Back in the Reagan era, when the highest marginal tax rates were cut, so were a lot of deductions. For example, you used to be able to deduct all interest expenses from your taxes, not just mortgage interest. That deduction was phased out over a few years following the 1986 tax changes.
When the marginal tax rates were over 50%, high income earners focused more on sheltering income than in maximizing it. When the rates were cut, they changed their focus. It was now better to maximize income because even though taxes went up, net income went up more. Raise the tax rates back to those bad old days and “the rich” (however that is defined) will take actions to reduce their taxes. They may decide that it isn’t worth it to make more than a certain amount (one of my wife’s former employers did this). They may look into tax shelters again. They aren’t just going to sit back and do nothing.
There are also other taxes to consider. It’s stupid to focus only on the federal income tax when there are so many other taxes that people also have to pay. For example, back in the 1950s, the maximum amount anyone paid into Social Security was about $250. Today, it’s over $10,000. Medicare didn’t exist back in the 1950s so that tax didn’t, either.
According to IRS data, the percentage of total income tax paid by the highest earners has increased just about every year since the 1980s while the percentage of lower income earners who pay no income tax has also increased.
They may decide that it isn’t worth it to make more than a certain amount (one of my wife’s former employers did this).
It amazes me how so many people don’t believe this statement. I think they have this weird assumption that a person that is “rich” will want the extra money regardless. People should note that people called “rich” typically refer to themselves as comfortable. And those that are more comfortable than rich, figure out how to be comfortable with less.
As the tax rate gets higher, your effective hourly income drops. Make the rate too high and people will decide whether it’s still worth it to increase income. My wife’s former employer was a very talented oral surgeon. He took off several months each year because it wasn’t worth it to him to make the extra income only to see so much of it taxed away.
The president acknowledges the fact that higher taxes on the rich will probably hurt the economy. He still wants them, because it is “fair.”
All of the people who maintain that he is just misguided, not evil, should ask themselves what kind of person wants to hurt others, knowing that it will benefit no one at all?
What kind of people? Hmm, the whole OWS movement springs to mind.
Our problem is not one of NOT enough taxes being collected, it’s one of TOO much spending. But we’ll never convince the Left /OWS crowd of that. They, much like that goof at 1600 Penn Ave, are out for BLOOD not GOOD.
I guess they don’t stop to think that IF there was a robust economy, more of US could afford to see puppet shows! Which would create a job for Puppetry Degree guy. Everybody wins.
And isn’t that what they want?
Does anyone know what the total sums of a) individual income and b) corporate income are in the US? It woudl be interesting to compare that figure to the size of the Obama debts.
Back in the Reagan era, when the highest marginal tax rates were cut, so were a lot of deductions. For example, you used to be able to deduct all interest expenses from your taxes, not just mortgage interest. That deduction was phased out over a few years following the 1986 tax changes.
When the marginal tax rates were over 50%, high income earners focused more on sheltering income than in maximizing it. When the rates were cut, they changed their focus. It was now better to maximize income because even though taxes went up, net income went up more. Raise the tax rates back to those bad old days and “the rich” (however that is defined) will take actions to reduce their taxes. They may decide that it isn’t worth it to make more than a certain amount (one of my wife’s former employers did this). They may look into tax shelters again. They aren’t just going to sit back and do nothing.
There are also other taxes to consider. It’s stupid to focus only on the federal income tax when there are so many other taxes that people also have to pay. For example, back in the 1950s, the maximum amount anyone paid into Social Security was about $250. Today, it’s over $10,000. Medicare didn’t exist back in the 1950s so that tax didn’t, either.
According to IRS data, the percentage of total income tax paid by the highest earners has increased just about every year since the 1980s while the percentage of lower income earners who pay no income tax has also increased.
They may decide that it isn’t worth it to make more than a certain amount (one of my wife’s former employers did this).
It amazes me how so many people don’t believe this statement. I think they have this weird assumption that a person that is “rich” will want the extra money regardless. People should note that people called “rich” typically refer to themselves as comfortable. And those that are more comfortable than rich, figure out how to be comfortable with less.
As the tax rate gets higher, your effective hourly income drops. Make the rate too high and people will decide whether it’s still worth it to increase income. My wife’s former employer was a very talented oral surgeon. He took off several months each year because it wasn’t worth it to him to make the extra income only to see so much of it taxed away.
The president acknowledges the fact that higher taxes on the rich will probably hurt the economy. He still wants them, because it is “fair.”
All of the people who maintain that he is just misguided, not evil, should ask themselves what kind of person wants to hurt others, knowing that it will benefit no one at all?
What kind of people? Hmm, the whole OWS movement springs to mind.
Our problem is not one of NOT enough taxes being collected, it’s one of TOO much spending. But we’ll never convince the Left /OWS crowd of that. They, much like that goof at 1600 Penn Ave, are out for BLOOD not GOOD.
I guess they don’t stop to think that IF there was a robust economy, more of US could afford to see puppet shows! Which would create a job for Puppetry Degree guy. Everybody wins.
And isn’t that what they want?
Does anyone know what the total sums of a) individual income and b) corporate income are in the US? It woudl be interesting to compare that figure to the size of the Obama debts.