Opinion of Bernie's Income Tax Plan?

[Lyin' Steve]

I used this website http://valadian.github.io/SandersHealthcareCalculator/ instead, because apparently it's what the Sanders people want me to use.  It takes the most optimistic view of everything Sanders has proposed, especially his health care plan.

At first, it seemed nice.  I put in my information and distributed my wealth properly and it said I would lose about $2000 a year.

Then I said, ok, let's fast forward a couple years to after I've been putting all my spare cash in a house fund and I want to cash in my mutual funds for the down payment.



Guess I'm not buying that house after all!

[Lyin' Steve]

My parents (who make around $300k a year) would pay a 62% tax rate under this plan (and around 67% if you include state income taxes). 67% tax rate is insane. No one should be paying that much.

Your parents make $300k a year and you dare to complain? Just be happy you won the lottery of birth while there are people in your country who don't have enough to eat every day.

Someone has to keep the upper part of the economy going.  Does Bernie want to put Lexus/Mercedes/BMW, high-value home manufacturers and resellers, boat sales, Saks 5th Ave. & Neiman Marcus, artists, classy restaurants, private schools, and other things that the $200K-1M income earners in this country like, out of business?  We live in a global marketplace now, BMW can't sell their cars at lower prices just because Bernie is giving the consumers less money.  They'll lose their profits and go out of business.

Everyone goes "oh those poor rich people!  They can't afford a BMW anymore!"  Come on guys.  If you work hard for twelve years to get your medical practice, and do the stressful and difficult work of being a doctor, don't you deserve a better quality of life?  Should we just run BMW and Mercedes out of town because f**k the rich?  Upper income earners have a right to their (usually hard-earned) livelihoods.  If you say "congratulations, you're rich, now you get to give all that money back to subsidize the poor" then we lose the motivation of becoming rich that inspires people to become entrepreneurs, to get their MBA/JD/MD, etc.

[Lyin' Steve]

My parents (who make around $300k a year) would pay a 62% tax rate under this plan (and around 67% if you include state income taxes). 67% tax rate is insane. No one should be paying that much.

Your parents make $300k a year and you dare to complain? Just be happy you won the lottery of birth while there are people in your country who don't have enough to eat every day.

Someone has to keep the upper part of the economy going.  Does Bernie want to put Lexus/Mercedes/BMW, high-value home manufacturers and resellers, boat sales, Saks 5th Ave. & Neiman Marcus, artists, classy restaurants, private schools, and other things that the $200K-1M income earners in this country like, out of business?  We live in a global marketplace now, BMW can't sell their cars at lower prices just because Bernie is giving the consumers less money.  They'll lose their profits and go out of business.

Everyone goes "oh those poor rich people!  They can't afford a BMW anymore!"  Come on guys.  If you work hard for twelve years to get your medical practice, and do the stressful and difficult work of being a doctor, don't you deserve a better quality of life?  Should we just run BMW and Mercedes out of town because f**k the rich?  Upper income earners have a right to their (usually hard-earned) livelihoods.  If you say "congratulations, you're rich, now you get to give all that money back to subsidize the poor" then we lose the motivation of becoming rich that inspires people to become entrepreneurs, to get their MBA/JD/MD, etc.

All of which takes for granted the idea that we need more lawyers, more MBAs, more medical specialists, etc. If higher tax rates encourage more high-achievers to opt for less remunerative careers with larger non-monetary rewards, I do think that we'd be better off.

Whether Sanders tax policy would encourage more MDs to become primary care docs rather than highly-compensated specialists (for example) is another matter, but you're coming at this with a set of assumptions about what is good that I suspect that most of the people you're arguing with do not share.

According to NBC, the most highly paid professions are surgeons, doctors, dentists, executives, petroleum engineers, lawyers, architects, pilots and air traffic controllers, pharmacists, and various upper-level managers.  I disagree strongly with your assertion that our brightest and most motivated people should be discouraged from pursuing those career paths.

[Lyin' Steve]

My parents (who make around $300k a year) would pay a 62% tax rate under this plan (and around 67% if you include state income taxes). 67% tax rate is insane. No one should be paying that much.

Your parents make $300k a year and you dare to complain? Just be happy you won the lottery of birth while there are people in your country who don't have enough to eat every day.

Someone has to keep the upper part of the economy going.  Does Bernie want to put Lexus/Mercedes/BMW, high-value home manufacturers and resellers, boat sales, Saks 5th Ave. & Neiman Marcus, artists, classy restaurants, private schools, and other things that the $200K-1M income earners in this country like, out of business?  We live in a global marketplace now, BMW can't sell their cars at lower prices just because Bernie is giving the consumers less money.  They'll lose their profits and go out of business.

Everyone goes "oh those poor rich people!  They can't afford a BMW anymore!"  Come on guys.  If you work hard for twelve years to get your medical practice, and do the stressful and difficult work of being a doctor, don't you deserve a better quality of life?  Should we just run BMW and Mercedes out of town because f**k the rich?  Upper income earners have a right to their (usually hard-earned) livelihoods.  If you say "congratulations, you're rich, now you get to give all that money back to subsidize the poor" then we lose the motivation of becoming rich that inspires people to become entrepreneurs, to get their MBA/JD/MD, etc.

Yeah, but the way taxes work, as I'm sure you know, is that you still get to earn more money as your salary raises, the raises are slower.

No one in their right mind says "aw, f*** it, I'm not going to try to win that promotion, because after taxes I'll only be making $500,000 more a year instead of $1,000,000 more."

Yes they do, because people have competing concerns in life and the risk/reward balance is set at a certain point in each society.  The reason we beat the Soviet Union, and the reason we're always the trendsetters in the global economy, is largely because the risk/reward balance in the United States is set to encourage innovation and risk-taking.  Elon Musk probably wouldn't have taken the risk of starting Tesla Motors if he was risking that much money for the potential of a small future reward.

Let's take glory, effort, and other variables out of the equation for a second and just look at numbers.  Suppose you're thinking about investing $10M to create a company that has a 25% chance of earning you $50M.  The expected ROI is (0.25*50)-10 = $2.5M.  Now suppose Bernie takes 20% of that $50M if you do succeed.  Now your expected ROI is zero and you have no motivation to pursue your company.

The same principle applies to virtually everything in our economy.  If you could sacrifice an extra few hours of your week for a 50% chance of earning a promotion in 18 months that gets you another $50,000 a year, but you value the opportunity cost of losing those few hours of your week at the equivalent of about $30,000 extra per year, then if Bernie suddenly changes your marginal tax rate from 35% to 50% you will decide to spent more time with your kids and family because that's now the most valuable option.  Apply this across the whole economy and innovation and progress are depressed.  Shift the burden to the rich people because "it's time for [my surgeon, manager, and orthodontist] to stop cheating and stealing from the middle class and pay their fair share" and only the upper tier of American innovators, great minds and hard workers will see their output depressed, albeit by a substantially larger amount.