Thursday, October 23, 2008

Courtesy of a reader
Posted by Chris Fountain at 2:04 PM

14 comments:

Anonymous said...

Chris - I love your blog from the real estate perspective but certainly am in disagreement regarding your political views. I have been holding my tongue but this cartoon made it impossible to hold it any longer. Do you honestly believe that the investment bankers, hedge fund managers, lawyers and corporate CEO's that are bringing in ridiculous salaries are harder working than the teachers, policemen, fireman, nurses (and on and on and on) who make less than $250k a year? I am so tired of Republicans thinking that they are "taking care" of the "lazy people" who don't make as much money as they do...excuse me, but there are A LOT of people in this world who work hard at very important jobs and make less than $250k a year.

I would imagine that you would be hard pressed to find a real estate broker (even in GREENWICH) this year who makes over $250k!!

Please quit calling hard working American citizens lazy!

2:38 PM
Anonymous said...

hey, if we leave it up to the Republicans, people will not be able to afford candy?

Greenwich Diva

2:43 PM
Anonymous said...

Good One - Chris - Perfect!

2:44 PM
Chris Fountain said...

The problem with this "250K" tax plan is that Obama's grand plans for spending will require far, far more than the revenue generated from punishing the rich. So next step is to dig deeper, like into the salaries of those teachers your worried about. Don't believe me? Look at the "Alternative Minimum Tax" that, when enacted, was supposed to hit something like 12 multimillionaires who didn't pay federal income tax. It now covers something like 62 million tax payers and grows every year. Congress won't shut it off because it wants the money.

If you work hard and feel underpaid, find a job that the economy values more - that's what many realtors have done,and have done quite well, thank you. Greenwich's economy, for instance, values real estate agents' labor about 2X as much as it does lawyers'. Not bad.

Again - I'm not calling working Americans lazy - my point is that under Obama's tax plan more than 50% of your beloved fellow citizens will no longer pay income tax and, thanks to our democratic rule, will have the power to raise taxes on all of us who do. And they'll do it - in the history of the world, no one's ever turned down a free lunch.

3:23 PM
Anonymous said...

to Anonymous @ 2:38:

My husband and I both work. We do this so we can give our children what we had growing up: a decent home (believe me, it's nothing spectacular), a private school education, and some limited extracurricular activities.

it takes TWO incomes to do this now (cost of housing and education have risen significantly faster than inflation - like, 5x faster - over the past 25 years), unless your parents subsidize you (which ours do not).

We are hit with the AMT, which takes 45% of our income each year.

We make somewhat above Obama's $250K limit. Not a lot above. But now our frugal-living, save everything or pay down the mortgage spending pattern will take a hit. so *I* can spread the wealth.

The biggest problem is that $250K is a lot of money in Kansas, but it is very, very little here. It is unfair to do to those of us working our butts off just to keep up with where our parents were.

Cut spending. The size of the government is insane. Get us out of Iraq. Try stopping spending before raising taxes.

A tax or fee increase of any kind is like a drug - that huge inflow of cash is far, far easier to do than cutting jobs or services that will affect people who may run screaming to the press.

So why should my family "spread the wealth" when we are working just as hard as someone making less? I chose my profession because it WOULD pay more and I could give my family things I consider important (education) - is that something I should be taxed for? My career choice?

I can give you tons of economic arguments, just let me know which ones you want, about the deterrent effect of taxation on people who work. Just say the word.

CEA (Current Equity Analyst who works long hours for her family, not anyone else's)

4:30 PM
Chris Fountain said...

Right on, CEA. You can guest blog here any time (besides, nobody seems to like Amanda except Claudette and me, so we have room).

5:36 PM
Anonymous said...

I couldn't agree more with CEA as our situation is very similar. There is so much to say on the presidential candidates and tax policy. For tonight I'll limit it to this; if you want to see some fascinating and somewhat damning data on federal income tax collections, check out http://www.taxfoundation.org/news/show/250.html. Scroll down to table 6 and table 8. Table 6 clearly shows that top 10% of income earners continue to bear an increasing percentage of the income taxes collected (increasing from 50% to 71% since 1980). Meanwhile the bottom 75% continue to see a decline with the bottom 50% paying nearing nil. In table 8 you can see that all income groups except for the top 25% have seen a steady decline in their effective tax rates. The top incomes have seen a yo-yo between the bush I, clinton and bush II eras. So with table 8 I will challenge my own republican party on this; does the middle class really need a tax cut at the federal level?! I'm by no means a tax and spend kind of guy, but do have an ongoing global war on terror and crumbling infrastructure that need attention. Over the past decade congress has also loaded up the tax code with middle class tax deductions with relatively low phase outs too.

Yes Diva, with the democrats in control, we'll get to see how well the economy works when the top 10% pay ALL the federal income taxes. And the voters, en masse, don't have a dime in play paying for their own voting habits.

-Cos Cobber

11:10 PM
Anonymous said...

The Democrats are running a pretty good scam, getting the gratitude of the non-taxpayers by confiscating the income of fewer and fewer taxpayers.

5:46 AM
Anonymous said...

To CEA, Cos Cobber and Chris -

First, for the record, I am a retired investment banker who spent my career at Morgan Stanley. I have been blessed by being in the right place at the right time. As a result, I am in the top 1% of the country in terms of my income and wealth. I have spent my adult life in Greenwich and sent my three children to private schools.

That being said, I do not think that my value to society as an investment banker exceeded that of any teacher, nurse, fireman, policeman etc. While I made a hefty salary for many years, frankly, I was overpaid.

CEA - I understand your feelings of frustration and I realize that $250k does not go very far these days, especially around here. Perhaps the threshold of $250k is too low. But, I do take issue with your feeling that the tax system would "penalize" your career choice. Don't the teachers who educate your children or the nurses who take care of you in the hospital get penalized severely for their career choices?

How much value to society has Dick Fuld created to deserve the multi-million dollars he has been making? You are working hard to make $250k/year as a credit equity anaylst - is Dick Fuld that much more talented or intelligent than you?

Do the Dick Fuld's of the world deserve a better life than the scientist who is working to cure cancer or soldier who is fighting for our country??

The issue isn't taxes...it's an issue of the disparity in incomes between the hard working average people of our country and the people who happen to be lucky enough to earn more simply because of their "career choice".

8:06 AM
Chris Fountain said...

"The issue isn't taxes...it's an issue of the disparity in incomes between the hard working average people of our country and the people who happen to be lucky enough to earn more simply because of their 'career choice'."
I completely disagree. I don't want someone else's mony "redistributed" to me. Your philosophy assumes that there's a perfect value for all labor, land, resources, etc. and that someone other than the person who earned or ownes that property is better able to decide how things should have ended up.
Obama certainly sides with your ideas - when asked why, when the capital gains tax increased federal revenues, he wanted to raise them again, he said "it's about fairness". You, sir, see property as a fixed-size pie that a beneficient goverment owns and has a duty to reslice it every year to make sure that everyone has the same size slice; capitalism has always seen a more dynamic vision of a pie that grows: one person's success enables others to prosper too - the entrepreneur who expands his business and hires 3 new workers, for instance. The countries that share your vision haven't done so well - I refer you to Russia. European countries, so beloved by liberals, have much higher unemployment rates and a pending economic crisis when their population retires that would dwarf that of the United States if we hadn't already gone so far down the road to join their socialism.
But there's a moral issue here that, to me, far outweighs utilitarian results: by what right do you demand that I work for the benefit of others and who gives you, or even a majority of my fellow citizens, to decide how much of my income I must give to others? I say none; you say, that's Democracy - the many shall feed on the few. Right now, you're winning and, I fear, you will continue to win. I am giving serious thought to going off the grid and leaving you looters to feed on yourselves.

9:09 AM
Anonymous said...

To Retired Morgan Stanley Banker:

This is CEA. Do you subsidize your children? (they may be too young for this). Will you subsidize them if they are working but want to send their children to GA or Country Day? If so, then you are proving my point - that you can't work hard and send your kids to private school anymore if you have anything but a lot of wealth.

I was very fortunate growing up, I went to private school here and college and grad school thanks to my parents. However, my dad (who was on Wall St and did quite well) did not believe in any subsidy after that, that we had to do it on our own. If you've been here many years you may know him. I believe, out of my entire graduating private school class, that I am among a tiny minority who are NOT subsidized in some way (house, education, monthly or annual stipends) by their parents.

"But, I do take issue with your feeling that the tax system would "penalize" your career choice. Don't the teachers who educate your children or the nurses who take care of you in the hospital get penalized severely for their career choices?"

How are they penalized? Teachers get the summer off! I dream of that!

You choose to be a nurse, then you live within your means. I am an analyst, I live within mine. My frustration is that the dream I had for my children (private school) may now disappear because combined, my husband and I will owe an extra $20,000 PER YEAR with just the removal of the Social Security cap. That's nearly a year's tuition - gone.

I wanted to be a teacher, or go into publishing (I was an English major), but when I looked at publishing jobs ($28K a year max) vs. Wall St (6 figures) - I made my choice.

The difference between me and Dick Fuld is that Dick got paid short-term bonuses for work that carried long-term liability. If nothing fell apart - then yes he deserved that money for creating billions of dollars in wealth by encouraging new products, new markets, and new ideas.

But it was a house of cards and there was no value.

In America, the "American Dream" is that you can work hard and "make it". What is the incentive if it's all taxed away? Remember Great Britain around Thatcher? When they taxed the rich at a 90% marginal tax rate?

You're right -$250K is too low. You're right - I am frustrated that even earning more than that, my husband and I somehow "owe" more. And listen, we could send our kids to public school, where nearly half of kids can't read at their grade level - in Greenwich! - and I could quit work.

Nurses and teachers made their choice and knew the income. I feel that I made my choice, knew the income, and now someone is going to deduct from my income in some bizarre idea of "fairness".

Remember "From each according to his abilities, to each according to his needs"? Doesn't that sound similar to what Obama is doing?

CEA

9:25 AM
Anonymous said...

I do sympathize with people who are merely "upper middle class" in certain areas (greater NY, Silicon Valley, etc.) -- things can sometimes be tough for them, with the huge costs of living in such areas. I wish to add to the discussion with a few additional angles on the facts:

1. Though it may be that Obama has more in store, his current proposed top bracket tax rates are hardly vast for high incomes, on a historical scale. The increase would take them to about where they were in the early part of the Reagan term (not strictly lower as he says, but not particularly higher). And if you look farther back into the past, the Obama-rates are dwarfed by those of his forebears, both in terms of the top bracket rates, and the rate of increase of taxes.

A poster mentioned 90% marginal tax rates in the UK; we had such rates right here in the USA through most of the (reasonably prosperous) 1950s. I don't want to see them again, but I think they're nice hyperbole-crushers ("class warfare," "socialism," etc.). Not even Obama would bring back the 90% days...that was back when politicians avoided letting the debt spiral upward without end.

2. As one poster points out, the percentage of income tax paid by the top 10% has indeed gone up significantly over time. This, however, isn't as sinister as it seems, given that top 10% pre-tax income represents a larger share of the total than in 1980... (LINK)

3. Let's not forget that neither candidate is a fiscal conservative. In terms of additional deficits caused by tax cuts, McCain is hardly lacking compared to Obama. The increased deficits may have a long term effect against the strength of the dollar; if they do, this may hit your bottom line in its own way. (LINK)

--
Early Mornin' Anonymouse

6:06 AM
Anonymous said...

My, my, my. With all the venting about what the democrats spending all of our money and all, can't anyone remember that the republicans have had the presidency for all but 8 of the last 28 years? What is wrong with all of you supposedly smart people?

The facts are that our representatives and so called leaders have dug us into a really deep hole. Either spending has to go down, not something politicians are fond of, or taxes have to go up.

I'm for the former, but try eliminating ethanol subsidies, corporate welfare for agribusiness which is sold as helping the american farmer, etc. Congress already has their hands deep into your pockets and pocketbooks.

Rather than figure out a way out of the mess, it is much easier to talk about small town values, pork barrel spending, and rail against the elites (they are talking about you, people!!). Then scare the people about terrorism to distract them from their day to day problems.

There is so much work to do in this country.

Can anything Obama does be worse than what the current president has inflicted on this country?

8:53 PM
Anonymous said...

to the last poster, yes obama could take our dear mess one level deeper, he could reposition the tax code so that more than 50% of the populous pays zero federal income taxes. in subsequent elections, what kind of responsible decisions the masses make when 50%+ have zero out of pocket cost to themselves? Meanwhile I think its a dangerous game in our highly mobile global age to create a federal budget so dependant on the super wealthy to fund it. these people are highly mobile and moreover have highly variable incomes. look at the tax foundation charts and its easy to see that the recession era budget gaps of the early 1990s and 2000s had everything to do with the rich not being as rich as they were in prior years. as a republican, i'd take the bill clinton marginal tax rates over obama's socialist agenda anyday.

and to the prior poster, talking about tax policy and tax rates prior to 1980 is irrelevant. for instance, prior to 1913 much of the time the US did not have a federal income at all. should I lean on that as good policy?

cos cobber

12:41 AM

Post a Comment

Subscribe to: Post Comments (Atom)