Should we tax the rich?
Posted at 2:40 PM on February 15, 2011
by Eric Ringham
(95 Comments)
Filed under: Economy, Politics/Government
Gov. Mark Dayton's proposed budget contains a new higher income tax bracket for top earners, a temporary surcharge on incomes of more than $500,000, and a state property tax on homes valued at more than $1 million. In short, his proposal appears to confirm expectations that he would tax the rich. Today's Question: Should we tax the rich?
Comments (95)
Should we tax anyone? If so, who? The question is really how much should we tax the rich. The answer is a lot more than we are. There are huge corporations paying 0 taxes and even getting rebates, including oil companies like BP and ExxonMobil and bailed-out banks like Bank of America. How much of the $220 million the Federal Reserve is paying the wives of Morgan Stanley should they pay in taxes?
Maybe MPR's news staff could ask a few tough questions of Republicans rather than simply repeating their talking points.
"Most of the people posting here are simply jealous of people who make more than them."
I can't remember the last time I read something so arrogantly dismissive or willfully ignorant as that.
"Are you upset that the CEo of a major corporation makes more than you? Tough luck...I guess you should have studied harder, or got your MBA, or worked your way up through a corporation the way he did. Why should you get his money? He earned it, not you."
Are you saying luck has nothing to do with it? I notice you didn't say, for instance, "You should have chosen wealthier parents to give you a good head start over your contemporaries." And then there's the philosophical question: In what sense did that CEO with a multi-million dollar "compensation" package really earn it? Did his labors really add that much value to the well-being of humanity? Or did he just find clever ways to exploit inefficiencies in the market, or persuade people to buy a product or service that didn't really benefit them? Did he really innovate in some way, or was it (like Bill Gates) merely shrewd management of intellectual property, together with anti-competitive business practices? What, exactly, was he being "compensated" for?
Most of the people posting here are simply jealous of people who make more than them. Should we tax the rich? Of course. Should we tax them a much higher percentage than everybody else? No..Why should we punish success? Are you upset that the CEo of a major corporation makes more than you? Tough luck...I guess you should have studied harder, or got your MBA, or worked your way up through a corporation the way he did. Why should you get his money? He earned it, not you. What about the corporation itself? Should you put them to the fire and make up for your crappy leaders overspending? Sure, go right ahead, and then they will pack up their plant and take those thousands of jobs to another State, so instead of getting the tax money from them you can try to gut them and end up with nothing...smart thinking. Take a look at the thousands of companies that have left Wisconsin in the past few years..are you still wondering why there is a problem in Wisconsin? The multi-million dollar corporation known as the Union has run them out of town...Economy bad? So what we want our raises...Pay for our health care like everyone else? No way, we are a union....They claim to represent the little guy when in fact they are blackmailing companies, and when the companies say the heck with it and leave, the head of the union isn't suffering, the thousands of unemployed workers are. So go ahead, tax those rich until they leave, tax those corporations until they leave...Then you can have your nice little communist society where everyone earns the same amount..$0.
Tax the rich? No.
Get rid if the rich? Yes.
The rich need to start paying back all the tax breaks they've taken over the past 30 years plus interest! They and their so-called conservative legislators want all the goods and services without paying for them. Why do large corporations and the wealthy think they are entitled to loot the treasury? It's high time the middle class wises up & starts electing officials who support our democratic ideals and equitable taxation. Quit voting for more welfare for the rich!!!
Hey, now wait one cottontailed minute here. Sunday liquor sales IS important! Have you ever run outa beer on a Sunday afternoon at half-time?
The plutocracy leeches the working class for its wealth. We can curse the rich all day and night. But what does anyone do about it?....continue working substandard wages. No longer do americans dare strike or protest . Taxing the rich is a way of begging back what has been stolen. Intimidation and extortion are their tools, that part of the american dream which a weak public drowns out with Sunday liquor sales.
Let the rich divest their billions to Dakar. Let them leave so we live once more.
"Tax the rich, feed the poor,
Till there are no rich no more."
That never made sense to me. People being rich isn't the problem. Isn't the problem that people are poor? What made more sense to me was:
"Tax the rich, feed the poor,
Till there are no POOR no more."
Then I grew up and realized that even that isn't ever going to happen. Some, NOT ALL, people just don't care to participate in the economy. It's just always been that way. Even 2000 years ago we had people gleaning through somebody else's fields picking up the little leftovers.
In my opinion, if ANYONE is subject to an income tax, then EVERYONE should be subject to an income tax - from dollar one - rich or poor. The government should be responsive to its constituents and live up to its fiduciary responsibility to spend wisely, and stay within its means. I know, my naivety is showing.
I think Governor Dayton's proposed budget is a reasonable response to the deficit. I would be elated to make $150,000 a year and pay a measly $161 extra dollars. I would be even more elated to be making a million EVERY YEAR, living in a 2 million dollar home, and have to pay only an additional $48,000 dollar.
And notice that it isn't even the rich who are whining. It's mostly conservatives who won't even be affected by the tax increase who are whining on their behalf!
"Where we have agreement, there can be compromise. I only hope our men and women in the legislature can also come to some sort of realistic, pragmatic, and fair solution."
That won't happen until we start electing realistic, pragmatic, and fair-minded people as legislators. And that won't happen until voters work a lot harder at being realistic, pragmatic, and fair-minded people themselves. In more ways than one, our politicians represent us.
@Dripping with Sarcasm
If you have any ambitions of making it big as a satirist, may I suggest you keep your day job.
Absolutely.
The rich caused the current financial problems in the country. It was the rich people on Wall Street who crashed the whole thing. Now they need to pay the costs of cleaning it up; the rest of us shouldn't have to pay for a party we weren't invited to and didn't attend.
If they cry and threaten to leave, then tax them again and show them the door.
Should we tax the poor? Everyone should pay the SAME percentage. Anything else would be undemocratic and unfair.
All day we've discussed "Should We Tax the Rich". And the resounding answer is YES!! Some have argued the question. All right then, let's modify the question.
[How] Should We Tax the Rich? There usually are two types of rich people, (three if you include lottery winners). Individuals, (including stock market racketeers and speculators), and those who own business or are high-end employees such as CEO's or pro "athletes".
First, define a real minimum wage for working adults, say $15 - $18/hr. Any employer that does not pay employees the living minimum wage must pay into a fund so the shortfall in wages can be paid to the employee by the government. Of course it would be better if the rich employers were to do this voluntarily). People are able to work for a wage that can actually pay for the high cost of living will alleviate the need for assistance by the government. So the rich have a choice, give people good paying jobs or pay the tax.
Second. It's understood that you can't pay employees if there is no demand for a product. However, I have NEVER worked for a company, not ONE that didn't have a need for more employees or new equipment. It's all a matter of the rich employer feathering his own nest vs. giving the working class a job which they can live on. It's simply amazing how much work goes undone because employers horde their money instead of enriching society. Which in turn.... raises taxes because government has to support these underpaid/unemployed workers.
For the independently rich, (like the stock market casino gamblers), they should be taxed for profits the are derived out of "thin air". That is the speculators who are causing the price of oil, corn, cotton and other commodities to skyrocket must be taxed substantially on these profits. This is nothing more than a profiteering skimming scheme, and we all pay the price for it.
And by the way, if the general fund continues to be used as the measure for determining the size of government, Minnesota's government has shrunk 13% over the last two years. So I really don't want to hear anyone complain about the size of our state's government. Therefore, to the Tom and Daisy Buchanans of Minnesota, pay the extra 3% and shut the hell up.
Federal, state and local taxes consumed 9.2% of all personal income in 2009, the lowest rate since 1950, according to the Bureau of Economic Analysis reports. Currently we have the lowest aggregate tax in decades. Our current highest marginal tax rate, 35%, is significantly lower than the highest rates maintained by Eisenhower (90%), Nixon (77%), Ford (70%), and even Reagan (50%). I'm having a hard time reconciling that fact with our current federal debt of $14 trillion. At the state level, I'm having a hard time reconciling the rhetoric of my former political party, the Republicans. We currently have a $6.2 billion deficit due to Tim Palwenty's irresponsible fiscal policies. Mark Dayton doesn't want to raise taxes on the richest Minnesotans in order to create programs or grow government. He needs to raise taxes on the wealthiest Minnesotans in order to pay Pawlenty's credit card debt. He implemented a pay and hiring freeze on state employees three years ago. Since then, state workers have been doing the jobs of two people for the pay of 2007. The GOP's "all cuts" solution of cutting an additional 20% of state jobs is untenable. We've borrowed from school districts who now have to transition to a four-day school week. Under Dayton's proposal, homeowners with children who make 401K contributions and typical charitable donations can have $200,000 in gross income yet not be affected by the tax hike on dollars exceeding $150,000 because their adjusted gross income (after deductions) won't exceed $150,000. A guy on the news last night said that, with Dayton's tax hike, he won't be able to afford to pay for his son's college tuition. Really? His AGI (adjusted gross income) would have to be more than $250,000 for the 3% hike to equal tuition for one class. Again, this hike is only on dollars exceeding $150,000 of AGI. Therefore, someone who has $151,000 in AGI will have to pay an extra $30 ($1,000 x .03). Seriously, my propery taxes have gone up 40% under Pawlenty due to cuts to local government aid (LGA). I haven't complained. But now that we're asking the richest citizens of our state to pay an extra 3%, it's Armageddon. Who's really waging class warfare? Not the middle class.
@CHS
I couldn't have put that better myself. Where we have agreement, there can be compromise. I only hope our men and women in the legislature can also come to some sort of realistic, pragmatic, and fair solution.
Thanks Jordan. I've enjoyed the discourse.
I've not once argued that taxes shouldn't be raised, and I hope that point hasn't been missed. I just patently reject the assumption that just raising the tax rate on the wealthiest will solve our problems, because it won't. Odd that trying to be voice of pragmatism and advocating for realistic fair approaches gets me flamed.
Do I feel that the wealthier segment can pay a higher share, sure they can. Should they? Probably, but let's take a good look at everything while we do it, because you can bet if we don't the fight gets even uglier from here out.
Also, comments like "If you can afford _____ your taxes aren't high enough" are ridiculous. There will always be people that make more money than you (and certainly me), and to imply that society should cap income through taxation is the type of attitude that creates this "class warfare" in the first place.
@Sarcasm,
Just because CHS' views differ from mine doesn't not mean we can't have a respectful and honest debate about the topic at hand.
I have a lot of respect for CHS. He clearly has an educated view of the question and a strong viewpoint. despite our differing opinions and your attempt at sedition is not going to change that.
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CHS, CHS, CHS......you're totally missing the point here. As demonstrated in the asinine way the question was posed, this thread was supposed to be all about class warfare and finally getting the rich to pay taxes, the implication being that they currently don't. Why not just get on board already? We liberals are generally very tolerant people, we tolerate just about anything and any view except those that differ from ours.
Perhaps a better question would have been: "Should we axe the rich?" To which the answer would be "Hell Yes!" Right? Can I get a high five, people!? Think about it....they're such "greedy hoarders" they don't deserve to live anyway, so we axe them and take their money. Are you with me Steve the Cynic? How 'bout you Ted? Jordan? Hello? C'mon, let the looting begin! Hoorah!
CHS, I agree with your values, I disagree with your approach.
I'm very much a proponent for less spending. I also think taxes should go up. (Across the board, and especially with the rich) but we as a society have too much self-interest. There isn't enough thought to the future.
This is why we're in Iraq and Afghanistan. This is the reason for the economic housing collapse. Impulse reactions for immediate results. We fail to critically think of the impact of our actions in even the near future, much less down the line. The lifestyle that the rich are becoming accustomed to will not last forever.
As the son of a wealthy father, I can tell you the rich aren't taxed enough. I'm not saying everyone should be worried if they're going to have enough money to feed their kids or pay their rent - I'm saying [i]some people already do[/i], and it's unacceptable.
"..how much pain are the rich willing to accept for the good of the state?"
A lot more than I would guess most people are giving them credit for. However, I don't think it's too much to ask in return that we take a serious look at reforming some of our institutions and our tax code. By and large I believe that people are willing able and ready to pay their 'fair' share of taxes, so long as it's clear and transparent that the money is going to worthwhile and efficient uses. I haven't seen a genuine attempt at worthwhile reforms from anyone in the legislature at this point on any topic. Instead we get bills for drug testing welfare recipients, or press conferences condemning the others for being against child protection.
"The rich should pay at least the same percentage of their income as the middle class pays. "
This type of comment confuses me, because they already are, in fact in many cases a higher percentage, depending on what you define as "middle class" and "rich." Seems like what everyone is upset about is that they have more left over when they are done paying their share.
And how much pain are the rich willing to accept for the good of the state?
Yet again we ask the poor to suffer. Cut their health services. Cut their education options. The poor has no representation in our legislation system because they don't have the capability or assets to do so.
It's immoral for the rich to prosper at the sacrifice of the poor.
Much of my social change comment was based on the comments related to the wage gap, wage stagnation, housing and food costs, etc. Those ARE social issues.
I'm all for properly funding our educational system and our public safety, our roads and transportation, etc. I just think before the "tax the rich" banner is flying too high we need to take a serious look at REAL tax reform and what most of our money goes to.
In our state the Big 3 account for the lion's share of our budget. Those are: Education, Local Government Aid (LGA) and Health and Human Services (HHS). Arguing about any budget items without addressing those is like pissing on a brush fire.
Last I checked our budget shortfall was about 6 billion on about 33-36 billion in projected spending, leaving us around 15-18% short. To just assume that we can raise an additional 15-18% on our budget by simply taxing the rich without taking a serious look at the whole picture seems mind boggling to me, but that is what I seem to be hearing from most people.
So of those three, everyone seems to agree schools, police/fire (mostly paid by LGA), and roads are good and we should all pay for it according to our ability.... which leaves the 3rd rail of our state politics: HHS.
Yes.
The rich should pay at least the same percentage of their income as the middle class pays. Minnesotans have seen the wealthiest 1% not only increase their share of our state's income to highest point since 1929 but they now have the lowest effective tax rate in our state's history. Tax the rich to win the future back for our children. Tax the rich to bring back fairness to our revenue system.
I don't understand this concept that if we tax the rich more, that money goes into the pockets of the poor. It's goes into the need of the state. This isn't a social change.
We want things like safe roads, competent schools with competent teachers, a fair work environment, a just judicial system. This isn't provided for free. And although the rich may not utilize it as much as the poor, situations become more and more dire as the environment becomes worse.
Putting money into government programs, health, and education improves the lives of the poor, which in turn provides profits for the rich.
These aren't social changes, they're basic human interests.
Jordan and Ted,
So what are debating here? I thought that the debate was about taxes and the budget. Of course the wealth gap in this country is widening, and needs to be addressed, along with wage stagnation and a dozen other social problems. My point is this, the Tax Code is NOT the place to address social problems.
Our country is in need of serious tax reform, (maybe even changes to rates, I'm not anti-tax), but the reforms should simplify the tax code and take politics out of taxation. Using the tax code as a tool for social change is going to come back around to bite us, and in many ways already has due to special interest groups and legislators pandering to their own base.
Trying to enact social change through the tax code is simply wealth redistribution not social change. If you simply take it away from those that have it and give it to those that don't without fixing the vehicle that got you there in the first place, you're going to get there again soon enough.
your question: "Should we tax the rich? "
my answer: Yes.
We should also tax every other income bracket except those making under $30,000 a year. in fact we should just have a flat tax, that would make it all easier and reduce loopholes.
side note: at the end of the 19th century and going into the 20th only those people making over $250,000 a year were taxed. Correct me if i am wrong, but i believe that is correct.
OK, CHS in St Paul.
Here's some FACTS
FACT: The division between rich and poor in this country is as wide as it has been since the Great Depression and the disparity is only getting wider. The rich get richer and the poor get poorer.
What is it, the top %4 have 90% of the wealth in this country. (Sounds like some Emirate in the Middle East).
FACT: While CEO salaries and bonuses continue to payout millions, the average workers salary is stagnant at best. Meanwhile the rich are getting richer by charging higher costs for energy, food, healthcare, housing, etc. Meanwhile the poor have to go without healthcare because they can't afford it.
FACT: The ratio between CEO pay and worker pay has never been in greater favor for the CEO. Henry Ford may have been rich, but he also knew that if he didn't pay his workers a living wage, no one would ever be able to afford his product. He also must have realized that if he didn't pay his fair share in taxes there would be no roads to drive his cars on.
Now I don't have any specific references or statistics, this information is widely known and accepted as factual.
It used to be that the rich had some sense of obligation to pay their fair share in taxes AND provide jobs that made it possible to afford a house, a car, and a family on ONE income. Now all I see are big boats, $80,000 cars and multi-million dollar houses. If you can afford a new $5 mil yacht - you don't pay enough in taxes!
@CHS
You may be right that the rich pay a large % of the taxes, but they also have the majority of the wealth.
The top 1% richest people in the country own 42-45% of the wealth. The distance in wealth between the rich and the poor is a gap that is widening dramatically.
CEOs used to make 5 times that of the lowest paid employee. Now they make up to 300 times.
We're creating a class system. The American dream is possible for a very small number of Americans.
It's not about money, it's about humanity. It's great to go through life with the mindset of "Well, I got mine!" Unfortunately, it's unsustainable.
"Let them eat cake."
Before making comments like "the greedy rich think they are entitled to all their money and let the lower class pay all the taxes" why don't you find some facts to back that up. The "rich" pay a massive percentage of the taxes collected in this country, but it seems that most people here believe that they pay nothing and are forcing the low and middle class to pay in their stead.
If we're going to have an honest and real debate on tax policy a little reality needs to be injected into the blogosphere and some people's consciousness.
Reality: The income taxes paid by the top 20% account for approximately 86% of income taxes collected in this country. The bottom 40% had a NEGATIVE income tax liability. Source: Congressional Budget Office (fy2007)
So, we're right back to the question. If 86% of the total isn't a fair share, what is? (Bear in mind that part of that collected from the top 20% is directly given to the bottom 40% who had a negative tax liability)
Now I know that these are Federal stats, but the same attitude seems to be pervading our state as our country at the moment, so I feel the comparison is a valid one.
Now, I'm not saying that our top marginal rate couldn't use a tweak, but the "us vs them" mentality driving this debate needs to stop. To insinuate that the "rich" aren't paying their "fair" share and are riding the backs of the poor by not paying taxes is a misrepresentation of what is happening.
"To bad the clowns we elected can't do the same.
Maybe it's time we stop electing clowns.
Define "rich". My definition is anybody who makes more money than I do. And so in turn, the rich should pay more in taxes than I do, as so should I pay more than someone who makes less than I do.
Unfortunately the greedy rich think they are entitled to all their money and let the lower class pay all the taxes.
A flat tax is not the answer either. It disproportionally favors the rich over the poor. Given that 10% of $100,000 leaves alot more left over than 10% of $25,000 to someone who needs every penny.
We should take a lesson from Egypt. Either the government make the rich pay their fair share or the workers should protest in the streets and even make the rich pay if the government won't.
@ Steve the Cynic
"Wade, are we starting to have a thoughtful conversation"
To bad the clowns we elected can't do the same.
As one who will be affected by Dayton's proposal ... YES!
Our state has been sliding into the middle for the past decade and all the while the upper income earners (my family included) have not been levied a fair tax, one in proportion to what other income brackets pay. Not only is that a matter of fairness, it is a matter of returning Minnesota to greatness or becoming East Dakota.
We are a community, not a business. Time for some responsibility.
Yes. Progressive taxes are the fairest.
In the "good old days" of the 1950s that the GOP so likes to hark back to, the Federal top marginal income tax rate was 90%! Now it's 35%. In the 1960s and 70s it was 70%.
The GOP threw themselves in front of the train to prevent the top 2% of households from getting a 5% income tax increase. Good thing they are concerned about average Americans!
Let's please avoid stereotypes and remember that the plural of anecdote is not data and that generalizing on the basis of isolated incidents is faulty logic.
Everyone can find or has heard of someone who is poor and yet is gaming the system (e.g., eating prime rib on someone else's money).
And I'm sure there are some wealthy people who are greedy and have no concern for the common good, but that doesn't mean all wealthy people are greedy and have no concern for the common good.
Wade, are we starting to have a thoughtful conversation, or is that wishful thinking on my part? It sounds like we agree that a fair pooling of resources through taxation to pay for necessary public services is just and right. What we may disagree about is what's "fair" and what's "necessary," and when or whether it's appropriate to levy taxes for things that improve the common good but may not be strictly necessary. I agree that taxing people to support those who will not work to support themselves is bad public policy. I think you agree that privatizing law enforcement would be a bad idea.
On the question of tax fairness, there are divergent opinions. You argue for a "flat tax." In point of fact, Minnesota's taxes are currently regressive. Maybe that's offset by the progressivity of federal income taxes, or maybe not. There's a case to be made that regressive state taxes are fair, because state services disproportionately benefit the poor and middle class. In countries that have single-payer health care (like Canada) it's usually paid for by a regressive tax (like Canada's GST). Our payroll taxes are intentionally regressive, because they pay for a progressive benefit-- Social Security. On the other hand, there's also a case to be made that having society be civilized, with no one living in squalor and desperate poverty, benefits the rich so much that progressive taxes to pay for social services is indeed fair.
Unfortunately, rational discussions of issues like these are currently impossible, because there's too much ideological sloganeering, because extreme partisans think it's more important to win the shouting match than to come to a reasonable compromise. (And the poor wording of today's question only makes the problem worse.)
"And this last one is for Wade:
Your friend, the one who paid $0 in taxes on his $77,000 in income. Why is it that when he takes advantage of the rules for his own benefit he's "crafty" and this is acceptable, but when someone near the poverty line does it it's a travesty and they deserve a penalty?" I
I don't think I called out any poor person and said it's a travesty. I called out the lazy person who wants to smoke and drink and eat prime rib on my dollar.
I can tell you, I know of one poor family that gets more money back on their tax return than I pay in on a given year. That is a travesty. I can assure you they aren't getting money back that they've paid in.
On top of that, do you know what they do with that windfall? I do. They buy TVs, gaming systems, snowmobiles, 4 wheelers, etc. All of which are usually destroyed by the next tax season. Want to know where they live? In a crappy trailer home in a rural northern MN town.
We shouldn't tell them what to do with their money. But if they aren't willing to save some cash, invest some cash, go to school to better their lives, etc. Why do they deserve to have my or your hard earned money?
How about my fiance's friend who is a 30 something bartender who wants nothing more for her life. All the while she's more than willing to feed herself and her boyfriend with our tax dollars (EBTCard/Food Stamps).
Let's look at another poor person I know who is gaming the welfare system. Why, cause she can get away with it. I know they gov't knows about it since she's been "turned in" by a friend of mine. To this day, nothing has been done.
She's actively told me and others (in a group setting) that she has to quite her job because they want her to work more hours and she'll loose her welfare benefits. Now tell me that's not a travesty.
All of these people have been acquaintances for many years. The funny part is, I've heard on more than one occasion from them and their friends that they deserve more. It's a mentality with these people. They honestly believe they deserve to live off our hard work. That's a travesty.
Not a very balanced question the way you put it. The middle class got clobbered during the Pawlenty years with massive increased property taxes. Now that we have a Governor who does not see the job as a stepping stone to a Presidential run, can will go back to adult style politics? It may not be be pretty to watch, but meeting in the middle is how divided government usually works. Governor Dayton has offered up a balanced approach to a serious problem. Now it's up to the GOP to offer up their approach. I trust it will be as balanced and reality based. We can only hope.
Kyle, thanks for such a thoughtful response.
I just have a couple of things to add:
Income inequality has been concentrating for a long time. It's not materially different for an executive board of a company to increase CEO pay astronomically while real wages for average workers declines than it is for government to fiddle with marginal tax rates. Both involve people who have to follow along regarding a shift in wealth.
Except that the wealthy have more influence in government than poor or even average citizens. They have a greater ability to select and assist candidates and control political discourse. Since they own the government in a way that no one else does (or can), why don't they have at least slightly greater ownership of the deficits we're facing?
As for working harder, the average American is significantly more productive now than thirty years ago. And yet, real wages have declined for them. Do you think that CEOs work harder now than thirty years ago? If so, is the increase enough to justify the increases, rather than the decline that most have faced?
How many people believe that the only impoverished people are lazy people, and that everyone who works hard succeeds? If you are one, how many low income people do you know, and how well do you know their finances? Of course there are some people who just don't want to work, and some people who game the welfare system, but is that portion great enough to justify slashing aid, rather than reforming it?
And this last one is for Wade:
Your friend, the one who paid $0 in taxes on his $77,000 in income. Why is it that when he takes advantage of the rules for his own benefit he's "crafty" and this is acceptable, but when someone near the poverty line does it it's a travesty and they deserve a penalty?
I think you meant to ask:
"Should we abuse the "rich" until they leave us to stew in our own backward and unjust fiscal policies?"
and the answer is "probably not".
If you actually meant to ask the silly question at the top, the answer is "we already do, and we tax them more than most".
This is a poorly-worded question. I think almost everyone is currently taxed, including the rich. So, YES.
I think the intended question is really: should the tax burden of the wealthy increase in order to balance the budget? That seems to be the theme of arguments already on-going anyway. To that, I also say yes, and for this reason: If a small proportion of people have to sacrifice a little more in order to help our county or state, so-be-it. That is the argument when we go to war (soldiers and their families sacrificing their time and efforts, and some, their lives), so why can't that argument hold in this case? Seems pretty selfish to me.
Whatever happened to coming to the call when your country needs you, whatever that need may be?
I'm not sure if we can post links on this message board or not but here is an intersting read on those at the very top of the income piramid.
http://ourfuture.org/blog-entry/2011020612/understanding-extreme-incomewealth-gap
The proposed new higher income tax bracket is fair and it's necessary. The federal income tax structure should be modelled on this one, too.
Short and sweet, YES. At or above the rate the rest of us have to pay.
Steve the Cynic
Easy there turbo. I did not intend on mischaracterizing your comments. I simply forgot you had made that previous comment.
Quoting you: "The government is not them, and taxation is not theft. The government is us, and taxation is how we pool our resources fairly to provide for our common well-being."
This needs definition. Should we all pay taxes into the "pool" for the road we use, fire department and law enforcement, parks, etc? Yes.
Should I pay taxes into the "pool" so some lazy person can have cable, a cell phone, eat prime rib, drink booze and smoke? NO!
Should I pay taxes so some senator or legislator can have a unbelievable health plan and/or enjoy an unlimited supply of cash for wasteful spending? NO!
"The government is us, and taxation is how we pool our resources fairly to provide for our common well-being."
What's fair about progressive taxation? Fair is we all pay the same percentage of tax. Be it based on spending or income.
It would be nice if we could have a tax system (both federal and state) which would remain consistent over a long period of time so that the government would run a surplus in prosperous times and draw upon the surplus in lean times. Then you wouldn't have to have the annual legislative grandstanding about who is more concerned about working Minnesotans and the other political rhetoric that we have all come to despise in the legislative debates.
@ Clark & Wade: Don't bother trying to employ reason with the "looters" (Steve the Cynic's word, not mine) that dominate this thread guys, it's no use. There are makers and there are takers in this world, and you can tell quite easily where one stands when you disect their logic.
btw....The way the question is posed here somehow implies that the rich are not currently taxed, which is patently false, wtf is that about anyway?
@ Steve the Cynic: Let's talk about the "general Welfare" clause a bit, shall we? Do you really think the founders had in mind what I presume is your looter's definition of "welfare" when they wrote those words in the preamble (and Art I Sect 8)? Are you sure they weren't referring to the "general welfare" in the context of doing what was right and necessary to preserve and defend the Union, and not to help/feed/clothe any one individual? Did public education fail you so badly that you can't even read or understand the words in proper context? It is unfortunate that the words can be so easily misconstrued, but not surprising considering how much they've been misinterpreted and stretched beyond the founder's imaginations by previous and current administrations, i.e. FDR, LBJ, and BHO. Should the government help those who cannot help themselves? That is a legitimate question. Should the goverment help those who WILL not help themselves? That is an entirely different question, and it happens to be the one we face today. My answer is a resounding NO. Good day.
"So in the interest of avoiding plutocracy, you would advocate for socialism?"
Wade, you appear to be deliberately mischaracterizing what I've been writing. In an earlier post I agreed that "pure socialism is every bit as disastrous as pure captialism" and have been advocating for a middle road. That's what the metaphor of the two ditches is about. Or don't you care to listen to thoughtful opinions that differ from yours?
The definition of "rich" is too low; for a two income family $150,000 is not rich. A couple late in their careers could easily meet this threshold and at a time when they need to be saving for retirement so they are not a burden on society over the next 20—25 years. I suspect this threshold was chosen to “meet” the budget not because it made sense.
A "yes" or "no" is too simplistic. When I hear that Minnesota will have the highest state tax rate, alarms go off. Be ware of unintended consequences! “Rich” people have choices; will more rich people make Florida or Texas their permanent residence? Will more taxes on the household making $175,000 result in less charitable contributions?
Neither state nor Federal governments have demonstrated the ability to make laws that actually achieve the intended results. Could the highest state tax rate result in less net revenue?
Laws with a noble purpose are often corrupted during negotiations resulting in unintended consequence. All systems seek equilibrium. The so called banking reform has driven banks to recover their losses through Machiavellian fees and rules. These impact lower income earners, who can least afford them, more. The healthcare reform allows a 26 year old to stay on their parent’s employers plan even if they are eligible to be covered by their own employer. This decreases one business’s cost at the expense of another. Employers with the best healthcare are the ones adversely impacted; is this fair? Will business’s cut back their healthcare programs as a result?
To my knowledge (and I'm not an economist, so I could be wrong), the first major figure in history to propose the need for the progressive income tax in a capitalist society was Adam Smith.
@Steve
So in the interest of avoiding plutocracy, you would advocate for socialism?
I'm all for a "fair tax". Example: 20% across the board, regardless of income level.
However I see no reason I should have to pay 65% of my income to tax just because I'm smarter, better educated, luckier, more ambitious, or whatever combination of qualities allowed me to achieve a high level of success. While a poor person pays almost 0%.
What if that poor person is simply lazy? Why are they entitled to anything?
Another example, a good friend of mine made 77K last year in income. He's paying almost $0 in taxes because he has so many business deductions, personal deductions, etc. That he deducted his income down to nothing. He was able to do that because he's ambitious, smart and crafty. It seems to me that a lot of high income earners are in a similar position.
Let's do away with all this deduction stuff and just do a "fair tax". Seems to me this would fix the budget issues.
If progressive taxation is your idea of "far left," you have a very skewed perspective. Perhaps you've drunk too much of the Cato Kool-Aid. Cuba is far left. Progressive taxation is smack-dab-in-the-middle moderate.
Wade, you're advocating that we avoid the ditch on the left by jumping deep into the ditch on the right. Your logic leads not merely to plutocracy, but hereditary plutocracy. Shall we go back to the era of the "robber barons" a century ago?
I believe some people are rich in this world so they may learn how to be generous and to help others. Some people are poor so they can learn humbleness and to be content. Simply giving money to the poor does nothing to help them out of their situation and simply forcing the rich to give to the poor not only doesn't teach them generosity, but it creates bitterness and hostility. It's interesting that in scripture money is written about more than any other topic in the Bible, with 2,350 verses devoted to it.
Of course we should tax the rich....what a silly question. Since the Reagan era, they have managed to convince people that they should not be taxed at a higher rate, but that's exactly what should be taking place. The income tax is a progressive one, and those who have the privilege of making more money, by whatever means, should be required to pay more. Along, with that those high-income earners should be contributing to the Social Security/Medicare Programs on all of their income; there should be no ceiling when they are off scott free on that.
In short, Yes!
If I made $150,000 a year, I would have no problem at all paying an extra couple hundred in taxes knowing it was going to essential services that benefit the common good. Right now I make $37,000 and I'm already paying that extra couple hundred this year in my property taxes. I know property taxes and income taxes are two different ball games, but if the more advantaged citizens of this state pay a higher percentage on their income taxes, it would really help us all out in the long run on property taxes. Republicans have no problem saying they don't want to raise taxes, but lets be real here, they will raise taxes through property taxes if Gov. Dayton's proposal is not accepted.
Well, we gave Jesse the libertarian four years to work his magic, then Pawlenty the right-wing budget slasher got eight years to do his thing, and look where we ended up. (By the way, Pawlenty is running around the country bragging about how he never compromised, just slashed, so please, let's not give him a pass on the mess he created.)
Gary Eichten conducted a lengthy interview with Arne Carlson about a week ago, during which Carlson said that unlike the budget crises in other states that started two to three years ago, ours started nearly a decade ago, and he placed responsibility for it squarely at the feet of Pawlenty. Of course, as a moderate Republican, Carlson is probably regarded as a RINO by the right wing of his own party.
If there's enough fat in state government that, by cutting it, we could make up the $6 billion budget shortfall, then we have to ask the question, what was Pawlenty doing during all those years?
I think we have cut just about as much as we can without doing irreparable harm to a large percentage of our population and to the overall health of our state. We need to raise revenue. And with the concentration of wealth, we know where we have to go to raise it.
David Morris, from the Institute for Local Self Reliance, has pointed out that our country has approximately 400 billionaires, while 37 million Americans have incomes below the poverty line. From 1992 to 2007, the wealthiest 1 percent captured half of the overall economic growth. From 2002 to 2007, their share rose to two-thirds. Not since the years immediately preceding the crash of '29 and the Great Depression have we seen this kind of disparity between the haves and the have-nots.
We need to nurture again the growth of a middle class and help the working poor so people have money to buy goods and services. That's how we will get the economy going.
Yes...an increase in marginal tax rates makes sense. In recent decades highest income earners have benefited most from government cuts and tax policy while middle class tax payers have seen income remain flat or decline in real dollars. Meanwhile the infrastructure that supports both private and business interests has been neglected. If we are going to regain strength, rich and poor alike, we need to remain strong in public goods.
Moreover, in the current economic condition, wealthier Minnesotans are savers, not spenders. We cannot take money away from spenders when that spending stimulates economic activity. This economic activity will benefit the interests of the wealthy as much as it helps those who are feeling the burden of lower incomes.
Steve the Cynic:
As Margaret Thatcher stated in the 1980's, "What happens when you run out of other peoples money to confiscate". If we don't cut spending it really does not matter as there will be no income left to confiscate.
Sorry lefties, I have no interest in working hard to support mark dayton's fantasies.
@Steve
So what if it inherited, earned, due to being born in the right family, etc.
What gives anybody the right to take my parent's money when they die and want to leave it to us? They worked hard to make a great life for themselves AND their family.
I will agree that cheating is unacceptable and should be dealt with. However that is another conversation.
"Is it virtuous to use force to take someone's hard earned money so you can give it to someone else?"
Is it true that all of the wealth of the wealthy is "hard earned"? How much is inherited? How much is a result of luck, such as being born into a family that can provide advantages like an excellent education, or the lack of some expensive health problem? And how much is the result of economic predation? How much is due to Wall Street money-shuffling that adds nothing of value to the well-being of humanity? Consider the income you're reporting on your 1040. Did your work last year really make the world better by that much? If not, then in what sense did you "earn" it?
On the flip side, is it true that the poverty of the poor is due to a lack of hard work? When I see poor folks working two or three low-paying jobs to string together a living, unable to afford the time or money to get an education that would qualify them for something better, only to see their meager savings confiscated by loan sharks and others who take advantage of their desperation to charge extortionary rates for goods and services that the rich can get cheaper, it's awfully hard to believe that they deserve their lot.
Yes, it's for their own good. If the gap between rich and poor grows, and the middle class continues to shrink, the rich will loose their ability to grow their money pile, over time their wealth will become static and they will be subject to the will of the unhappy masses.
If the question is "Should the rich be required to pay their fair share of taxes?", the question answers itself.
Well, yes.
And while we are at it tell Obama to turn off the heat in the White House and the Republicans to try to feed their kids (or grandkids) without money to buy milk, eggs, or other healthful foods.
Cut LIHEAP??? How much health care does he think will be needed if people cannot afford to heat their homes? Cut WIC? Sure it's actually a corporate and Ag subsidy, but it also provides food for kids so they have enough nutrients to get or stay healthy....and again saves medical costs.
Listening to Simpson today on Morning Edition really brought this home -The deficit is caused by heavy welfare for fat-cat defense contractors and high subsidies for former military employees, and they are trying to balance the budget, once again, on the backs of those least able to pay - preschoolers, people with disabilities,and the working poor.
So of course those tax loopholes need to be plugged, or if the rich must have their little loopholes, maybe the self- employment penalty needs to be decreased for low income self employed people (Say, below 20,000 a year single) and the base rate for the top 10% and corporations who take advantage of all the loopholes needs to be increased.
JD and any others who are whining about how unfair it is to "take more hard earned money from the rich"... please pick up the old Webster's and discover for yourselves that the word "fair" is not synonymous with the word "same".
"The love of money is a root of all kinds of evil."
Is it virtuous to use force to take someone's hard earned money so you can give it to someone else?
Well folks, better start figuring out who John Galt is.
Clark, you're correct that pure socialism is every bit as disastrous as pure captialism. But if we strive so hard to avoid the ditch on the left that we fall into the ditch on the right, what have we gained? Over the last thirty years, our national paranoia about socialism has caused us to move dangerously close to that ditch on the right. It's time for some moderation. If there's anything like a good road, It's somewhere between the two ditches.
There's an old joke from the Cold War era.
Q: What's the difference betweeen captialism and communism?
A: Under capitalism, man exploits man. Under communism, it's the other way around.
I believe it is very difficult to comprehend the meaning of "paying their fair share". If you are a low income individual, taxing the rich and sending the money your way is a good thing. You could certainly get comfortable living off other peoples hard work. When dayton requires more revenue, suddenly the top rate is increased from 10.95% to 15%. Along with feveral taxes, why would any individual take any risk knowing the state and federal government will confiscate 60-65% of their income? In the 1950's and 1960"s there were a number of deduction offsets to the high marginally rate, we were a cash society so it was quite easy to cheat on your taxes. Why not just take it all and give everyone an income of $40,000 a year. This way the far left will be happy. as we all be mediocre. As an ex citizen of the former USSR stated: Ve tried that, it didn't verk."
@JD
Excellent post. It brings a quote to mind.
"Don't steal, the government hates competition."
Again, well put JD.
Let's define "RICH".
Looking at this statement, "the proposed tax is 10.95% on those who make 150,000+ (for married filers) and 130,000+ (single filers). Subtracting that 10.95% from either of those incomes results in 133,575 (tax being 16,425) and 115,756 (tax being 14,235) respectively." that is NOT rich. That's still middle class.
Making 150K isn't even wealthy. Let's get realistic here. Taxing those of us who have a little disposable income isn't going to help. Just means people like me are going to get more creative with our taxes to fall below the cut off. Or like us, consider moving out of state.
"From everyone to whom much has been given, much will be required; and from the one to whom much has been entrusted, even more will be demanded."
Don't worry, Steff. I gladly contribute more to MPR than I personally get out of it, because I know it helps provide the service for people with less income than I have. If you can't afford to contribute, I'm covering part of your share. Pay it forward when you can. (BTW, Bill Kling is not overpaid. A person of his ability could easily make lots more money doing something else.)
Of course- those that benefit (economically) should be expected to contribute to the public commons.
I think the term "tax the rich" gives everything a bad connotation. But, instead, if we talk about it as making taxes proportional to earnings, then it's much more palatable.
And, look at it this way: the proposed tax is 10.95% on those who make 150,000+ (for married filers) and 130,000+ (single filers). Subtracting that 10.95% from either of those incomes results in 133,575 (tax being 16,425) and 115,756 (tax being 14,235) respectively.
That's still a lot of money. More than the majority of Minnesotans make in a year.
We like our quality of life here. We brag about it. Taxes help to provide that quality of life.
Why not I get taxed!
Someone have a sense of humor?
Heck yes!
It is now very clear the rich horde their money or spend it in vain on themselves. The typical Scrooge before Christmas.
It is clear they think their money savings and vanity spending helps the economy, which it does not. They should be investing in the community and helping honest hard working people. Where are our Bruce Waynes? There are a couple, but few have grown up that much to realize their responsibility in the world.
There are some who think money is theirs once they earn it and everyone should not care what they do with THEIR money.
Money is a community agreement of exchange.
Money is also a reflection of responsibility awarded due to one's success in society to REINVEST in the community to help foster a repeat of success.
Instead the chain to grow is killed when its horded or used selfishly.
Progressive taxation is fair and equitable. I for one don't believe we can cut ourselves out of this mess nor that we want to. It's easy to cut someone's food stamps (assuming you are not on them) and say you made a tough choice. Do you want less fire and police protection? How about less snow plowing or street maintenance? I think we see this winter how that worked out. The fact is that we all relish and want the high levels of public service because they actually deliver value and are good, state parks for example.
I think the rub in this issue is that someone says 'tax the rich' which is pretty simplistic. It's just as bad as the rich denying food stamps or medical care to the poor. Both sides are willing to let the other sacrifice. Not a real 'in this together' attitude. I think the definition of rich that is used is actually more upper middle class as well, but that's another issue.
I guess I am willing to pay for a higher quality of life here than in other states (live somewhere else and see how good this is here), but I want the posturing on both sides to end.
The rich should pay more in taxes. Each according to his means. The rich already have so many tax loopholes to slip thru it's a wonder they pay anything!
Higher taxes wouldn't impact them one bit. Say they make $6 mil. Even if half of that was paid in taxes, they would still have $3 mil left. When is enough enough? How much money does the greedy rich want at the expense of the poor? And all this "I work hard for my billions" Oh bull! You mean the lower class doesn't work hard too? The notion that progressive taxes stifle entrepreneurship and self motivation is foolish. Even with a progressive tax, the rich will still be able to satisfy their materialistic lust.
BTW: How much money does Bill Kling make? MPR is asking ME for money to stuff Bill's pocketbook? I'm UNEMPLOYED!! Maybe instead, Bill should open his own fat checkbook and give me a job.
"@ Steve the Cynic: Look, you illustrated my point better than I could ever dream of doing."
Only if you deliberately misconstrue my point.
"The proper role of government would be to protect anyone and everyone, whether they be rich or not, from the looters of this world."
That's one of the roles of government, but not the only one, and arguably not even the most important. The preamble to the Constitution says the purpose of the government is to "establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity." [emphasis added]
"The way you put it, it's almost a threat: 'Pay a higher % of your earnings, or else us angry lower and middle class peeps will loot you!' That's crap."
You seem to assume that the wrath of the poor is mere greed and not a righteous anger directed at real injustice. The world belongs to everyone. What do you think is a fair and just way to share it's resources? Let those who are most skilled at hoarding them get the lion's share and use it to extract even more from those who have less, until a few hold all the power? That's what pure libertarian capitalism will get you.
"I'm saying person A should not pay more than person B as a percentage of their income, otherwise you run the risk of penalizing the very productivity society should be encouraging."
Bovine feces! If it were true that allowing the rich to amass as much as they can would make everyone else more prosperous, why are jobs being created more slowly now than when the top marginal tax rate was 91% during the Eisenhower administration? I'll tell you why. It's because those rates rewarded hiring (wages, being a business expense, are not taxed) and discouraged hoarding. The tax rates we have now reward hoarding.
@ Steve the Cynic: Look, you illustrated my point better than I could ever dream of doing. The proper role of government would be to protect anyone and everyone, whether they be rich or not, from the looters of this world. The way you put it, it's almost a threat: "Pay a higher % of your earnings, or else us angry lower and middle class peeps will loot you!" That's crap. That's extortion of the legal variety, but that doesn't make it right. And you imply that I don't think the rich should pay anything, that's not at all what I'm saying. I'm saying person A should not pay more than person B as a percentage of their income, otherwise you run the risk of penalizing the very productivity society should be encouraging. If you do the math honestly, the rich always end up paying more and shouldering the vast majority of the tax burden in this country. A looter such as yourself will never understand this.
In the middle 50's the highest incomes were taxed at a whopping 91% under a Republican Aministration. 1958 was the last time a dollar was worth a dollar. There were 24 income tax levels compared to the 3 we have now. Higher taxes for the rich are about stabilizing the economy. It is the huge gap in incomes that has created the mess were in. Under higher taxation the rich will still get richer just not obscenely rich.
I did "wake up," JD. I woke up to the fact that our country has been rapidly sliding into plutocracy over the last three decades as we've moved away from progressive taxation.
Those who are the richest benefit the most from having good government, and indeed from the fact that the government has a legal monopoly on the use of force. Who is it that keeps enraged mobs from looting the rich, if not the government? And why should the rich not be taxed to pay for that security?
The rich also benefit from having the not-so-rich enjoy a modicum of well-being, because that's what keeps them from wanting to loot the rich in the first place. Why should the rest of us allow the rich to keep it all, if they're not going to use any of it for the common good? (Didn't your parents teach you it's good to share?)
The government is not them, and taxation is not theft. The government is us, and taxation is how we pool our resources fairly to provide for our common well-being.
No, taxation is not theft. Hoarding is.
Sure, but no more than you tax anyone else. Isn't this supposed to be about "fairness?" How is it fair to tax someone more just because they have more earning power? In fact, the system in place penalizes productivity, what's the sense in that? But sense is what's lacking in this debate, it appears. How else can anyone explain the widely held premise on this thread and in society as a whole that what is rightfully mine is also rightfully yours in the form of taxes? That's called theft, and just because it's the government perpetrating it doesn't make it right. In fact, it makes it even scarier because government is the only entity that has a legal monopoly on the use of force. The problem is not that we're not taxed enough people! The problem is politicians spending too much of our money on things the government has no business doing. Wake UP!
One of my friends noted to me that Governor Dayton's proposed budget would ask a Minnesota couple with 2 children making $200,000 per year to pay an extra $100 in income tax per year.
I'm pretty sure I could swing that $100 increase on my $60,000 household income, so I should certainly hope the higher income levels can somehow manage to squeak by.
You think they'll voluntarily contribute their fair share out of the goodness of their hearts?
Hell yeah! Should we tax the poor instead?
"Should we tax the rich?"
Of course. What are we going to do - not tax them?
they can afford it.
especially since i can't afford food for the week. or a car being towed. or rent for next month
Should we evolve or go extinct ?
Yes, our society, community, government has provided an environment in which they have been able to make money. There is no such thing as a completely "self-made" man. They need to return some money to the society that has made it possible for them to succeed.
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