An interesting and reflective read

[MontyTSI]

Edde... i have to admit something. I have a top 5% IQ and have no idea what "distribution of wealth" means. The word distributed means according to definition #1. Give shares of (something); deal out. The term distributon of wealth is a manufactured item that not even hints at the term "Earned" definition 1.Obtain (money) in return for labor or services: "earns his living as a truck driver".

 

Somewhere along the way 99% of those that have "it" got "it" from good hard work... it wasnt "given" it was "taken" and the weapon they (most) used to take it with was good ole honest working their butt off. I make a very nice living but i am required to work as much as 1100+ hours more than the US average... yeah thats right i work 6months more than average in a years time. I would imagine even that pales in comparison to the upper 3% earners that are just a little more motivated than i am.

[Chad]

 

 

Somewhere along the way 99% of those that have "it" got "it" from good hard work... it wasnt "given" it was "taken" and the weapon they (most) used to take it with was good ole honest working their butt off. I make a very nice living but i am required to work as much as 1100+ hours more than the US average... yeah thats right i work 6months more than average in a years time. I would imagine even that pales in comparison to the upper 3% earners that are just a little more motivated than i am.

 

I don't currently work those kinds of hours, but I too at one point worked like that, and it is that part of my life that led to where I am now. I used to work 90-110 hours a week, for months at a time, I took every opportunity my company had available, took on every role they would allow me to work, took all the hardest jobs, and I made sure I was always moving forward in my life/career goals.

 

I must admit, I think I enjoy what I have more that most because I earned every bit of it. There is a certain satisfaction from a hard days work, and that is even more true when you don't take the "instant gratification" reward (blowing your paycheck) for that hard work.

[chiplee]

I need to give this topic some more thought, but I've always wondered why the rich should pay not just a higher amount of tax, but also a higher percentage. In other words, having not really studied the topic, my initial take is that a flat tax would be best. Earn $4B in a 25% flat tax system and you will pay $1B in tax. Earn $200,000 and you'll pay $50k. See, the rich guys end up paying more anyway you slice it. Obviously, in a teared system you can get a raise that makes your take home pay go down. The obvious question is what if people stop striving to earn more to avoid the taxes? Then again, my effective tax rate was about 8% this year after deductions, so the brackets are kind of pointless.

[Chad]

The rich pay the bulk of our taxes because they earn the bulk of our income. Creating a flat tax will not change that.

 

Edde's graphs demonstrate the income gap and what it says about the direction we are going.

 

The communist systems took away the reward system for hard work, and look as how well they are all working. The only reason China is working (economicaly anyway) is their capitalist economic policies.

[Cloud81918]

Flat % tax and tariff imports to decrease the deflation of our economy to massively uneven trading and patent/trademark ignoring countries. Why is the government going after income when it should be looking at tariffs as well?

[MontyTSI]

I need to give this topic some more thought, but I've always wondered why the rich should pay not just a higher amount of tax, but also a higher percentage. In other words, having not really studied the topic, my initial take is that a flat tax would be best. Earn $4B in a 25% flat tax system and you will pay $1B in tax. Earn $200,000 and you'll pay $50k. See, the rich guys end up paying more anyway you slice it. Obviously, in a teared system you can get a raise that makes your take home pay go down. The obvious question is what if people stop striving to earn more to avoid the taxes? Then again, my effective tax rate was about 8% this year after deductions, so the brackets are kind of pointless.

 

Chip... i feel the majority of the problem isnt what "they" require the rich to pay but who in fact they want you the public to believe the rich are. I am in fact no where near being "rich" but according to these fancy charts that get published i am...

 

Note: Expendable income/ asset base make you rich, therefore someone that makes half as much as the top earner and has no debt is in fact more "rich" than the other. Using this logic you would think in terms of federal revenue they would want to tax what you own and what you have more so than what you "earn"... i dont support this (im a flat tax guy and completely debt free) but using the "logic" based on "wealth" that is the anwser.

[SubZero]

I like the flat tax idea, it sounds fair and a simpler way to support our government. As a tax payer, as far as I understand the employer pays an equal amount of what we pay in income taxes. If income taxes get eliminated then the employer will have more money available to invest in more hires, increase wages,.....

As an employee, it would automatically give them a raise and much better control over how they get taxed. A higher sales flat tax along with eliminating income taxes is a fair way to go, this not being a socialist country I think everyone should pay their fair share no matter what income level. Success should never be punished by imposing higher taxes and lower income should never get a free ride either. Also there are a lot of money being made under the table and a flat sales tax would have them pay their fair share through the higher flat sales tax.

Hopefully this would simplify the IRS and make us less dependable on CPA's and lawyers saving us even more money.

[patra_is_here]

 

Somewhere along the way 99% of those that have "it" got "it" from good hard work... it wasnt "given" it was "taken" and the weapon they (most) used to take it with was good ole honest working their butt off. I make a very nice living but i am required to work as much as 1100+ hours more than the US average... yeah thats right i work 6months more than average in a years time. I would imagine even that pales in comparison to the upper 3% earners that are just a little more motivated than i am.

 

 

HAHAHAHAHAHAHAHAthe wealth in the super elite does not come from 'working'. it comes from investments, it comes from assets making money, it comes from things that don't require man hours.

 

i can just picture a CEO sitting as his desk, laboring hard for $23.50 an hour: "if i just work 10,000 hours I'll have a decent income"

 

your extra hours per year for your "very nice living" isn't even close to what the people at the top make. please stop kidding yourself. your hard work simply puts you somewhere in the upper middle class i would suspect.

[patra_is_here]

I need to give this topic some more thought, but I've always wondered why the rich should pay not just a higher amount of tax, but also a higher percentage. In other words, having not really studied the topic, my initial take is that a flat tax would be best. Earn $4B in a 25% flat tax system and you will pay $1B in tax. Earn $200,000 and you'll pay $50k. See, the rich guys end up paying more anyway you slice it. Obviously, in a teared system you can get a raise that makes your take home pay go down. The obvious question is what if people stop striving to earn more to avoid the taxes? Then again, my effective tax rate was about 8% this year after deductions, so the brackets are kind of pointless.

 

 

the downside to flat tax, is if you don't make much money, that %25 is needed just to get your bills paid. someone making 20K a year would probably have a hard time making ends meet with only 15K of that going to their pocket. hell, in CA 15K is a joke. you'd be living off of food stamps and welfare at that rate.

 

if your income in $200,000 that 25% is not needed for your survival.

[Komeuppance]

teared system

 

Pun intended??

 

-Robert

[MontyTSI]

HAHAHAHAHAHAHAHAthe wealth in the super elite does not come from 'working'. it comes from investments, it comes from assets making money, it comes from things that don't require man hours.

 

i can just picture a CEO sitting as his desk, laboring hard for $23.50 an hour: "if i just work 10,000 hours I'll have a decent income"

 

your extra hours per year for your "very nice living" isn't even close to what the people at the top make. please stop kidding yourself. your hard work simply puts you somewhere in the upper middle class i would suspect.

 

first part... most of the wealth in this country came from someone that built it and passed it down or from an innovator that was determined and hard working enough to bring something new and useful to market. Smart investment in companys that are run efficiently by hard and focused labor force (both in suits and those in boots) no doubt....

 

second part...CEO's are generally voted on by a group of people that believe in their ability to lead a company from a proven track record (track records are built from hard work).

 

third part... i never made any claim to being in any "class" and my living isnt set on the extra hours they are just what i have to do as part of my requirements. My state of life has come from working hard, making sound decisions, taking prudent risks and making certain sacrifices that were required to meet my goals. My quality of life doesnt depend on any self proclaimed "class"... nor do i care what the income seperation is between classes. Fact: Corporate money has to trickle down... the burger flipper should only make a small percentage of what the guy responsible for the entire vision and return of a company does. Keeping in mind entry level positions are entry level the ones that are determined to move up and are prepared to do what it takes to accomplish this generally do.

[FlattopMike]

the downside to flat tax, is if you don't make much money, that %25 is needed just to get your bills paid. someone making 20K a year would probably have a hard time making ends meet with only 15K of that going to their pocket. hell, in CA 15K is a joke. you'd be living off of food stamps and welfare at that rate.

 

if your income in $200,000 that 25% is not needed for your survival.

 

Exactly.

We need a progressive tax system.

So many of you are turning your nose up to the working poor and lower middle class of our society.

Those people are the tools that the wealthy use to make money.

Taxes should be based on expendable income. The rich have a hell of a lot more expendable income than someone making $50k a year.

I see no problem with taxing someone taking home more than $1 million paying 70% taxes on everything above that $1 million.

1st off, all they have to do is re-invest it into their company in order to avoid it. That means new jobs, more equipment purchased and a stimulated economy. (this currently isn't happening and that's why "trickle down" doesn't work)

2nd, these are the people that profited the most from the "American dream". They should be happy to support our country.

3rd, it's not going to hurt them. 70% after the 1st million isn't going to keep them from eating well or putting gas in their 25 year old Mitsubishi or buying their kids an iPad for Christmas.

4th, the country needs the money. We can't dig out from under mountain of debt on the backs of the middle class.

5th, continue out into the future with those graphs showing the increasing division of wealth. If this trend continues, we are all in trouble.

 

I'm not any good with internet searches but can someone find a graph showing the correlation between tax rates and the health of our economy over the years?

[Chad]

Having worked in many fortune 500 companies (on their networks as a contractor), I've seen how it really is from the middle manager all the way up to the CEO. They all work their butts off, and if they don't, they won't advance. By the time they reach the "easy life" CEO status, they have done a few lifetimes worth of work. I have very few qualms about they lifing the easy life, cause they have earned it at that point. Most of them have MBA's or higher, most sacrificed their best years working like dogs, many had little family life. They had a goal to acchieve the best, and the paid for it with hard work and sacrifice, usualy for decades. How many CEO's do you see with mega-buck incomes that are under 50 years old? it takes decades of sacrifice to reach that goal. It also takes an extraordanary personality and special skills. We all know some were borne with "more" than us, why be gealous? In America, you can still be a success.

 

I've met and worked with/for thousands of business people, and I've never met a succesful one yet that was lazy. Sure, I've met some lazy ones, but you could tell they were already "peaked out" in their career because of it, and they were all at or near the bottom.

 

If the burger-flipper is mad at his lot in life, what is he going to do about it besides complain? He has choices.

 

I personaly like our system over the others, driven people have mroe opportunity, and success is easier to acchieve. If you work hard, you have more to gain here. It does come at a cost though : lazy people have more to loose. It's at he heart of the American dream, if you don't want to live in the dream, you can't expect what it has to offer. I think we all know the "dream" involves hard work.

[Chad]

Mike, I think our tax system alerady does that (though 45%, not 70%). There was a time about 120 years ago were the tax rate above 1 mill (in todays $$) was at 85% I believe. When they removed it for our current system, there was a huge boom in investement and spending, and a new middle class soon eveolved (there was no middle class at that time).

 

There is the reason you hear of rich people not paying -any- taxes, they invest in ways that take advantage of tax loopholes. I own 2 businesses, and believe me, it's easy to pay little or no taxes, and the $$ does still get spent in ways that benifit the economy. If you want the "rich" to pay more taxes, remove the loopholes, but watch for the lashback when investment dries up and the rich start to hoard their $$. It will cost us more than it makes. I don't fully believe in Ragans trickle down economics, but there are sound elements in it. Most anything you do to capture rich peoples $$ will shift thier financial activities in ways that will hurt the economy as a whole.

[FlattopMike]

Mike, I think our tax system alerady does that (though 45%, not 70%). There was a time about 120 years ago were the tax rate above 1 mill (in todays $$) was at 85% I believe. When they removed it for our current system, there was a huge boom in investement and spending, and a new middle class soon eveolved (there was no middle class at that time).

 

I have been told that just the opposite occurred. Our economy was at it's best when wealthiest payed a higher percentage and it started to drop along with the tax rates.

Of course my source is liberal biased so that is why I asked if someone could find the unbiased facts about it.

 

 

There is the reason you hear of rich people not paying -any- taxes, they invest in ways that take advantage of tax loopholes. I own 2 businesses, and believe me, it's easy to pay little or no taxes, and the $$ does still get spent in ways that benifit the economy. If you want the "rich" to pay more taxes, remove the loopholes, but watch for the lashback when investment dries up and the rich start to hoard their $$. It will cost us more than it makes. I don't fully believe in Ragans trickle down economics, but there are sound elements in it. Most anything you do to capture rich peoples $$ will shift thier financial activities in ways that will hurt the economy as a whole.

 

If the money is invested in an industry that actually produces a product, I wouldn't consider that a loop hole. That is good for everyone.

The economical circle of life requires that goods or services be purchased with a large percentage of the money.

Trickle down doesn't work because a large percentage is "invested" in non tangible things like futures that produce nothing.

 

If you give $25k to a guy that makes $60k, he might go out and buy a new car.

If you give $2.5 million to a guy that makes $6 million, is he going to go out and buy 100 cars?

[Chad]

I have been told that just the opposite occurred. Our economy was at it's best when wealthiest payed a higher percentage and it started to drop along with the tax rates.

 

At that time there were only 2 classes, and the lower class had it better than the lowest class has it now, so indeed there was a negitive movement in that. The creation of the middle class as a result is what made the tax code change overall a good one, it created more kindsof jobs, more opportunity.

 

Statistics can be very misleading, so you ahve to look at the human element (changes in society) as much as the raw data. 120 years ago, you had to work 60 hours a week to cover basis costs of living, and you had little or nothing to show for it at the end of the week.

 

It could be argued that now we need 2 incomes at 40 hours to support a family, where as then it was only one at 60 hours. I however see it as now we want the lifestyle that comes from 2 @ 40 hour incomes, not need. If you lived like they did 120 years ago with just food, housing, and clothing costs, and litelry nothing else, then indeed, you don't need 2 incomes now, and you probalby have it better in many ways now compared to 120 years ago.

 

We raised the bar but expect to work less for it, that's the problem.

[FlattopMike]

At that time there were only 2 classes, and the lower class had it better than the lowest class has it now, so indeed there was a negitive movement in that. The creation of the middle class as a result is what made the tax code change overall a good one, it created more kindsof jobs, more opportunity.

 

Statistics can be very misleading, so you ahve to look at the human element (changes in society) as much as the raw data. 120 years ago, you had to work 60 hours a week to cover basis costs of living, and you had little or nothing to show for it at the end of the week.

 

It could be argued that now we need 2 incomes at 40 hours to support a family, where as then it was only one at 60 hours. I however see it as now we want the lifestyle that comes from 2 @ 40 hour incomes, not need. If you lived like they did 120 years ago with just food, housing, and clothing costs, and litelry nothing else, then indeed, you don't need 2 incomes now, and you probalby have it better in many ways now compared to 120 years ago.

 

We raised the bar but expect to work less for it, that's the problem.

 

You're going back a little farther in history than what I was thinking.

 

I know that growing up in the 60's and 70's, my father worked a 40 hour job and my mother stayed home.

We were middle class.

We had a nice home, plenty to eat, a new car every few years, a color TV and a family vacation every summer.

 

I now work 50 to 60 hours a week and my wife works 40. We are middle class.

We have a nice home that just lost every penny of equity that has been growing over the past 10 years.

There is no way I can afford a new car. In fact I don't own one. I have a company car.

My wife drives an '02.

I took my family on a vacation this past summer for the 1st time in 15 years. I had to max out a credit card to do it but I figured that this was my last opportunity.

There is no way that I'll be able to pay off the college loans that I'm taking out for my kids but ruining my credit and having collectors knocking at my door is a small price to pay for giving my kids every opportunity to ride the upper graph line.

 

We are losing the middle class of this country because of the greed of the 1 percenters.

 

 

I found an historic listing of the tax rates.

 

http://www.ntu.org/tax-basics/history-of-federal-individual-1.html

 

When looking at it, keep in mind the health of the US economy during that time frame.

[Chad]

You're going back a little farther in history than what I was thinking.

 

I know that growing up in the 60's and 70's, my father worked a 40 hour job and my mother stayed home.

We were middle class.

We had a nice home, plenty to eat, a new car every few years, a color TV and a family vacation every summer.

 

 

 

We've outsourced the middle class, that's not the fault of taxes, it's the change of our global economy. When you were growing up, there were no good places to outosurce those jobs too, we were on top and no one did it as good as us. Now we have to compete, and we became lazy over those 5 or 6 decads of realitive prosperity. Now others can do it better than we can, so that is where the $$ goes. It's not even really our fault, it's because the other countries caught up to us. They are now passing us...

 

The model you grew up in wasn't sustainable in my opinion. It was a time of growth, and you can't grow forever. I'm about 15 years behind you and I remember seeing it vanishing as I was growing up, so I do know what you are talking about. I watched a lot of news and I remember the sentiment of the times. I was a kid duirng the learly 80's recession, that changed everything here, and a lot of the jobs that were here before that (timber/construction) never came back.

 

I'm afraid our childeren won't have it as good as we did, unless something happens to the global economy that somehow puts us back on top. I can't imagaine anything that could cause that to happen, excet perhaps a major global catastropy. Our childeren will have to compete to succeed, but that is no different than anywhere else in the world.

 

I feel your pain, 5 years ago I was worth double what I have now, and I haven't done anything wrong (and couldn't have done anything differently). I do have time, so I am grateful for that.