Posted on 12/09/2010 7:34:38 AM PST by SeekAndFind
For the last two years, $250,000 in annual income has been an arbitrary line in the sand of a renewed class war. Those above it must have their income taxes raised. Those below it are deemed more virtuous and so deserving of a tax cut.
But who exactly are the “rich”? Zillionaires such as Warren Buffett, Bill Gates, and George Soros surely are. But these wealthiest individuals have so much money at their disposal that they don’t care much about income-tax rates. Their tax lawyers have found ingenious ways to divert millions of what would be owed to Uncle Sam by funding tax-free pet causes, private foundations, and favored charities – in a way not available to those who make far less than a million dollars a year.
Is annual income a good gauge of wealth? Who is richer — the architect in Monterey, Calif., who makes $250,000 a year and who paid $700,000 for a modest house while picking up the full tab of $50,000 a year for his daughter at a private liberal-arts college, or the engineer in Salt Lake City, Utah, making $100,000 a year who has a house twice as large at half the cost, and whose son is on a need-based scholarship at the university? Should annual income alone trump all other considerations when the costs of living vary widely by region, and eligibility for billions of dollars in federal and state subsidies is predicated on income levels?
By the same token, what exactly is “poor” in a globalized world of cheap imported TVs, cell phones, and high-tech gadgetry available to most Americans at Walmart and Target? The middle class today has better access to what were once called luxury items than did the super-wealthy just two decades ago.
How do we define tax “cuts”? Were the George W. Bush income-tax rates really “cuts” for the rich? Or were they across-the-board cuts only in comparison with the higher Clinton rates? In turn, were the Clinton rates actually “hikes” on top of the George H. W. Bush “hikes”? Both upped the lower Reagan rates, which in turn had been “cuts” from the higher Carter rates. In fact, every president’s newly adjusted income-tax rate is derided mostly on partisan political grounds as either a counterproductive hike that “kills small business” or an unfair “trickle-down” cut.
Income taxes don’t operate in a vacuum. That the “rich” should pay 39.5 percent on their income might seem justified in isolation. But what about property, state income, payroll, and other taxes that, combined with federal income taxes, can take up to 65 percent of some incomes in high-tax states?
In addition, income taxes are already graduated, so one pays a higher percentage of one’s income the more one makes. Yet 50 percent of Americans pay no income taxes at all, while 5 percent of taxpayers pay nearly 60 percent of the total collected. The result is that half of Americans are likely to favor both higher entitlements, which they may well receive, and higher income taxes, which they most certainly will not pay.
Did the staggering annual national deficit arise from a lack of revenue or out-of-control spending? California manages to have the highest income, sales, and gas taxes and the largest deficits. Over the last decade, federal income-tax revenue — and budget deficits — have increased almost every year.
Income levels are not static. Belonging to the upper brackets is not always a matter of privilege or inheritance. Some Americans go in and out of the top tax brackets depending on the economy. Others are “rich” for only a few years in their 50s and 60s — making far less before and after.
If we prefer high rates, we will see either more tax avoidance or a certain reluctance to work an extra day, buy new equipment, or hire a new employee — given that any additional income will be mostly eaten up in taxes. Those who make over $250,000 are those who would be more likely to hire new employees, and they usually can do it far more efficiently than the federal government.
Finally, if the goal is to increase federal revenue, then it is wisest to keep taxes as they are. That encourages Americans to make as much as they can and to hire and buy, thereby enriching the nation at large. But if the aim is instead to ensure that we mostly end up about the same, then raising taxes on the already highly taxed might make us more equal — and collectively all poorer as well.
— Victor Davis Hanson is a classicist and historian at the Hoover Institution, Stanford University, and the author, most recently, of The Father of Us All: War and History, Ancient and Modern.
I hope FReepers will see Hanson is being rhetorical.
A genie went to the Middle East, where he saw a sad looking Arab. He asked the Arab what he wanted most in life. The Arab answerd, “My cousin Abdul has the most beautiful flock of goats you ever saw, while I don’t have any goats at all. It’s not fair! I’m just as good as he is. Why should HE have such beautiful goats and not me?”
The genie smiled and said, “So, you want a beautiful flock of your own?”
The Arab snarled, “Of course not, you idiot! I want you to kill all of Abdul’s goats!”
This is why I get so angry when I hear stupid people say the rich aren't paying their fair share. How 'bout a true minimum tax that says the 50% who pay nothing must at least cough up $1000 to be a US citizen and have the right to vote. If you don't pay any taxes, you can't vote. At least that might make them have a vested interest in the US.
What I make, how I make it (as long as its honest), and what I do with it is nobody’s damn business.
They also shelter their money from taxes and play games so as to avoid paying taxes. (Remember John Kerry's yacht?)
When taxes are raised on the "wealthy", it's the two income couple who makes just over the "wealthy" line or the small business who end up actually paying more in taxes.
Even more important is not giving the politicians one more cent because giving them more money is like giving gasoline to an arsonst.
If you read comments on YouTube or Yahoo News, pretty much all the libs who advocate taking from the "rich" use the argument that everyone else is hurting, the "rich" should hurt as much or more than everyone else.
The left is all about revenge. If there’s no harm done, their politicians create a false crime and unleash their useful idiots.
It never ceases to amaze me how sure the left is that “the rich” have stolen something from them. The problem is that they don’t even have a clear explanation of what they had that the rich have taken.
Anthony Weiner is playing this game with the tax non increase. He’s portraying it as money taken from the poor and given to the rich when the poor never had it in the first place.
Its all about taking revenge for an imagined crime. Its no more than a tool used by progressives as a means of siezing and clinging to power.
Goose. Golden Egg. Discuss.
Leftists/liberals believe that economics/business/trade is a zero-sum game - that in order for someone to become rich, others must be impoverished. Therefore the rich must have stolen from the poor.
I should know, I used to be one when I was growing up in Los Angeles. I got better. :P
The fact that trade is not a zero sum game but actually generates wealth or value for both parties in a trade in all cases is a surprisingly difficult idea to wrap your head around for a lot of people.
The vast majority of the wealth of people like Gates or Buffett is held in the biggest tax shelter of them all- unrealized capital gains on stock. Someone should propose a tax on wealth rather than on income which is counterproductive. I don’t really believe this should be done. I just want to watch the Dems squeal.
I have an even better idea to make them scream - 90% tax on any annual income over 100K coming from performances in concert, theater, or in a movie or other electronic media.
Listen to the screams become a shriek.
That 50 percent is the problem, making us so close to the tipping point where 51% can just keep voting themselves our money.
Just think what the DREAM Act would do to that!
Too bad it can’t just be property owners and/or tax payers who vote, and specifically exclude those who get the bogus earned income credits (welfare)!
Liberals view the “rich” as “everyone” else. If you live in a 3 bedroom home then the “rich” live in a 4 bedroom home. If you drive a Ford then the “rich” drive a Lexus. The liberals want everyone living in the same shack, with the same amount of food, same amount of everything and that will make us “equal”. (except them... they are just more equal) Just a thought.
Bread and wine and reality shows for the MOB!
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