TAX CUTS FOR THE RICH….HELL NO

            I read a letter to the editor in today’s Post-Gazette from a woman who, though middle class herself, felt that the rich should not be taxed more than they are. A number of the regular lurkers on that site left comments with a surprising number agreeing with her, one using the screen name of HockeyDad.
               If you wish to read the letter and all the comments to date: http://blogs.sites.post-gazette.com/index.php/opinion/open-letters/23717-its-time-to-stop-whining-about-the-rich
               I of course vehemently disagree and posted my own usual astute observations which are below. Anyone with a reasoned opinion may respond and see if you can convince me to change. Go for it!
                    
                                     MY RESPONSE
        Let me enlighten you. Some of you seem worried about a possible redistribution of wealth. That redistribution has already been accomplished though in this case more and more of the wealth is being distributed to the wealthy among us. The gap between the rich and the middle class in this country is the greatest it has been in our history since that aspect has been tracked since early in the last century.

Meanwhile, the top marginal tax rate is the lowest at least since 1936 when it hit 79%, save for the years 1988-1990 when it was 28% but applied to incomes above $29,750, $30,950 and $32,450 respectively. At some points in our history that high rate applied to incomes over $5 million.

HockeyDad

I am certain you and your wife have worked hard to achieve the income level you have attained. Two points, assuming Obama’s proposal to void the Bush tax cuts only on incomes above $250,000 for a couple, you would not be paying any more tax than you do. Any increase in your taxes would only be paid on what you earn above that amount, so if the previous marginal rate would be restored, on $100,000 of income above your current level you would be paying slightly more than $3000 more than you would if the cuts are maintained.Which means you still have an extra amount over $60,000 to put in your pocket which itself is more than the average per person income in the U.S.

Also at that income level you are indeed way above the vast majority of folks in the country. The mean household income is $46,326 which of course means half earn above that figure and half earn below. You and your missus are far above the mean.

But let’s say you really are not rich and peg the threshold at $500,00 or $1 million. That might seem fairer to our esteemed panel here and would not affect HockeyDad.

Now to denigrate the less fortunate among us as lacking motivation because they don’t have the extremely high incomes is ridiculous on its face. First of all mere motivation and effort do not always result in wealth. There are many factors involved. Education can be one of them but remember Bill Gates is a college dropout. Many high earners among athletes and entertainers either did not attend college or don’t have a degree. They have parlayed their talent into riches and that is fine.

But look at how many people who have a college education and have worked just as hard all their lives as anyone here and have been laid off, their jobs outsourced or somehow else not their fault have been getting the short end of the income stick. And remember, American worker productivity is at an all time high also, while the real earnings of the middle class have fallen over the past ten years or so, as the rich have gotten richer with an ever-increasing share of the pie.

Some of you also look down on the many people who receive some kind of government assistance. Well, the rich get plenty of government assistance in their own right. Some examples right in your own backyard are PNC Park and Heinz Field and Consol Energy Center. I don’t know what the current status is but the proposal to build a new convention center hotel has been languishing for several years and no hotel outfit is willing to come in without a government subsidy. Look at the scramble in Cranberry to get Westinghouse to move there. Another handout to the wealthy. I could go on and on but the point is that wealthy individuals and companies constantly game the system to get someone else to pay for their well-being.

Someone here mentioned they wouldn’t want a lottery winner to be subject to so much tax. Well, in that case it is a one time windfall and there may be some legal ways to lessen the tax burden but even if not, if it is a multimillion dollar take, the overall taxes will not really affect them.

Then think of all the investment bankers or other Wall Street sharks who get annual bonuses in the millions. Have they earned it? By their standards yes they have but they have created nothing. They have simply moved money around and in most cases virtually gambled with it and that money was not theirs to begin with. And they get these bonuses whether they made money for their clients or lost it. Surely you can’t be concerned with their ability to buy a new house in the Hamptons for millions or the vacation home in Aruba for other millions or the yachts or exclusive autos or the jewelry or furs or the $200-$400 dinners almost every night of the week.

Other than HockeyDad no one else here seems to claim their income is anywhere near the threshold where they would be affected by eliminating the Bush tax cuts. And that is an arbitrary figure which could be raised anyhow.

Frankly I doubt that any of the inarguably rich are paying attention to this blog. If they are they are laughing with disdain over the middle class tools who support them gaining an ever growing part of the pot.
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Comments

  • Betsy  On December 13, 2010 at 6:45 PM

    Personally, I would not complain (okay, not too much!) if they raised taxes across the board, as long as Congress put the money toward the deficit. Of course, then what would happen to all those lovely earmarks?

    • umoc193  On December 13, 2010 at 7:56 PM

      Actually I believe I’ve seen at least one poll that showed a majority of Americans agree with that. But I seriously doubt that any commitment by Congress to apply the extra income solely to reduce the deficit will last, no matter who’s in charge. Frankly earmarks per se don’t bother me so much since they are relatively a drop in the bucket. Even shutting down certain departments to eliminate those expenditures wouldn’t affect the over all budget that much.
      I may be writing more on this in the next few days. I’ve been gathering some facts, but have to organize them.

      • Betsy  On December 15, 2010 at 11:19 AM

        Check out the total number of earmarks in the current appropriations bill. $8 billion+ is a heck of a lot of money, even with the size of the deficit. Somebody needs to get his/her head out of the sand and say “enough!”

        • umoc193  On December 15, 2010 at 11:34 AM

          Aw, you’re just jealous cause none of it is going to you. And I’m only getting $12.38, barely enough for a few beers. If you haven’t already, read my Christmas newsletter. It’ll cheer you up.

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