With all this talk of class warfare I wonder about the logic of the people who advocate taxing the rich. In some ways I understand it economically things aren't going well right now and people don't know where to turn. So the simple solution is to find fault with the other, the evil rich for of course all rich people got that way trampling on the rights of the average guy. I won't pretend I can defend all rich people but percentage wise there probably aren't any more evil rich people than there evil middle class or poor people.
There other reasons for arguing against taxing the rich when the economy is struggling. The first has to do with incentives everything has an incentive we eat foods because of the way they taste, date a girl because she's pretty or smart, work hard to earn more pay. There are also disincentives don't touch the stove it's hot, how hard do you work after a pay cut. How hard is anyone going to work if the government is going to take a bigger share. The second argument against increasing taxes is selfish who do you think pays this tax on the rich. No I'm not rich but I'll be paying for any tax increase, much of any tax increase will be passed along through higher prices. Thirdly effectiveness of any tax increase is dubious most of the Bush tax cut's went to the poor and middle class raising taxes solely on the rich would have little impact on the deficit.Plus if G.E can pay n0 federal taxes now they could pay zero with an increase as well. We need only to close loopholes as a minimum but hopefully move away from an income tax all together.
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Why is the suggesting that the rich pay higher taxes somehow equivalent to "finding fault" with the "evil" rich? There's not a direct connection there.
ReplyDeleteAck... I disagree with this post, but have to do dishes, run, and get ready for a wedding, so I can't write it all out now...
Jockeystreet, your correct in saying the is no direct connection but this seems to be implied by many editorials and your favorites letter to the editor writers.
ReplyDeleteI guess the frustration and the finding fault comes when that simple request to raise a tax gets met with cries of "class warfare" and "socialism!" and such. The reaction to the notion of taxes gets so absurd and out of control, with all these veiled threats and throwing fits... then I roll my eyes and talk about those "evil rich."
ReplyDeleteIgnore the question of taxing the evil rich. The real issue is spending because all government spending equals taxes. This is compounded by deficit spending because anything not paid for when purchased is actually more expensive due to the nature of interest. People can say just tax the rich more in order to justify additional wasteful government spending, but it doesn't work for a couple reasons. First there are not enough rich people to cover all the ridiculous spending - you could take every dollar accumulated from every U.S. billionaire and it wouldn't solve the problem. Second reason is is even more important for regular folks to understand and it the fact that we don't tax wealth in this country. No, we tax annual income. You are not punishing the real rich with onerous tax rates. Nope, you're just making it harder for folks trying to get rich to accumulate money. If you want to punish the rich go with a consumption tax with exemptions for groceries and higher rates for luxury items.
ReplyDeleteJS,
You talk about your frustration that people respond to a "simple request to raise a tax" with cries of tax warfare. Imagine the frustration of people who understand math when they see people fooled by class warfare demagoguery. The current president talks about billionaires to fool people when his spending will necessarily require greatly increasing taxes on the middle class because there are more of us. We are heading to a Greece style default and all the politicians are doing is trying to ensure it doesn't blow up until the next guy's watch.
"If you want to punish the rich go with a consumption tax with exemptions for groceries and higher rates for luxury items."
ReplyDeleteTake out the "punish the rich" notion and I agree with this wholeheartedly.
The rest is more complex than fits into a couple of comment boxes. But the essence would be something along these lines: over the past few years, there has been a massive widening of the gap between rich and poor, or rather, between the rich and everyone else. We have the average person struggling more and more, poverty levels rising, and the incomes of highest earners going through the roof. It doesn't seem like "class warfare" to me to suggest that in that environment, we tweak things so that some of those new record profits are going to fix some of the problems that those same people (to an extent) helped to create. Crazy talk, I know, but maybe not completely crazy.