If you tax people more, they will spend less. This hurts businesses, which will now be able to employ fewer people. In theory, that’s what would happen anyway. In real life, who really knows? Everyone just supports the policy that will benefit them the most. That’s why you rarely see millionaires advocating higher taxes or poor people favoring tax cuts for the wealthy.
ohai Wrote: ------------------------------------------------------- > If you tax people more, they will spend less. This > hurts businesses, which will now be able to employ > fewer people. > > In theory, that’s what would happen anyway. In > real life, who really knows? Everyone just > supports the policy that will benefit them the > most. That’s why you rarely see millionaires > advocating higher taxes or poor people favoring > tax cuts for the wealthy. Buffet, Gates etc. have been advocating higher taxes for themselves. Buffet claims that he pays a much smaller percentage of his income than his receptionist.
You can’t take one or two people and assume that it’s the rule. I don’t think even you believe that rich people are less likely to favor tax cuts.
If I were a billionaire I’d also advocate higher marginal income tax rates because with my municipal bonds, real estate, foreign investments, and tax-favored dividends–and an expensive tax accountant–I don’t and won’t pay a heavy tax burden anyway. And even if all the loopholes were ended, increasing my tax rate a few % points has zero impact on my lifestyle. However, if I’m a doctor who was in school and accruing debt until I’m in my early 30s and I’m earning $500,000 each year as a standard annual wage for my services, raising the marginal tax rate from 33% to 39% on “the rich” has a discernable impact, particularly when my state is doing the same thing and my county is raising my property taxes and particularly as one of the easiest fixes to SS and Medicare is to expand the tax base to higher wages (over $100,000) and is likely to happen in the next 5 years.
People further down the income scale generally have a higher marginal propensity to consume. Getting income into their hands is a surer way to stimulate consumption, which is the revenue source that drives businesses and profits. Giving wealthier people tax breaks *might* increase investment capital availability. But the banks are already sitting on a bunch of capital that they won’t lend, so it’s hard to see how fattening wealthy people’s savings accounts is going to turn into either consumption or investment. Now taking wealth and starting a business with it is going to generate employment too, which is definitely something we want to encourage. So why don’t tax breaks for the rich turn into that? This is the crux of the issue, and it is more nuanced: 1) If you employ people, guess what, those are business costs, so you don’t pay income tax on that money (though your employees do, and you do pay 1/2 of the payroll tax, which is why a payroll tax holiday is a sensible tax break for those who are willing to invest and employ people). You only pay taxes on PROFIT. In fact, one of the ways to reduce your tax bill as a small business is to employ more people. 2) Now it’s true that if taxes are higher, your net profit is going to be a bit less (remember that we’re talking about 3% difference in the marginal tax rate) and some barely profitable businesses might not be able to survive, but all of that is happening at the margin, whereas the budget deficit and some degree of crowding out is happening across the entire economy.
kkent Wrote: ------------------------------------------------------- > If I were a billionaire I’d also advocate higher > marginal income tax rates because with my > municipal bonds, real estate, foreign investments, > and tax-favored dividends–and an expensive tax > accountant–I don’t and won’t pay a heavy tax > burden anyway. And even if all the loopholes were > ended, increasing my tax rate a few % points has > zero impact on my lifestyle. > > However, if I’m a doctor who was in school and > accruing debt until I’m in my early 30s and I’m > earning $500,000 each year as a standard annual > wage for my services, raising the marginal tax > rate from 33% to 39% on “the rich” has a > discernable impact, particularly when my state is > doing the same thing and my county is raising my > property taxes and particularly as one of the > easiest fixes to SS and Medicare is to expand the > tax base to higher wages (over $100,000) and is > likely to happen in the next 5 years. Cry me a river for the people making >500k…we are close to being in a depression right now if we aren’t already and everyone should share the pain and sacrifice. Lots of people are struggling to feed their families and we are supposed to feel the suffering of someone downgrading to a 7 series instead of a Bentley Continental?
Do you know anyone struggling to feed their families?
ohai Wrote: ------------------------------------------------------- > Do you know anyone struggling to feed their > families? Yes, I volunteer at a local food bank. I see a lot of struggling families with kids, who would never be there in a normal economy and look obviously embarassed.
> […] > > 2) Now it’s true that if taxes are higher, your > net profit is going to be a bit less (remember > that we’re talking about 3% difference in the > marginal tax rate) and some barely profitable > businesses might not be able to survive, but all > of that is happening at the margin, whereas the > budget deficit and some degree of crowding out is > happening across the entire economy. It’s disingenuous to look at a tax hike as a proportion of pre-tax income. You need to compare on an after tax basis, because that’s what people spend. Let’s say person X makes $750,000 a year and spends everything he makes. Assuming a 50% bracket (which is not unreasonable net of federal, state, local, sales, and property taxes), a 3% tax hike on actually reduces his spending by 6%.
I’ve volunteered at food cabinets too, and have seen people drive up in BMWs. Similarly, I lived by some projects in the city and have observed people with iPhones and new Buicks.
Poor people are driving Buicks! Now I’ve heard it all…end all forms of welfare immediately.
marcus, the point is, the truly wealthy are not impacted by tax increases, which is why the billionaires don’t care or even support higher income taxes. The people who are most affected are high income earners who are usually small businesses or people who have spent many years in school getting specialized training. I’d say a doctor who spent 4 years in undergrad, 2 years in medical school, 2 years doing rotations, 3 years in residency, and 2 years in a fellowship program accruing half a million dollars in debt and foregoing a decade of income and then providing the population with extraordinarily valuable services owes society very little.
kkent Wrote: ------------------------------------------------------- > marcus, the point is, the truly wealthy are not > impacted by tax increases, which is why the > billionaires don’t care or even support higher > income taxes. The people who are most affected are > high income earners who are usually small > businesses or people who have spent many years in > school getting specialized training. I’d say a > doctor who spent 4 years in undergrad, 2 years in > medical school, 2 years doing rotations, 3 years > in residency, and 2 years in a fellowship program > accruing half a million dollars in debt and > foregoing a decade of income and then providing > the population with extraordinarily valuable > services owes society very little. I have a problem with education, including medicine, becoming a big racket in this country that leads to doctors accumulating a ton of debt and then shunning much needed practices like internal medicine for dermatology and other specialities. I would rather subsidize their education so they end up with little or no debt, and then focus on a field of practice that they are truly passionate about than do it for the money and paying off debt. Just like what it used to be. They may not earn as much money afterwards but at least it will weed out the middle men making a killing and the doctors in it purely for the money.
Well, I broke my leg 2 months ago–I’m happy as hell my surgeon went to school for 15 years to specialize in how to repair bones/knee fractures and ACLs. And I don’t begrudge his 7-figure salary at all nor do I think he should have his taxes raised–you’ll never find people willing to put in the education and then the 18-hour days (he does 2-3 surgeries per day and then sees patients in the afternoon) for a marginal salary. And I’m sure as hell glad my mother went to the dermatologist 3 weeks ago because she caught a cancerous growth and cut it out before it did any harm–and I don’t begrudge my dermatologist’s $500,000 salary either.
kkent Wrote: ------------------------------------------------------- > Well, I broke my leg 2 months ago–I’m happy as > hell my surgeon went to school for 15 years to > specialize in how to repair bones/knee fractures > and ACLs. And I don’t begrudge his 7-figure salary > at all nor do I think he should have his taxes > raised–you’ll never find people willing to put in > the education and then the 18-hour days (he does > 2-3 surgeries per day and then sees patients in > the afternoon) for a marginal salary. And I’m sure > as hell glad my mother went to the dermatologist 3 > weeks ago because she caught a cancerous growth > and cut it out before it did any harm–and I don’t > begrudge my dermatologist’s $500,000 salary > either. They are both doing their jobs…thats what they get paid for. Why should I worship them? Anyways my argument was against the exorbitant costs of college and medical school which should instead be subsidized so they graduate with little debt. That will encourage more doctors to go into internal medicine, which is most needed by the general populace. In addition, we should be loosening the restrictions on foreign doctors from getting visas and practicing in the US. There is a looming shortage of doctors and just like we so many engineers and computer programmers on H1-B, we need H1 visas for doctors as well. This will also bring down the salaries and healthcare costs. Of course the AMA will fight tooth and nail against this.
No argument from me. More doctors and engineers is what we need in this country.
I’m not sure how successful foreign educated doctors would be in this country. When I choose from the doctors available in my insurance plan, the first thing I do is look at where they went to school. I don’t care where the doctor is from (my current doctor was born in India), but I want a doctor who went to a medical school that I’ve heard of and have a good opinion of (current MD graduated from Penn). I don’t know anything about individual medical schools in other countries. I guess I’m guilty of being US-focused, but who has time to research every med school in the world? Maybe other folks don’t care where their doc went to school though.
higgmond Wrote: ------------------------------------------------------- > I’m not sure how successful foreign educated > doctors would be in this country. When I choose > from the doctors available in my insurance plan, > the first thing I do is look at where they went to > school. I don’t care where the doctor is from (my > current doctor was born in India), but I want a > doctor who went to a medical school that I’ve > heard of and have a good opinion of (current MD > graduated from Penn). I don’t know anything about > individual medical schools in other countries. I > guess I’m guilty of being US-focused, but who has > time to research every med school in the world? > Maybe other folks don’t care where their doc went > to school though. Many medical schools in other “third world” countries are just as good as comparable schools in the US, though they may not have that much money to conduct biomedical research. In any case, doctors from overseas have to take the USMLE exam etc. to be able to practice.
kkent Wrote: ------------------------------------------------------- > at all nor do I think he should have his taxes > raised Raising his taxes would be a seperate conversation. All this would be is not extending the Bush tax cuts and tax rates would be in line with the Clinton administration. Are there any non Fox news articles out there that discuss why keeping the Bush tax cuts makes sense? I haven’t come across any convincing evidence.
marcus phoenix Wrote: ------------------------------------------------------- > Many medical schools in other “third world” > countries are just as good as comparable schools > in the US and those comparable schools in the US are ‘walk-it-off’ and ‘rub some dirt on it’