We’ve been hearing a lot lately (see the last post, for example) about taxes driving away wealthy people. If we raise taxes on the rich to what they were during the Clinton Administration, apparently the poor dears will get the vapors and move away, and then where will we be? Because we all know that wealthy people are our benefactors and give us jobs.
You might have seen a video that was making the rounds a few days ago, which I can’t find now. A bagger woman ranted at a Green Party candidate that if you tax the rich they’d all move away, and then where would we be? She was a volunteer serf.
Anyway, the Wall Street Journal reports on a study done in New Jersey showing that a state tax increase on income above $500,000, which was imposed in 2004, didn’t cause a mass exodus of rich people from New Jersey. The millionaire population increased, in fact.
And the point is that the well-off want to live where they want to live, and if some of ’em want to live in New Jersey — it takes all kinds, I guess — they will live there.
I am living in a county with the second-highest property taxes in the country. The “tax burden” in New York state is among the highest in the country. The high tax burden has been in place for a long time, yet extremely wealthy people continue to live here, and I’m not seeing them move to Texas or Mississippi or Somalia. That’s because they want to live here. It’s expensive to live here, but it’s still considered a “desirable” area by the well-to-do, which is why it’s expensive to live here. The retirees tend to relocate to places like Vero Beach and Hilton Head, but that’s more because of climate than taxes.
Raising federal taxes on the wealthy is unlikely to drive many of them away from the U.S., for the simple reason there aren’t many civilized places they could go where they wouldn’t be taxed just as much if not more. Yes, they might be able to find a spot on some tropical island, but if they want to live where lots of stuff is going on — where there are parties and culture and shopping and snooty schools and five-star restaurants — that’s not going to work.
Good post. This is one of the more ridiculous arguments I’ve heard from the anti-tax crowd. I like that woman’s response, though: So what if they move away? Then we’ll be the new rich people!
BTW – here’s the video I think you were talking about:
http://www.youtube.com/watch?v=sxGLhavwrTI&feature=player_embedded
And, no, I don’t think the rich will either “Go Galt,” or have a Moses and the Jews like Exodus out of Egypt if we raised the taxes back to the Clinton era. Hell, I’d raise them a few points higher than that, for making out like bandits for the last 30 years – last 10 especially.
One of the great lies spread by the right is that these tax increases will affect the small business owners in their area. I don’t know of too many small business owners who net more than $250,000 a year. I’m sure there are. I just don’t think it’s anywhere near a majority, and if I wanted to look, I’m sure I could find data to back that statement up.
I worked for a guy for years who had a pretty successful pub business. He and his family had a very modest home, and they didn’t drive around in brand new luxury cars, but decent used ones. We employees made good money from a small salary, plus tips. We had access to health care and a retirement fund, if we wanted to participate.
So that’s the great BS lie that they spread. First, most of the small business owners wouldn’t be affected. And even if they’re one of the lucky ones making over $250,000, it’s not like someone like him could or would pull up stakes and move his business to some really low tax haven of a country. I don’t think a pub business would be very welcome in Muslim Dubai, for instance.
And if it’s the super rich we’re talking about, and they did go, I wouldn’t miss them.
If they’re that rich, they may already have property in other countries, and probably don’t pay much in taxes here or there. We also need to close individual and corporate loopholes.
And I want to see them make their low tax pitch for themselves to the French if they decide to move there. Yeah, that’ll go over well.
Or the Chinese. They couldn’t run some of their businesses and live in China the way they do here (though they may outsource jobs there). They usually have a 45 caliber judge and jury when it comes to people who defraud the government, the country and the people. So, go ahead and move there. I double dare you.
c u n d gulag — yeah, that’s the video. The baggers should change the motto from “don’t tread on me” to “don’t tread on me unless you have a minimum of $5 million in investable assets.”
Before you get too excited you should actually read the Princeton and Stamford study for the other half of the story. The NJ millionaires tax was a revenue bust. It was touted to raise $1 billion, but only $560 million was collected. Seems that taxing the rich is harder and less effective than it looks.
Mr. Wysocki — Yes, it’s always the loopholes. However, per projections by the Congressional Budget Office and the Joint Committee on Tax, maintaining the Bush tax cuts for the wealthiest 2 percent of Americans will directly reduce revenues by about $690 billion over the next 10 years. Now, that’s a projection, not a guarantee. And by itself that’s not going to eliminate the budget deficit. But at a time when programs essential to a lot of people are being nickled and dimed to death because of the budget deficit, what sense does it make to maintain those tax cuts? Do you have an answer that doesn’t boil down to “we don’t want to piss off rich people”?
Yeah, it’s that conservative mindset on display yet again.
If a figure of authority who they trust tells them something, then there’s NO disputing that.
And these willing serfs gladly lap up the line that, “Well, the rich will up and move if we increase taxes, and then where would you be?”
I just can’t get my head around how blisteringly stupid you have to be to believe the nonsense that they believe as gospel truth.
I hear this all the time in CA, and it’s the same story – the truly rich are still with us, can live anywhere they want, and will always be. I think the argument has some merit for a certain range of middle class incomes – a lot of folks fled CA for NV during the last decade – housing was significantly cheaper and quality of life (in their eyes) better. I’m guessing some of these people actually do own businesses/create jobs, but most do not. There is yet another range of middle to lower class incomes who end up in expensive places and can’t leave – a strange phenomenon, but I know of several cases in this category.
But it’s just one aspect of the voluntary serfdom mentality. It’s next to the argument against union members – rather than trying to bring their own wages and conditions up to what union people enjoy, they feel compelled to drag everyone down to their own miserable level. Behind all of this is tribal identity – the right has successfully programmed these not-rich people to identify with the rich, and to turn against others of their own class – a pretty amazing feat when you think about it.
It was touted to raise $1 billion, but only $560 million was collected.
Still $560 million in revenue that wasn’t collected before. And if we make it less easy to hide wealth, that figure will go up.
The fact remains that it takes a lot of $35K/year working stiffs like me to contribute $560 million, while we carry the revenue burden so squarely on our backs. That wasn’t so much the case before 2001, in those halcyon years of budget surplus.
Sure. No poor man ever gave me a job.
Why is unemployment so persistently high? Uncertainty. Not knowing when, or if, taxes will rise stifles the desire to spend money expanding my business. The adverse regulatory climate (for example, what the political hacks on the NLRB are doing to Boeing in SC) doesn’t help either.
Whereas pro-growth policies enhance everyone’s revenues, including the government’s via taxation, even without raising tax rates.
@joanr16 – at $35K you’re barely paying income taxes, so in a sense you’re right. It’ll take a whole lot of folks who pay nothing to add up to $560 million. And those Bush Tax Cuts you guys hate? They lowered your tax bills. Significantly.
Mr. Wysocki, please note that I hold comments to certain standards, and a big one is that I don’t take kindly to people who come here and spout the same old, tired talking points they saw on a sign at a teabagger rally. Is that clear?
Now, on to why your comment is absurd — the argument is that if the wealthy were allowed to keep more of their money, or if they were less uncertain about their future marginal tax rates, they will somehow create more jobs for us.
If your theory about taxes is correct, then the Bush Administration should have seen strong job creation. But George W. Bush had the worst record at job creation since the government has kept records on job creation. And that’s according to the bleeping Wall Street Journal.
On the other hand, Bill Clinton raised taxes, and unemployment rates fell to a 30-year low. Hmmm.
See, this is what I call “reality.” Your half-baked ideology that you believe in so fervently doesn’t work in the real world. I remember in the late 1990s some pundits were saying, wow, conservatives can’t claim that raising taxes kills the economy any more, can they? And I thought, ha. They will still claim it, because it is their religion. What happens in the real world doesn’t interest them. However, it is of great interest to me.
Here is some news from the Real World for you: Corporate profits in the U.S. are at an all-time high. Corporations have so many loopholes some of them barely pay taxes at all.
Now, you say, the wealthy are uncertain. They are so terrified that taxes will be rolled back to what they were before the Bush Administration — even though the economy was pretty sweet in the late 1999s, as I recall — that they can’t expand or hire or anything. Although they had no trouble expanding and hiring back in 1998 when they paid more taxes.
Um, no.
The argument that makes a great deal more sense is that they are not expanding or hiring because they have no incentive to do so, because consumer spending is low. Ain’t no use crankin’ up the toaster factory if there ain’t nobody buying toasters.
And why aren’t consumers buying toasters? Because they are uncertain. Because they don’t know if they’re going to have a job next week, or if their 401Ks will flatline, or if they’ll keep their medical insurance. Put more money into the hands of ordinary working people, give them more financial stability, and they’ll go out and buy stuff, and pretty soon the corporations will be expanding because they will have customers. And I promise you they will do this even if the marginal tax rates of the CEOs go up.
It’s the supply and demand thing, see? No demand, no use providing a supply.
Real pro-growth policies, fine. Fantasy pro-growth policies, such as the trickle-down theory, do not work in the real world.
But at $35K people still pay FICA taxes, so they’re paying a chunk of their incomes into Social Security and Medicare.
Not really, and I think most of us would say take the damn tax cuts and give us more jobs. Like Clinton.
Please don’t bother commenting here until you learn to notice what is actually happening in Reality Land, and also to think for yourself. Thanks much. Bye.
Chris Wysocki,
Uncertainty is the cause for unemployment?
OK, I’m calling you on it. Give me some stats that don’t come from anywhere hear Jamie Dimons colon to back that up.
In other words – Bullshit!!!
Sorry, I’m usually polite, but that’s the stupidest thing thing I’ve ever heard of, and I’ve heard enough of it.
The one thing “certain” right now, is their profits.
Ok, let’s for a moment say that it WAS true. Well, if that’s the case, then certainty would most certainly be welcome if they knew we’d go back to top rate taxes that Ike had.
They’d be certain of it, right?
Hence, more jobs raining down on us.
And have another cocktail if you think the Bush Tax Cuts lowered the “Overall” tax rates on those making 35K. Single people like me making, at the time, the mid-high 5 figures, got $300. Married people got a whopping boondoggle of $600! Almost enough for a carved miniature wooden yacht for the mantlepieces we don’t have – but not quite!
No, never mind, you’ve obviously had enough to drink already! OBAMA was the one who lowered taxes on those making that amount of money, and on those making under $200,000 – NOT Bush!!!
A tux, a bow tie, and a distinguised look do not an intellectual make.
Get away from the stupid talking points, and come back when you have an original thought. People who dress like you obviously care about the impression you leave on people, and buddy, you’ve got a lot of making up to do.
“Uncertainty,” my fat white ass!!!
I’ve heard it before, parroted by some of those third-tier economists who get hired by the rightie think tanks to say whatever the Koch Brothers want them to say. It’s nonsense on its face, of course, but you can always count on a true-blue bagger to repeat it without thinking about it much.
Such a warm, friendly welcome you guys put on here.
Small business is what creates the most jobs in this country, and it’s small business which is paralyzed by uncertainty. Uncertainty not just on the federal level, but within states and municipalities too. Yes, I am a small business owner. No, I’m not hiring. I know lots of other small business owners. They’re not hiring either.
But let’s talk about your “corporations” bugaboo. How’s the Friends of Barry at GE working out for you guys? Special tax breaks just for them? Can I have a few of those too? Or Fannie Mae and Freddie Mac? They suckered the taxpayers for way more than Chase or Citibank ever did.
FICA taxes? You’re discussing income taxes on millionaires and comparing them to FICA taxes? That’s intellectual dishonesty.
So again, thanks for the warm welcome. Don’t fret, I won’t be back. You’re safe inside your Keith Olbermann bubble. But if you ever wonder why a guy like me won’t consider hiring folks like you, reread this thread.
I have little patience with baggerbots. I’m doing my best.
Do you have an iota of data to show that more than a sliver of genuine small businesses are frozen in uncertainty because they fear the marginal tax rates on income over $250,000 will go up? Can you demonstrate that all but a handful of genuine small business would be affected? And do read the link.
Are you not hiring because business is slow (which makes sense), or are you not hiring because you are frozen in fear about future taxes, even though business is good and you could make more money by expanding now (which is stupid)? Be honest.
Don’t be so anal as to assume that we give knee-jerk approval to everything President Obama does. We are not baggerbots, as you are. We think.
Yes, and we don’t like that. Don’t change the subject.
Not if you’re trying to live on $35,000. I am self-employed, btw,and my FICA taxes are a real bite. i suspect they are a bigger burden to me than the pre-Bush marginal tax rate was to a millionaire.
You can’t handle challenges to your stupid assumptions, I take it.
Wait, wait, wait, wait, WAIT! FICA Taxes should not be compared to millionaires’ income taxes? The tax that stops taxing at $87K, which means a disproportional amount of social security and medicare is paid for by the “poor” people (should I say the little people?). 16% of our money is not in our pockets, but since it’s FICA, it doesn’t count? Pulease!
I just talked to a guy about eliminating the cap on FICA and he said “But it’s their money!” Isn’t the $35K or $87K our money? Aren’t we all in this together?
Sir, I wouldn’t work for you if you were the last employer in the country. You are probably second or third generation small business owner anyway, but think you are brilliant, because grandpa started the lumberyard.
Oh yeah, I, too, started my own business. With my own money. I’m not rich. I’m not hiring either, because sales are down, not because I’m worried about my taxes. I, too, would gladly give back the $300 if the RICH were paying their fair share.
Oooh – New slogan. Have them pay-their fair share.
Yep, that’s what he sounds like to me, too.
If people are making over 250 thousand on their business and haven’t incorporated or done an llp or something then I have no sympathy for them. They have other choices. I’m all for helping small business. It’s the corporatocracy that I am bothered by. Yes the Dems and the Cons are part of it. That bothers me greatly. I wish Chris was as bothered and ready to do something about it as I am. He seems only to take offense when Democrats do it.
He seems not to understand that it really is a class war and unless he is making tens of millions every year then he is not in the upper class.
Those companies kill jobs not create them. When a large company wants to expand it buys another one. Then they ALWAYS cut jobs.Then they often ship others overseas.
Trickle down
Piss on my leg and tell me it’s raining.
It seems to me if you want to find the people that want the majority of the people to be locked into the same low wage with little choice of profession you don’t look to the progressives, you look to the Big corporations. There’s yer evil communists right there out in the open.
Deep thought is not a viable concept on the right.
Mr.Wysocki, sir …Please hire me! I’m not like the rest of the Barry loving liberals here on this blog who are living in the Olberman bubble..I got my head right! Please hire me..I need a job.
I haven’t played pinball in a long time but damn you guys bounced wysucki around like pinball wizards, baggerbot indeed. Wouldn’t hire people like you no shit every employer of the conservative persuasion is scared shitless that their employees just might be smarter than them they want mindless trolls who willingly accept their position in this age of Neofeudalism.
Several friends of mine share Mr. Wysoki’s opinion .Why, just the other day, I and my friends Scooter and Stanton were sharing cocktails at the club when this very discussion started,
They truly believe that things will not get better until the wealthy and the small business owners feel more comfortable and warm and fuzzy about the economy, and at that point they will start hiring and the unicorns, faeries, and saints will come marching in.
In the mean time, the prophets of doom are screaming that Obama is driving the world off a cliff, the economy is going to hell in a hand basket.We all know this is “Barry’s” fault.
There was a time “in this great country”, that the rich felt it was an honor to pay their taxes and “give back” to the country that made it possible to live in freedom and harmony.They now remind me of penguins on an ice floe pushing each other around until one falls in; if the leopard seal doesn’t show up, it will be safe for all to get in the water.Sorry to be rude, but that’s a bunch of wusses. Wringing their hands, and whinning never fixed anything.
In the current climate, we see people “investing” in things like gold and silver as a hedge against uncertainy, which contributes NOTHING at all to the economy.
Silver broke $47.00 per ounce yesterday, and the only reason is fear.
We are trapped in a viscous cycle where business seeks to bust unions and cut costs in order to be responsible to the “share holders”, increases the burdens on the employees, ships jobs offshore, puts money in offshore accounts to avoid taxes. This caused unemployment, cheaper products, and a general down turn in the standard of living.
On a trip to Miami this week, I was pleased to see a huge work in progress to expand I-595, which is putting thousands to work AND ease traffic congestion. Our tax dollars at work……….
It’s extraordinarily difficult to hide wealth (legally, anyways).