusing to me is that some people view wealth as some sort of static zero-sum quantity that must be re-distributed, partitioned etc. rather than seeing it as something that can grow in aggregate and trickle out along the way.
Last edited by chopchop0; 07-05-2010 at 06:04 PM..
What's to say that it wasn't related to the recent phenomenon of globalization, a decrease in power of private-sector labor unions and the offshoring of previous manufacturing jobs with a transition to a service-based economy?
Do we have time machines or something? Why would recent events have any effect on the past? The point is that high marginal rates did not result in failure, the US had them for over 40 years and it did not result in ruin. Furthermore, there is no historic evidence that lowering marginal tax rates will generate more business activity. Whether or not current wage stagnation is the result of globalization, etc is an entirely different question.
You are again trying to infer causation when I'm not making a causal claim.
Whether or not current wage stagnation is the result of globalization, etc is an entirely different question.
You are again trying to infer causation when I'm not making a causal claim.
Oh, so then why mention "wage growth" for the middle-class at all in your statement if not to infer an effect from those higher marginal tax rates? The inference is there.
Btw, Reagan's tax cuts definitely spurred economic growth in the early-to-mid 80s, leading us out of Carter's recession, arguably the worst one before the current recession.
My family physician is one. I've read anecdotes of others.
Again, I said "you don't have many" not that you don't have any.
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Originally Posted by chopchop0
It's well-known that a good chunk of students take out six-figure loans (79% of graduates have that according to the AMA) to finance medical school, so having rich parents isn't a pre-req to going into it.
Please don't distort what I said, to quote myself " Most doctors, lawyers, etc are from upper-middle class families though". The upper-middle class generally do not have enough money to pay for both undergrad and $100k+ for medical school, though they usually contribute a lot. Furthermore, due to the lower interest rates on student loans it does not always make sense for the parents to fork out the money in the first place.
Kids from rich families usually don't become doctors, they aspire to be rentiers like their parents.
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Originally Posted by chopchop0
Well that's good because most MDs are making closer to that than they are to $150 K
No they aren't and its odd you think the posted link says anything about median salaries. The median salary is around $150k, I looked it up before I posted.
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Originally Posted by chopchop0
Chavez came to power to fight the exact thing you're complaining about, so in essence, you should be a fan of communism or socialism, no?
No, not really. My problem is with the rentier class, I think advocates of communism incorrectly categorize the capitalist as a rentier. So long as the government is not funneling money to the capitalist, capitalist are a force for good.
When someone generates income it should be because they did something, not because they merely own something.
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Originally Posted by chopchop0
What's amusing to me is that people view wealth as some sort of static zero-sum quantity that must be re-distributed, partitioned etc..
I have never stated anything along these lines, rather that the rentier-class should be prevented from extracting large sums of wealth from productive society.
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