So read this article and found it interesting. My initial reaction is that these families are complaining about the economic burden of education costs essentially. They are wealthy by Obama standards but funding their childrens education takes a toll on them financially.
http://finance.yahoo.com/retirement/article/10693…
My second thought was that if anyone that truly is struggling such as being able to heat their home, pay for gas, groceries, healthcare etc they would be livid over this article at over the comments made by some of the people mentioned in the article. Let the class warfare debate begin. Liberals and conservatives are both welcome here.
STudent loan interest AND PRINCIPAL REPAYMENTS must be tax deductable. Most people who are in that bracket have a lot of debt. Lawyers, doctors, educators and MBA's borrowed a lot of money to become better educated and better paid. Now they will get penalized.
My gf (likely future wife) and I will be in that bracket in the near term. We are both working on graduate degrees which will push our combined income and debt burden much higher. Oir gross income will cause us to get taxed at an awful rate, despite the monthly loan payments.
I should have never gone to college. I should have just become an angry, racist irish cop, just like my dad.
loved it
I see no Cost of living adjustment in determining tax brackets. Have fun with the high tax rates in NYC. Anyone trying to raise a family in NYC on $200-$300K could tell you how far from wealthy that is.
I also assume that, $125K for single people will be treated like $250K for married couples.
This article was originally posted in the WSJ. What was extremely interesting is the number of user comments it received. Over 300 people left comments in a day, which is a lot. There were a number of arguments for both sides and a heck of a lot of anger.
Personally? I completely agree with those worried about the cost of living adjustment. However, I think this article does not address the core argument that most wealthy people have, and that argument is:
"Why should the obligation to pay more in taxes fall on the wealthy simply because they have more earnings?"
~~~~~~~~~~~ CompBanker
Compbanker, liberals don't possess the mental capacity to answer such a simple question. They believe all rich people are greedy and selfish, therefore they should be punished for their success. Basically, these are people who could not compete in the free market system and thus target their ire towards those who did.
[quote=SAC]Compbanker, liberals don't possess the mental capacity to answer such a simple question. They believe all rich people are greedy and selfish, therefore they should be punished for their success.
Many people will be offended by that obvious generalization. But that really does sum up the sentiment of millions (probably the majority of people) out there. And not just liberals - many of the populist social conservatives.
Once the class warfare and anger have worn away and the infamous "change" has come to stay, I fear there will be devastating long term affects.
Similar to the family in the article, I have family friends that the father is a medical doctor. He probably makes a little more than the people in the article, but not much. With 39% income tax and property taxes and then the rising malpractice insurance you think he's encouraging his kids to give up their 20's taking on the debt of medical school and the years of residency?
The able minded youth will no longer be attracted to such endeavors.
Gordon Gecko said it best, "Greed is good"
We've got over 500 congressmen making over 170 grand a year. Now, I have spent the last two months analyzing what all these guys do, and I still can't figure it out.
You can call it free market all you want, but in truth some people in this country are given a 20 mile head start in a marathon. Some kid born in the projects isn't a member of a free market. His school is shit, his living standards are dangerous.
Now some kid born in Connecticut is given those 20 miles.
Yes we all have the choice to do things. But you think someone who has to go to the worst public schools in the world can actually stand up to some kid who goes to a "public" school financed by property taxes on 3 million dollar homes?
I will answer comp bankers question. The rich should be taxed at a slightly higher rate because the tax burden is not as much on them. 40% on 1 million is alot different than 40% on 60,000. I believe that I should be taxed a little more so that we can make public schools and services for the poor better. A little less for me will be a lot more for someone else. And what are we talking about here? maybe 5% less income for the rich? Is that really going to put people in the poor house?
If you do your homework, you will see that though spending has more than tripled on public education, performance has dropped drastically. When it comes to government management, dollars are not directly linear to results, remember that.
Imagine if you could spend/invest your client's money as you wished with no threat of losing your own money or your job. That is what the government does (well maybe there is a slim chance of losing your job every 2 or 4 years, but it still is fundamentally inefficient). Why not allow individuals to support the businesses, luxuries, and charities that they themselves support, rather than having "representatives" gaming a system of ineffective accountability and artificial incentives (despite elections) choose how to spend everyone's money?
Private spending and charity allocates funds purely democratically, whereas government does so through a convoluted representative republic system. If most people want to support a cause and some don't, they will donate accordingly. People actually choosing which method of helping the poor to give their money to instead of a collectivist representative choosing. Government screws up the equation.
This is fundamental logic, no matter how hard you try to rationalize adding a sub-optimal middle-man into the transaction - you get less efficient results (whether it is the federal government or dozens of VPs at Teldar Paper making 250k a year).
Remember we are all greedy, everyone from the most rational capitalist to the most self-exempting VP of Teldar Paper to Congressman Chris Dodd. Some of us are merely misinformed when it comes to the best way to harness greed for maximum societal utility.
Leftism is rooted in emotion and unintentionally perpetuates poverty, slavery, and emotion. Classical liberalism is rooted in logic and perpetuates freedom, opportunity, and logic. Unfortunately the self-perpetuating cycle that is winning in society is the vicious one, that of Leftism, and you are failing to diagnose the true source of the suffering you observe.
However, it may just be that basic human psychology has a fundamental irrational tendency toward collectivist dependency (shown in recent studies in game theory), and we will forever live in societies ruled by collectivism - Welfare Capitalism, Communism, Slavery, Corporatism, Fascism, Feudalism, Aristocracy, and whatnot.
I was born in a orphanage in a shitty part of London, and my mother hit the bricks before the ink was dry on the paperwork relinquishing her parental rights. I was lucky enough to be adopted by an enlisted Navy quartermaster (himself an orphan) and his family, and brought to the U.S. He retired from the Navy and became a mailman. I grew up in a neighborhood populated by Mexican gangs, and routinely got my ass kicked for nothing more than being white.
With all due respect, fuck you and your head start theory. Do rich kids have it easier? Yeah, and so what? It has no bearing on a poor kid's chance of success. Take it from someone who knows: the worst thing you could do for the poor is to level the playing field. It would take all the fun out of succeeding and then directing the brunt of your blue-collar rage at all the privileged pricks who had it easier than you.
I could never adequately describe the sublime pleasure of reducing some Ivy League stain to tears, and watching him self-destruct as he boxes up his shit because I just fired his entitled ass. One of the big swinging dicks at the CBOT just friended me on Facebook and told me that he still trembles when he thinks about the four months he spent as my assistant.
Anyone truly interested in fairness would never suggest any class of people should pay more in taxes than any other class. The only fair and equitable solution is a flat tax on consumption.
I completely agree with Edmundo. I'm not from a wealthy family by any means. When I interned in IBD last summer, after taxes I made more than a fourth of what my parents make together. I definitely did not have a "head start" but I think I turned out fine. It's just unfair to tax people that make more money just because of this idea that they must be better off than you because they make more money. It doesn't work like that. Relative benefit is just what it is: relative.
And like another comment said, education is a huge factor. There has been an increase in education funding, but come on- government is just inefficient in its nature. Tax money for education would be better off if taken over by a charity organization that had a real focus on change.
You make good points about the head start. This is definitely true and there needs to be a balance between keeping everything for yourself, and providing the possibility for realization of the American dream for future generations.
I think most people have the concern with taxes not because it is lopsidedly "unfair" but because they feel that there is little to show for it. That is, money could be better spent if it wasn't being done by uncle sam
furiousgeorge86, your response still fails to address the question. The fact that the tax burden has a smaller effect on a rich person does not justify the taxation. What you're suggesting is that we should seek to minimize the negative impact of taxation by having those most capable of shouldering the burden make the sacrifice. However, I see no justifiable argument that the rich should be the ones making the sacrifices. Sure, taxing the rich would theoretically cause the smallest impact, but that certainly doesn't make it the fairest route.
I am in wholehearted agreement with those above that the real concern is to cut wasteful spending rather than find alternative ways to plug the gap in budget deficits. I have read and witnessed so many examples of government spending that was inefficient, unintelligent, or even just a complete throwaway. Without a doubt, we need some base level of spending to maintain infrastructure where there is no private incentive to support it (I.E. roads, public school systems, cheap healthcare). I think we're far beyond an acceptable base level of spending.
~~~~~~~~~~~ CompBanker
I wish I hadn't been away from my computer while Edmundo and Putz were replying, your posts were far more articulate and purposeful than mine...
First, I want to mention that I don't agree with the tax increase and think that it is total BS, but people are overreacting.
Let's take a family that makes $300,000:
The first 250K is taxed at 68,250 and the remaining 50K is taxed at 33% (You don't hit the 35% tax bracket until you make over 357,700), so you pay 16,500 in taxes on that last 50K for a total of $84,750 (federal taxes), which leaves you with $215,250 after-tax dollars.
Now after the Obama tax increase, you will still pay 68,250 on your first 250K and the last 50K is now taxed at 36% or an additional $18,000, for a total tax liability of 86,250.
So a family making 300,000 will now have $213,750 after-(federal)tax income instead of 215,250. But if you make "only" $260,000 then your tax hike will be a whopping $300. I screwed up, because I used single tax rates instead of married filing jointly, but the same differences of $1,500 and $300 hold true, only that your after-tax income will be a little higher than $215,000; maybe $230,000.
Puenta? ~ Stop fucking complaining. The people in these articles are complete morons if they cannot make an (extremely awesome) living on $250,000 in Tennessee. I mean come on, I can understand NY, but complaining that $250K is not enough in Tennessee is absurd.
BTW, the author of the article wrote, "raising the top federal tax rates to 36% from 33% on households earning $250,000 or above." Top federal tax rates are at 35% and will be raised to 39.6%.
if you want to send one kid to a typical private college, tuition + living expenses etc = $150k+ over the course of four years. that's just one kid. think about the people who have 3 ($450k+) or 4 ($600k+) kids.
That is still only one year's worth of salary for four years of college. And who said you have to pay for your kid's college? My parents didn't give me even one penny towards my education, and that includes a masters degree from a top university.
Even if you pay $40,000 a year for your child's college, that still leaves you with over $10,000 after-tax dollars to live off of per month (if you make $250K). If you can't live a GREAT life on $10,000 a month then you are doing something very wrong.
I'm going to completely ignore the practical arguments related to incentives and go to the philosophical heart of it.
Taxing the rich more is driven by the idea that resource allocation should be driven by 'need' rather than by a fair exchange of value. I have no responsibility to take the value I have created and give it away to others without expecting to receive anything in return. I can if I want, but no one has the right to force that on me.
To those who argue for leveling the playing field, here is my response:
First, it is impossible.
Second, even if it were, it wouldn't be ideal. One incentive that I, personally, have to make money is to ensure my children (whenever I have them) get the best educations in the world. Parents should be able to give their children an advantage.
Third, just because you're born in the batters box doesn't mean you can't hit a home run. I'll save you all my story, since Edmundo's is a hell of a lot better, but there tons of examples out there.
I think in the end, no one owes you anything. People can whine all they want but life doesn't owe you jack shit. Sure, you could get dealt a shitty hand but it's how you play it that matters. It's a whole lot easier sitting on your ass complaining than doing something about it.
All these people crying out for the rich to get taxed so that they can better their public schools/get better welfare/whatever is sort of lost upon me. I don't think it's an obligation for the rich to provide for others but it may be the moral thing to do. And to be frank, I think the wealthy do a great job in donating both their time and money to certain causes. Do people really think that the government will do a better job allocating the funds, i.e. taxes? Probably not. if anything, it will go to paydown their trillion dollars worth of debt.
NY Magazine has yet another one of these articles (about Bankers bonuses and the like). I urge you to read the ridiculous comments. I don't think anything amuses (and simultaneously enrages) me more.
I am so sick of hearing how people that are rich or wealth owe something to the poor people of this nation. The 8 dollar an hour job at McDonalds or Walmart or Subway was NOT created for a 30 or 40 something year old parent to be support their kids! Those are jobs for high school/college students and for people looking to make a few extra bucks on the weekends.
Part-time jobs with part-time pay shouldn't be considered as full time employment, but the fact of the matter is, people would rather point their finger at the man in the suit and say that he makes enough, he should help out more than to get their ass up out of bed at 7 in the morning because their associate called and then stay working until 3 or 4 in the morning because shit has to get done.
People make their own choices in life and there are far too many people who have come from nothing to make something of themselves, as well as people who have come from elite/wealthy families who have ended up face down in the gutter for me to think where you were born and what type of school you went to ultimately decides how far you get in life.
If this was the case, I wouldn't have graduated from college with, potentially, a job in investment banking while my younger brother finds himself in and out of jail and often homeless...how do we explain this disparity...and actually, he went to better schools than I did...I guess that makes me an anomaly.
Regards.
i find your post a bit offensive. Both of my parents work as part time for years because they can't find full time jobs, not because they don't want to work more. I think you are a bit spoiled to think that full time jobs are so easy to find.
And really? My parents are in their 40s and 50s and are earning 12 and 8 dollars per hour. You are so ignorant.
The above indicates that you've either no knowledge of statistics or have willfully shut off your brain to further an ideological point. Sure, it's more or less possible to get anywhere from any start if you're born in a developed country, but it can still be overwhelmingly less likely, and that, to me, is unfair.
I've no chip on my shoulder about this. I could join all of you in rattling off my anecdote about how I didn't have a private school education, how I paid for my own college, but that would be to give in to populist demagoguery and avoid real rational thought.
Societal policies should be driven by data, and the plural of anecdote is not data. Your "look at me, I overcame the odds" spiel does not good policy make. It's petty and ignorant. You are not representative.
Zombie thread alert!!!
Other than grandstanding, what point are you trying to make??
I said that where you are born and the school that you went to doesn't ultimately determine whether you're successful in life...that the individual can makes choices that can change their future.
See the part about "ultimately"?
I didn't say, "Statistically speaking, poor people have no problem becoming rich."
If where you were born and where you went to school ultimately decided whether your were successful then there would be no examples of rags-to-riches and rich people could never become poor...they would essentially be predetermined...but we can clearly see that instances of both actually occur.
Even you said it's "more or less possible" and I never spoke to the likelihood of it occurring, just merely the possibility...which you even agreed with.
And why have we developed this belief that the world needs to be fair? And equally relevant...what is fair? Who's in charge of defining the word and who's responsible for making sure that the definition it is given is, in fact, fair?
People aren't born the same, people aren't raised the same, people don't have the same talents or temperaments, or grit or even luck. That makes it impossible to make things fair in the long run.
In my experience, when people start yapping about things being fair, they are typically talking about outcomes, which we can't reasonably change because you can't give to somebody what's been taken from another.
What's truly tragic is that the people who advocate for such policies are too blinded by dogma and hate to realize that the government they're asking to solve the problem is the same government that created it in the first place, through subpar education, welfare dependency, minimal job opportunities, etc.
Also, you clearly do have a chip on your shoulder.
And yes, you could have avoided giving in to the populist demagoguery by not mentioning your plight, but for some reason you didn't.
Regards.
CHANGE
It's all that you'll have left of your income.
Gordon Gecko is your role model?? really??
Similar article only more relevant for those in suburban New York, specifically Westchester.
http://www.lohud.com/article/20090823/NEWS02/908230354/1018/NEWS02
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