Opinion of Bernie's Income Tax Plan?

[RaphaelDLG]

Of course, the calculator is misleading to the ill-informed because the increase in payroll taxes pays for a medical system that will be at least 33% cheaper and lead to a significantly or maybe even substantially healthier populace.

So for the payroll tax portion of the increase, you are getting something decidedly good in return, unless you are really wealthy.

[RaphaelDLG]

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."

[RaphaelDLG]

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.

Economists don't generally find the effect you're describing.  IMO for two reasons:

1) At the high-pressure, professional human beings can only work so many hours a week once you get to 60-80 hour work weeks, and what makes a big difference is how much effort and ingenuity they put into their hours.  So a middle-manager who works 70 hours a week is of course going to have incentive to try to be better and get a somewhat higher paying job as an executive working 70 hours a week (though if he gets NO increase in salary or recognition he probably isn't going to be as motivated).

2) People aren't economic robots who work strictly for the marginal dollar given for each unit of effor6 that they apply.  Do you think Elon Musk gives that much of a sh**t as to whether he has 2.4 billion versus 2.6 billion?  I'm sure he cares somewhat, who wouldn't, but I imagine what matters way, way more for him is being a leader, a success, and a great historic figure who everyone admires and who will be read about in history books someday.

If talented people acted like you say they acted, they wouldn't run for political office, because salaries in political careers, while nice, are nothing like the ones you mentioned.  But ambitious people do run all the time for political office for status, glory, and influence that is as good or better than the money.

[RaphaelDLG]

We're talking about people who earn 6-figure incomes a year.  So yes, if you become one of the professionals we were discussing, such as a medical specialist, then yes, you deserve every red cent you earned.  Obviously, many affluent people inherited their wealth, but what we're discussing is whether or not to raise taxes on everyone making that much, which I am resolutely opposed to.

 frankly, many of them are superior to the losers who get women's studies degrees, smoke pot all day, and then whine about their minimum wage job.  Taxing high incomes more is everything I hate about the left - they want to give it all to the illegals, to the Muslims, and to successful people they throw up a big middle finger and say, we want to give it to losers.

As someone who both smokes pot, and studies a useless humanities degree this is highly offesnive

I'm just having a little fun here, brother.

Something about Averroes's post just ticked me off.  It made it sound like it's the government's responsibility to make everything "socially optimal" and do that by confiscating a crapton of wealth from the most successful in our society.  This is why I like the idea of a flat tax - then people won't vote to get themselves benefits and take it from successful people; instead, everyone has to pay the cost.

We can agree that giving losers who smoke dope and contribute nothing to society a high salary is bad, but you're continuing to ignore that your "flat tax" system doesn't at all enable everyone a fair shot to work hard and use their talents.

The kid who is the next Elon Musk, Lincoln, or great medical inventor may never get a real shot to work hard apply himself if he goes to roach infested schools and grows up ill due to lack of adequate nutrition and medical care.

Your system encourages the Kardashians to sit on their asses and do vain, wasteful things with daddy's money while contributing nothing to society.

We can agree that people who do more valuable things should be entitled to a better standard of living, but your flat tax system is fundamentally unfair in reality even if it violates your a priori sense of fairness.

Are people on here seriously trying to say that the vast majority of rich people have gotten there through their own efforts and merits?

You gotta be kidding me.

In my opinion taxes should be a lot more exponential than they are and the estate tax should be extremely high to the benefit of six figure professionals at the expense of 8, 9, 10, 11 digit inherited wealth

[RaphaelDLG]

Another thing to watch for when billionaires claim largely "self-made" status is what percentage of their wealth came from compounding interest on inherited wealth.

It's relatively easy to make money with a pile of money and does not require some special skill as an investor.  For instance, if Trump had put his hundreds of millions in inheritance into vanguard index funds and sat on his hands for a few decades, he'd actually have more money than the 4 billion he made as an "entrepreneur."

[RaphaelDLG]

My problem with Bernie's tax plan is that, like the spending plan, I don't trust him and his "experts" to actually get this sh_t right and will just end up creating a needlessly expensive tranche of new programs that everyone will get pissed off at and then elect Republicans who cut it all.

I don't necessarily mind higher income taxes on the highest earners (imo the 2013 tax hikes weren't enough), or even the elimination of some credits that reduce taxable income in the first place for lower brackets, but an additional payroll tax to pay for Medicare for all (something I don't think is necessary to provide universal healthcare in the first place) is unnecessary.


Like the rest of his proposals for other taxes and spending, his proposals are just what clueless liberals masturbate to thinking northern Europe is like, not how it actually is. He promises all the goody-goodies of Europe without acknowledging the very real downsides of some of these programs and systems.

Like?

[RaphaelDLG]

I already pay thousands of dollars with current rates -there is no ing way I would ever vote for a candidate with this tax plan that would make me pay thousands of dollars more, though I can easily understand why young people would be attracted to it, since they don't yet have full-time jobs that would require them to pay such high rates, so it isn't real to them. 

What if you got healthcare that was overall substantially cheaper due to medicare's bargaining power in exchange for your higher taxes, causing your take-home pay to rise slightly?

For some folk, they make enough money and pay enough taxes that single-payer is a bad deal, but overall for most middle class and working class people single-payer saves them money.  IDK what you are, if you live in NOVA and are a Yuppie (no disrespect, you seem like the competent smart professional type) you may be one of the small group of people hurt by an uncapped medicare payroll tax.