Should we tax the rich more? Or should we stop taxing the rich less?
Americans are constantly demanding more bipartisanship. And we’ve come very close to achieving that kind of unity on one particular issue: an aversion to raising taxes on the wealthy.
Beginning with President Ronald Reagan, Republicans began pushing back hard against the idea that the wealthy should bear the lion’s share of the cost for paying for government programs.
Conservatives accused anyone arguing for higher taxes of taking up the banner of “class warfare.” Estate taxes — an accepted part of American taxation for nearly a century — were renamed “death taxes.”
A lot of prominent Democrats, including Governor Andrew Cuomo, have embraced this policy-approach.
But the Congressional Budget Office says the deficit next year will top an astonishing $1.5 trillion, another sizable step toward national insolvency.
I view it as a matter of simple common sense that Americans face a period of Federal austerity, with deep cuts to social programs, infrastructure spending, and the military.
But we may also find ourselves asking that the rich pay more to help close the gap — I’m guessing a lot more.
The reasons aren’t ideological. Americans — yes, even most Democrats — love the idea of getting rich.
But the simple fact is that the wealthy have gotten a lot wealthier the last few decades and at the same time their tax burden has been cut sharply.
From 1980 to 2006, per capita GDP in the US grew from around $22,000 per person to $37,700 per person. That represents a massive 60% increase in our ability to create wealth.
But over that same period, average household income only increased by about 15%, with ever-larger shares of newly created wealth shifting to the richest Americans.
Meanwhile, the wealthiest households — those in the top .01% — saw their incomes rise five-fold, from around $5.4 million a year to $29.6 million a year.
Liberal and conservative platitudes aside, it’s a simple fact that this trend represents a huge redistribution of tax-paying clout in America.
Yet over the same period, tax rates for the rich were cut roughly in half.
As we think about our current fiscal crisis, it’s important to remember that tax cuts for the rich represent a dramatic departure from the bipartisan consensus that existed from the late 1930s through 1980.
The last time America faced a crisis similar to the one we face today — fighting wars abroad, with our Federal government running up huge deficits — wealthy citizens were taxed at marginal rates that ranged from 70% to more than 90%.
This wasn’t just a Democratic approach to paying for government. During Dwight Eisenhower’s presidency, which lasted from 1953 to 1961, the top marginal tax rate was more than 90%.
Eisenhower argued for tax-and-spending policies that in his view would lead the country “down the middle of the road between the unfettered power of concentrated wealth . . . and the unbridled power of statism or partisan interests.”
But today, the highest bracket is just 35% and recent tax breaks have generally benefited wealthy households over the middle class.
The Bush-era tax cuts, for example, saved average middle-income families around $647 a year, or about the price of a low-end laptop computer.
Meanwhile, the top 1% of households benefited to the tune of $35,000 apiece. That’s about the price of a new SUV.
Conservatives defend these ever-deeper tax cuts for the wealthy with three basic claims:
1. Soaring deficits are caused exclusively by bloated government. According to this philosophy, tax cuts are always a net benefit and don’t need to be paid for by off-setting cuts.
2. The rich already pay more than their fair share, even with lower marginal rates.
3. By freeing the rich of a sizable tax burden, American has created far more economic activity.
Beginning tomorrow, I’ll wrestle with each of these arguments in turn, starting with the Big Government debate.
In the meantime, what do you think? Was it wise for America to liberate the wealthy from a chunk of their tax burden? Or will we need the rich to kick in more in order to wrestle this deficit to the ground?
Comments welcome.
.jpg)
Luke 12:48 “For to whomsoever much is given, of him shall be much required”.
Bible quotes aren’t usually my bag but conservatives seem to love them. They seem to have overlooked or forgotten that one along with all the others about riches.
When I was in college working 3 PT jobs and going to school FT I earned so little that every year I got back all the money I had paid in withholding. Effective tax rate, zero. For several years thereafter I ended up paying a low percentage of my income in taxes because I wasn’t making very much money. As my income grew I paid progressively higher percentages. I don’t begrudge it because my success in life (such as it was) was not mine alone. I wasn’t out in the wilderness wrestling a living from nature single handed. My success was made possible and supported by ‘the system’.
The system includes a monetary system backed by the “full faith and credit” of the US government (not the full faith and credit of Jim Bullard or Brian Mann or any other individual in this country). It also includes a system of laws and regulations to govern commerce and make it possible. It includes education, libraries, fire departments and all the other things that contribute to the social order which supports our individual success. We all have to contribute from our successes to the system that makes our success possible and (IMO) those who enjoy disproportionate success should contribute disproportionately. SO, yes. The rich should pay more. Should I find myself in the position of being in the top 1% or ½% I will not be one of those whining about paying more taxes. Rather I will be grateful to a system that made such a thing possible.
Brian, if you can present an argument that our gov’ts and the State and Federal level are not bloated and inefficient, I’ll be truly amazed to see it.
As a conservative, my problem with the “tax the rich more” idea is a bit more complex than your post might indicate. Soaring deficits are not caused by tax cuts for “the rich”. You wouldn’t have deficits, without spending beyond your means, no matter what the tax rate on any class. That’s pretty basic I think.
The “rich” do pay more than their “fair” share, if fair means what we think it does- uniform. equitable, balanced. Using 2008 data (http://www.taxfoundation.org/news/show/250.html) the top 10% of wage earners payed almost 70% of the income taxes. The top 25% paid over 86% of taxes. The top 1% paid over 38% of all income taxes revenue! The top 5% paid over half of all the income tax revenue recv’d! And that’s just the Federal level. Putting the majority tax burden on one group of people is foolish and certainly not “fair”.
Another issue related to this is the changing definition of “rich”. Is it those making over $100K? According to many here it is. $250K, $500K? I forget what the subject was, but I remember Obama/Biden talking about some tax that would only apply to the “rich”. It started out at a half million and then it was $250k then the number $150K was mentioned and that really smoked them and they backed right off. My fear is it’ll be the top 2% and that won’t fix it so it’ll be the top 5%, 10% maybe 20% and by then you’re getting down into your friends and neighbors.
And just how many are there? Out of 140 million taxpayers how many are in the top group? According to those charts the top 5% comprises just under 7,000,000 returns, the top 1% just 1,600,000. So lets be generous and say it’s 3 million people in the top 2%. Are we going to solve all our problems off the backs of 1% of our population? To me that seems ludicrous.
The other question I have is what happens if we raise their rates to, say, 50%? I really doubt the vast majority of truly wealthy people declare all their income. I mean, that’s what all those off shore banks are for right? As Leona Helmsly said, “Only little people pay taxes”. Does anyone really think the rich people writing the tax laws won’t leave the loopholes for their rich friends? Do you really think the Kennedys or Gates will actually just “contribute” 50% of their income to the US Gov’t? Really? Switzerland has made a great deal of money off those peoples bank accounts.
I’m not saying don’t tax the wealthy. I’m just saying it’s a whole lot more complex and no where near as simple as upping their rates back to 90% and all our problems are solved. In my mind a much fairer and more equitable solution would be a consumption tax. No loop holes- NONE. The more you spend, the more you pay. You want to live frugally and save your dollars, have at it. You want to be Snoop Dog and cover yourself in gold, thank you very much.
It still comes back to spending being the problem. Some programs are certainly needed and worthy, others are pure, unadulterated PORK. We’re going to have to find a balance point between spending and taxation that allows us to pay down our debt while fulfilling our obligations. At my house that’s called budgeting, and it’s not easy.
I’ll be interested to read your thoughts Brian.
A balanced approach is what is needed. I think the wealthy have to pay more; it is not a matter of philosophy but of necessity. The question is how much more and how to go about doing it. One of the big burdens on our deficit is Social Security, Medicare and Medicaid, these taxes are largely born by the middle and lower income people as they are regressive in nature wealthy people have lower marginal rates for these taxes, in fact going to zero at some point. One solution would be to leave income taxes alone and increase Social Security/Medicare and Medicaid taxes for the wealthy.
But if we increase taxes and simply keep spending it will just be a waste. This is the danger in my mind the idea that taxing the wealthy is seen as some ticket out of our spending mess.
It will be easier to increase taxes on the top 1% of Americans than it will be to cut medicare or social security. AARP was already upset that social security was even MENTIONED by the President in his state of the union speech. Both will be hard though.
I will be very surprised if either happen through our political process. I think it will have to be forced upon us through the international credit markets.
How dare you write about this, Brian? This is class warfare.
Here is an interesting point of view from a very wealthy person who thinks the tax code is unfair.
http://www.blueoregon.com/2007/10/warren-buffett-/
Jim, I enjoy your comments, and agree with the above.
Brett, you’re figures are in a vacuum; they have no reference point.
I believe the stats that indicate the top tax rates for the wealthy have decreased dramatically over the last few decades, and that the gap between wealthy and non-wealthy continues to widen.
I also believe that a wealthy person can pay more in dollar amount without coming close to paying more in percent of income than a less wealthy person does.
Not sure if that’s fair.
I think it’s a problem that we have so many people who aren’t content to be rich, and have far too much money ever to spend; they want to be super rich, and have even more money they could never spend.
FWIW, we are lucky enough to be in the top couple of percentile points for family income in SL County. I don’t mind paying more income taxes, and more property taxes than those who have less.
It seems to me that the idea of not increasing income taxes on the “wealthy”, or any Americans is not really a “conservative” policy, but the majority policy, save a few folks on the fringe like our president. I think it is pretty much off the table. People should focus their efforts in areas other than the “quick fix”.
The last debate in congress around tax increase pretty much showed that a majority of politicians and economists think that raising taxes is a bad idea.
Why not focus on other ways to get more of “wealthy” peoples money flowing into the economy?
I feel sorry for the very rich. The poor dears probably worry about money more than a poor person does.
The more stuff they own, the more aggravation they have. And no matter how much money they have, they all drop dead just like everyone else.
What I find amusing is how we Americans seem to spend a lot of time worrying about the rich while at the same time we love it when they fall from grace.
I guess our rich are our version of the British Royal Family.
Fair taxes? We will never have fair taxes any more than we will ever have fair income or fair anything else.
We like to believe every American has a Right to Life, Liberty and the Pursuit of Happiness but we all know life isn’t fair and the best we can hope for is the pursuit of life, liberty and happiness, all of which ends in death.
Question. When did we exchange the word happiness for the word money?
We focus too much on the Federal Income tax, it is only one part of our national and state tax mix.
Tax increases and spending decreases have the same fiscal impact on the economy, in the short run they slow things down, not something that we need right now.
We need to let things be the way they are for another year or two, no tax increases and no major spending decreases. I don’t see how we can have a big budget tightening exercise with 10.5 % unemployment.
“It seems to me that the idea of not increasing income taxes on the “wealthy”, or any Americans is not really a “conservative” policy, but the majority policy, save a few folks on the fringe like our president.”
Paul, please provide the source you are using to make such a statement.
The last (scientifically conducted random sample) poll I saw had 61% of Americans in favor of taxing the wealthiest as a first step in controlling the deficit. The poll’s margin of error was 3%.
http://www.foxbusiness.com/personal-finance/2011/01/03/americans-say-tax-rich-balance-budget
Fringe?
Dave,
As you know we have a “representative” government. We don’t legislate via the Fox news polls, or any other polls. The debate and vote to to raise taxes via an ending of the tax cuts we are talking about here seemed to end with a fairly solid vote against any such action. That was in a congress that was majority democrat. I am just saying that the idea to raise taxes is not a popular one among most politicians. Perhaps not fringe but it is out there.
Dave, should we base our tax policy on opinion polls? If so, I’m in favor of taxing anyone that makes a single red cent more than I do at 90% and me at 0%. That’s as fair as laying the majority burden of taxation on the top 25% of wage earners.
Dan, if you’ll go to the link I provided you can see the IRS stats for over 20 years, hardly a vacuum.
Pete, I have no pity for ‘the rich”, but stealing from them is just as wrong as stealing from me. Taxation is legalized, but “necessary”, theft. Saying they earn more/have more and therefore should be taxed more is punishment for success. It’s just another artificial means of collecting revenue. Tax the rich at 90%, will it solve the deficit? Will it lower the National Debt? Nope, not if we keep spending like we do. Lower the bar from over $350K to be “rich” to $200K or $150K. That’s a whole lot more people, lots more! Tax them at 50% . Will that solve the problem? Maybe, but what does it do to those folks? Where is the line you all think “rich” is? What are you going to do when the bar keeps getting lower and lower and your taxes creep up and up and you end up with less and less in your pocket?
Spending is at least as much an issue as the tax rates people. Fine, up the tax rates on the top 2 or 5 or 10%. I can promise you as soon as the money starts flowing in the spending will increase! That’s the problem.
The title of these posts are important to consider. The title here and yesterday talks about taxing the “rich”. Problem is we don’t tax people’s “riches” or “wealth” we tax peoples income. Guys like Warren Buffet are all for raising taxes on the “wealthy”. What does he care, he or his heirs never need to earn another penny of income in their whole lives and more. These tax increase will have no effect on him, but they will flow through and effect other folks on the lower income scales. Like I said we need to find other ways to get wealthy people to put their capital into the market. Also, if you look at this WSJ article (below), you will see that over time (including many recessions) for every dollar in new taxes that the government collects they spend about $1.20. They just can’t help themselves! What politicians seem to be getting and the folks in the poll aren’t is that raising taxes on anyone is just throwing money into a rat’s hole and making the problem worse. You can raise income taxes on the “rich” but in the end folks at the other end of the ladder will pay for it. I say we find a different way.
Sorry here is the link I was talking about:
http://online.wsj.com/article/SB10001424052748704648604575620502560925156.html
Paul,
Which vote are you talking about? To my knowledge there was never a straight vote on whether or not to raise taxes on the wealthy.
The only vote I am aware of is a vote to extend the Bush tax cuts, which included a concession to the minority on tax cuts for the wealthy in exchange for an extension of unemployment benefits (and tax cuts for the rest of America)
So, 61% of American’s think it is a good idea – and the main reason it didn’t happen legislatively is because of a compromise to the minority party in order to achieve higher priority policies. You have to really apply some spin to call this “out there” or “fringe”. Nice try though.
Bret, do you know what an opinion is? It is not “Bret’s opinion”, or “dave’s opinion”, it is the opinion of a statistically relevant sample of citizens.
Regardless, re-read my comment, I never suggested we legislate based on opinion polls. If Paul and I agree on one single thing it may be in the importance of governing via representation. I simply was refuting (refudiating!) the statement that taxing the wealthy was somehow a fringe position. It is not – not even close – it is a position held by most Americans.
“Bret, do you know what an opinion is?”
Oops! Meant to say, “do you know what an opinion POLL is…”
I certainly know that you know what an opinion is!
Just for the record, the government doesn’t steal money through taxation. Since it prints all the money, all of it belongs to the government. Without the government, we would need to barter for everything. Ah, the good old days when bartering was king!
When you go to Las Vegas, buy chips, play a game and lose, don’t complain that your money was stolen from you. You just played a game and lost.
But I earned my money, you say. Not really. You got paid. You might have worked very hard and made very little money or you might not have worked very hard but got paid a lot. This is the nature of the money game.
dave, we will see if any tax increases get very far. Hopefully we won’t spend too much time on it. Either way it is a mistake. It looks like the quick fix, maybe that is why only 40% of the country gets the wrong impression of what this type of tax increase will mean. It is not a quick fix it isn’t even fix. Tax increase on the higher incomes, even if we had the discipline to use them for deficit reduction which we don’t (look at the data in the WSJ article), will flow through to the consumers at the bottom rungs of the ladder. Why isn’t there the kind of support for these tax increases on capital hill? I think it is because politicians seem to understand that taxing the wealthy will only shift the increased tax burden onto the middle and lower classes. You have to find the answer somewhere else.
Sorry I mean “why only 40% of the county (in the Fox Poll) have the RIGHT impression.
Since we are so fond of polls :-) here’s another one from CNN:
http://politicalticker.blogs.cnn.com/2010/11/17/cnn-poll-only-one-third-favor-tax-cut-extension-for-wealthy/?iref=storysearch
It says only 35% favored extending the “temporary” Bush tax cuts for the rich. Yet 100% of Republicans and many Democrats voted for it. I think politicians are out of touch with the average citizen. Plus politicians will say anything to get elected and we have allowed them to cite the mantra of “tax cuts, tax cuts” over and over again without demanding the specifics of what they would cut.
Thank you James Bullard. I forgot about those many years when I got back all my withholdings from the IRS. And my guess, that includes most of your readers. And thanks too, Marcus Aurelius. If only Warren Buffett was RNC Chairman!
Myown, these polls are interesting. I think they show how uninformed Americans are, and how they are always looking for a quick fix that doesn’t seem to ever work. Maybe some folks are doing a good job at misleading them? Even if they didn’t believe anything about the data that shows that increasing taxes on the higher income levels only negatively affects the lower and middle classes you would think they could understand the other part of what I said above. If you look historically over decades you see that for every dollar raised in taxes the federal government spend more than the dollar in increased spending. Until you fix this these tax increases just won’t have the effect you are looking for. Like I said you gotta plus the hole first or forget it. I am not wealthy, but I know that increasing taxes on higher incomes is not going to help me and it will most likely hurt me.
Sorry that is “plug” the hole.
My favorite poll I saw recently was:
“Are you tired of stupid polls”?
Classic!
I just don’t think marginally increasing income taxes will be horrible one way or the other. I don’t think it is a solution to the long term problem of funding the social benefits needed for an growing aging population who are relying on social security for a good chunk of their retirement and medicare to pay their health insurance. Without cuts in these things plus some good sized cuts in defense taxes won’t make any difference. We could double the marginal tax rates for the wealthy and it would not solve our deficit and debt problems. We may feel better and we may feel that it is more just and indeed it probably is more just, but that won’t solve our looming fiscal problems.
I promise to keep smoking so I hurry up and die and don’t become a burden on all you kids.
If that doesn’t work, would you like me to shoot myself?
In the mean time I will continue to work.
Pete,
Take care of yourself, we will figure out a way to fix things!
An early version of the Declaration of Independence had the phrase “life, liberty and property” but they struck the word “property” because they didn’t want everyone to think that the whole Revolution thing was about money.
But, of course, it was about money for most of the Founders. They were prepared to risk their lives and fortunes for this new country though so props to the wig wearing dudes.
Nowadays we’ve got some people that are wealthy beyond virtually all imagination. These are comic book wealthy people. And you have to ask yourself, who benefits most from having a government? Is it the homeless guy on the street with just the clothes on his back? Yeah, a little.
But let’s compare that to the guy who is very wealthy. The police defend his property from theft, his business uses the roads and public utilities to increase his wealth; the military is used to defend his business interests; it goes on and on. So it is in the rich man’s best interest to pay more in taxes to keep his wealth growing. Unless he can convince the poor man otherwise.
Bret tells us that the top 1% pay 38% of all income taxes. He doesn’t mention that the top 1% have over 42% of all income. Of course the rich pay a larger chunk of the total taxes. They have a larger chunk of the total wealth. Duh!
Some of the rich are smart enough to know that they need “the little guy” to become and stay rich.
Henry Ford knew it would be a really good idea if he paid his workers enough to buy his cars.
Smart rich people also know that the poor and less than rich need to have some of the goodies of life if they want to keep living. They remember how things were for the rich during the French Revolution. The Russian Revolution provides another good example of why the rich need to remember and care about the poor.
We might call this watching your back. Turn your back on the poor, as Harry Belafonte sang in Matilda at Carnegie Hall in 1959, and they might walk over you.
Pete, all that was before TV. The Revolution will not be Televised! Not in any country where the majority of people have TV, because they are numb and indifferent. Who will take to the streets when American Idol is on? Or Dancing with the Stars.
We are poor, fat, and lazy sitting tranquil in front of the glowing eye. If we took to the streets we would turn around after a block or two.
Meanwhile we are being leeched through our 401k or our Mutual Funds, through for-profit health insurance/care, through Big Pharma/Oil/Military Industrial complex all with the promise of better investments/health/security.
And just when will WWII be over so we can bring our troops home from Europe and Japan?
Not only do they know we are stupid, fat and lazy they rub it in our faces. What kind of a truck do you want to buy? Get the one the moron who always says “hemi” gets.
The only Revolution likely to happen in this country will be on a video game. Soon we will be like the Japanese where the young people aren’t even interested in having sex anymore. Forget about manning the barricades.
Someone said “You know, Paul, Reagan proved deficits don’t matter”. I don’t remember who.
James, Duh! I don’t know where you got the 42% figure. It’s about 20% from what I see. Duh! And the question was about “fairness”, duh!, not who made more, but who is forced to pay more. Duh!
Dave, yes, I do understand opinion polls.What I was trying to illustrate is what polls like that generally give you- that everyone making more than “me” (the person polled) should be taxed more and “I” shouldn’t have to pay anything!
Knuck, actually the word “property” was struck and chanced to pursuit of happiness as a result of the slavery issue.
Paul, you raise a good point in your 1:33P post. If we were to tax peoples worth rather than income things would be far different. But even then we’d run into issues. Would we count insurance policies in that? IOW- would a guy with a $100K life policy be taxed far lower than a guy with a 10 million dollar policy? I still think a consumption based tax is far more uniform and fair.
Pete, talk like that will get you labeled a terrorist.
Just the reality, Bret. A heads up is better than a heads off.
If you want to fight terrorism, which I do, you need to understand the root causes. Otherwise, you find yourself in the situation like in the Greek story where every skeleton slain becomes two more skeletons to fight.
Knucklehead,
Speaking of how compliant we have become, what about the tracking and snooping the government can do thanks to cell phones and GPS in our vehicles?
Americans would balk at putting on ankle bracelets so the government knows where you are but we gleefully purchase devices that do the same thing.
Brian Mann’s opening paragraph suggests there is, “unity on one particular issue: an aversion to raising taxes on the wealthy.” I disagree. The CNN poll I referred to above indicates that on the federal level only 35% favored extending the “temporary” Bush tax cuts for the rich.
And at the state level the idea of continuing NY’s millionaire’s tax is supported by a clear majority (55%-42%).
http://www.capitaltonight.com/2011/01/siena-nyers-back-cuomos-agenda-millionaires-tax/
The real question is why are politicians afraid to confront this issue? Here are two suggestions. Who do they work for? While the middle class pays part of their salary that is chump change. Look at a politician’s largest campaign contributors – that is where the big money is and who they represent.
Any responsible politician who suggests tax increases will be immediately tarred and feathered by hysterical reporters and pundits from Murdoch’s News Corp media empire (FOX, WSJ, NY Post, etc) and other right-wing megaphones whose goal is to cut taxes so low that all government programs (except the ones that benefit them) wither and die. Yet the polls also show the majority of Americans don’t want that to happen.
Bret, I was just noting that we are talking about an income tax, and not about taxing a person wealth. I wasn’t suggesting that we do it. My point was that wealthy individuals do not need any income so if you raise taxes on them it may not really have any effect. You will get some new income from the folks in the 200-500,000 range. These are the small business owners, they will then have to pass that onto their customers, most of whom are middle class or lower class. Even if they are not small business owners they are folks that will then command a higher wage to compensate for the loss in net income. That cost to their employer will then be passed onto the middle and lower classes again. Taxing the rich more, or stop taxing them less? I just don’t see the logic in it.
No argument Paul, I think you made a good point. I’m just saying there’s no perfect system, that what seems “more fair” to one person might not to another. My consumption tax seems unusually fair to me, probably not to others although I fail to see why.
Myown, I don;t think everyone to the right of Bernie Sanders wants gov’t to wither and die, just to stop growing, stop mandating costs to States and stop spending so that our taxes rise and jobs go elsewhere. Sacred cows like Social Security, Medicaid and Medicare aren’t in danger from the right, but they are in danger of simply becoming too burdensome to afford.
Maybe there’s a basic disconnect between right and left that we’ll never bridge.
I think you’re right, Brett, although I wish it were otherwise.
I ‘m not a far left liberal ideologue nut job, and I don’t believe you’re a far right neo-con nut job. I believe I hover a bit left of center, and, in my limited perception, you’re about the same distance to the right of center. Even so, in our interchanges, it appears that we each have perceptions that are hard to shift. I’m never going to accepth that the uber wealthy shouldn’t be bearing more of the tax burden, and I don’t think you’ll ever agree with me. In a face to face discussion over a few cold ones, I’d like to believe we could come to a compromise.
“In a face to face discussion over a few cold ones, I’d like to believe we could come to a compromise.”
But then the right would just label, mock, and criticize your attempts to solve issues via a “beer summit”
Even if this new revenue scheme would work you have to address the spending issues first. Even if this means extending the debt a bit longer it will be smart in the long run to address the spending as the top priority. You have to see how well the spending cuts are going to work before you even know how much revenue you need to plug the gap. That is why I think that Cuomo has the right idea. Maybe he won’t get all the debt relief that he needs through spending cuts be he has to see how that works first. Then you have to make sure that the spending cuts remain in place over time. Otherwise you are back in trouble. At that point you can raise revenue through taxation to balance things out. And at the point businesses and wealthy individuals will see that maybe NYS is a good place to do business and a good place to live. Here in NYS they have not even announced where the cuts will come from yet and people are entrenched and talking about how they can’t be made!
dave, lighten up. Everybody made fun of the beer summit.
Bret, My apologies. The term I should have used was wealt, not income (although you don’t get welath without income). My source was .
James, I also wish to extend my apologies. The “duh” really steamed me.
Dan, I don’t have a problem with taxing the uber wealthy at a higher rate so much as I have a problem with the idea that’ll fix everything and that the idea will trickle down to people far more like you and me than Bill Gates. Raising tax rates without a shift in our spending patterns will simply result in a continuation of the problem we have now. The left refuses (seemingly) to accept the idea we have to cut spending, the right has a problem with raising taxes. This conservative can see both things are going to have to be done, but those taxes are going to have to be on nearly everyone to balance things, not just the uber rich (who have the ability to hide much of their income BTW). I have yet to see a majority of the left in favor of across the board tax increases, but that’s what it’ll probably take to fix this mess, along with spending cuts.
BTW, I DO have a problem with the inheritance tax. To me, that is simply criminal, no more, no less than outright theft.
Dave, tacky is tacky. Had Bush proposed a beer summit it would have resulted in the left going on and on about alcohol abuse and red neck solutions. Lies and distortions, just like Palins alleged “…Russia from my front door…” comment. Lets not start throwing those kinds of rocks without cause, it’s too easy for both sides.
Bret why do you have a problem with the inheritance tax? I mean yes it is double taxation, however it seems to be a tax that has little distortions. We have to fund the government we have to tax. So the key is finding taxes that do not screw up the rest of the economy by radically changing our decisions. Taxes on labor income and investment income will change how people act and they do hurt economic growth. However I do not think taxes on your assets after we are dead hurt economic growth. It seems like a really good area to tax. At the most it will encourage people to give their assets to their children while they are alive or to donate those assets to charity while they are alive and those are not bad things.
Regardless there is not enough there however to solve any of our true problems as far as the budget goes.