A radical idea on taxation

Discussion in 'The VIP Lounge' started by DYohn, Nov 10, 2017.

  1. capsuleri

    capsuleri Well-Known Member

    But savers are providing the capital needed to make the stuff for the spenders. Also, what will the spenders spend with or even live off when the pay check or ever increasing real estate prices (a la 2007-8) stops?
     
  2. Drew

    Drew Well-Known Member War Zone Member Top Poster

    Some people will pick and exclude certain things to correlate to one group vs another. If I make $450k but that puts me into the top 1% then isn't it a bit silly for me to say I have more in common with someone making $45k? Literally 99% of all others are in a different category, but instead it's "sure $450k is a lot of money to some, but its I don't have billions so its no big deal, right?".

    This is an example, I'm not saying nor do I know where $450k/year puts a person.
     
  3. DYohn

    DYohn Well-Known Member Donor

    The former owner of my company (a billionaire) was complaining about taxes one day and I said I could hear a tiny violin somewhere weeping for his problems. He sais his money problems were the same as mine, they just had more zeroes. I asked if he'd like to trade bank accounts and find out, but he didn't take me up on it. :)
     
  4. Phil A

    Phil A Active Member Top Poster

    It's a huge problem as noted above that people who make really nice money lose perspective on the reality of ordinary people. I remember many moons ago the head of a tax department (title was asst. VP) where I worked getting up at a meeting and saying that he is in the same boat as everyone else when it came to proposed salary freezes and there were people in the room making about one eighth of what he does (or even a drop less). By the time he got his bonus in the beginning of the year based on the prior year (from memory the bonus was paid around the end of February), he had already made more than everyone except probably his 4 or 5 direct reports (and there were 65-70 in the dept.) and it would not be that long (another couple of months or a hair more) before he would pass those 4 or 5 people.
     
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  5. Barry_NJ

    Barry_NJ Well-Known Member War Zone Member

    I found this article and since the discussion included "what is middle class?" I thought it was relevant...

    middle-class-cutoff-table%20(1).png
     
  6. Barry_NJ

    Barry_NJ Well-Known Member War Zone Member

    another interesting article relating to "Middle Class"
     
  7. Carl V

    Carl V Well-Known Member Donor War Zone Member Top Poster

    thanks good articles and good graph
     
  8. CJ

    CJ Well-Known Member Admin War Zone Member

    Top Poster Of Month

    It puts them in a camp where likely all or most of their money comes from salary and thus they pay taxes on all of it. It also means they no longer qualify for most tax credits (like dependent care, child tax credit etc.) It means they still have to save up to take a family vacation. It means they have a mortgage and car payments, not buying those things with cash. It means they have to save for their child's college, not just write a check to the university when the tuition bill comes. What it means instead of having a balance at Best Buy for a Samsung refrigerator, they have a balance at NFM for a Sub Zero refrigerator. It means they have granite counter tops instead of Formica. It means they have solid hardwood floors instead of laminate. It means they drive a Lexus instead of a Toyota. It means they eat out more. It means they cover the tab at the bar for their coworkers. All of that is really nice. But in a lot of cases, it means they don't necessarily have real wealth. They might have a 401K and that's about it.

    I don't make $450K. But I know what its like to go from middle class to upper middle class (and probably beyond by objective measures). It is pretty rare (probably less than 1%) that people do that and don't experience lifestyle creep. I do pretty well in maintaining a modest house and not going too crazy. I know people who make what I do who are asking when bonuses pay out because they have a 5 figure credit card bill due. They're living paycheck to paycheck too. You might say you have no sympathy because those people are dumb and they could easily have a huge amount in savings. I'd submit that they are no more dumb than people making $50k who buy Coach purses and Oakly sunglasses on their credit cards.

    But like I said, the politicians have managed to pit the middle class against the upper middle class with these nonsense distinctions when it is the people with millions in offshore accounts that hasn't been taxed that we should all be up in arms at.

    Regarding Barry's article, I'd argue that the middle class spend far more of their income as a percentage and adjusted for inflation on non-necessity and non-durable goods than any past generation. They have the latest smart phone, $300 phone and internet bills, Starbucks, fast food, and in a lot of cases, they DO have things like new cars. What I see is a society that is unwilling to forgo instant gratification in a lot of areas and has raised the "standard of living" bar without realizing it. I'm sure there are white papers out there about this phenomenon. I'd speculate it has a lot to do with the very real increased level of stress in modern society so therapeutic shopping and eating and consumption in general results in the middle class nickle and diming themselves and not having the larger things to show for it like a vacation.

    This may garner a "easy for you to say" reaction but I really think the focus on income is a red herring. Wealth is so much more than that.

    140523165254-chart-top-one-percent-1024x576.png

    Opinion | To Reduce Inequality, Tax Wealth, Not Income
     
  9. DYohn

    DYohn Well-Known Member Donor

    I like that Daniel Altman piece. Thanks for posting it.
     
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  10. Barry_NJ

    Barry_NJ Well-Known Member War Zone Member

    Good article, and agreed, but it's far easier to accumulate wealth, make investments, with a higher income level, as there is less "need" to spend all you earn on just living.
     
  11. CJ

    CJ Well-Known Member Admin War Zone Member

    Top Poster Of Month

    That's the point of the proposal.
     

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