So, I make $300,000 a year ....

[dawg]

No, not *really*. But for the sake of discussion, let's assume I do. With the tax rates as they are, or even with the Bush tax cuts expired, I would still be hauling in plenty of after tax dollars.

But what would I do if the top marginal rate were raised to 90% on income above $250,000? (This is just a thought exercise - I don't actually advocate doing this)

I'll tell you what I'd do, though. I would hire myself an assistant to help me with all these odd jobs that I normally handle myself. If 90% of my surplus was going to go to the government anyway, then I'd just as soon hire someone - deduct their salary, 'cause salaries are, like, deductible for businesses ya' know, and make my life a little easier in the process.

Think about that, all you guys that worry that higher marginal rates at the top will kill job creation.

[Tippy]

1. K&R....Common sense tells us this but republicans just say it isn't so

And the blubering teabaggers sing the same song

[Wounded Bear]

2. If lower taxes on rich people created jobs...

why is unemployment at its highest rate on record?

Why should I listen to assholes who claim "higher taxes will disincentivise job creation?"

I'm with you.

One of our problems is the RW lie machine. Everybody thinks that a) the Bush tax cuts will help them, too and that b) Obama raised their taxes. It is my experience that neither of those statements is true.

:shrug:

[jwirr]

3. Especially if you can hire a relative. That way you could keep it in

the family. But I do get your point.

[Newsjock]

4. The 90% threshold is much, much higher than a mere $300k

Last time I ran the numbers to account for 40 years of inflation, the top Eisenhower-era marginal tax rates kicked in at about $4.3 million in today's dollars. Don't quote me on that, but it's way, way up there.

Mere peons who make under half a million won't have to worry their poor lil' Hummer-driving and Ed Hardy-encrusted selves.

[tosh]

5. Exactly.

These rethugs believe that if they repeat this drivel endlessly it will be taken as fact.

[GOPBasher]

6. I think you're preaching to the choir, but very good example.

That illustrates everything quite well.

[toddwv]

7. I'm willing to bet that nobody EVER paid a 90% tax rate.

If they did, it's their own fault that they didn't higher a decent accountant and/or tax attorney.

[Atman]

9. THAT'S THE ENTIRE POINT! The 90% tax rate actually ENCOURAGED employment.

The National Gallery, The Guggenheim, on and on --- their construction employed thousands. Why? Because if the Carnegies, The Mellons, the Guggenheims, didn't do something with the "excess" income, then they'd simply have to hand it over to the government. The preposterous 90% tax rate actually encouraged these billionaires to hire more people and reduce their tax burdens. But today's Republicans just want to keep it ALL. Give nothing to no one, no how. IT'S MINE, DAMMIT! Thank you, Ronald Reagan, for bringing about the "Me Generation" of greed and selfishness.

[Hippo_Tron]

11. Probably not, but they at least paid 50%

Now they pay 35% on income and less than that since many wealthy people get their income from capital gains for which the rate is far lower.

[dawg]

14. Yep, that's it. They don't wind up paying that rate.

They hire more people or they buy more things for their businesses. Either way, it isn't the drag on the economy the right makes it out to be.

Even now, you would be amazed by how many "Should I go ahead and buy a new truck for my business" phone calls I get each December.

[GSLevel9]

8. or...

the other option...

If you work 60 hours per week doing whatever it is that you do to make 300K... cut back to 40 hrs per week and spend more time at home.


If I was going to pay 45,000 tax on my last 50,000 of income, I simply wouldn't EARN that 50k.

[Atman]

10. You clearly don't understand how that 90% marginal tax works.

[dawg]

12. In which case, someone else ...

will get to serve those clients and have the opportuntity to earn that income.

[XemaSab]

13. Haha, I came in here like "Are ya single?"

But seriously, the part I don't get is that it seems like tax cuts for the POOR and middle class would create more jobs than tax cuts for the rich.

Follow my logic: Rich people aren't going to spend every penny of the 300K. (Or if they do, they're not going to be rich for long.) They're going to sock it in a bank, and while the bank might use the money to provide startup capital to a small business, a chunk of that cash is going to go to home loans and other things that don't really create jobs.

Meanwhile, the person living paycheck to paycheck is going to go down to Safeway and buy beer with the money, creating jobs for the people at Safeway, the delivery truck driver, the folks down at the Sierra Nevada brewery, and so forth down the chain.

I'm no economist, but it seems like capital moving through the system is where jobs get created, and since the government gets a cut of all of this, they're really not losing money by providing these tax cuts.

(This is part of why I was so tickled to see Meg Whitman blow a wad. The people who make the shirts, print the signs, cater the fundraisers, set up the speeches, and so forth are laughing all the way to the bank.)

[dawg]

16. You are so right.

Business will hire, regardless of tax rates, as long as there is additional demand for their products or services. Getting extra money into the hands of those who will spend it is a far more efficient method of stimulating the economy than allowing wealth to accumulate at the top where much of it is hoarded, used to blow speculative bubbles in stocks, bonds or real-estate, etc.

[uncommon]

15. You would only be paying 90% on the $50K anyway, right?

Isn't that how it works?

Seems reasonable at that salary.

[dawg]

17. Reasonable? Maybe. But I wouldn't pay it anyway ...

I seriously would hire someone instead. He or she would fetch my coffee, fetch my laundry, call and cancel appointments with people I don't feel like getting trapped on the phone with, etc. It'd be a crappy job, I guess, but I'd be a pretty easy going guy to work for, so it'd all even out.

This is a hypothetical situation, but that is exactly what I *would* do with my business.

If only I had that extra zero.

[rhett o rick]

18. High tax rates at the top creats jobs. When the rate was 90% business people left their

money in the company and let it ride. Now that the rate is low, they take their money out.

[Change Happens]

19. I make $500K per year, let's say I am a "job creator" small business guy...etc.

I take the following deductions:

1) Interest on the loan for my nice $1.0 million home: $85K
2) Depreciation on my building and equipment: $75K
3) Deductions for 25% of my home office...etc. including property tax, insurance, electric, water, cable...etc: $50K
4) Company car payment, car insurance...etc.: $10K
5) I max out my and my wife's SEP IRA's and other retirement accounts: $92K
6) Other various deductions like: child care, private schooling, charity...etc: $65K
7) Deduct 50% of the payroll taxes: $75K

Total deductions: $400k+, meaning I will only pay tax on something less than $100K...Or about $20-$25K, that's all.

Overall, I would have made $500K and paid $25K in taxes OR 5%!!!


Very real numbers, I did not even include the apt building I own, where I can show all kinds of losses from depreciation and interest cost, which will transfer over to my personal income, making my taxes even lower...

The pukes want to make my tax even lower, who pays for this country then? The rest of the people, the very poor...Or at best the middle class!!!

[Bonhomme Richard]

20. Bingo! n/t

[KharmaTrain]

21. Dirty Secret...The Rich Are Pay ZERO In Taxes

Anyone worth that kind of money has a good bookkeeper who knows the ins and out of the tax code. Between deductions and contributions, the bottom line gets shaved quick (especially if you live in a multi-million dollar McMansion). Then there's all those losses from 2008...surely those are still being written off or down. When it's all said and done whatever they make over the 250 or 300 or whatever the level is set, good chance these people have the taxes already zeroed out or even getting a refund.

[dawg]

22. No, I've got to argue with you here.

They don't pay zero in taxes, even under Bush's wealth-friendly scheme. Why do you think they are willing to spend so many millions to defeat Democrats? It's not like they really *care* about all those social issues they sell to the rubes.

Their *actual* tax rates are much less than the nominal rates set by congress, but they are still paying. And they hate that. With a white fury, they hate the fact that one dime of their *hard-earned* money goes to benefit someone else (or, society in general).

Despite an economy that has been dramatically re-drawn, sometimes by events and sometimes by policy, to favor the economic elite, it is still not enough for them. Their greed and selfishness is insatiable.

Their God is Mammon and they worship at his altar and they falsely call him Christ.

[KharmaTrain]

23. No Argument Here...

Many ways to skin this cat and fits in with the overall rushpublican profile...selfish and arrogant. If anyone is paying the 35% rate its cause they have a bad bookkeeper, but you are correct, the fact they have to pay anything is what they're bitching about. Despite all the propaganda about welfare, the biggest leaches around are those living off corporate welfare...and many of those make the big coin.

They still haven't figured out that all the money in the world won't mean squat when people can't afford to buy. But then I just read about Tribune company that is mired in bankruptcy and billions in debt yet will be forking out over $200 million in bonuses. Nice scam if you can find one...and wanna bet it's all tax deffered or exempt.

Even if someone who makes 300k has to pay 35%...that comes out to about 40gs in taxes (and that's not giving them the break President Obama has proposed)...40gs while the rest of the 260k is clear. That's a far less bite than someone who earns 50k at 23%. The difference is the guy making 300gs can throw $5000 at a candidate and get his/her calls answered where the poor schmuck who makes 50 and donates $50 gets put into voice mail.

Cheers...

[tex-wyo-dem]

24. Thanks for the great discussion, dawg!

The RW mantra that lower taxes for the wealthy creates jobs is wrong-headed simplton thinking and is just parroting the propoganda from the wealthy elite.

I've made the same arguements you have to my conservative aquaintances and often get met with confused minds, as though their whole world view is suddenly taking in water. They try very hard to prove my points wrong with whatever they have heard on faux or RW radio, but end up failing 110% of the time.

[nadinbrzezinski]

25. That is what happened in the real world

in the 1950s

I am willing to give them a break... 70%

[whopis01]

26. Thank you

This is exactly the point that I try to make to people.

When you are talking about a business, taxes are based on profit. Higher taxes on upper brackets can be an incentive for the business to spend and invest in it's own growth.

[Romulox]

27. Angering the rich is said to be the deathknell for any gov't program

(See Social Security and the utter impossibility of asking the wealthy to pay the same rate as me.)