I'm sorry I find Kevin's post to be a hypothetical illustration. It is overly simple and full of holes.

It depends on how you define rich and what the rich are doing with the money that some would say they "earn".

If a a family of four makes $250,000 per year, I define that as rich. I hope that they pay the same taxes I do because they are probably employees or independent contractors.

I cannot under any circumstances accept anyone making more than $1 M a year. I don't think such pay can be rationalized. How much money does a person or a family of four or even eight actually need?

Here is my comment from Kevin's post.

"Okay, productivity is up, people are saving money, other people are getting jobs with other companies due to Mr. Moo’s increased productivity. But maybe just maybe one of Mr. Moo’s milkmaids is an excellent worker who puts in a good days work for her income and has fifteen years to go for retirement. Regardless she gets laid off and finds she won’t get hired by anyone else due to her age and no one takes into account that she has clearly been a good enough worker for one person for 20 years. After two years of unemployment she runs out of unemployment insurance and has no income at all. What about her? What about the national average of 9% that are unemployed? What about the 18% unemployment in the area where she lives? What about the 30% unemployment in the area where she lives that are over the age of 50?

I would appreciate your insights."

No insights have yet been given.

I can't honestly say that I hate the rich but I can't honestly say that I love them either. I will say that there are some rich I hate. An excellent example would be the CEO of McClatchy Corporation. His total compensation for 2009 according Forbes Magazine was $3.7 M per year. That happens to be the year that McClatchy laid off 7,000 employees including myself and couples who have lost their home.

I think it would be a very safe bet, and I'm not a gambling man, that he isn't using any of that money to put anybody to work. He him self is an employee. I can't see how anybody could rationalize anyone making that much money. I would also bet that he doesn't pay, as a percentage of his income, as much as my wife and I do.

To answer your direct question I do not deny that many politicians paint the wealthy as evil and greedy. I would submit that many of them are not the least bit interested in raising taxes on the wealthy though as they would be raising taxes on themselves and their rich friends and many of their staff that make well over $100,000 per year.

In a post not to far below yours is one by Bill in which he mentions being flown to an out of state church to evaluate a pastor. Why does the church need to fly anyone anywhere?

That, to my way of thinking, can't be rationalized.

In a post not to far below yours is one by Bill in which he mentions being flown to an out of state church to evaluate a pastor. Why does the church need to fly anyone anywhere?

It should be noted that he was not flown on a private jet or flown first class. The trip was far enough to justify a flight (otherwise, Bill would have been taken away from his family for at least a weekend), and the money for a round trip flight would not have been much more than the money spent on gas. Are you arguing that Bill should have had to pay for the trip out of his own pocket? Or that the church should not have been looking for a pastor so far away?

I cannot under any circumstances accept anyone making more than $1 M a year. I don't think such pay can be rationalized. How much money does a person or a family of four or even eight actually need?

Scary thinking.

I will say that there are some rich I hate.

Brian, are you a Christian?

Karl, the warnings about riches are numerous and grave. But the Bible also speaks of wealth as a blessing. I don't think we have exegetical warrant to equate riches with sinfulness or to assume wealthy people are any more sinful that non-wealthy people. Their danger is a different danger, but mine is just as grave.

Another thought, or perhaps a caution:

For most of us, spreading derision upon millionaires is about the same as millionaires spreading derision on billionaires, from a historical perspective.

Speaking generally, most of us are filthy rich compared to the majority of people throughout history. We have access to wonders that were denied kings in the past (the internet, for instance, or your smart phone), we're surrounded by food, top-notch entertainment piped directly into our houses 24x7, excellent medical care, dentistry, etc. Communication is swift and sure. The world is our oyster.

I live in a 1,700 sq foot house (that is very, very "lived in") in an ungated neighborhood that will never be featured in home and garden . . . and I feel very nervous when I read the warnings in the Bible about greed, trusting in riches, hoarding, etc.

Generally speaking, if you're living in America and have leisure to spend time on the internet, and are blessed to have a decent job right now, you're rich.

Brian

I won't argue with your opinion on "how much is too much" (because how do you argue with someone's opinion?), but could we discuss this?

I guess maybe I'm not a Christian since I hate a guy who makes $3.7M per year while he lays off 7,000 people.

I won't talk about you, since I don't know you, but in light of my own sins that put Jesus on the cross, what McLatchy did (if I have that name right) is small potatoes.

We can be righteously angry. We can be prophetic voices for justice. But we can't hate. Jesus said hatred was murder.

I struggle with it too, of course. I've thought of the scenarios - how could I forgive someone, for instance, who hurt or murdered a family member? But I pray that I would.

Sorry to hear that, Brian. I'm blessed to have a stable job (although my area of the company is being spun off in a few months :-) - I know it's hard out there.

Hang in there!

As you may recall I never said anything about taking any money away from anyone. However, I do think that anyone who makes more than $1 M per year and does no charity with any of their money is easily as immoral as you find the idea you thought I said. I do think that would also be bad economic business.

Well, truth be told, I don't think anyone should make any more money than that. How can it possibly be rationalized. I do not advocate having money taken from them to bring them to $1M per year. That is senseless and pointless. I am not an advocate of the redistribution of wealth. If wealth were redistributed who would do the redistribution and how often would the wealth be redistributed? Would a daily redistribution be often enough or would it have to be hourly?

Anyway I guess that is all I have to say. Thanks for being patient with me.

I have to point out that not everyone who supports the progressive tax structure is in it for greed, jealousy, or covetousness.

Ken, I know. But politicians don't usually work with nuance and reasonableness.

What would be unfair about a flat tax rate? Same percentage for everybody over a certain income level. Rich people would still pay more than middle class.

"the warnings about riches are numerous and grave. But the Bible also speaks of wealth as a blessing."

...and in US evangelicalism, we are most likely to quickly pass over or give lip service to the former of those two statements, while resting comfortably in the latter. It is oh, so easy to (rightly) point out that it is the "love" of money rather than money itself that is the root of all evil . . . and then to decide that of course one doesn't "love" money more than God and that one *would* be willing to give it all up IF God asked one to, but since one is "holding it in an open hand" and hasn't heard an audible voice saying to give it up, one can spend it on oneself.

Seriously - tax policy aside most American evangelicals need to hear more about the dangers of consumerism and be asked questions by their pastors like "so, how much of the money God entrusted you with did you spend on yourself this year?" Rather than being given yet another reason to feel comfortable with America's headlong pursuit of riches. JMHO. Written as an estate planning and tax attorney who often helps wealthy folks figure out how to pay little or no estate tax.

Bill,

Ah ... Yes, Reagan cut tax rates and reduced the number of brackets. He also dramatically increased government spending, which has a demonstrable growth effect. What Reagan did was stimulate eonomic growth with massive spending programs. In many ways, Reagan was more of a Keynesian than the worst Keynesian would ever claim to be.

He also signed two huge tax increases, closing all kinds of loopholes and the like. All told, as a percentage of GDP, revenues under Pres. Reagan were very much in line with ongoing averages. His spending was higher, though.

As for much of the growth in the 80's, bear in mind that the 80's included the recovery from the late 70's "stagflation." Reagan's legacy benefits, here, from the business cycle. Much of the rest is far more attributable to the government spending than turnaround from top-end tax cuts.

As for Kennedy, yes, he lowered the top marginal rate to 70%. Frankly, I'm not sure that supporting a 70% rate corresponds much with anything on anyone's radar in the current environment.

Although he did lower top rates, Kennedy was more focused on, and skewed his tax cuts more toward, lower brackets. He was more interested in the demand side than the supply side. He was after the multiplier effect of increased spending from people at the lower end of the economic scale.

As to what rates should be: I don't have a number for you. I'm not, actually, that interested in raising taxes, per se. What I'd like to see is some real effort at the legislative effort to cut spending and then raise taxes where necessary to close the deficits. At this moment, I'd rather Exxon and General Electric contribute more to that than low-income families. Not because I hate Exxon or GE, but because I think GE and Exxon benefit quite a lot from being in this society and should help pay some of the bills.

At risk of being branded a heretic, the only remotely-fiscally-responsible President the US has had in a very long time was Bill Clinton, who used a somewhat-balanced approach to close the deficit. And, yes, it pains me deeply to say anything good about Pres. Clinton.



And answering Jared:

While politicians don't deal in nuance, I'm not reading a post by a politician. In truth, though, I don't think I've ever heard an American politician call for punishing the rich. That's the charicature that I hear the Right use to smear the Left, but I've always thought that that was a lot like liberals calling conservatives racist unfairly.

What would be unfair about a flat tax rate? Same percentage for everybody over a certain income level. Rich people would still pay more than middle class.

Inherently, not much. If we, as a society, actually make some huge reductions in the size of the government's expenditures, so that it would be feasible, I wouldn't really care. I'm actually kind of a fan of the Fair Tax.

In the current environment, though, a flat rate which would cover our expenditures would be extremely burdensome on a middle-class family.

To turn the question around, though, what's unfair about asking those who benefit most from the society to contribute proportionately?


Sorry about the long comment. I was trying to avoid that ... but then I waded in and got asked big questions.

That I'm aware I've too much fire in my belly drives me to limit my comment to one aspect not mentioned thus far in the comments.

My wife is a tax specialist, an Enrolled Agent. If you have any sort of complicated tax situations, this is the sort of professional whose form-filling counsel you will probably need. Eventually. To show how to save lots of money the law does not ask you to pay, if not even to correct mistakes. Those with other credentials (including, eg, CPA), unless accompanied by the Enrolled Agent credential, just do not know as much about the IRS system.

That evaluation (which is not my point, but will lead to it) comes from having observed a process. After obtaining a BS in accounting and doing tax and accounting work for a few decades, she decided to get the Enrolled Agent credential. Took her about 500 hrs study, ie, about a year of grad school in one topic, followed by comprehensive exams. Then, to maintain her credential, she spends time and $ for 70 hours CPE (continuing professional education) each year. (A 16 week semester with 3 credit hours meets 48 hours.)

I'm no accountant, and a relative dummy about tax forms. Just a physicist/engineer. But I can appreciate the implications of a skilled professional aided by computers having to spend 100 hrs on a return for an individual, a retired widow with home, inheritance, savings, not a corporation.

Now, think. How come that degree of specialization. How come that much work every year just to keep abreast? How come so complex?

Taxes, folks, aren't just or even mostly about gov't income. They are about control, about creating and maintaining a clientele. If you don't read "class warfare", I'm persuaded you miss the obvious. Think about the lobbying. Think about the brochures you receive in the mail from your elected reps. Think, for that matter, on the comments you've read thus far in this thread. Yes, the idea of class warfare has been mentioned. But nothing about the inherent design of the system such that it both depends upon and cultivates that feature.

Bill,

There's a world of difference between suggesting that there's an inequity in the tax system and being punitive. No, I'm not kidding you. Exxon's corporate income taxes last year? Nothing. My family, making about $50k for a family of six, paid more than Exxon did as a company in income taxes. Since Exxon made a lot more money ... maybe they aren't paying their fair share.

You disagree? Fine. We each have intelligent positions which can be discussed.

Subjecting those who disagree with you to mockery isn't conducive to intelligent discourse. Redefining the words used by those with whom you disagree isn't fair play.

I return to my analogy about Lefties who accuse the Right of being racist all the time. It's every bit as dishonest when the Right does it to the Left over tax policy. Being center-left economically and right-ish socially, I don't enjoy being called names all the time.

You're asking for numbers, and I'm not going to try to play. There are too many things that I want to see done as part of getting to those numbers -- not the least of which reducing a whole lot of spending. I'm not prepared, in the comments section of a blog, to map out the exact details of the entire public finance system.

That's not avoiding a straight answer ... it's pointing out that there are many other factors.

Since I'd rather not get into how many ... say ... aircraft carriers and fighter wings we need to maintain right here, I'm not going to work out those numbers.

In theory, I'd love to see taxes lowered on everyone, if by that we can pay for everything that we've decided to do.

I don't want to see income rates at such a level as to punish anyone. I do want us to pay our bills.

Simplification is certainly a good thing. Most, if not all, deductions should be eliminated because they're used to manipulate numbers. Heck, all kinds of dialogue is dishonest because of them.

Yes, we have some high rates in certain categories ... but since no one actually pays the stated rate, it's irrelevant. But it gives pols (Right and Left) all kinds of talking points to fire people up.

Deduction systems are also used by the lobbyists ... conspicuously, poor and middle-class people seldom hire lobbyists. That might have something to do with some of those inequities in the system.

Ken,

You say that Exxon-Mobil paid no corporate income tax last year? My guess is you got that information from some news source which has an agenda rather than trying to explain the truth.

I could link you to several of Exxon's official SEC financial reports, but for ease of reading, here is a link to a CNN article on oil company profits:



Exxon-Mobil paid $15 billion in corporate income taxes last year, so your statement is not true. However, it is true that none of that was US corporate income tax, and all of it was international tax. But that is where the vast majority of the oil is now drilled, and as the article states, those nations impose high corporate taxes on oil drilled in their countries. Do you really think it is unfair that Exxon doesn't double pay their taxes, both to the foreign governments where they drill oil and then again to the US government? Do you believe that after Exxon pays 85% to Nigeria for oil drilled there, they should pay another 35% to the US just because they happen to be a US headquartered company?

Furthermore, as the article also notes, while Exxon paid no corporate income tax in the US, it still paid $7.7 billion to the US in sales taxes and duties. Add all their US and foreign taxes together, and Exxon paid over $78 billion in tax, or 47% of their income.

One can argue that rate should be even more than 47%, but passing along arguments that make people believe Exxon avoids paying taxes is simply wrong.

Ken,

You don't know me, but I am a CPA and therefore pretty familiar with all taxation.

Your situation of living in Maine and working in Massachusetts precisely proves my point. Contrary to what you apparently believe, you DIDN'T pay taxes to both states on the same income unless you prepared your tax return incorrectly and overpaid. Yes, you have to file a tax return in each state and end up paying taxes in each state on the share of the income you earned in each, but you don't pay taxes to both states on the same income. Think of it this way, you state tax bill gets divided up between the two states - it does not double by paying taxes on the same income to both.

If you had to pay taxes to Massachusetts because you worked there, you either got to exempt that same income from Maine taxation in the form of apportionment, a deduction, or a credit on your Maine tax return. Maine did not double tax the same income as you already paid tax to Massachusetts on. Now, of course, if you or you wife had different/other additional income which was earned in Maine, you would have still had to pay tax on that income in Maine, but of course you wouldn't be taxed on that same income by Mass. This is, in essence, exactly the same treatment as Exxon gets by having to pay tax in Nigeria and elsewhere, but not double pay again on that income in the US.

Frankly, subsidizing companies by exempting them from US taxes because they pay taxes to other countries is not even allowing the free market to operate.

Sorry, but this is utter nonsense. No economic system in the world, whether in the US, or among countries, works like you would propose. Your theory would mean that taxes would compound with every tax jurisdiction you operated in, instead of being somehow divided among them, as it what really happens. By your reasoning, because Coca Cola sells cokes in Mexico, the Mexican government is entitled to 35% of all the profits Coke makes in the US as well. And Canada gets 35% too, and Japan, and France, and the other 100+ companies where coke is sold. In sum, Coke would pay a overall tax rate of about 3,500%, or would have to remit $35 in tax for every $1 in coke they sold. Any such business would be bankrupt within a day.

Your logic would mean no business could be anything but a business that only operates in a single country and a single state, and no person, such as yourself, would want to work outside their state either.

You know, Ken, this is why the economic situation in the country is mostly hopeless. You, like so many I talk to, are so tied to an ideology that you won't accept you might be wrong regardless the evidence.

So I will give you proof, regardless of what you think of my credentials. Here is the link to the State of Maine Revenue Services worksheet which is the actual form you use to compute a credit for taxes you paid to a different state if you are a resident of Maine.

http://www.maine.gov/revenue/forms/credits/2010/10_DualResidenceWksht.pdf

Or if you happen to be a non-resident or part year resident of Maine (as you apparently are or were), you use a different form to apportion your income, but the end result is the same, you only pay tax to Maine to income earned in Maine and not on income you earned and paid tax on in any other state.

http://www.maine.gov/revenue/forms/1040/2010/ScheduleNR_dwnload_2010.pdf

And here is the thing. I don't for a second deny there are real problems with the income tax systems in the US. Also, I know of very few people, including a majority of Republicans, that claim that the tax code should not be progressive at all.

But the big problem is it is impossible to even begin to discuss tax issues and entitlement reform options when the left in the country has largely poisoned the well and convinced half the country that "the rich" don't pay their fair share, "the rich" use loopholes to avoid taxes, and that our entitlements can be fixed by taxing "the rich" some more. The right has some of their own canards in that we can fix entitlement programs by eliminating "waste, fraud, and abuse" and/or by deporting illegal aliens. The reality is, while their is some minor truth to all of these, none of them are significant causes or possible solutions to our entitlement problems.

And when people even refuse to listen to facts, in my experience the likely cause is, some form of envy and resentment.