Can Afford Higher Taxes. Will Work Less.

[Revere]

Starting at $250,000, they will do what they can to avoid paying them. And they can, moreso than someone making $75,000 who will see his taxes go up and can't avoid paying them.

Of course they will try to avoid paying taxes. I would expect nothing less. But they aren't going to work any less.

Not the point. These tax increases will actually result in upper income earners paying a smaller percent of the overall Federal income tax burden.

It will soak the working class.

 

[Toro]

Starting at $250,000, they will do what they can to avoid paying them. And they can, moreso than someone making $75,000 who will see his taxes go up and can't avoid paying them.

Of course they will try to avoid paying taxes. I would expect nothing less. But they aren't going to work any less.

Not the point. These tax increases will actually result in upper income earners paying a smaller percent of the overall Federal income tax burden.

It will soak the working class.

No it won't. There is no evidence of this.

Ironically, the author of the OP, Greg Mankiw, who was Bush's chair of the Council of Economic Advisers, concluded that for every 1% drop in the marginal income tax rate, government revenues drop 0.83%. What that means is that a 3.5% increase in the marginal tax rate will increase government revenues by 2.9%. The relationship isn't linear but it is positive nonetheless.

 

[Revere]

Of course they will try to avoid paying taxes. I would expect nothing less. But they aren't going to work any less.

Not the point. These tax increases will actually result in upper income earners paying a smaller percent of the overall Federal income tax burden.

It will soak the working class.

No it won't. There is no evidence of this.

Ironically, the author of the OP, Greg Mankiw, who was Bush's chair of the Council of Economic Advisers, concluded that for every 1% drop in the marginal income tax rate, government revenues drop 0.83%. What that means is that a 3.5% increase in the marginal tax rate will increase government revenues by 2.9%. The relationship isn't linear but it is positive nonetheless.

Yes, there is, the percent of overall taxes paid by the rich went up as their taxes were cut.

 

[Revere]

Here you go.

The Tax Foundation - Summary of Latest Federal Individual Income Tax Data

Each year from 2005 to 2007, the top 1 percent's constantly growing share of income earned and taxes paid set a record. That trend reversed in 2008. In fact, the income share for the top 1 percent of tax returns was lower in 2008 than in 2000, largely due to differences in capital gains.

Another indicator of this reversal in the income and tax shares of the top 1 percent is that during 2007, the top 1 percent had actually paid more in federal income tax than the bottom 95 percent, a comparison that was much remarked on a year ago. But the diminished income of the top 1 percent in 2008 means that the comparison no longer holds. During 2008, the bottom 95 percent (AGI under $159,619) paid 41.3 percent of the total collected, a larger share than the 38.0 percent paid by the top 1 percent (AGI over $380,354).

Top wage earners did not pay less as a percent of the total burden until the market crashed in 2008.

 

[Toro]

Not the point. These tax increases will actually result in upper income earners paying a smaller percent of the overall Federal income tax burden.

It will soak the working class.

No it won't. There is no evidence of this.

Ironically, the author of the OP, Greg Mankiw, who was Bush's chair of the Council of Economic Advisers, concluded that for every 1% drop in the marginal income tax rate, government revenues drop 0.83%. What that means is that a 3.5% increase in the marginal tax rate will increase government revenues by 2.9%. The relationship isn't linear but it is positive nonetheless.

Yes, there is, the percent of overall taxes paid by the rich went up as their taxes were cut.

You're mixing up causality.

The reason why the percentage of taxes paid by the wealthiest rose is because middle class incomes stagnated and tax cuts for all meant that fewer people were paying taxes.

That doesn't mean that raising income taxes on the rich will mean the rich will pay less.

http://www.usmessageboard.com/economy/51527-tax-cuts-dont-pay-for-themselves-gop-economists.html

 

[edthecynic]

Starting at $250,000, they will do what they can to avoid paying them. And they can, moreso than someone making $75,000 who will see his taxes go up and can't avoid paying them.

Of course they will try to avoid paying taxes. I would expect nothing less. But they aren't going to work any less.

Not the point. These tax increases will actually result in upper income earners paying a smaller percent of the overall Federal income tax burden.

It will soak the working class.

Baloney!

How could those who benefited least from Bush's tax cuts be hurt most from Bush's scheduled tax increase???????

Studies Shed New Light on Effects of Administration?s Tax Cuts — Center on Budget and Policy Priorities

Data from a CBO report released on August 13 indicate that the tax cuts will exacerbate income inequality by boosting the after-tax income of high-income households far more than that of middle- and low-income households.

Based on the CBO data, the top one percent of households (whose incomes average nearly $1.2 million) will receive an average tax cut of approximately $40,990 in 2004. This is more than 40 times the average tax break for those in the middle fifth of the income distribution. The gap is dramatic even though this calculation does not include the effects of two major tax cuts that disproportionately benefit very high-income households — the “bonus depreciation” business tax cut and the phase-out of the federal estate tax. The CBO study is the most comprehensive analysis available by a governmental body of who benefits from the Bush tax cuts.

The resulting increase in after-tax income is, on average, more than two and a half times larger for the top one percent of households than for those in the middle of the income scale. As a result, the top one percent will enjoy a larger share of the after-tax income in the nation than they would have received absent the tax cuts, and the bottom 80 percent will receive a smaller share. Economists generally believe that changes in after-tax income represent the most appropriate measure of the distributional impact of tax cuts, since after-tax income reflects the income a household has available to spend or save.

The top one percent will gain by far the most from the tax cuts even though it has already been the main beneficiary of income trends since the 1970s. Data from a separate CBO study, released in April of this year, indicate that between 1979 and 2001 (the latest year CBO examined), the average after-tax income of the top one percent of households rose by a stunning $409,000, or 139 percent, after adjusting for inflation.[1] This dwarfed the $6,300, or 17 percent, average increase among the middle fifth of the population, over this 22-year period, and the $1,100, or 8 percent, increase among the bottom fifth of the population.

 

[Samson]

First, I have to acknowledge that the Democrats are right about one thing: I can afford to pay more in taxes. My income is not in the same league as superstar actors and hedge fund managers, but I have been very lucky nonetheless. Unlike many other Americans, I don’t have trouble making ends meet.

They worry about "many other Americans," and feel guity that they can afford to pay more in taxes.

I suggest that they relieve themselves.

WTF is this guy's problem? Has he never heard of the Red Cross?

All you fuckers out there who feel you can pay more in taxes should take that pile of money that's weighin' on your pea-brained conscious and DONATE it, and get your fucking hands out of MY pocket.

 

[Ravi]

Why would medicare come out of that $1,000? The writer of the article is a liar.

It's not Medicare. It's the expiration of the Bush tax cuts.

Acquire some knowledge about marginal tax rates.

the expiration of the bush income tax cuts is a 3.5% tax hike on whatever this man makes OVER $250K.

HOW does he go from making $2000 out of his 10k to $1000 out of his $10k by a 3.5% increase in tax on what he makes over and above the $250k?

he makes no sense? I think I agree with Ravi, the man in the op is a deceiver/liar.

Yep...basically he'd end up paying an extra $40 in taxes.

He's a good liar, though...look at all the fools that believe him.

 

[MikeK]

So is this Mankiw's way of announcing he's giving up his column at the NYT because the pay for that extracurricular won't be worth it anymore?

And he seems to assume that he and he alone is capable of writing a column worthy of publication in the Times. Let the egotistical jerk resign and he'll quickly realize just how mistaken he is -- as are all those who believe that singers only sing for money.

There are very few producers of anything in America who cannot be replaced.

 

[Annie]

So is this Mankiw's way of announcing he's giving up his column at the NYT because the pay for that extracurricular won't be worth it anymore?

And he seems to assume that he and he alone is capable of writing a column worthy of publication in the Times. Let the egotistical jerk resign and he'll quickly realize just how mistaken he is -- as are all those who believe that singers only sing for money.

There are very few producers of anything in America who cannot be replaced.

Who cannot be replaced?

 

[boedicca]

It's not Medicare. It's the expiration of the Bush tax cuts.

Acquire some knowledge about marginal tax rates.

the expiration of the bush income tax cuts is a 3.5% tax hike on whatever this man makes OVER $250K.

HOW does he go from making $2000 out of his 10k to $1000 out of his $10k by a 3.5% increase in tax on what he makes over and above the $250k?

he makes no sense? I think I agree with Ravi, the man in the op is a deceiver/liar.

Yep...basically he'd end up paying an extra $40 in taxes.

He's a good liar, though...look at all the fools that believe him.

Wrong.

If one adds up the higher state and federal income tax rates, medicare, Obamacare surcharge, the loss of deductions due to higher income and the AMT impact, a net effective rate of 90% is very plausible,

 

[Revere]

He is not being priced out of the market. His work is being shoved off a cliff by government.

 

[boedicca]

This is what happens when taxation is used for social engineering purposes instead of raising funding for the proper role of government.

 

[Cecilie1200]

Exactly. Right now those with money just don't know where 'all this' is going, so gold and silver keep rising. When the investor class decides the economy has bottomed, those commodities will begin to fall, right now? Nope, they don't think bottom's hit yet.

Same with this class warfare. The poor and middle class, they'll keep working and paying, no choice. The high earners? They have choices. Oftentimes like doctors, they work many, many hours. They could choose to work less and fall below to the other side of no man's land.

I know many, many extremely wealthy people who run financial firms, hedge funds, etc. (Unfortunately, I am not one of them.) None of them will work a minute less because taxes are higher. They will try like to hell to avoid paying taxes, but do people honestly think that someone will work less hard making $80 million than $100 million?

Starting at $250,000, they will do what they can to avoid paying them. And they can, moreso than someone making $75,000 who will see his taxes go up and can't avoid paying them.

And of course some people will choose to work less. Why would you work harder than you have to, if you're not actually going to profit from it?

 

[Cecilie1200]

Exactly. Right now those with money just don't know where 'all this' is going, so gold and silver keep rising. When the investor class decides the economy has bottomed, those commodities will begin to fall, right now? Nope, they don't think bottom's hit yet.

Same with this class warfare. The poor and middle class, they'll keep working and paying, no choice. The high earners? They have choices. Oftentimes like doctors, they work many, many hours. They could choose to work less and fall below to the other side of no man's land.

I know many, many extremely wealthy people who run financial firms, hedge funds, etc. (Unfortunately, I am not one of them.) None of them will work a minute less because taxes are higher. They will try like to hell to avoid paying taxes, but do people honestly think that someone will work less hard making $80 million than $100 million?

Oh no doubt there are many like that, especially those that tend towards the gambling type of behavior with systems. I'd say that whether or not someone who can afford to, makes the choice to work less depends on many factors: age, family time concerns, joy the employment itself makes.

People make choices for many reasons. One who chose to stop working, to avoid paying out: Tom Clancy. Motivation: screwing ex-wife. Lots of reason.

George Lucas did the same thing. That's was the reason there was such a long break between Episode 6 and Episode 1: he was trying to screw his ex-wife out of any of the proceeds.

 

[Cecilie1200]

First, I have to acknowledge that the Democrats are right about one thing: I can afford to pay more in taxes. My income is not in the same league as superstar actors and hedge fund managers, but I have been very lucky nonetheless. Unlike many other Americans, I don’t have trouble making ends meet.

They worry about "many other Americans," and feel guity that they can afford to pay more in taxes.

I suggest that they relieve themselves.

WTF is this guy's problem? Has he never heard of the Red Cross?

All you fuckers out there who feel you can pay more in taxes should take that pile of money that's weighin' on your pea-brained conscious and DONATE it, and get your fucking hands out of MY pocket.

He's saying he CAN, not that he WANTS to. That's rather his point: just because he's capable of it doesn't make it a good idea.

 

[frazzledgear]

but none of those people couldve become wealthy without society and government protecting their wealth. if there was no government to create law and order, there would be no security, and anyone could have come around to seize their fortune. taxes are essentially a citizen's fee to be a citizen and enjoy (theoretically) protection, justice, public roads, public parks, public everything. that is why wealthy people dont deserve tax cuts. but hell, wouldnt you rather live in squallor in a shack paying no taxes than live in a mansion paying alot of taxes, wondering if perhaps you shouldnt buy another ferrari?

You TOTALLY missed the point. This wasn't an article about not paying ANY taxes or what we as a society get in return for them. You have presented a TOTALLY FALSE argument to this person's LEGITIMATE point. (But since you point out some of the things our taxes are used to pay for and these are benefits enjoyed by all, it emphasizes the immorality of not insisting all who benefit contribute to footing the bill for them in proportion to their earnings - instead of insisting it is a burden that should only be paid by some. Perfect justification for the Fair Tax -NOT the VAT tax which is grossly unfair and punitive - but the FAIR TAX. Americans For Fair Taxation:)

The article was NOT an argument saying he shouldn't be paying any taxes! It was about when tax rates become so high they are a disincentive to WORKING HARDER. If a person's taxes are so high that the benefit he receives by working harder has been confiscated by the government in the form of taxes -as if it owns both the individual and all he produces -people really do decide NOT TO BOTHER EARNING IT AT ALL. If a person doesn't bother to earn at that level at all, the actual dollar amount government gets from the higher rate of taxation of that harder level of work by the individual - is ZERO. So which do you really think is the better idea here? Less government revenues because people stop bothering to earn the money which means government ends up with less money to pay for protection, roads, parks, etc. etc. etc.? Or keeping the tax rate low enough it doesn't work as a disincentive and discourage people from earning it which means government gets to tax those earnings and ends up with MORE money to pay for those roads, parks, protection etc. etc.? We already know the tax rate it will be returning to in January IS so high it is a disincentive and we know this because when it was lowered, government revenues greatly INCREASED which means more people decided to work HARDER after the across-the-board tax rate reduction.

This isn't rocket science and it has been proven to be FACT over and over again. Impose a punitive tax rate and government ends up with LESS money, not more -because people stop bothering to even earn it at all. Higher taxes are a DISINCENTIVE to create, to innovate and to WORKING HARDER. This is a FACT -whatever government punishes or penalizes in the form of higher taxes, it will get LESS of -and whatever it rewards it will get even MORE of the same. (Just look what happened when government decided to reward having out-of-wedlock children in the form of additional benefits that don't exist for the married parents of a child. Even knowing that being born of out-of-wedlock handicaps that child and creates a disadvantage that affects that child's very future and lowers the odds it will become a productive and independent member of society that doesn't exist anywhere close to that level for the child born in poverty - but is born to its married parents. What government rewards guarantees getting more of it -even when what we get more of causes REAL CURRENT AND FUTURE HARM TO OTHERS.)

Government punishes the most successful and rewards the least successful while our current President also DEMONIZES the most successful. A double whammy to punish the most successful instead of encouraging more people to work harder too. When the tax rate increases after January there will be an initial but brief boost to government coffers during the overlap before the disincentive is felt by people and kicks in -which won't take long - who will then choose to stop bothering to earn it since the benefit they received by working harder will be confiscated by government. And then government revenue will DROP and sharply -and government will have LESS MONEY. At a time our deficit is EXPLODING. Meaning it will accelerate at an even greater rate BECAUSE of raising taxes. Even if Congress stops their out-of-control spending.

 

[Toro]

Exactly. Right now those with money just don't know where 'all this' is going, so gold and silver keep rising. When the investor class decides the economy has bottomed, those commodities will begin to fall, right now? Nope, they don't think bottom's hit yet.

Same with this class warfare. The poor and middle class, they'll keep working and paying, no choice. The high earners? They have choices. Oftentimes like doctors, they work many, many hours. They could choose to work less and fall below to the other side of no man's land.

I know many, many extremely wealthy people who run financial firms, hedge funds, etc. (Unfortunately, I am not one of them.) None of them will work a minute less because taxes are higher. They will try like to hell to avoid paying taxes, but do people honestly think that someone will work less hard making $80 million than $100 million?

Oh no doubt there are many like that, especially those that tend towards the gambling type of behavior with systems. I'd say that whether or not someone who can afford to, makes the choice to work less depends on many factors: age, family time concerns, joy the employment itself makes.

People make choices for many reasons. One who chose to stop working, to avoid paying out: Tom Clancy. Motivation: screwing ex-wife. Lots of reason.

Don't get me wrong. Raising taxes on those making $250k+ will have some negative affect, albeit marginal, and raising taxes during a recession is a remarkably bad idea.

 

[Revere]

I know many, many extremely wealthy people who run financial firms, hedge funds, etc. (Unfortunately, I am not one of them.) None of them will work a minute less because taxes are higher. They will try like to hell to avoid paying taxes, but do people honestly think that someone will work less hard making $80 million than $100 million?

Oh no doubt there are many like that, especially those that tend towards the gambling type of behavior with systems. I'd say that whether or not someone who can afford to, makes the choice to work less depends on many factors: age, family time concerns, joy the employment itself makes.

People make choices for many reasons. One who chose to stop working, to avoid paying out: Tom Clancy. Motivation: screwing ex-wife. Lots of reason.

George Lucas did the same thing. That's was the reason there was such a long break between Episode 6 and Episode 1: he was trying to screw his ex-wife out of any of the proceeds.

People who make a fraction of what Lucas does don't have that option.

 

[Cecilie1200]

Oh no doubt there are many like that, especially those that tend towards the gambling type of behavior with systems. I'd say that whether or not someone who can afford to, makes the choice to work less depends on many factors: age, family time concerns, joy the employment itself makes.

People make choices for many reasons. One who chose to stop working, to avoid paying out: Tom Clancy. Motivation: screwing ex-wife. Lots of reason.

George Lucas did the same thing. That's was the reason there was such a long break between Episode 6 and Episode 1: he was trying to screw his ex-wife out of any of the proceeds.

People who make a fraction of what Lucas does don't have that option.

Exactly. Class envy gets us nowhere, because the wealthy are always going to have more options than those with less money. More options is rather the whole POINT of becoming wealthy, in fact.