Posted on 12/24/2009 4:12:20 AM PST by Tolik
Why attack the productive classes who want to be rich?
There is class warfare going on in this country — but it’s not against the established rich. It’s against those who are trying to become wealthy.
President Obama has declared that those who make over $200,000 will pay higher income taxes. Caps on payroll taxes are supposed to come off as well for the upper class. Envisioned estate taxes will take 45 percent of individual inheritances valued over $3.5 million. Many states have also hiked their income taxes on the upper brackets.
Again, most of those targeted are not the already rich — a Warren Buffett or Bill Gates — but millions of the wannabe rich. They may have achieved larger-than-average annual incomes, but they’re not the multimillionaire speculators on Wall Street who nearly wrecked the American economy in search of huge bonuses and payoffs. Most are instead professionals and small-business owners who take enormous risks in hopes of being well-off and passing their wealth on to their children.
Oddly, much of the populist rhetoric about the need to gouge the newly affluent is voiced by the entrenched wealthy, who don’t have to care how high taxes go, given their own vast fortunes.
Take Bill Gates Sr., who is clamoring for higher estate taxes on inheritances. But such advocacy comes easy for him. After all, he is the father of the richest man in the world — someone who clearly needs no inheritance.
Billionaires also often set up charitable foundations to ensure their estates are channeled to their own preferences rather than simply given over to a needy U.S. Treasury. In contrast, moderately affluent business owners or farmers often leave enough property for their heirs to pay death taxes, but not enough to set up tax-exempt charitable foundations.
Warren Buffett also wants higher income taxes on the wealthy. He once confessed that thanks to all sorts of write-offs, he had paid only about 17 percent of his gross income in federal taxes, a lower rate than many employees in his office.
But Buffett, like Bill Gates Jr., is worth many billions of dollars. In truth, he has so much money that no amount of taxes would affect him much. A combined tax bite of 60 percent of his annual income would still leave Buffett each year with millions. Yet the same rate could cripple a business owner making $300,000 in annual income.
Often those in government claim that their tax-increase proposals are simply targeting the affluent like themselves — proof of their own selflessness. President Obama, for example, has complained that the well-off like himself could afford to pay more.
But unlike politicians in Washington, most upscale Americans in private enterprise do not receive free government perks and lavish pensions. Nor are they guaranteed lucrative post-political lobbying and speaking careers.
Focusing tax hikes on those who in some years make between $200,000 and $500,000 makes no sense in a recession for a variety of reasons. They are neither the speculators who caused the panic of 2008 nor the Washington politicians who are bankrupting the country.
Instead, most are small-business owners who hire the majority of the nation’s employees. But faced with the talk of higher taxes, more regulations, and hostile rhetoric, they will remain confused, and so retrench rather than expand.
With the proposed new income, payroll, and health-care tax rates, along with increased state and local taxes, many business owners fear that 60 percent to 70 percent of their income will go to the government. That does not seem a good way to convince small businesses to hire more workers in hopes of greater rewards.
Income is also not the only barometer of affluence. Two-hundred thousand dollars is quite a lot of annual money in Kansas, but does not always go so far in San Jose, where modest houses often cost well over half a million dollars. For those whose children do not qualify for need-based scholarships, a private liberal-arts education can easily set a parent back $200,000 per child over four years.
Why the war against the productive classes who want to be rich?
Maybe it is because they are not as numerous as the proverbial middle class. Perhaps they do not earn our empathy that is properly accorded to the poor. They surely lack the status and insider connections that accrue to the very rich.
Yet continue to punish and demonize them, and the country will grind to a halt — as we are seeing now.
Just a partial list: http://www.freerepublic.com/tag/victordavishanson/index:
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If one really wanted to decrease inequality in this country, it would make more sense to tax accumulated wealth heavily rather than income. Some significant proportion of the wealthy did nothing productive to generate their wealth and do not themselves have a moral right to it.
Most Politicians like Biden and Obama, who never worked a day in their lives in a small business, can't relate at all with them.
This article hits spot-on.
My colleagues and I are an independent network that generates ideas and concepts and bring them to fruition, i.e bricks and mortar. All are very talented, cutting edge thinkers, some are Mensa geniuses. To a man, they are NOT going to keep working 60, 70, 80+ hours per week just to have the money stole by the lefterals and give it to someone that won’t work. It is our choice whom we will give charitable donations to!!!
The so-to-speak progressive dance, the gestapobama goosestep, will not be funded on the backs of doers, they will simply work less.
Just compare this to a man that has two blue-collar jobs. Why work the second job if your paycheck goes to some dreg that won’t work, in fact, who lives a life of dissipation and expects someone else to continually bail him/her out. NOT!!!
I’ve been a tax advisor since 1974. I’ve seen congress pretend to take aim at the rich, but hit the higher income middle class. I think it is the way that the actual rich keep us rabble out of their country clubs.
Right with you. The very rich hire accountants and lawyers to protect their stash. Most of the US senators and probably half the reps are millionaires and they aren’t affected by these laws.
The Kennedy family being one of the highest profile examples of that phenomenon. Nearly every one of them has used that wealth to help destroy the country.
Exactly correct!
You got it ... it’s because the only threat/competition to the elite comes from the upwardly mobile.
Way too many elitists are lazy and/or incompetent, and live in fear of those with ability and drive, so our ‘betters’ strive for feudalism. It starts with an uneducated populace ... I think we are seeing the results with the slavish ‘consensus’ over GW for example.
If one really wanted to decrease inequality in this country, it would make more sense to tax accumulated wealth heavily rather than income. Some significant proportion of the wealthy did nothing productive to generate their wealth and do not themselves have a moral right to it.There is class warfare going on in this country — but it’s not against the established rich. It’s against those who are trying to become wealthy.
You didn't do anything for any of the things your parents gave you. Are you ungrateful enough to say that you are not going to try to pass along as much, and if possible more, to your own children? And if you do decide to use your money to make your children's lives financially easier, do they not have a right to the enjoyment of what you decided to do with your money?The crucial difference between conservatives and leftists is that conservatives conserve memory, and leftists claim the right to "start the world over again." Well, there are people who actually do start the world over again every day - they are called "Alzheimer's Disease Patients." They wake up every morning not knowing where they are or who they are meeting. And having only a vague memory of the fact that they have saved money in the past.I have seen it - and I say, I'll take memory over that, any day of the week. Socialists want to obliterate the credit (ie, money and ownership of things) which the productive have earned. Because the ownership of money/things is just recognition of the accomplishments (even if it's only digging a ditch) which the socialist politician or propagandist (read, journalist) has not done.
Those who produce have a moral right to what they have produced. I’m not in favor of taxing wealth or those who decide to leave money to their heirs.
I’m merely pointing out that heirs have a reduced degree of moral right to wealth than those who produced the wealth. IOW, taxing wealth is less unfair than taxing income. Still unfair, but less so on average.
If my second cousin twice removed who I haven’t even met dies and unexpectedly leaves me $1M, that’s great for me. But it’s very much an unearned windfall, quite similar to winning the lottery. If the legal system is set up so that someone else inherits, I’ve suffered no injury.
OTOH, if I work and struggle to earn $500,000 and the government confiscates $300,000 of it in the name of “fairness,” I’ve suffered a great and undeserved injury.
“Wannabe rich” is another phrase to define the middle class. The goal of any good “progressive” is to totally eliminate the middle class, leaving a dictatorship with the usual two tiers: ultra rich and ultra poor.
After all, communist, fascist or other, what’s the point of being rich, powerful, and in charge if you can’t seem super rich by comparison?
>>If one really wanted to decrease inequality in this country, it would make more sense to tax accumulated wealth heavily rather than income. Some significant proportion of the wealthy did nothing productive to generate their wealth and do not themselves have a moral right to it.
They have every moral right to it, and your class warfare rhetoric here is straight from the Left’s playbook. It is the government (i.e. YOU) that lacks the moral right to take it from those who have earned it, and their heirs.
Profligate heirs will burn through an inheritance fast enough. This redistributes the wealth more than fast enough. I’d much rather we support bar tenders, resorts, high end car dealers, and such, than more gov’t functionaries.
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