Who is J.C. Owsley? and why did he pay a 69% tax rate back in 1941?
December 1, 2010 1:10 PM Subscribe
Think your taxes are high now? A list of the top ten salaries in the US in 1941, and the taxes they paid (spoiler: 65-73% tax rate! but, still doesn't include total compensation, though, which makes it a little sketchy). Interestingly, the NYTimes couldn't figure out two of the names, C.S. Woolman (who is probably C.E. Woolman, one of the founders of delta airlines) and another mysterious name, J.C. Owsley, that seems to be unidentifiable...
another mysterious name, J.C. Owsley, that seems to be unidentifiable...
Well, W.C. Fields used to take out safe deposit boxes, it is said, under outrageous names, to spread his wealth around, so maybe....
posted by IndigoJones at 1:20 PM on December 1, 2010 [1 favorite]
Well, W.C. Fields used to take out safe deposit boxes, it is said, under outrageous names, to spread his wealth around, so maybe....
posted by IndigoJones at 1:20 PM on December 1, 2010 [1 favorite]
I thought it may be JC Penny and that either the Times misread the document or there was a typo in the original. Old James Cash could easily have been in the top salary range.
posted by allen.spaulding at 1:22 PM on December 1, 2010
posted by allen.spaulding at 1:22 PM on December 1, 2010
What exactly is the point of over 75% marginal tax rates? Once you consider state taxes and social security, the people affected would basically take nothing home if they were paid more. So now they have incentive to get compensated in some way that isn't taxed as income, and once you are doing that, why even bother taking a substantial salary at all?
posted by smackfu at 1:22 PM on December 1, 2010
posted by smackfu at 1:22 PM on December 1, 2010
So we should give them twice as many tax breaks as the rest of us get?
Because, you know, the way progressive taxation works, those middle class tax cuts the Republicans are trying to block right now would go to these guys, too.
What the Republicans are busy ramming down our throats right now is basically a second tax cut over and above the one we would all get (yes, even the super rich) under the Obama proposal, only this second tax cut is only for the really rich people.
posted by saulgoodman at 1:23 PM on December 1, 2010 [1 favorite]
Because, you know, the way progressive taxation works, those middle class tax cuts the Republicans are trying to block right now would go to these guys, too.
What the Republicans are busy ramming down our throats right now is basically a second tax cut over and above the one we would all get (yes, even the super rich) under the Obama proposal, only this second tax cut is only for the really rich people.
posted by saulgoodman at 1:23 PM on December 1, 2010 [1 favorite]
What exactly is the point of over 75% marginal tax rates? Once you consider state taxes and social security, the people affected would basically take nothing home if they were paid more. So now they have incentive to get compensated in some way that isn't taxed as income, and once you are doing that, why even bother taking a substantial salary at all?
I'm not sure why most people would care.
posted by Stagger Lee at 1:29 PM on December 1, 2010 [4 favorites]
Right, most people would be fooled into thinking the rich were paying the high rates like dummies, and the rich would be avoiding the heck out of it. I'm surprised no one has embraced it in modern times, since it's the ultimate do nothing initiative.
posted by smackfu at 1:31 PM on December 1, 2010
posted by smackfu at 1:31 PM on December 1, 2010
Once you consider state taxes and social security, the people affected would basically take nothing home if they were paid more. So now they have incentive to get compensated in some way that isn't taxed as income, and once you are doing that, why even bother taking a substantial salary at all?
You don't understand our tax system at all.
Here's how it works, in a nutshell:
Suppose there were three income brackets, taxed at the different rates like this:
$0--10: 5%
$10--20: 6%
$20--?: 8%
If you made only $10 in a year, that ten dollars would be taxed at the rate of 5%.
If you made $11 in a year, the first ten would still be taxed at the rate of %5, and only the last dollar would be taxed at the 6% rate. If you had a really good year, and earned $50, the first 10 would still be taxed at 5%, the next $20 would be taxed at 6% and the remaining $30 would be taxed at 8%.
It's not the case that all your income would be taxed at the 8% rate.
When Bush's tax cuts went through, they lowered the rates on the lower brackets some but lowered them again, more, on the highest bracket, effectively giving the really rich TWO tax breaks for the price of one. That's what this misleading sounding "tax on the rich" debate is about.
posted by saulgoodman at 1:33 PM on December 1, 2010 [18 favorites]
You don't understand our tax system at all.
Here's how it works, in a nutshell:
Suppose there were three income brackets, taxed at the different rates like this:
$0--10: 5%
$10--20: 6%
$20--?: 8%
If you made only $10 in a year, that ten dollars would be taxed at the rate of 5%.
If you made $11 in a year, the first ten would still be taxed at the rate of %5, and only the last dollar would be taxed at the 6% rate. If you had a really good year, and earned $50, the first 10 would still be taxed at 5%, the next $20 would be taxed at 6% and the remaining $30 would be taxed at 8%.
It's not the case that all your income would be taxed at the 8% rate.
When Bush's tax cuts went through, they lowered the rates on the lower brackets some but lowered them again, more, on the highest bracket, effectively giving the really rich TWO tax breaks for the price of one. That's what this misleading sounding "tax on the rich" debate is about.
posted by saulgoodman at 1:33 PM on December 1, 2010 [18 favorites]
It's strange that the NYT would describe this as recently released--there's a 1983 journal article about this same document. Sadly, he doesn't know who Owsley is either.
posted by Horace Rumpole at 1:38 PM on December 1, 2010 [1 favorite]
posted by Horace Rumpole at 1:38 PM on December 1, 2010 [1 favorite]
You don't understand our tax system at all.
Sure smackfu does, s/he even used the word "marginal" in the part you didn't quote. S/he's saying that once you reach the 75% marginal rate, why do more work (because the 75% marginal rate on that extra salary plus state taxes plus social security will erase almost all of it).
I do agree that many people don't understand marginal tax rate, but I don't see any evidence that smackfu is one of them.
posted by dfan at 1:40 PM on December 1, 2010 [5 favorites]
Sure smackfu does, s/he even used the word "marginal" in the part you didn't quote. S/he's saying that once you reach the 75% marginal rate, why do more work (because the 75% marginal rate on that extra salary plus state taxes plus social security will erase almost all of it).
I do agree that many people don't understand marginal tax rate, but I don't see any evidence that smackfu is one of them.
posted by dfan at 1:40 PM on December 1, 2010 [5 favorites]
What were the poor people paying when the rich guys were paying these high rates? Because stinging the rich doesn't seem ridiculous to me at all.
But Google fails to solve the riddle of "J.C. Owsley." A Wikipedia search of "Owsley" finds no suitable possibilities. Out of curiosity, we also searched Google and Nexis for a "J. Cowsley," but he isn't a person, either. Now we're totally out of ideas.
Investigative journalism is not dead!
posted by biffa at 1:40 PM on December 1, 2010 [14 favorites]
But Google fails to solve the riddle of "J.C. Owsley." A Wikipedia search of "Owsley" finds no suitable possibilities. Out of curiosity, we also searched Google and Nexis for a "J. Cowsley," but he isn't a person, either. Now we're totally out of ideas.
Investigative journalism is not dead!
posted by biffa at 1:40 PM on December 1, 2010 [14 favorites]
Ach--I'm too cranky right now to see straight, apparently.
I thought smakfu was making the common mistake of thinking that once your income slipped into the next bracket, you'd actually potentially end up with less after-tax income than you would have had, had you not slipped into the next bracket. That's impossible.
posted by saulgoodman at 1:44 PM on December 1, 2010
I thought smakfu was making the common mistake of thinking that once your income slipped into the next bracket, you'd actually potentially end up with less after-tax income than you would have had, had you not slipped into the next bracket. That's impossible.
posted by saulgoodman at 1:44 PM on December 1, 2010
I live in Sweden which has the highest taxes in the world. You get over it.
To my way of thinking, it is still better to earn 100 kronor and pay 52% in tax than to not earn any money and pay no tax. Call me greedy I guess.
posted by three blind mice at 1:46 PM on December 1, 2010 [5 favorites]
To my way of thinking, it is still better to earn 100 kronor and pay 52% in tax than to not earn any money and pay no tax. Call me greedy I guess.
posted by three blind mice at 1:46 PM on December 1, 2010 [5 favorites]
NYMag hypothesizes that Owsley is a misspelling, and could not find a match with the one alternate name they could think of. I guess they never heard of the wonders of the Soundex Search.
posted by charlie don't surf at 1:48 PM on December 1, 2010
posted by charlie don't surf at 1:48 PM on December 1, 2010
That FDR must have been a commie. And Eisenhower who had a higher marginal tax rate must have been a marxist.
Seriously though, I did some math and noticed that today if someone makes $400k a year they pay around $95k in income tax. Back then it was around $270k in income tax. Wow. Obama has proposed to merely raise it up around 40% and the Tea Party is foaming at the mouth.
posted by Rashomon at 1:50 PM on December 1, 2010
Seriously though, I did some math and noticed that today if someone makes $400k a year they pay around $95k in income tax. Back then it was around $270k in income tax. Wow. Obama has proposed to merely raise it up around 40% and the Tea Party is foaming at the mouth.
posted by Rashomon at 1:50 PM on December 1, 2010
smackfu: "What exactly is the point of over 75% marginal tax rates? Once you consider state taxes and social security, the people affected would basically take nothing home if they were paid more. So now they have incentive to get compensated in some way that isn't taxed as income, and once you are doing that, why even bother taking a substantial salary at all?"
Maybe the point is to prevent people form taking that substantial salary? Maybe if we had a high marginal rate you would have fewer CEOs making $30 million while their companies shares tanked. Instead they can get paid a measley $5 million and drop that other $25 million into something productive, like new manufacturing capabilities.
posted by I am the Walrus at 1:56 PM on December 1, 2010 [4 favorites]
Maybe the point is to prevent people form taking that substantial salary? Maybe if we had a high marginal rate you would have fewer CEOs making $30 million while their companies shares tanked. Instead they can get paid a measley $5 million and drop that other $25 million into something productive, like new manufacturing capabilities.
posted by I am the Walrus at 1:56 PM on December 1, 2010 [4 favorites]
Or, get paid in stock options instead, so their fortunes are tied to the success of the company they're managing.
posted by anthill at 1:59 PM on December 1, 2010 [1 favorite]
posted by anthill at 1:59 PM on December 1, 2010 [1 favorite]
Wow. Obama has proposed to merely raise it up around 40% and the Tea Party is foaming at the mouth.
Yeah, I think that's kind of the real point of this story, and I'm glad someone's finally getting around to pointing it out. The proposed "tax raise" (i.e., failure to extend past planned expiration - more great messaging from the Dems) would only raise rates on people making over $250K, and then only by 4 percentage points, and then only on the marginal income past $250K.
So, someone making $250K or under would get ZERO tax raise. Someone making $300K would get a tax raise of about $2K. Someone taking home a million dollars in salary would get a tax raise of about $30K. And for this, we are apparently willing to jam up our entire legislature. Yargh!
posted by rkent at 2:01 PM on December 1, 2010 [2 favorites]
Yeah, I think that's kind of the real point of this story, and I'm glad someone's finally getting around to pointing it out. The proposed "tax raise" (i.e., failure to extend past planned expiration - more great messaging from the Dems) would only raise rates on people making over $250K, and then only by 4 percentage points, and then only on the marginal income past $250K.
So, someone making $250K or under would get ZERO tax raise. Someone making $300K would get a tax raise of about $2K. Someone taking home a million dollars in salary would get a tax raise of about $30K. And for this, we are apparently willing to jam up our entire legislature. Yargh!
posted by rkent at 2:01 PM on December 1, 2010 [2 favorites]
I hadn't seen this before, and I find it truly amazing. The apoplectic fits of rage that would erupt on the right if it were even suggested that taxes be raised to something barely approaching this level would be mind-boggling. When exactly were these bygone golden days so fondly cherished in the conservative mythology? You know, when the government "stayed out of your business" and no one touched your hard-earned money?
posted by Go Banana at 2:02 PM on December 1, 2010 [4 favorites]
posted by Go Banana at 2:02 PM on December 1, 2010 [4 favorites]
What exactly is the point of over 75% marginal tax rates? Once you consider state taxes and social security, the people affected would basically take nothing home if they were paid more.
If you mean actual Social Security, you only get dinged on your first $90,000 in salary. No salary above $106,800 is considered toward Social Security. As such, it doesn't reach the highest-tiered tax brackets.
posted by jabberjaw at 2:02 PM on December 1, 2010 [1 favorite]
If you mean actual Social Security, you only get dinged on your first $90,000 in salary. No salary above $106,800 is considered toward Social Security. As such, it doesn't reach the highest-tiered tax brackets.
posted by jabberjaw at 2:02 PM on December 1, 2010 [1 favorite]
^ Also, 75% of $50,000 is not basically nothing. But 75% of $5,000,000 is still $1,250,000. I'm not agreeing with a 75% tax bracket, but that's a lot of money to take home.
posted by jabberjaw at 2:06 PM on December 1, 2010 [3 favorites]
posted by jabberjaw at 2:06 PM on December 1, 2010 [3 favorites]
And expanding on what jabberjaw said, some states, like my own, don't have income taxes. (That's why Florida's so popular with crooks and billionaires.)
posted by saulgoodman at 2:08 PM on December 1, 2010
posted by saulgoodman at 2:08 PM on December 1, 2010
Really rich people make money via capital gains anyway. To them, CEOs threatening to take their valuable brains elsewhere if they are taxed slightly more on their seven-figure salaries look like Costco middle managers e-mailing each other angry memos about taking too many donuts at the weekly motivational meeting.
posted by No-sword at 2:16 PM on December 1, 2010 [3 favorites]
posted by No-sword at 2:16 PM on December 1, 2010 [3 favorites]
The marginal rate actually went to 92% in 1952. I just don't think it's reasonable to think people are going to even bother taking money as salary at that point. You can waste a lot of money on tax avoidance schemes and still come out ahead.
posted by smackfu at 2:16 PM on December 1, 2010
posted by smackfu at 2:16 PM on December 1, 2010
There are plenty of uneven tax relief measures, and a lot of them are in the grasp of the not-rich. I enjoy the deductions for children, but is that fair? Nope. I use the deductions for mortgage interest, but really, why shouldn't renters have some of that?
When it comes to different types of income, I find the rules harder to 'get.'
Why there are different tax rates on salary v. capital gains. Why is the money one works for more valuable to the State than the money one didn't work for, in the case of a stock portfolio or inheritance?
I'd like to find out what it would be like in the US if all income would be taxed at one rate per household, and have that formula be progressive in terms of total income.
Anyway, we've got bills to pay as a country; we handed out 300 dollar checks during a war and a shrinking economy. I take every deduction I can find, but I'd vote to make them make more sense and be more just and/or fair, whichever comes first.
posted by drowsy at 2:18 PM on December 1, 2010
When it comes to different types of income, I find the rules harder to 'get.'
Why there are different tax rates on salary v. capital gains. Why is the money one works for more valuable to the State than the money one didn't work for, in the case of a stock portfolio or inheritance?
I'd like to find out what it would be like in the US if all income would be taxed at one rate per household, and have that formula be progressive in terms of total income.
Anyway, we've got bills to pay as a country; we handed out 300 dollar checks during a war and a shrinking economy. I take every deduction I can find, but I'd vote to make them make more sense and be more just and/or fair, whichever comes first.
posted by drowsy at 2:18 PM on December 1, 2010
If you mean actual Social Security, you only get dinged on your first $90,000 in salary. No salary above $106,800 is considered toward Social Security. As such, it doesn't reach the highest-tiered tax brackets.
That's one of the dumbest things I've ever encountered and I've done military service.
The cap, that is, not your post.
All this talk of deficits and "SS might be insolvent" and all that... well, there's the solution, deficit hawks- remove the cap and watch SS funding problems evaporate like MC Hammer's career.
posted by hamida2242 at 2:22 PM on December 1, 2010 [16 favorites]
Keep in mind that the highest tax rates were usually tied to extremely costly wars.
posted by electroboy at 2:23 PM on December 1, 2010 [2 favorites]
posted by electroboy at 2:23 PM on December 1, 2010 [2 favorites]
Also, ten imaginary sixties dollars say that the Mad Men writing staff are scrambling right now to introduce a mysterious new character named "J. C. Owsley." First appearance: lighting a dollar bill and sneering at Young, Great Depression-Era Don Draper from a passing Model T Ford. "You'll never make anything of yourself, young man!" Hmm... Maybe not of myself, but...
And then it turns out it was Cooper all along!
posted by No-sword at 2:23 PM on December 1, 2010 [1 favorite]
And then it turns out it was Cooper all along!
posted by No-sword at 2:23 PM on December 1, 2010 [1 favorite]
Why there are different tax rates on salary v. capital gains.
Because it's an easy way to help the rich while the poor don't even understand what it is.
posted by smackfu at 2:24 PM on December 1, 2010 [6 favorites]
Because it's an easy way to help the rich while the poor don't even understand what it is.
posted by smackfu at 2:24 PM on December 1, 2010 [6 favorites]
How about whichever quintile has 85% of the wealth pays 85% of the taxes
posted by hamida2242 at 2:24 PM on December 1, 2010 [5 favorites]
posted by hamida2242 at 2:24 PM on December 1, 2010 [5 favorites]
The obscenely wealthy and their Republican henchmen and flunkies have succeeded in changing the conversation to the extent that any return to even the Reagan-era tax rates is off the table. And the very sensible and fair measure of removing the cap and social security taxes, fuggeddaboudit!
posted by Danf at 2:34 PM on December 1, 2010
posted by Danf at 2:34 PM on December 1, 2010
Part of the Tea Party/libertarian justification lies in Hauser's Law. Which suggests that despite massive changes in the tax structure of the country over the past 60 or more years, the amount of tax receipts has remained constant at about 19%. Suggesting that raising taxes won't actually result in greater revenues.
posted by spaceviking at 2:35 PM on December 1, 2010
posted by spaceviking at 2:35 PM on December 1, 2010
"What exactly is the point of over 75% marginal tax rates? Once you consider state taxes and social security, the people affected would basically take nothing home if they were paid more. So now they have incentive to get compensated in some way that isn't taxed as income, and once you are doing that, why even bother taking a substantial salary at all?"
Here is an article that takes a look at incentives with regard to tax increases that might help to shed some light on this question. I like I am the Walrus's idea that such ridiculously high rates might have worked to disincentivize ludicrously high salaries to begin with. Sort of like a built in "enough is enough" threshold. This certainly wouldn't disincentivize people from working their way up the ladder...but at a certain point on the higher rungs of the ladder, with wages being more or less equal after taxes, you'd really have to WANT to be the CEO, more for the challenge / prestige than the money itself. I would image this sort of arrangement might actually benefit a company. Additional research has shown that money itself might not be the best incentive for the type of dynamic thinking required by someone in the upper echelons of their career...
posted by jnnla at 2:39 PM on December 1, 2010 [1 favorite]
Here is an article that takes a look at incentives with regard to tax increases that might help to shed some light on this question. I like I am the Walrus's idea that such ridiculously high rates might have worked to disincentivize ludicrously high salaries to begin with. Sort of like a built in "enough is enough" threshold. This certainly wouldn't disincentivize people from working their way up the ladder...but at a certain point on the higher rungs of the ladder, with wages being more or less equal after taxes, you'd really have to WANT to be the CEO, more for the challenge / prestige than the money itself. I would image this sort of arrangement might actually benefit a company. Additional research has shown that money itself might not be the best incentive for the type of dynamic thinking required by someone in the upper echelons of their career...
posted by jnnla at 2:39 PM on December 1, 2010 [1 favorite]
Out of curiosity, and to flex my librarian muscles a little, I went and tracked down the original document. The journal article I linked above cites it in the diaries of Treasury Secretary Henry Morgenthau, which we have on microfilm. Sadly, there's no more information on the mysterious Mr. Owsley.
There's also a list of the top 100 for total net income, and Owsley doesn't come close to cracking it. As you might imagine, John D. Rockefeller is number 1.
posted by Horace Rumpole at 2:43 PM on December 1, 2010 [5 favorites]
There's also a list of the top 100 for total net income, and Owsley doesn't come close to cracking it. As you might imagine, John D. Rockefeller is number 1.
posted by Horace Rumpole at 2:43 PM on December 1, 2010 [5 favorites]
That's one of the dumbest things I've ever encountered and I've done military service. The cap, that is, not your post.
I concur. I'm not sure what the logic is behind it - SS is clearly a "tax" on the poor and middle class; as it turns out, the poor and middle class share a larger percentage of their income toward keeping everybody socially secure in their old age. I'm not sure what the reasoning is by capping it. Maybe they can taper the FICA tax as you go higher in the bracket, minimizing it at 0.25% of a given bracket; even that would alleviate Social Security bankruptcy concerns, while pandering to conservatives worried about paying more than their fair share.
The interesting thing about Social Security taxes is that it is the only identifiable portion of your taxes,* meaning that you know (in theory) exactly where that money is going. Imagine if all taxes were done that way. Instead of calling it an income tax, they can call it a Military Tax (where 10% to 15% of your wages will go), a Federal Administration tax, a Federal Subsidy tax, a Federal Education tax (which will be something like 0.1%), etc. All of it clearly laid out and identified on your paystub. That way we can remove this facade that somehow, the 0.06¢ that you pay every year toward funding the fine arts won't seem as pressing as the $2,500 you pay to support military operations.
Oh, that we could be so transparent.
*Also Medicare / Medicaid, now that I think of it.
posted by jabberjaw at 2:53 PM on December 1, 2010 [10 favorites]
I concur. I'm not sure what the logic is behind it - SS is clearly a "tax" on the poor and middle class; as it turns out, the poor and middle class share a larger percentage of their income toward keeping everybody socially secure in their old age. I'm not sure what the reasoning is by capping it. Maybe they can taper the FICA tax as you go higher in the bracket, minimizing it at 0.25% of a given bracket; even that would alleviate Social Security bankruptcy concerns, while pandering to conservatives worried about paying more than their fair share.
The interesting thing about Social Security taxes is that it is the only identifiable portion of your taxes,* meaning that you know (in theory) exactly where that money is going. Imagine if all taxes were done that way. Instead of calling it an income tax, they can call it a Military Tax (where 10% to 15% of your wages will go), a Federal Administration tax, a Federal Subsidy tax, a Federal Education tax (which will be something like 0.1%), etc. All of it clearly laid out and identified on your paystub. That way we can remove this facade that somehow, the 0.06¢ that you pay every year toward funding the fine arts won't seem as pressing as the $2,500 you pay to support military operations.
Oh, that we could be so transparent.
*Also Medicare / Medicaid, now that I think of it.
posted by jabberjaw at 2:53 PM on December 1, 2010 [10 favorites]
And remember it's not even all rich people, just a subset --- and the only reason they're successful is that they have a substantial number of not-rich allies.
Plenty of people who would be affected by the rollback of the top 2 brackets (in other words, individuals > $200k and married people > $250k) voted for Obama despite his intention to do just that. In fact, many think it's a good idea. Other rich people support higher estate taxes, capital gains taxes, etc.
It's more of a philosophical / political divide than a monetary one. Now, there's some back-and-forth there --- getting rich / wealthy does change some people's political views, but not everyone becomes a Tea Partier just because their startup hits it big.
posted by wildcrdj at 2:59 PM on December 1, 2010
Plenty of people who would be affected by the rollback of the top 2 brackets (in other words, individuals > $200k and married people > $250k) voted for Obama despite his intention to do just that. In fact, many think it's a good idea. Other rich people support higher estate taxes, capital gains taxes, etc.
It's more of a philosophical / political divide than a monetary one. Now, there's some back-and-forth there --- getting rich / wealthy does change some people's political views, but not everyone becomes a Tea Partier just because their startup hits it big.
posted by wildcrdj at 2:59 PM on December 1, 2010
I concur. I'm not sure what the logic is behind it - SS is clearly a "tax" on the poor and middle class
Well, the logic is that it's supposed to be more of a mandatory retirement savings than a tax. In other words, since your payout as a retired person is capped, your pay-in should be capped as well.
I think it's time to abandon that and get rid of the cap. But that's the reasoning for why it's the way it is.
posted by wildcrdj at 3:01 PM on December 1, 2010
Well, the logic is that it's supposed to be more of a mandatory retirement savings than a tax. In other words, since your payout as a retired person is capped, your pay-in should be capped as well.
I think it's time to abandon that and get rid of the cap. But that's the reasoning for why it's the way it is.
posted by wildcrdj at 3:01 PM on December 1, 2010
Obama has proposed to merely raise it up around 40% and the Tea Party is Koch brothers are foaming at the mouth.
posted by benzenedream at 3:09 PM on December 1, 2010
posted by benzenedream at 3:09 PM on December 1, 2010
It looks as though the mysterious J.C. Owsley was actually J.E. Owsley, involved in the manufacture of machine guns for the U.S. Army.
posted by verstegan at 3:40 PM on December 1, 2010 [11 favorites]
posted by verstegan at 3:40 PM on December 1, 2010 [11 favorites]
Part of the Tea Party/libertarian justification lies in Hauser's Law. Which suggests that despite massive changes in the tax structure of the country over the past 60 or more years, the amount of tax receipts has remained constant at about 19%. Suggesting that raising taxes won't actually result in greater revenues.
And of course once again a hack at the Hoover Institute sucks in the numerically illiterate. The actual range of revenues is from 15.8% to 21%. This is a range of more than 5% of GDP, a difference of $740 billion, hardly insignificant. And guess what. When taxes were cut, revenues declined to 15.8% of GDP. When taxes were raised, revenues increased to 21% of GDP. So it turns out that Hauser's Law is simply Hauser's Fantasy for ignorant people. No, it is not the case that revenues remain constant regardless of tax rates. Only a delusional idiot would believe that tax rates have no effect on revenues.
posted by JackFlash at 3:43 PM on December 1, 2010 [8 favorites]
And of course once again a hack at the Hoover Institute sucks in the numerically illiterate. The actual range of revenues is from 15.8% to 21%. This is a range of more than 5% of GDP, a difference of $740 billion, hardly insignificant. And guess what. When taxes were cut, revenues declined to 15.8% of GDP. When taxes were raised, revenues increased to 21% of GDP. So it turns out that Hauser's Law is simply Hauser's Fantasy for ignorant people. No, it is not the case that revenues remain constant regardless of tax rates. Only a delusional idiot would believe that tax rates have no effect on revenues.
posted by JackFlash at 3:43 PM on December 1, 2010 [8 favorites]
What exactly is the point of over 75% marginal tax rates? Once you consider state taxes and social security, the people affected would basically take nothing home if they were paid more. So now they have incentive to get compensated in some way that isn't taxed as income, and once you are doing that, why even bother taking a substantial salary at all?
And yet in the original post we have black and white evidence before your very eyes that people still continued to work and still continued to take high salaries in spite of high taxes. I am forever astonished that people can cling to simple-minded conservative dogma that is contradicted by empirical facts.
posted by JackFlash at 3:53 PM on December 1, 2010 [5 favorites]
And yet in the original post we have black and white evidence before your very eyes that people still continued to work and still continued to take high salaries in spite of high taxes. I am forever astonished that people can cling to simple-minded conservative dogma that is contradicted by empirical facts.
posted by JackFlash at 3:53 PM on December 1, 2010 [5 favorites]
and once you are doing that, why even bother taking a substantial salary at all?
"Um, yeah, well, you know that $10M you're offering me to work next year? Well, I just found out I'm going to only be able to keep $2.5M after taxes if I'm so stupid I can't shelter most of it, so why don't you just keep it and I'll go flip hamburgers."
posted by Mental Wimp at 3:54 PM on December 1, 2010 [3 favorites]
"Um, yeah, well, you know that $10M you're offering me to work next year? Well, I just found out I'm going to only be able to keep $2.5M after taxes if I'm so stupid I can't shelter most of it, so why don't you just keep it and I'll go flip hamburgers."
posted by Mental Wimp at 3:54 PM on December 1, 2010 [3 favorites]
There should be some type of special high rate. The top 10 hedge fund managers are taking home a billion a year and at least part of that they are only paying 15% on due to the carried interest exception they bought from Congress. We have bridges collapsing, our electrical grid is decades old, our water infrastructure in many areas is a century old or older. Come on. We need to have higher taxes on high earners, and by high I don't mean 250K. Start at a million or heck even 5 million, and start taxing higher. 50% sounds fair. Okay you make a billion dollars and you give up 50% and have to buy one less yacht. You'll live.
posted by chadmalik at 3:56 PM on December 1, 2010 [1 favorite]
posted by chadmalik at 3:56 PM on December 1, 2010 [1 favorite]
Yes, here we are .. J.E. Owsley, 'a New York management engineer', secured the $15 million contract for the High Standard Manufacturing Company to supply Browning machine guns for British fighter planes. That would explain his $486,000 salary.
posted by verstegan at 4:07 PM on December 1, 2010 [3 favorites]
posted by verstegan at 4:07 PM on December 1, 2010 [3 favorites]
Let's take a trip back fifty years in my own personal time machine, shall we?
My father was making what would be today a comfortable six-figure income. He paid more than half his income (60%, I think) to the federal government. Scrupulously. He did not like cheaters, like those corporations and rich individuals who cultivate dicey tax loopholes. He was happy to do it. Why?
Because the government helped him out with the G.I. bill. Because the government was - ostensibly - trying to build A Great Society and did help poor people.
Today, sadly, with most of my money going to the American Military Empire, even though I don't make enough to pay much in income tax, I am bitter about paying what I do.
And another example: with the type of medical care I've seen in Scandinavia, along with their other social benefits, it is easy to see why there has not been a tax revolt there.
People who make over $500,000 a year (the new figure I've been reading about) should take a look at the tax table from 50 years ago and shut the fuck up about paying their fair share.
posted by kozad at 4:08 PM on December 1, 2010 [4 favorites]
My father was making what would be today a comfortable six-figure income. He paid more than half his income (60%, I think) to the federal government. Scrupulously. He did not like cheaters, like those corporations and rich individuals who cultivate dicey tax loopholes. He was happy to do it. Why?
Because the government helped him out with the G.I. bill. Because the government was - ostensibly - trying to build A Great Society and did help poor people.
Today, sadly, with most of my money going to the American Military Empire, even though I don't make enough to pay much in income tax, I am bitter about paying what I do.
And another example: with the type of medical care I've seen in Scandinavia, along with their other social benefits, it is easy to see why there has not been a tax revolt there.
People who make over $500,000 a year (the new figure I've been reading about) should take a look at the tax table from 50 years ago and shut the fuck up about paying their fair share.
posted by kozad at 4:08 PM on December 1, 2010 [4 favorites]
I was hoping Owsley would be the father of the guy who made acid for the Grateful Dead or some relation.
posted by Maias at 4:11 PM on December 1, 2010 [4 favorites]
posted by Maias at 4:11 PM on December 1, 2010 [4 favorites]
And yet in the original post we have black and white evidence before your very eyes that people still continued to work and still continued to take high salaries in spite of high taxes..
Well, we know ten people in the entire country did. And we know that most of the really rich people aren't on the list. So I would be reluctant to draw any conclusions from this list, other than that there are least ten rich suckers in the U.S. who should have gotten a better contract.
posted by smackfu at 4:32 PM on December 1, 2010
Well, we know ten people in the entire country did. And we know that most of the really rich people aren't on the list. So I would be reluctant to draw any conclusions from this list, other than that there are least ten rich suckers in the U.S. who should have gotten a better contract.
posted by smackfu at 4:32 PM on December 1, 2010
I guess I shouldn't call them suckers. Most of them own or founded their respective companies, so it's probably more that their top 10 salary is insignificant to them.
posted by smackfu at 4:38 PM on December 1, 2010
posted by smackfu at 4:38 PM on December 1, 2010
it's probably more that their top 10 salary is insignificant to them.
Which means their tax rate is also irrelevant. You've completely refuted your own argument.
posted by JackFlash at 4:49 PM on December 1, 2010
Which means their tax rate is also irrelevant. You've completely refuted your own argument.
posted by JackFlash at 4:49 PM on December 1, 2010
spaceviking: "Part of the Tea Party/libertarian justification lies in Hauser's Law. Which suggests that despite massive changes in the tax structure of the country over the past 60 or more years, the amount of tax receipts has remained constant at about 19%. Suggesting that raising taxes won't actually result in greater revenues."
This may or may not be true, but even if it were: shifting the burden to the rich will make the government's haul less of a drag on the economy. This is because of the notion of marginal utility: If the broke-ass guy at the bar next to me sees a ten-spot on the ground, he spends it. If my rich uncle even bothers to pick it up, it goes in his pocket, forgotten. In other words, the dollar to the poor man has much greater utility than it does to the rich man - back to the guy at the bar, he spends it on beer, and the bartender takes that extra tip and puts it in the stripper's thong, and she pays the babysitter, and the babysitter buys gas. Churn, baby - the GDP's just gone up by five bucks. The rich uncle's extra money sits in a bank, which may or may not lend it out. That dollar is maybe two, to the GDP.
The best way to apportion taxes is that which removes the least utility from the market. Tax the rich guy (and most definitely tax capital gains, which are money made by doing nothing), not the poor guy, to maximize the economy. I mean, if tax receipts are going to be 19% anywhich way, might as well be in a just, robust economy, eh?
posted by notsnot at 4:52 PM on December 1, 2010 [5 favorites]
This may or may not be true, but even if it were: shifting the burden to the rich will make the government's haul less of a drag on the economy. This is because of the notion of marginal utility: If the broke-ass guy at the bar next to me sees a ten-spot on the ground, he spends it. If my rich uncle even bothers to pick it up, it goes in his pocket, forgotten. In other words, the dollar to the poor man has much greater utility than it does to the rich man - back to the guy at the bar, he spends it on beer, and the bartender takes that extra tip and puts it in the stripper's thong, and she pays the babysitter, and the babysitter buys gas. Churn, baby - the GDP's just gone up by five bucks. The rich uncle's extra money sits in a bank, which may or may not lend it out. That dollar is maybe two, to the GDP.
The best way to apportion taxes is that which removes the least utility from the market. Tax the rich guy (and most definitely tax capital gains, which are money made by doing nothing), not the poor guy, to maximize the economy. I mean, if tax receipts are going to be 19% anywhich way, might as well be in a just, robust economy, eh?
posted by notsnot at 4:52 PM on December 1, 2010 [5 favorites]
My argument is simply that imposing higher tax rates on the rich to punish them for being rich doesn't really work as well as you would think because it encourages avoidance. Perhaps it's a net gain, but just increasing the rate doesn't guarantee. I don't even think it's an argument really, more like a fact.
posted by smackfu at 4:54 PM on December 1, 2010
posted by smackfu at 4:54 PM on December 1, 2010
JackFlash wrote: "The actual range of revenues is from 15.8% to 21%."
Worse. In 1950 federal revenue as a percentage of GDP was less than 14%. Total government revenue as a percentage of GDP ranged from a hair below 20% in 1950 to a high of almost 32% in 2000.
posted by wierdo at 5:09 PM on December 1, 2010
Worse. In 1950 federal revenue as a percentage of GDP was less than 14%. Total government revenue as a percentage of GDP ranged from a hair below 20% in 1950 to a high of almost 32% in 2000.
posted by wierdo at 5:09 PM on December 1, 2010
It looks as though the mysterious J.C. Owsley was actually J.E. Owsley, involved in the manufacture of machine guns for the U.S. Army.
And the deadshits at both newspapers couldn't work that out before going to press?
posted by uncanny hengeman at 5:22 PM on December 1, 2010 [1 favorite]
And the deadshits at both newspapers couldn't work that out before going to press?
posted by uncanny hengeman at 5:22 PM on December 1, 2010 [1 favorite]
I am not old enough to remember this, but my impression is that the well-to-do at this time, unless they were truly rich (or ostentatious), tended to own less stuff (consumer goods) than they do today. It might be expensive but they expected it to last for years, and it did. This is one reason why the stereotype of New England preppies has them wearing faded red chino trousers and falling-apart boat shoes.
posted by bad grammar at 5:24 PM on December 1, 2010
posted by bad grammar at 5:24 PM on December 1, 2010
I've done probably too much thinking about the tax system. I still like to point out that, since 1980, the top 1% of income earners has seen their income triple from about $500,000 to 1,500,000 in yearly income (adjusted for 2006 dollars, if I recall.)
What these people don't want to believe is that they needed anyone else to do it. As if they are so brilliant you could airdrop them into the Congo and they would come out ten years later as a millionaire there, too. Well, no fucking way.
Most countries don't have reliable roads, water, electricity, sewage, police, fire departments, airports, ports, reliable building materials, buildings inspectors, food inspectors, a relatively corruption free legal system (especially if you're middle or upper class), etc, etc, etc. Not to mention a nation full of creative, bright people who want to produce and consume, precisely because they have received a good education. Ever wonder why electricity and water are so expensive in the third world? Because instead of investing money into infrastructure, the corrupt governments and bosses there spend it all on making their own neighborhoods fabulously adorned while the rest of the country wallows in poverty.
Now, once the top millionaires who have benefitted from all of this infrastructure start whining about not keeping more of the money they believed they are privileged to, I say fuck'em. I don't care if every person making over a million a year leaves, as if there aren't people who would be willing to work for less than the privileged pricks at the top. They even make the same argument about when they try to drop minimum wage - "Hey, somebody will work for $4 an hour!"
You know what? What's good for the goose is good for the gander. If you don't love this country enough to help pay down the debt that your sorry ass helped create by pushing bad tax policy, don't let the screen door hit you where the Good Lord split you.
tl:dr; This is a great country because of our values and infrastructure, not because of your wealth. Love it or leave it.
posted by notion at 5:59 PM on December 1, 2010 [13 favorites]
What these people don't want to believe is that they needed anyone else to do it. As if they are so brilliant you could airdrop them into the Congo and they would come out ten years later as a millionaire there, too. Well, no fucking way.
Most countries don't have reliable roads, water, electricity, sewage, police, fire departments, airports, ports, reliable building materials, buildings inspectors, food inspectors, a relatively corruption free legal system (especially if you're middle or upper class), etc, etc, etc. Not to mention a nation full of creative, bright people who want to produce and consume, precisely because they have received a good education. Ever wonder why electricity and water are so expensive in the third world? Because instead of investing money into infrastructure, the corrupt governments and bosses there spend it all on making their own neighborhoods fabulously adorned while the rest of the country wallows in poverty.
Now, once the top millionaires who have benefitted from all of this infrastructure start whining about not keeping more of the money they believed they are privileged to, I say fuck'em. I don't care if every person making over a million a year leaves, as if there aren't people who would be willing to work for less than the privileged pricks at the top. They even make the same argument about when they try to drop minimum wage - "Hey, somebody will work for $4 an hour!"
You know what? What's good for the goose is good for the gander. If you don't love this country enough to help pay down the debt that your sorry ass helped create by pushing bad tax policy, don't let the screen door hit you where the Good Lord split you.
tl:dr; This is a great country because of our values and infrastructure, not because of your wealth. Love it or leave it.
posted by notion at 5:59 PM on December 1, 2010 [13 favorites]
My argument is simply that imposing higher tax rates on the rich to punish them for being rich doesn't really work as well as you would think because it encourages avoidance. Perhaps it's a net gain, but just increasing the rate doesn't guarantee. I don't even think it's an argument really, more like a fact.
It really irks me to see this appeal to emotion brought into tax discussions. Taxes aren't "punishment", no one is suggesting we tax rich people more because we're jealous, or hate them. Rich people should be taxed more because, as notsnot eloquently stated, money has decreasing marginal utility. Being taxed 50% on every dollar over a million dollars is much less of a hardship than being taxed on your first million. Even Adam Smith recognized this!
It's so intellectually bankrupt to treat people who disagree with you as jealous little children, but it seems to be remarkably effective politics.
posted by heathkit at 6:00 PM on December 1, 2010 [6 favorites]
It really irks me to see this appeal to emotion brought into tax discussions. Taxes aren't "punishment", no one is suggesting we tax rich people more because we're jealous, or hate them. Rich people should be taxed more because, as notsnot eloquently stated, money has decreasing marginal utility. Being taxed 50% on every dollar over a million dollars is much less of a hardship than being taxed on your first million. Even Adam Smith recognized this!
It's so intellectually bankrupt to treat people who disagree with you as jealous little children, but it seems to be remarkably effective politics.
posted by heathkit at 6:00 PM on December 1, 2010 [6 favorites]
Taxes aren't "punishment", no one is suggesting we tax rich people more because we're jealous, or hate them.
"Okay you make a billion dollars and you give up 50% and have to buy one less yacht. You'll live."
posted by smackfu at 6:11 PM on December 1, 2010
"Okay you make a billion dollars and you give up 50% and have to buy one less yacht. You'll live."
posted by smackfu at 6:11 PM on December 1, 2010
Or maybe that's not jealousy or hate. I don't know what to call it. It's like "you have enough money, so take one for the team". But it seems to me like the kind of thing that everyone thinks about people who make more than them, but would never say about themselves.
posted by smackfu at 6:16 PM on December 1, 2010 [1 favorite]
posted by smackfu at 6:16 PM on December 1, 2010 [1 favorite]
Taxes aren't "punishment", no one is suggesting we tax rich people more because we're jealous, or hate them.
"Okay you make a billion dollars and you give up 50% and have to buy one less yacht. You'll live."
Alright, you got me, chadmalik is in fact very jealous of successful people and wants to eat the rich.
Still, that doesn't change the facts about what a rational tax policy is. Adam Smith was in favor of progressive taxation, and I have it on good authority he was very pro-yacht as well.
posted by heathkit at 6:25 PM on December 1, 2010
"Okay you make a billion dollars and you give up 50% and have to buy one less yacht. You'll live."
Alright, you got me, chadmalik is in fact very jealous of successful people and wants to eat the rich.
Still, that doesn't change the facts about what a rational tax policy is. Adam Smith was in favor of progressive taxation, and I have it on good authority he was very pro-yacht as well.
posted by heathkit at 6:25 PM on December 1, 2010
smackfu: But it seems to me like the kind of thing that everyone thinks about people who make more than them, but would never say about themselves.
"I think people at the high end, people like myself should be paying a lot more in taxes." -- Warren Buffet at 0:28 in this video.
Also, Bill Gates Sr. was recently one of the primary movers in the failed initiative to have Washington state institute a state income tax on earnings above $200K, which would almost certainly increase his taxes.
posted by mhum at 6:29 PM on December 1, 2010 [2 favorites]
"I think people at the high end, people like myself should be paying a lot more in taxes." -- Warren Buffet at 0:28 in this video.
Also, Bill Gates Sr. was recently one of the primary movers in the failed initiative to have Washington state institute a state income tax on earnings above $200K, which would almost certainly increase his taxes.
posted by mhum at 6:29 PM on December 1, 2010 [2 favorites]
Taxes aren't "punishment", no one is suggesting we tax rich people more because we're jealous, or hate them. Rich people should be taxed more because, as notsnot eloquently stated, money has decreasing marginal utility.
In American politics these days, everything seems to be about punishing someone. It's not really, of course, but it is in terms of how the political theater plays out.
Personally, I don't resent the rich categorically. I even have a few "rich" friends myself (not old money, super-rich types, but not merely upper middle class either)--and I respect and admire them for their accomplishments. And although my own adolescent fantasies of entering the upper economic class have long since given way to the more humbling realization that I'm just not nearly opportunistic, canny or craven enough, like most other people, I wouldn't complain about a sudden change in fortune. But I also like to think I wouldn't deny that I owed a hell of a lot back to the society and community that helped me get there. And I certainly wouldn't be oblivious to the fact that greater wealth comes with greater moral and social responsibility, as so many of our most politically engaged economic elites refuse to admit.
I'd go even slightly further than you, heathkit and say that, more generally, the best justification for taxing larger incomes at a higher rate is simply that it's the only fair way to construct a tax code, because money's real value increases in concentration.
Give 1,000 people a dollar each, and what have you given them? A weak cup of coffee, maybe, if 7-11 happens to be running a special. Give one person $1,000 and what have you given them? A trip to Europe. A new digital television. Groceries for a couple of months. A new wardrobe. Maybe a life-saving medical treatment.
The real value--the purchasing power--of money increases geometrically as it aggregates. Someone with a million in the bank has far more than a million $1 dollar bills to spend, because that money once aggregated becomes a significant amount of capital that can be used to secure credit under extremely advantageous terms.
A billionaire's dollar is simply worth more than a poor man's. So it should be taxed proportional to its real value, not just its nominal value. Even Republicans once readily acknowledged that basic economic reality, as when Teddy Roosevelt wrote on the subject of progressive taxation:
"The really big fortune, the swollen fortune, by the mere fact of its size... [differs] ...in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes."
posted by saulgoodman at 6:57 PM on December 1, 2010 [7 favorites]
In American politics these days, everything seems to be about punishing someone. It's not really, of course, but it is in terms of how the political theater plays out.
Personally, I don't resent the rich categorically. I even have a few "rich" friends myself (not old money, super-rich types, but not merely upper middle class either)--and I respect and admire them for their accomplishments. And although my own adolescent fantasies of entering the upper economic class have long since given way to the more humbling realization that I'm just not nearly opportunistic, canny or craven enough, like most other people, I wouldn't complain about a sudden change in fortune. But I also like to think I wouldn't deny that I owed a hell of a lot back to the society and community that helped me get there. And I certainly wouldn't be oblivious to the fact that greater wealth comes with greater moral and social responsibility, as so many of our most politically engaged economic elites refuse to admit.
I'd go even slightly further than you, heathkit and say that, more generally, the best justification for taxing larger incomes at a higher rate is simply that it's the only fair way to construct a tax code, because money's real value increases in concentration.
Give 1,000 people a dollar each, and what have you given them? A weak cup of coffee, maybe, if 7-11 happens to be running a special. Give one person $1,000 and what have you given them? A trip to Europe. A new digital television. Groceries for a couple of months. A new wardrobe. Maybe a life-saving medical treatment.
The real value--the purchasing power--of money increases geometrically as it aggregates. Someone with a million in the bank has far more than a million $1 dollar bills to spend, because that money once aggregated becomes a significant amount of capital that can be used to secure credit under extremely advantageous terms.
A billionaire's dollar is simply worth more than a poor man's. So it should be taxed proportional to its real value, not just its nominal value. Even Republicans once readily acknowledged that basic economic reality, as when Teddy Roosevelt wrote on the subject of progressive taxation:
"The really big fortune, the swollen fortune, by the mere fact of its size... [differs] ...in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes."
posted by saulgoodman at 6:57 PM on December 1, 2010 [7 favorites]
Keep in mind that the highest tax rates were usually tied to extremely costly wars.
THIS IS WHAT JUST SLAYS ME. So, where did the Bush Administration believe that the money for Iraq and Afghanistan was going to come from? The fact that we wrote a blank check for two wars in the Middle East pointed to three possibilities:
1) Bush Administration believed the cost of the wars would come out of oil profits in Iraq?
If so, that was a ridiculous gamble and not very grounded in reality. And did they think that these imaginary oil profits would cover war costs in Iraq AND Afghanistan, and that the Iraqis (plus any other interested parties in the region) would just roll over and let us make off with it? Plus there would be an infrastructure left to use to get it out of the ground and the region? Idiots.
If that WAS their plan, then these were their only Plan B options:
2) Raise taxes to pay for these wars.
3) Cut into the funding for social security, education, Medicare, infrastructure investments, etc.
No way was the Bush Administration going to raise taxes to pay for these wars. This was the chance they saw to profiteer from a war while forcing the issue of government program cuts.
Seems to me that they bloody well wandered into these two wars deciding that the middle class and the poor would take the hit. Don't need to send YOUR kids to Iraq, Mr. Moneybags, those youngsters in the National Guard who had few other options to earn money for a college education will be going. No need for a messy draft, no, no. Tell the Missus not to worry. And no need to send your money, Mr. Wall Street! We'll just cut all of these programs that benefit the bottom 80% of the citizenry. No, no. No need to worry your pretty little Brooks Brothers head about it. We won't be rationing like they did in the 40's, either, so eat, drink and be merry, friend!
Keep in mind that, while I say this, I am fortunate enough to be in the tax bracket that would be paying more in taxes should the breaks expire. And that is fine with me, frankly. I'm just disgusted at the people who were gung ho about going into Iraq and are now whining about a war deficit. Because that is what it is. It isn't a generic spending deficit. It is a WAR deficit. Imbeciles.
posted by jeanmari at 7:12 PM on December 1, 2010 [3 favorites]
THIS IS WHAT JUST SLAYS ME. So, where did the Bush Administration believe that the money for Iraq and Afghanistan was going to come from? The fact that we wrote a blank check for two wars in the Middle East pointed to three possibilities:
1) Bush Administration believed the cost of the wars would come out of oil profits in Iraq?
If so, that was a ridiculous gamble and not very grounded in reality. And did they think that these imaginary oil profits would cover war costs in Iraq AND Afghanistan, and that the Iraqis (plus any other interested parties in the region) would just roll over and let us make off with it? Plus there would be an infrastructure left to use to get it out of the ground and the region? Idiots.
If that WAS their plan, then these were their only Plan B options:
2) Raise taxes to pay for these wars.
3) Cut into the funding for social security, education, Medicare, infrastructure investments, etc.
No way was the Bush Administration going to raise taxes to pay for these wars. This was the chance they saw to profiteer from a war while forcing the issue of government program cuts.
Seems to me that they bloody well wandered into these two wars deciding that the middle class and the poor would take the hit. Don't need to send YOUR kids to Iraq, Mr. Moneybags, those youngsters in the National Guard who had few other options to earn money for a college education will be going. No need for a messy draft, no, no. Tell the Missus not to worry. And no need to send your money, Mr. Wall Street! We'll just cut all of these programs that benefit the bottom 80% of the citizenry. No, no. No need to worry your pretty little Brooks Brothers head about it. We won't be rationing like they did in the 40's, either, so eat, drink and be merry, friend!
Keep in mind that, while I say this, I am fortunate enough to be in the tax bracket that would be paying more in taxes should the breaks expire. And that is fine with me, frankly. I'm just disgusted at the people who were gung ho about going into Iraq and are now whining about a war deficit. Because that is what it is. It isn't a generic spending deficit. It is a WAR deficit. Imbeciles.
posted by jeanmari at 7:12 PM on December 1, 2010 [3 favorites]
The Bush people were brought into power by dot com millionaires, mortgage brokers, Enron and Worldcomm. Is it any surprise that these guys could t come up with a reasonable tax policy. Obama should tell the Republicans that he will veto any attempt to give another tax break to milionaires. Fucking fight for us goddamnit we put you in there to change things.
posted by humanfont at 7:56 PM on December 1, 2010 [3 favorites]
posted by humanfont at 7:56 PM on December 1, 2010 [3 favorites]
Well, the problem is, vetoing the extension will cause middle class taxes to increase, too. That will slow the recovery. People who aren't quite as passionate about it as we might be (which is most of them) are just going to notice they have less money, everyone seems to have less money, and that the Democrats caused it.
Also, since no new social or stimulus spending that might ameliorate the effects of everyone having less spending money is possible now due to the Republican's de facto control over the legislative process, vetoing the extension will have at least a near-term depressive effect on the economy--which historically is bad news for whoever's occupying the White House come election time, regardless of who was to blame, because American votersare mostly simpletons have better things to do than closely follow the tedious details of political processes.
posted by saulgoodman at 8:26 PM on December 1, 2010
Also, since no new social or stimulus spending that might ameliorate the effects of everyone having less spending money is possible now due to the Republican's de facto control over the legislative process, vetoing the extension will have at least a near-term depressive effect on the economy--which historically is bad news for whoever's occupying the White House come election time, regardless of who was to blame, because American voters
posted by saulgoodman at 8:26 PM on December 1, 2010
verstegan's man is John Ebsworth Owsley (1883-1953). Believe it or not, he was a football coach at both Yale and the Naval Academy. And Wikipedia has a stubby article about him.
posted by gubo at 8:26 PM on December 1, 2010 [1 favorite]
posted by gubo at 8:26 PM on December 1, 2010 [1 favorite]
Question: Were the higher marginal tax rates in the WWII to Reagan era balanced by far more loopholes, higher capital gains tax or other tax shelters? I was arguing the point recently and that was one counter argument I got. Truth?
posted by sapere aude at 8:37 PM on December 1, 2010
posted by sapere aude at 8:37 PM on December 1, 2010
THIS IS WHAT JUST SLAYS ME. So, where did the Bush Administration believe that the money for Iraq and Afghanistan was going to come from?
That's just the thing. Iraq, Afghanistan and all the homeland security expenses since 9/11 added together cost about the same as Vietnam (2.5% of GDP). The highest tax rates came after much more costly wars, like WWII which was somewhere around 35% of GDP.
posted by electroboy at 8:37 PM on December 1, 2010
That's just the thing. Iraq, Afghanistan and all the homeland security expenses since 9/11 added together cost about the same as Vietnam (2.5% of GDP). The highest tax rates came after much more costly wars, like WWII which was somewhere around 35% of GDP.
posted by electroboy at 8:37 PM on December 1, 2010
electroboy, percentage of GDP or no, the Bush Administration had a budget surplus. A surplus that could have been a (small, yes) cushion for the budget during an economic downturn. He gave away the surplus (and more!) and purchased two large expensive wars. He had two options for paying for those wars. He could pay with taxes or he could pay with cuts to Medicare, Social Security, federal education funding, etc. Instead of dealing with the costs of these wars, he just passed off the whole mess to the next Administration. Whether one war cost more than the other, where did he think the money was going to come from? The cost of WWII was approx. $2160 for every U.S. citizen in 1941. So far, the cost of Iraq + Afghanistan has cost each U.S. Citizen in 2010 approx. $3700. And the tab isn't closed out yet.
posted by jeanmari at 9:03 PM on December 1, 2010
posted by jeanmari at 9:03 PM on December 1, 2010
Well, the problem is, vetoing the extension will cause middle class taxes to increase, too. That will slow the recovery. People who aren't quite as passionate about it as we might be (which is most of them) are just going to notice they have less money, everyone seems to have less money, and that the Democrats caused it.
No it won't. Corporations who are awash with cash will be forced to raise salaries to compensate. The money will move from the balance sheet to the the pockets of tax payers and then to the government generating economic activity with each transfer. The Clinton economic plan did this in the 1990s.
posted by humanfont at 9:13 PM on December 1, 2010
No it won't. Corporations who are awash with cash will be forced to raise salaries to compensate. The money will move from the balance sheet to the the pockets of tax payers and then to the government generating economic activity with each transfer. The Clinton economic plan did this in the 1990s.
posted by humanfont at 9:13 PM on December 1, 2010
Humanfront: How are corporations going to be awash in cash if consumers have less spending money and everyone's paying higher taxes because all the cuts have expired?
posted by saulgoodman at 9:30 PM on December 1, 2010
posted by saulgoodman at 9:30 PM on December 1, 2010
No you fool! This is Obama's Only Bargaining Chip! He must let the republicans have their tax cut in exchange for... for... uh.
bipartisanship!
posted by benzenedream at 9:40 PM on December 1, 2010
bipartisanship!
posted by benzenedream at 9:40 PM on December 1, 2010
How are corporations going to be awash in cash if consumers have less spending money and everyone's paying higher taxes because all the cuts have expired?
They are sitting on piles of it now. It is just sitting there. They have not motivation to give anyone a raise, or do anything other than give out giant bonuses to the CEO. This was done int he 1990s and it worked great.
posted by humanfont at 9:42 PM on December 1, 2010
They are sitting on piles of it now. It is just sitting there. They have not motivation to give anyone a raise, or do anything other than give out giant bonuses to the CEO. This was done int he 1990s and it worked great.
posted by humanfont at 9:42 PM on December 1, 2010
The cost of WWII was approx. $2160 for every U.S. citizen in 1941. So far, the cost of Iraq + Afghanistan has cost each U.S. Citizen in 2010 approx. $3700.
Right, and in constant dollars, WWII cost each US Citizen $28,000. I'm not arguing over the rightness or wrongness of the tax brackets, but they were implemented to pay for extremely costly wars, period.
posted by electroboy at 9:56 PM on December 1, 2010
Right, and in constant dollars, WWII cost each US Citizen $28,000. I'm not arguing over the rightness or wrongness of the tax brackets, but they were implemented to pay for extremely costly wars, period.
posted by electroboy at 9:56 PM on December 1, 2010
Puzzling how in thrall to the rich most people seem to be. There is little to no evidence giving the rich a "break" does diddly other than enlarging their estates.
posted by maxwelton at 10:36 PM on December 1, 2010
posted by maxwelton at 10:36 PM on December 1, 2010
Taxes aren't "punishment", no one is suggesting we tax rich people more because we're jealous, or hate them.
I am, and I think a lot of others are too. The theoretical social benefit that the money itself will bring is a side-effect, and will probably be gobbled up by things which I hate or don't care about. We use tax policy all the time to encourage and discourage certain behaviors. We punish renters and reward taking out a mortgage. We encourage couples to marry, and discourage them to cohabitate for long periods unmarried. We encourage people to have children, invest their savings in stocks and bonds, and buy energy-efficient washing machines.
The way I see it, we can do the same thing with gross overcompensation for corporate executives, which we as a nation, and I personally, find so distasteful. We discourage it with our tax code. We implement a steeply progressive tax on actual compensations including lavish hotel suites, corporate jet trips, company-leased luxury cars, stock options and all the rest. We employ a whole crack team of forensically-trained tax collectors to find out where these people hide their money and take it from them in excess of a certain amount. We punish their behavior, behavior we've decided we dislike and want to discourage.
I don't think we should care if it costs more to go after the tax cheats than the new policies bring in in revenue. It will still be a net social good, much more beneficial than a few more toys for the pentagon or building a string of interstate rest stops named in honor of congressional campaign contributors.
I've presented this in the guise of a rational argument because, as you suggest, our tax code pretends to be based on reason. In reality, it is a reflection of the values and interests of the congressional class. I propose we remake it to be a reflection of the values of the United States of America, the values of a people that largely and honestly are "jealous" of these people and do "hate" their behavior.
posted by LiteOpera at 4:54 AM on December 2, 2010 [3 favorites]
I am, and I think a lot of others are too. The theoretical social benefit that the money itself will bring is a side-effect, and will probably be gobbled up by things which I hate or don't care about. We use tax policy all the time to encourage and discourage certain behaviors. We punish renters and reward taking out a mortgage. We encourage couples to marry, and discourage them to cohabitate for long periods unmarried. We encourage people to have children, invest their savings in stocks and bonds, and buy energy-efficient washing machines.
The way I see it, we can do the same thing with gross overcompensation for corporate executives, which we as a nation, and I personally, find so distasteful. We discourage it with our tax code. We implement a steeply progressive tax on actual compensations including lavish hotel suites, corporate jet trips, company-leased luxury cars, stock options and all the rest. We employ a whole crack team of forensically-trained tax collectors to find out where these people hide their money and take it from them in excess of a certain amount. We punish their behavior, behavior we've decided we dislike and want to discourage.
I don't think we should care if it costs more to go after the tax cheats than the new policies bring in in revenue. It will still be a net social good, much more beneficial than a few more toys for the pentagon or building a string of interstate rest stops named in honor of congressional campaign contributors.
I've presented this in the guise of a rational argument because, as you suggest, our tax code pretends to be based on reason. In reality, it is a reflection of the values and interests of the congressional class. I propose we remake it to be a reflection of the values of the United States of America, the values of a people that largely and honestly are "jealous" of these people and do "hate" their behavior.
posted by LiteOpera at 4:54 AM on December 2, 2010 [3 favorites]
I don't know what to call it. It's like "you have enough money, so take one for the team". But it seems to me like the kind of thing that everyone thinks about people who make more than them, but would never say about themselves.
People say it about themselves all the time. Look, here's Bill Gates saying it. TAX THE RICH. Here's Warren Buffet screaming it from the top of the mountain as plain as it can be said. TAX ME MORE. That's what a couple of the wealthiest Americans are saying.
They get it. Why don't you?
posted by Civil_Disobedient at 5:08 AM on December 2, 2010 [1 favorite]
People say it about themselves all the time. Look, here's Bill Gates saying it. TAX THE RICH. Here's Warren Buffet screaming it from the top of the mountain as plain as it can be said. TAX ME MORE. That's what a couple of the wealthiest Americans are saying.
They get it. Why don't you?
posted by Civil_Disobedient at 5:08 AM on December 2, 2010 [1 favorite]
I've presented this in the guise of a rational argument because, as you suggest, our tax code pretends to be based on reason. In reality, it is a reflection of the values and interests of the congressional class.
Please. Congressional critters have no values or interests. Their goals are self-enrichment and re-election. They accomplish this by appealing to the majority of their ignorant, uninformed constituency.
posted by Civil_Disobedient at 5:19 AM on December 2, 2010
Please. Congressional critters have no values or interests. Their goals are self-enrichment and re-election. They accomplish this by appealing to the majority of their ignorant, uninformed constituency.
posted by Civil_Disobedient at 5:19 AM on December 2, 2010
Argh... "have no values or interests except self-enrichment and re-election."
posted by Civil_Disobedient at 5:21 AM on December 2, 2010
posted by Civil_Disobedient at 5:21 AM on December 2, 2010
Congressional critters have no values or interests.
They do and their constituents (campaign contributors) do too. They value their own value and are interested in self-interest.
posted by LiteOpera at 5:32 AM on December 2, 2010
They do and their constituents (campaign contributors) do too. They value their own value and are interested in self-interest.
posted by LiteOpera at 5:32 AM on December 2, 2010
If you are that cynical about the government, it's shocking you would ever expect anything from them.
posted by smackfu at 6:01 AM on December 2, 2010
posted by smackfu at 6:01 AM on December 2, 2010
No realation.
posted by Kid Charlemagne at 7:28 PM on December 1 [+] [!]
eponysterical
posted by leonard horner at 9:47 AM on December 2, 2010
posted by Kid Charlemagne at 7:28 PM on December 1 [+] [!]
eponysterical
posted by leonard horner at 9:47 AM on December 2, 2010
Holy shit! Apparently the Dems figured out a way to beat the Republicans on the tax cut extensions!
But Democrats figured out a way to avoid this. They're attaching their tax cut plan as an amendment to a separate bill [the Airport and Airway Extension Act, to wit]. That legislation already passed the House, and has just been returned from the Senate. The rules say it can't be recommitted. So the GOP's hands are tied.
"The election was month ago," Boehner said. "We're 23 months from the next election and the political games have already started trying to set up the next election."
posted by saulgoodman at 10:09 AM on December 2, 2010
But Democrats figured out a way to avoid this. They're attaching their tax cut plan as an amendment to a separate bill [the Airport and Airway Extension Act, to wit]. That legislation already passed the House, and has just been returned from the Senate. The rules say it can't be recommitted. So the GOP's hands are tied.
"The election was month ago," Boehner said. "We're 23 months from the next election and the political games have already started trying to set up the next election."
posted by saulgoodman at 10:09 AM on December 2, 2010
More on the developing news from the House on the tax cut extension.
Why couldn't they have been this clever about procedure before the midterms?
posted by saulgoodman at 10:15 AM on December 2, 2010 [1 favorite]
Why couldn't they have been this clever about procedure before the midterms?
posted by saulgoodman at 10:15 AM on December 2, 2010 [1 favorite]
This makes me happysad. I'm happy that they've figured out a way to beat the Republicans at their own game. I'm sad that we're playing the stupid games Republicans play.
posted by wierdo at 10:37 AM on December 2, 2010
posted by wierdo at 10:37 AM on December 2, 2010
imposing higher tax rates on the rich to punish them for being rich</em
Yea, sure, that's what it's about. Why do you want to talk like a Fox News personality?
posted by Mental Wimp at 1:24 PM on December 2, 2010
Yea, sure, that's what it's about. Why do you want to talk like a Fox News personality?
posted by Mental Wimp at 1:24 PM on December 2, 2010
Or maybe that's not jealousy or hate. I don't know what to call it. It's like "you have enough money, so take one for the team". But it seems to me like the kind of thing that everyone thinks about people who make more than them, but would never say about themselves.
Jesus Christ. If you're in the enviable position of being in the highest tax bracket, good for you. Don't expect the rest of us to not try and not get fucked over by regressive tax structures. If someone wants to pay less taxes, let them try and live in my bracket.
Also, if there was at least a shred of the old social welfare state remaining in this country, I really wouldn't mind giving up 50% of my 20k for it.
posted by thsmchnekllsfascists at 4:50 PM on December 2, 2010
Jesus Christ. If you're in the enviable position of being in the highest tax bracket, good for you. Don't expect the rest of us to not try and not get fucked over by regressive tax structures. If someone wants to pay less taxes, let them try and live in my bracket.
Also, if there was at least a shred of the old social welfare state remaining in this country, I really wouldn't mind giving up 50% of my 20k for it.
posted by thsmchnekllsfascists at 4:50 PM on December 2, 2010
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posted by yeoz at 1:13 PM on December 1, 2010