When did "Rich" become a dirty word?

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With increasing frequency over the past several years, I've noticed that opposition to any tax-cut plan (on any level of government, not just federal) is led by the argument that it will benefit only the rich. Well, isn't getting rich part of the American dream? Has this been replaced by "qualifying for government handouts" and someone forgot to tell me?

The most interesting thing about this argument is how few people take the time to figure out if they'd benefit from the proposal they're about to vote down. Maybe it's too much to expect that kind of analysis, but whatever happened to old-fashioned self-interest? It seems quite odd to me that a person making ~$50K/yr is willing to forego a $1,000 tax break just to stop someone who makes ~$500K/yr from receiving $10,000.

Before anyone jumps on the minutiae, please note that I'm pulling numbers out of thin air to illustrate a point. R.)

Exactly what does "rich" mean these days?

 

It's not about $1k vs 10k, it's more like $1k (which is about $20 a week) vs. 120k, with the majority of the money only going to people who have enough stocks to be noticably taxed on them.

The reason everyon is complaining this time is that (according to various independent analysists, at least) the latest tax cut is going almost entirely to people with more than $300,000/year income. Who pay proportionately less that someone who earns $30,000.

Remember, most of what you earn after the first 50k is exempt from social security taxes, which are most of what us not-so-rich types pay.

So, if you earn 500k, you pay 35% on the first 50k, and about 2% on the rest, where if you earn 50 k, you pay 35% on everything you earn.

Now, (to be a little radical) if we were to institute a flat 10% tax on ALL income, we would triple or quadruple our tax revenue, and the lower and middle class families would have REAL tax breaks, not the $300 - $600 they made a big deal of last year.

It will never happen, though, because the rich make the laws, and don't want to have to pay a fair share on what they have.

 

Thank you for the economics lesson, but that's not what I'm asking about. Why should success be punished? Why does someone turn down a tax cut just because someone else is going to get more?

Also, please refrain from making assumptions about my economic status. That's not relevant to the overall question.

 

I didn't realize I was drawing assumptions about anyone's economic status, sorry.

As for rich becoming a dirty word, that happened about 10 minutes after the invention of money.

The tax cut should be turned down because it does nothing to stimulate the economy, by the way. All it does is further pad the pockets of the people who need it least while throwing a token bone to everyone else. After all, the rich aren't the ones losing their jobs. Nor are they the major consumer base whose confidence has been slipping. If the White House really wanted to stimulate the economy, they would tax everyone fairly.

 

Yochimbo,

I am sorry to say this, but you are way off base. The vast majority of people earning $30K or less in America pay almost nothing in federal income tax. And in fact many of them receive more back than they pay in through the earned income credit (which is neither earned nor income).

The top 10% of wager earners in this country earn 46.01% of the total US income, but the pay 67.33% of the total income taxes. Those people in the bottom 50% of wage earners earn 12.91% of the total US income, but only pay 3.91% of the total income taxes.

You can only cut taxes on those who pay taxes. You cannot count Social Security in this as it is totally different. We are talking Fed Income Tax cuts. Also you are wrong about the $50K limit. The limit for this year is $84,900. The reason that there is a limit is because they are never going to receive back benefits even close to what they pay in. Remember, you pay SS to receive a benefit back some day, either in retirement, disability, or your immediate family in case of your death. If we collected on amounts above the limits, we would have to pay out proportionally on those amounts. This means that if an individual paid SS on all $360K of their income, we would have to pay them $11,250 a month (using WAG numbers here, when my father retired he was earning just under $50K per year, and I believe his SS is $1,500 a month) . That is not was SS was designed for.

Since we have just established that the "rich" pay the majority (almost all) Federal income tax, if you want to cut taxes, only the "rich" will receive a tax cut.

As far a a flat rate tax, will never happen if it is to include SS. A 10% flat rate tax would not only never be able to cover the governments spending (at least at its current level, it would lower taxes for the rich, and raise taxes on the poor, and that would cost people their elected seats.

[ January 29, 2003, 17:53: Message edited by: Darkwolf ]

 

You mentioned it when you said the american dream in your post Rallymamma. In Sweden and I think in most of Europe the word rich has always had a bad tinge, especially among the less fortunate. This is not so strange if you look throughout history. Slaveowners in Greece and Rome living in enourmous luxury and wealth due to the labour of their slaves in the anticque, nobles sitting in their castles living off the labour of their serfs during the feudal times, the same nobles living off the labour off the 'freed' peasants during the renaissance, capitalist industrialist living off the labour of the workers in the industrial age. All the while the ones that have done the work have lived in squalor while their masters have reaped the benefits of their labour. Not odd that the word rich has a pretty ugly tinge in the minds of the ones supplying the labour. This is all part of our cultural heritage but it is less pronounced in the states as this is exactly what people fled from when they moved there, to start anew on a more or less equal footing.
Today there may be alot more self made rich people and we are all rich compared to our ancestors but there all still that resentment against rich folks that they hoard wealth and not sharing when X works his bum off and gets nothing for it. And even if the world has changed so are the descendants of the slaveowners, nobles and industrialists still among the rich people today, with no real reason except they were lucky enough to be born into the right family. So atleast think that the resentment is more or less justified, but then again I am a commiebastard.

 

jaocqin,

I guess that explains a lot of the differences between US and EU sentiment. In the US we just don't have enough history for "old" money to be passed down and get locked up in the same families for generations. In the US, most of us believe that we will be rewarded for our hard work, and if we are not, we go find another job. It doesn't always seem like a fair reward, but everyone pretty well knows it exists. There are lots of cases of ordinary people here getting filthy rich, and even more cases of poor people getting plenty rich. Almost everyone in America is related to, or knows someone who is living "the American dream". My cousin for instance. He grew up on the wrong side of the tracks. His mother was on welfare, he went to school on grants and subsidies. Today he is a multi-millionaire. He started out selling used cars and now is a partner is a huge group of auto-dealerships. He didn't win life's lottery. He worked his butt off, had setbacks, bet kept working hard and taking advantage of every opportunity he was presented. He invested in himself and made himself rich. Does he owe a dime of this money to anyone who "didn't have the same opportunities" he did? No, because we all have those same opportunities, at least in America. I could tell you several more stories of relatives of mine that had little or nothing and rose to riches, but I think my point is made.

 

I always heard that in America the taxes are quite low in comparison to countries like Holland. I find it rediculous that people with a high salary should pay almost half of what they earn to taxes. The rich people should not be exploited. If a person makes more money, it means that he probably has a more responsible job and should get what he deserves and not lose it all to taxes.

If some of the more left-winged parties came to rule in the Dutch government the rich people should pay 99% of what they make to taxes, which would mean they should get well-fare.

[ January 29, 2003, 19:43: Message edited by: Silverblade ]

 

Rich became a dirty word in the US when the Democrats took over the media. Their way of battling for their agenda is to stir up class warefare ... most of it without basis.

Why not move to a flat tax???

How can anyone argue that it is unfair or uneven if everyone pays 13% of what they make? If you make $30,000 or $300,000, you pay the same percentage ... and any tax relief would then be evenly distributed by *percentage*.

 

Personally, I don't think the brackets are the heart of the problem with the American tax system. It's all those loopholes in determining just what part of your money is taxable in the first place.

 

Mathetias,

If you were speaking to me in regards to you comment on flat rate taxes, I must not have made myself clear. I am in favor of flat rate taxes. The fact is that it would be political suicide for either party to try to pass it. Flat rate taxes would increase taxes on the poor, and lower taxes on the rich, unless you include the SS tax in the flat rate tax. Then we run into the same argument I made above regarding SS. It would be more fair, but the party who didn't back it would argue that you are raising taxes on the poor, and giving the rich a tax break. This would kill the other party in the next election.

Just a little piece of trivia for all you US citizens.

Did you know that Congress can pass any tax law it likes and make it permanent, but that any tax cuts are only in effect for 10 years, and then they must be renewed, or else taxes automatically return to their previous level. Great system, we can permanently raise taxes, but we can only temporarily lower them!

[ January 29, 2003, 20:28: Message edited by: Darkwolf ]

 

It is strange how perception changes depending on where you stand on a political spectrum. Me on the leftside has always viewed the media as controlled by the republicans in the US and their ecquivalent in other places.
And Darkwolf as usual you have a way of twisting what someone has said to suit your own needs. But perhaps I wasnt clear enough. I said that the resentment was stronger in Europe as the cultural heritage is more evident, now there are the same oppurtunties here as there are in the states for a poor bugger to be filthy rich, in any way, be it hard work or luck, namely extremely few. But they do exist.
And I think that a flat tax of around 30% for everyone and and then rising with your income, shouldnt be a problem to pay 60-70% for someone that earns 500k$ a year.

 

joc ... I'll assume you're kidding.

60-70% taxes for the "rich"??

30% for everyone else????

That would cause a revolt.

 

dmc,

Ownership of real property by citizens ended in most states long ago. Those people who supposedly "own" their homes really are just leasing it from the government on a fully transferable lifetime term that is enforced at gunpoint. Don't believe that, well anyone who "owns their home outright" who refuses to pay their property taxes will soon find an armed sheriff at their door to escort them off of the governments property.

joc,

If you didn't make weak arguments, using facts that are irrelevant to the argument at hand, I would stop using them against you. And I am going to do it to you again! I as sorry that the opportunities for people to get rich in your country are so few and far between, but that is not how it is in the US. Why do you think everybody from damn near every 3rd world country wants to move here? There is a direct correlation between your dedication and how hard you word and your success in America. Intelligence helps, good looks help, already having money helps. But if you have the drive, ANYONE in America can be earning $100K (in today's $'s) within a 10 years. The next question is, do I make more that $100K per year? Nope, and I know exactly why. It is because I am too lazy to work that hard. I make a good living doing what I do, and the sacrifices for me to quickly make more just aren't worth it to me. It is call freedom of choice, & it was one of the founding keys of this country. Am I rich, no way, I don't even have a months savings in the bank at the moment. Do I hate the rich or think that they should pay a heavier burden of taxes to carry me? Nope.

I know I will get flamed for this, but as I am probably several years older than most of you reading this I will anyway. The stance that the rich should be taxed at a higher rate than everybody else is generally only championed by 3 groups. The youth because they are full of ideals and want to be champions of the world. The poor, because they believe that it just isn't fair that they aren't rich, so they want to punish the rich for taking more than their share. And finally, politicians who want the votes of the youth and the poor because if they can get that and 1 or 2 other groups to vote for them, they win the election.

I know I have been full of quotes lately, but I just can't resist:

A government which robs Peter to pay Paul can always depend on the support of Paul. --George Bernard Shaw

Democracy must be something more than two wolves and a sheep voting on what to have for dinner. --James Bovard (1994)

 

I've always thought I was pretty rich...I have good friends, a close loving family, warm clothes in the winter, etc...But I guess I am wrong.

 

I've never really understood much about the economics of tax cuts, but an email I just received makes things far clearer. Beware, it is quite pretentious sounding, but still makes a lot of sense.

 

The Deviant Mage ... I'm proud to live in Chicago with you! That was wonderful!

 

sounds like the idea of Denmark taxation without a revolt. The strong helps the weak.

[ January 30, 2003, 16:05: Message edited by: Lokken ]