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Can we all just admit that both create jobs? Seems pretty simple to me. Demand is demand, supply is supply.
True. The thing is, we have a much larger gap between high incomes and low incomes. The huge amounts of money earned by the vastly wealthy are not useful in powering the economy. It's not that I don't begrudge it to them or think it is "unfair" that the super rich have so much. It's simply that the economy needs millions of Joe six packs out there buying goods, keeping people employed in their communities, purchasing professional services etc. I agree with the author (I'm not rich though!).
Some excellent points. However, I genuinely disagree with the premise that just raising taxes on the rich and using that money to throw at the middle and lower class is going to bring us back to prosperity.
We have to be careful about the kind of wealth that gets taxed, because there *is* a difference between wealth generated by the creation of value and the wealth generated by skimming off the commercial activity of others. It's the latter type of wealth we should be taxing to the extreme.
Generating wealth through the creation of value-creating businesses requires one to take a risk. No entrepreneur in his/her right mind would take risks if all they had to look forward to was a jump into the 99% tax bracket. In fact, I would challenge Nick Hanauer that he probably would *not* have founded aQuantive nor would he have invested in Amazon if all of his gains would've been taken away by the government. It's a two-way street: yes, you need consumers creating demand for a business to survive. But you also need entrepreneurs seeking suitable reward for risk for businesses to exist in the first place.
Now, if we're talking about taxing the hell out of the skimmers (lawyers, stock traders, hedge funds, landlords, monopolist rent-seekers), let's do that.
The following passage from this article illustrates what I have been trying to hammer home about taxes in these threads. Rich people get taxed the same low rate as the rest of us on their income in the lower brackets, which goes toward securing life's necessities. Those who make in come in the upper brackets, get taxed at a higher rate on that income and that income only -- because that's a different animal. This is not unfair. It's no more unfair than taxing private jets or beachfront property.
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One reason this policy is so wrong-headed is that there can never be enough superrich Americans to power a great economy. The annual earnings of people like me are hundreds, if not thousands, of times greater than those of the average American, but we don’t buy hundreds or thousands of times more stuff. My family owns three cars, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. Like everyone else, I go out to eat with friends and family only occasionally.
The following passage from this article illustrates what I have been trying to hammer home about taxes in these threads. Rich people get taxed the same low rate as the rest of us on their income in the lower brackets, which goes toward securing life's necessities. Those who make in come in the upper brackets, get taxed at a higher rate on that income and that income only -- because that's a different animal. This is not unfair. It's no more unfair than taxing private jets or beachfront property.
So what rate should the higher income bracket be taxed at? Why is higher income a different animal, as you say? If that higher income is my reward for creating value to society, why should I pay an additional penalty on creating that value?
Take a surgeon for example. They make a lot of money, easily in the multiple six figures. So do you think surgeons should be taxed heavily because their higher income is a "different animal". Surgeons have to do 4 years med school, 1 year internship and ca.7-8 years of residency - all the while making a paltry income, working crap hours and carrying hundreds of thousands in student loans. But when all that's done, the surgeon is performing life-saving services to the community. So you think it's not fair that a surgeon making $400K a year should be able to buy a beachfront property, especially when that person took the years of time and thousands of dollars of risk to develop life-enhancing skills for society?
So what rate should the higher income bracket be taxed at? Why is higher income a different animal, as you say? If that higher income is my reward for creating value to society, why should I pay an additional penalty on creating that value?
Take a surgeon for example. They make a lot of money, easily in the multiple six figures. So do you think surgeons should be taxed heavily because their higher income is a "different animal". Surgeons have to do 4 years med school, 1 year internship and ca.7-8 years of residency - all the while making a paltry income, working crap hours and carrying hundreds of thousands in student loans. But when all that's done, the surgeon is performing life-saving services to the community. So you think it's not fair that a surgeon making $400K a year should be able to buy a beachfront property, especially when that person took the years of time and thousands of dollars of risk to develop life-enhancing skills for society?
The current rate for the highest income bracket -- $370,000 and up -- is 35 percent. That's ridiculously low. It was as high as 90 percent at certain points ... which is too high. Ronald Reagan thought that around 50 percent was about right. I agree.
We tax income in the lower brackets differently than income in the higher brackets because lower bracket income goes toward securing life's necessities. I don't care if your Bill Gates or Mary Churchmouse, the first $10,000 is going to go toward food, shelter, clothing etc. As a matter of policy, the government does not take a percentage of food out of anyone'e mouth... not Bill Gates and not Mary Churchmouse's. That's why the first $10,000 is hardly taxed. This is true for Gates as well as Churchmouse. Gates pays the same rate as Churchmouse on his first $10,000.
Now, Gates has a lot of income in excess of $370,000, so he pays a higher percentage of tax on most of his income (except capital gains of course, which is taxed at the OBSCENELY low rate of 15 percent). That's because that income isn't going toward securing life's necessities. It's his to do with as he sees fit, but he can't expect to pay the same low rate on that income as he pays on the first $10,000.
If Gates wants to use some of that income to buy himself a jet and some beachfront property, great! He's earned it. I hope he enjoys it. He better not expect me to pitch in on the taxes he's going to pay on that jet and property though. On the same token, I'm not going to pitch in and pay a higher percentage of tax on my income in the lower brackets so Gates can get a break on the income in the upper bracket.
Gates and I pay the same rate on our first $80,000. I'm not getting a better deal than him at all. Everything is fair.
Read this op-ed in Bloomberg. This guy hits the nail on the head.
Pay special attention to the points that one super rich consumer cannot power the economy like thousands of middle class consumers can.
Oh and the guy is a venture capitalist that helped launch amazon.com. Someone many of the righties on here would call a job creator.....yet he argues he isn't one
Just because he's rich doesn't make him smart or right. In fact, his own words conflict with his headline;
Even so, I’ve never been a “job creator.” I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate.
Starting a business and hiring dozens or hundreds of people is JOB CREATION. That's the definition of the term.
Then he introduces a new topic; he goes on to say that he needs customers to sustain his business. Nobody would deny that you need customers after you start a business to sustain the business. But you can have millions of customers and if nobody has the capital and energy to start a business, there will be no jobs created.
Middle class people with no capital do not create jobs. It takes capital to start a company or expand a company and create jobs.
Every time I hear this empty rhetoric, I'm reminded of Ed Murrow's wise words...
"Our major obligation is not to mistake slogans for solutions"
So, how exactly does a business sustain itself without customers who can afford its goods/services? Using tax cuts, so it can hire more people, and customers will come?
Quote:
Originally Posted by GlockUnderMyKilt
Some excellent points. However, I genuinely disagree with the premise that just raising taxes on the rich and using that money to throw at the middle and lower class is going to bring us back to prosperity.
You disagreed with the fundamental premise and yet see some excellent points?
Quote:
Now, if we're talking about taxing the hell out of the skimmers (lawyers, stock traders, hedge funds, landlords, monopolist rent-seekers), let's do that.
I'm glad we agree at least somewhere. If there is a something we ought to give a closer look for sure (at least since what the dot com bubble should have taught us), what business is Wall Street into? We need to start differentiating between a stock trader versus an investor. I personally think that we could institute a progressive tax on capital gains, that goes down to zero in 3-5 years. In other words, no quick money making schemes, but putting Wall Street back to investments and for capital to businesses for long term growth.
Gates and I pay the same rate on our first $80,000. I'm not getting a better deal than him at all. Everything is fair.
But if someone like Bill Gates is producing employment for people in the United States, why should he pay a higher rate of tax on that income? In fact, one can argue that he's paying his taxes in the form of jobs.
Let's say I make $1M salary per year. Let's also say I earn that income on a business that I took the risk and time to build which employs 20 people, each earning $45K a year. So that's me, having created incomes for society totalling $900K - in addition to a product or service which benefits society. So how am I getting a free ride from society which demands I pay a punitive tax for creating jobs? That's the thing that makes me different from a regular wage earner - the regular wage earner isn't creating jobs, but I am.
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