Through Glenn Reynolds, whither I wandered because of Mark’s post about something else entirely, I came upon this truly amazing pasticcio of mendacity, ignorance, and small-minded cupidity. [UPDATE 20-21/IX: the original post was taken down; instead there's this and a cache of the original post is here.] It’s worth a close look because the author is a law professor, not some high-school dropout Limbaugh lemming, and because the tone of entitlement and whining is typical of a fair number of the comments I got on my post about intergenerational equity (and by extension, equity).
UPDATE 20/IX: I had in mind to remove Prof. H’s name from this post in view of his recent post, because I have and had no wish to make him personally victimized or threatened, much less his family and especially his wife, who apparently gave him counsel he should have listened to (mine has certainly saved me from making a fool of myself many times). But I can’t edit the whole web or even, practically, the hundreds of comments.
What I can say is, leave him alone. If his post weren’t typical of a common way of thinking, so common as to rate discussion in Paul Krugman’s column today, I wouldn’t have flagged it or flogged him about it. This isn’t personal and shouldn’t be.
Because Obama proposes to let the Bush tax cuts expire only on “incomes above $250K”, I was surprised that Prof. Henderson expected to be importantly worse off under the president’s plan, so I went here and plugged in what seemed to be reasonable numbers. He says his family’s “combined income exceeds the $250,000 threshhold for the super rich (but not by that much)” . I tried $140,000 each for him and his wife, $5000 in charitable deductions, and a 5% mortgage on a million-dollar house, which is what would cost about $15K in property tax per year in Chicago, with 80% 20% down [thanks JHA]: $40,000 per year in mortgage interest.
Under Obama’s plan, his federal tax would be $48,333, and his Illinois tax about $8400 (3% of AGI). Under current law (Bush tax cuts), $55,600 + $8400. Oops; what happened? Obama will greatly ease his AMT hit, and his taxable income is less than the $250,000 cutoff. If all the Bush tax cuts expire, his income taxes will be the same as now, $55,600, again because of AMT changes.
But wait a minute: he says he’s paying “nearly $100,000″ in state and federal taxes, not including sales tax; let’s say $95,000. Leaving out his property tax, that’s $80,000 in income tax. How much income would lead to this kind of tax hit? I had to experiment with the calculator a little, but it’s a little less than $170,000 apiece. So his pretax family income exceeds $250,000 by at least $90,000. But this doesn’t include tax-free contributions to their 401Ks: anything they are socking away for retirement adds to his actual income; unless they’re at the $33,000 limit they must just like to pay taxes, or are too stupid to be walking around professing and treating sick kids. So we’re pretty close to $400K gross income, and on top of that their employers are surely putting money into their retirement funds. I guess $150,000 is “not that much” in some circles.
He is also whining about his and his wife’s education loans, $500,000, which are costing them about $50K per year in interest. Let’s just sketch out the family budget here:
Taxes $100,000
Housing* $65,000 mortgage + 15,000 insurance & maintenance = $80,000
Two really nice cars $.70/mile x 15,000** miles = $10,500
Student loan payments (20 year amortization at 10%) = $60,000
*Why a couple with a half-million dollars of debts decides it needs a million-dollar house in Chicago, where the Hyde Park average price ” near their work” is a third of that, is not entirely clear. Also note that $25,000 of this is going into their own pockets, building equity in their house.
**They live near their work, so this is probably generous.
This leaves about $90,000, a lousy $245 a day, for food, clothes, vacations, cable TV, and like that. You can walk into Nordstrom’s on Upper Michigan and spend that in a minute, and for stuff you really need. Really, I don’t know how these people get by; their adaptive skills, economical habits, and modest living style is an inspiration to all of us. Perhaps they are careful to tip no more than 15% at the Sizzler when they splurge.
So how does our third-of-a-million-a-year law prof/doctor couple and their three kids, barely scraping by already and falling before our eyes to the very bottom of the top 1% of US families by income, make out under Obama’s rapacious soak-the-rich commie attack on all that is holy and American and fine? Wait for it; take a guess before the jump:
His taxes will go down $3700; he can buy one of those ties every two weeks! And this guy is threatening to fire the gardener and the house cleaner, take the kid out of art class, turn off his cell phones, and try to raise competent adults with only basic cable. Prof. Henderson, I’m ashamed to share my profession with you.
Henderson’s lying isn’t limited to misrepresenting his income and what the Obama tax plan really means for rich people like him (though I wonder if he actually knows what any of the numbers in his family finances really are). He also blithely says ” The biggest expense for us is financing government.” No it isn’t: their biggest expense, and it’s three times larger, is financing their private consumption. Any budget can be sliced up so the piece you want to look big is the biggest; Henderson is obviously dividing his private expenses up like the budget I constructed above, but choosing not to divide his public expenses into, say: education, policing, national defense, fire protection, keeping his street paved, subsidies to corn farmers and oil companies, etc. etc. If he did that to “financing government”, his largest expense would certainly be his housing. This is a familiar trick, but no less disreputable for that.
The next time you come upon a Chicago law professor in his scuffed Gucci loafers and tattered Armani on the sidewalk, holding up his libertarian down-with-government sign and shaking his tin cup to get his doctor wife and hollow-eyed waifs through another tough week in their million-dollar hovel, please don’t just walk by. Remember, it could be you. Be a mensch: throw a nice shiny 3/8″ washer and couple of nickel slugs in there, with my blessings.
UPDATE 18/IX: my original calculations of the Obama tax plan effect ignored the deductibility of state income tax.
UPDATE 18/IX: Brad Delong kicks this up to launch speed.
sorry, another typo. @50k s/b 250k.
He bitches about taxes, but sidesteps the equally political, equally civic, and totally bitch-worthy problem concerning the state of Chicago Public Schools and public education in general, by sending his three children to private school. If he threw more money at some other tax-deductible vanity, or perhaps found God at 10%, he could keep his cake and lower his taxable income at the same time.
Jeff, we obviously have a very different set of philosophical assumptions underlying what we believe. I think it’s important to remember that when trying to parse the logic on both sides. I understand that you feel like because you did the work of developing your business, and are seeing returns on your investment, you consider the profit yours to keep. You believe in taxes, but feel they should be fair – at least according to what you feel is appropriate. You feel you do society a service in creating wealth at all, and as such are owed your rewards. I understand that.
But try and understand my perspective – and likely that of many here, as liberals. I view your profit as taking place entirely within a broader social contract. The money that you receive is simply paper that is backed up by the rest of us. I believe you have every right to make a profit, but that our social democracy is based on the notion that we all get to decide – together – what kind of government expenses we want. That is the number one priority, by law, and everything beyond that is yours to keep.
Now, to the degree that you are able to leverage your capital – whether brains, brawn, luck, etc., that transaction takes place within a democratic system that needs you as much as you need it. Your money is not something purely between you and those with whom you do business. In a very real sense, it belongs to all of us. Now, we may decide as a country that you can have 99% of your profits to do with as you please. I think that’s a recipe for anarchy. But if we decide to do so democratically, then the money is yours. Likewise, if we decide that you can only have 1% of your profits, then that money is yours. I think that model would be similarly disastrous. But the fact remains that we have decided what kind of contract we wish our citizens to have. Going around saying that this or that portion of one’s money is his own is irrelevant. As a society we set the tax and our citizens must pay it.
The likely fact that your money would soon be worthless as society falls apart nicely illustrates my point. Your profit is entirely dependent upon a functioning state, and the arrangements we have all agreed to. The only reason you have the ability to make such profits at all is that we have the state that we do.
Now, just to finally mention what all the fuss us liberals have over taxes. We likely have very different views about what the state can and cannot do, what people can and cannot do, and therefore what both *should* do. At the beginning of this thread I tried to detail what it is exactly that liberals insist the state spend money on. It isn’t cheap. But it is morally correct, no less so than arming our troops or putting out fires.
Conservatives often argue that we need to cut spending, so that we may cut taxes, which will increase growth, so that increased revenues will pay for the spending we want. But that’s a kind of fancy dance. What they really want is to cut programs they don’t like, and never pay for them. Believe me, I’d like to do so to. I can think of a lot of military spending that could pay for a lot of after school tutoring. But the reality is that there is just simple disagreement over what is worth spending money on. So we spend it on everything. Democracy is expensive. And so someone has to pay for it. The reality is that if we can put as much of those costs as possible on people who are already living better than most of us can imagine, the unfortunate disagreement over government spending will cause as little discomfort as possible.
Like I said, I tried to lay out in a previous post the moral case for what government spending can do to help the poor. If you disagree, that’s fine. But I’d hate to think it was only so that you have the right to keep what you earned fair-and-square. Obviously, life isn’t “fair”.
They borrowed half a million dollars in education loans on which they pay interest only and haven’t paid down any principal yet? And then took out a mortgage on a million-dollar house, say $800,000, maybe at the top of the bubble so that they are now underwater? And instead of paying down their very large debts, they spend and spend and spend (I suspect they might be running a lot of credit card debt, too)?
Obviously, they are modern borrow-and-spend Republicans, feckless, extravagant, and innumerate. I am much too conservative to live my life that way, which is why I am a liberal Democrat.
(And I’ve been self-employed for decades; I can imagine the howling from this bureaucrat if he were paying double FICA!)
“So. What was that you were saying about focusing on the benefits we (and others) receive from taxes?”
Here’s the benefit: those property taxes you pay increase the value (sales price) of the units you are selling. Real estate prices depend on location. Location means a lot of things, but it include amenities and quality of life – it includes streets, sewers, water treatment plants, public transportation, police departments, hospitals, schools, park, and a whole raft of other public services. You pay for those services (some or all or others, depending on local taxing schemes) as part of the $4 million you pay in property taxes. You get it back in the higher price you can charge for the housing units.
To put it another way, I’m sure you’d pay only a small fraction of that $4 million in property taxes if you were building housing in Claunch, New Mexico. But you probably wouldn’t sell a single unit.
Michael Schneider
I think you missed my point when I quoted DavidG on ‘focusing on the benefits’.
Various government entities absolutely wasted 65 units x $185,000 = $12,025,000 on this one project in my locality by overpaying the favored non-profit developer to build housing units for very-low income households. That one instance of waste represents a full 1% of the budget for the entire county.
This is a benefit? It’s certainly not a benefit to the taxpayers!
“businesses like mine provide a huge amount of employment for the rest of you.” No, Mr. Sanctimony McPatronizer, I own my own business too. And businesses like yours provide a huge amount of income for yourself. Who are you kidding? You did not go into business to help others. Nice try, though. Earn $400k per year. Earn $1m! I don’t give a darn. But don’t pretend you’re in business for the good of society.
Ohhhh, a de*VEL*oper! The line of business that gets perhaps more than any other in government subsidies —
billions for the roads to serve new development, billions for the government-insured loans to buy the houses, billions for the water and sewer lines to serve development, and untold other costs in terms of surface water pollution (largest source: non-point source stormwater runoff from impervious surfaces created by development), billions and billions and billions in subsidies (not to mention externalities) — not only from federal taxpayers, but from every state, county, and municipality taxpayer as well. Now I get it, Jeff. I can’t stop laughing — sorry, folks!
I don’t get it mr.meyer. Maybe I am just plain wrong but you are making about $180k over the $250k, 3% of 180 is about $5500. They aren’t talking about getting rid of the mortgage interest deduction. You pay yourself a small salary to avoid payroll taxes, incl. medicare taxes which you probably benefit more from than you personally put in. Are you talking about cap gains? Where do you come up with the $10K? BTW, my educated guess is that you directly benefit in your business from all the money that government spends around your properties. Unless you are developing compounds in BFE for neonazi survivalist kind of people.
“I’ll go with this one: http://www.roadmap.republicans.budget.house.gov/”
Now we know for sure you are a dishonest sap. See Ezra Klein for details on Ryan’s “plan”. Poor Ezra tried, but in the end, it’s just another garden variety Republican scam to blow the deficit sky high AND completely trash essential services for the lower 4/5ths of the population. But it’s true, he’ll cut *your* taxes. The rest of us aren’t fooled any more by this uh… misdirection.
Michael Schneider
Let me see if I can draw a bolder line under that last comment.
My local government WASTED more money ($12 million) than I will EVER have to pay in income taxes on this one project.
And I should feel good about shoveling more money into the federal blackhole that blew through trillions EXTRA in the last two years alone.
Eli points to a cause we probably all think is a good one and suggests those guys will lose out if my extra money doesn’t arrive.
Well, I went to my Town and made them a better offer for low income housing units. They essentially said, “No thank-you, we’d rather take more money than you will ever spend in your entire life on income taxes and waste it on this other project over here. Now pay more taxes so we can spend it on a worthy cause.”
For those new to this space, welcome.
Let me restate our “play nice” comments policy:
- No personal insults directed at posters or other commenters.
- No words that would get us filtered.
I’ve had to delete comments from both sides of this debate.
Beah
I put my numbers into the linked Tax Calculator and those are the tax numbers that came out. I didn’t delve too deeply into what the difference was made up of. You can go to the site and plug my numbers in if you want.
As far as infrastructure goes, you could say that I benefit from it. Or not.
First, I am required to either build or pay the city to build any improvements that my project requires. For example, If my project increases the sewer demand I have to pay to enlarge the sewer treatment plant. If traffic from my project causes delays at an intersection, I have to upgrade the intersection. So, I benefit and I pay. In addition to that, I pay mitigation fees to the city for sewer, traffic, parks, fire, schools, and what have you. One might argue that I benefit from that but it is hard to trace the actual benefit since I have already paid separately (via the first category) for identifiable impacts.
Are we to say that taxes are not taxes if we receive some benefit? Eli argues in his comments that we all benefit from association with each other. How can one say “pay more taxes because we all benefit from each others well being” out of one side of the mouth and “but I’m not giving you any credit for taxes that you benefit from” out of the other.
jeff meyer offered = I’ll go with this one: http://www.roadmap.republicans.budget.house.gov/ [and is likely the Republican plan referenced by Warren Terra above]
Although I have not done an extensive analysis, it appears that Rep Paul Ryan while cutting various tax rates to ZERO [corporate, capital gains and others as I recall] he assumes, as noted, that taxes collected will be 19% of GDP without any supporting details. Also, the future of Medicare is to provide those that qualify with vouchers [without provision for inflation] to be used to purchase private insurance policies on the open market. Other health care cost reductions are to come from selling policies across state lines [where I live Wellpoint [BC/BS] and UHC together already have well over 50% of the market on both sides of the state line]. Although tort reform is already in place in Texas, there has not been any significant reduction of healthcare costs there. . . .
It is interesting that not very many other Republicans have officially ‘signed on’ to the ‘Road Map’ which I believe was formally presented last March or April.
I’ve removed comments from both sides of these debates for violating the RBC “play nice” rules, of which there are only two:
- No insults directed at posters or other commenters.
- No words that might get the site filtered out.
It’s amazing to me how many feel so justified reaching into someone else’s pocket to pay for shit that you want, but don’t pay enough taxes yourself to cover. This guy isn’t Paris Hilton, sitting on a trust fund and earning the mega bucks off of dividend income. He and his wife are wage earners and obviously worked long and hard, and went into an incredible amount of debt, in order to reach the positions they have. You bitch about his choice of housing, you bitch about the cars he drives (he never indicated what he drove) and you bitch about his decision to enroll his children in private school. Guess what? None of his choices are coming out of your pocket. If he pays more in taxes, you are not going to see an increase in your disposable income because of it. At almost $100K in combined state and federal taxes (and Mr. O’Hare included his $15K in property taxes in that figure, when it was a separate expense), he feels like he pays enough and knows that any increase will cause changes to his budget. I would like to remind Mr. O’Hare, as he vents his spleen over this man’s choices, that they are very similar to the choices that the Obama family made. And to hear the both of them tell it, they had a very hard time making it on the over $250K they made before they struck it rich on his book. And ole Joe Biden, he of the U.S. Senate for over 30 years, barely has two nickels to rub together, given the extremely expensive housing choice he and his wife made. That, and using their home as an ATM, constantly refinancing ever increasing mortgage amounts, has made him almost literally house poor. His mortgage interest is over $50K per year!
As Mr. O’Hare keeps insisting that the Professor will actually pay less when the Bush tax cuts expire, well that is very open for debate. Many people in upper income brackets don’t actually get hit by the AMT, because their tax bill is already so high. I ought to know, since I’m one of them. We have very little in deductions, except for charitable giving. Because of this, and the fact that our two children are older and we don’t have child care expenses and we make too much to get the child tax credit, we never get hit by the AMT. Instead, we just pay out the nose – approximately $95K on $364K AGI (almost all wage income for a dual earner couple) in 2008. Mr. O’Hare also forgets that with the roll back on marginal rates, there will also be a roll back of the child tax credit, the amount that can be expensed for child care, etc., etc., etc. He also forgets that the Democrats are also proposing that income over $250K be subject to additional Social Security and Medicare taxes. I sincerely doubt that the Professor is going to be paying less once the Bush tax cuts expire, and there is no plausible way for Mr. O’Hare to insist that they will, given he has only very rudimentary information to work with, and each tax payer’s situation is unique.
To those that say they are happy to pay more, I have only one response – What the Hell is stopping you? You can give the government 100% of your income, should you so choose. But what you want is not necessarily what I want, so why do you feel entitled to my money? And for those that feel that, at almost $100K per year in federal taxes, I don’t pay enough, I have only one response – kiss my ass.
First off, I just have to ask “jeff meyer” whether he ever commented at Obsidian Wings under the names “Frank” or “d’d'd’dave”.
Now, about his views on income taxes: “jeff meyer” is EXACTLY the kind of person who SHOULD oppose the madcap Republican-passed sunset provision in the Bush tax cuts. It’s money out of HIS pocket. Who the hell ELSE should be complaining?
Of course, if ONLY people like “jeff meyer” voted to extend the upper-end Bush tax cuts, the GOP would be nowhere. They cannot take back the Congress with only 1% of the vote. So “jeff meyer” has to convince the rest of us that WE would be better off if HE pays less tax. Many of us are not buying it.
But you can’t blame a fellow for trying
–TP
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Mr. Meyer,
That’s a shame. Sounds like an example of poor government. But, maybe the solution to bad government is better government, not necessarily less govt. Should the govt not try to help the poor with their housing costs because sometimes they do a bad job of it? One in seven Americans live below the poverty line and 50 million now lack health insurance. In many localities, the wait for Section 8 housing is measured in years, sometimes almost in decades. I know some people in this terrible position. Do you?
More braodly, desiring a drastically shrunk federal government, when 80% of it’s revenue is spent on Social Security, national defense, medical care for the elderly and poor, and interest on debt from a public that insists on all the govt services they want without paying for it is a choice based on ideeology, not on cost-benefit analysis. You’re frustration with govt regulations and bureacracy is probably well-earned, but “gov’t bad, private sector good” is just a bumper sticker slogan. It’s not that simple.
I could refer you to many good places for a list of some of the obvious good govt does, but, hey, why not to my blog? http://civilizedconversation.wordpress.com/2010/02/02/successful-government-programs-a-partial-list/
Incidentally, the benefits I listed at that post do not include the clean water you showered with this morning, the roads you drove to work on, the ability of your employees to read, write, and follow directions, or the 911 call you hopefully will not have to make today. They say that if you ask a fish to describe its environment, the last thing it will mention is the water. It’s everywhere and invisible, so it’s just taken for granted.
Jeff, we obviously have a very different set of philosophical assumptions underlying what we believe. I think it’s important to remember that when trying to parse the logic on both sides. I understand that you feel like because you did the work of developing your business, and are seeing returns on your investment, you consider the profit yours to keep. You believe in taxes, but feel they should be fair – at least according to what you feel is appropriate. You feel you do society a service in creating wealth at all, and as such are owed your rewards. I understand that.
But try and understand my perspective – and likely that of many here, as liberals. I view your profit as taking place entirely within a broader social contract. The money that you receive is simply paper that is backed up by the rest of us. I believe you have every right to make a profit, but that our social democracy is based on the notion that we all get to decide – together – what kind of government expenses we want. That is the number one priority, by law, and everything beyond that is yours to keep.
Now, to the degree that you are able to leverage your capital – whether brains, brawn, luck, etc., that transaction takes place within a democratic system that needs you as much as you need it. Your money is not something purely between you and those with whom you do business. In a very real sense, it belongs to all of us. Now, we may decide as a country that you can have 99% of your profits to do with as you please. I think that’s a recipe for anarchy. But if we decide to do so democratically, then the money is yours. Likewise, if we decide that you can only have 1% of your profits, then that money is yours. I think that model would be similarly disastrous. But the fact remains that we have decided what kind of contract we wish our citizens to have. Going around saying that this or that portion of one’s money is his own is irrelevant. As a society we set the tax and our citizens must pay it.
The likely fact that your money would soon be worthless as society falls apart nicely illustrates my point. Your profit is entirely dependent upon a functioning state, and the arrangements we have all agreed to. The only reason you have the ability to make such profits at all is that we have the state that we do.
Now, just to finally mention what all the fuss us liberals have over taxes. We likely have very different views about what the state can and cannot do, what people can and cannot do, and therefore what both *should* do. At the beginning of this thread I tried to detail what it is exactly that liberals insist the state spend money on. It isn’t cheap. But it is morally correct, no less so than arming our troops or putting out fires.
Conservatives often argue that we need to cut spending, so that we may cut taxes, which will increase growth, so that increased revenues will pay for the spending we want. But that’s a kind of fancy dance. What they really want is to cut programs they don’t like, and never pay for them. Believe me, I’d like to do so to. I can think of a lot of military spending that could pay for a lot of after school tutoring. But the reality is that there is just simple disagreement over what is worth spending money on. So we spend it on everything. Democracy is expensive. And so someone has to pay for it. The reality is that if we can put as much of those costs as possible on people who are already living better than most of us can imagine, the unfortunate disagreement over government spending will cause as little discomfort as possible.
Like I said, I tried to lay out in a previous post the moral case for what government spending can do to help the poor. If you disagree, that’s fine. But I’d hate to think it was only so that you have the right to keep what you earned fair-and-square. Obviously, life isn’t “fair”.
2
May I respectfully request that commenter “Teresa”‘s comment not be deleted? It’s perfect except for the last word. Maybe fix it up slightly for the censors.
Oops – double post.
*How can one say “pay more taxes because we all benefit from each others well being” out of one side of the mouth and “but I’m not giving you any credit for taxes that you benefit from” out of the other.*
Jeff, I didn’t quite follow that. You point out that government is often wasteful. OK, I’ll go along with some of that. But you then have to realize that government is generally doing things that can’t/won’t get done by the private sector, and so can’t benefit from competition. Like David wrote, that simply means we must hold government accountable. Who else is going to do any of the things I referred to as oral necessity.
Teresa, I do pay my fair share. But I don’t make that much and so I would feel it a lot more than you would. Honestly, the needs of state come before your luxury expenses. You are lucky to have been so fortunate, whether because you were born with special talents or things happened to have gone your way. There are many more out there who have not had the same opportunities and you owe it to them to give more of your income to help them. And if they have a right to state services (like the ones I mentioned above), then we can’t have them dependent upon the charity of the rich. Would you tell the military that they need to do pledge drives?
I think the real problem lies deep in the philosophical weeds, of how human success is created, and to what extent we can claim responsibility for our individial successes or failures. I can make a strong case that everything you have has been handed to you either through genetics, environment, or pure dumb luck – whether your drive to work hard, your family connections, etc. As such, then there is no meritocracy, so you ought to be extremely pleased that you aren’t homeless, addicted to drugs, or in prison somewhere. For many, the reality is that it is “there but for the grace of progressive taxation go them”. We’re all seeing the irreparable harm an inadequate budget for social services does right now. I see it everyday in my line of work.
I’m imagining you walking up to a 5 year old who’s mother who can’t afford childcare so she can’t take night classes, his father is stuck in an overcrowded prison with no money for rehabilitative counseling and remedial education, and whose school doesn’t have enough money to provide him with the educational services he needs, and who has to walk 10 more blocks because they just cut his bus line, and telling him to “kiss your ass”. Delightful.
sorry – *moral* necessity!
Paying taxes is not very enjoyable to anyone. However, perhaps if Mr. Meyer wants his taxes to be reduced he needs to remove his mother from Medicare and, to the extent she is receiving more than she paid in, Social Security. Surely on a $410,000 income he can afford to assume those expenses.
Also, I would think being a conservative, Mr. Meyer supported the wars in Iraq and Afghanistan as well as massive defense spending in general. He surely doesn’t object to paying for those ventures. After all, others have given their lives in those operations, not just their money.
Interest needs to paid on the national debt, of course. Part of that debt is yours, Mr. Meyer, and a large part of it was run up after the Reagan and Bush tax cut revolutions. You supported those, right?
It’s sad in a way to see someone who feels offended while being one of the luckiest people on earth. If you are in the top 1% of American incomes, just think where that puts you in relation to the entire planet.
I can’t wait for the Bush tax plan to expire. With the swoop of the pen of Obama, he will be able to take $120/month out of people’s checks who are making $42k/yr or more! This will be great so that he can create a surplus of money to get the United States out of debt. BRAVO!!!!
We really don’t need to get philosophical with Bret and Mr. Meyers. We have a government. We had a government when it decided to engage in massive spending on two wars, expansion of medicare part B, payment of SS benefits, and paying for golf courses and rich people’s stadiums. All of this has been deficit financed–that is, our government and our Republican voters (though not our democratic voters), did not consider how to actually pay for what we were buying. Meyers, Bret, and the original letter writing professor exhibit magical thinking: taxes are “real” money when they come from actual rich people, and are not real money when they are levied on our children to pay off the debt we ran up for them. Bush’s tax cuts were scheduled to expire as part of a shell game with the accounting. Every single person who voted for them knew that. Passing the tax cuts at the same time that we were at war, and already stretched thin with the everyday duties of common government (roads, prisons, defense, SS, medicare, diplomacy, etc…) was massively irresponsible. Paying for what we consume as a people–whether wars or medicare–is the responsible thing to do. Only in bizarro world can people like Bret, Meyers, and the original writer insist that as citizens who consume all those things they aren’t also on the hook to pay for them.
Also, as others have pointed out, the Law Professor and his wife are in fact dead beats: they borrowed money from the government for their education and they have slow walked those repayments in favor of excessive spending on capital goods like their own house. Far from being an unfair observation this is the very crux of the matter. The Professor and his wife used the tax monies paid forward by much poorer citizens, enabled their own education, and then simply refuse to give back what they actually owe so that other people can benefit from the good government they have enjoyed. Only the fact that they are upper class obscures the reality that they are as much “welfare queens” as anyone taking a direct welfare payment from the government. Except they have slightly less humility in bitching about their benefits, apparently.
aimai
“So that would put their tuition bill at a little over $20,000 a year … If they spend like the Obamas did when they were in Hyde Park, the various enrichment activities for the older kids would be around $10,000 a year … So, assuming you have the calculations for their disposable income right, they’re down to about $30,000, which isn’t a lot.”
You’ve just assumed $30,000 per year for educating and entertaining their children, and another $30,000 for disposable income. Maybe that “isn’t a lot” to you, but you do realize the median household income in the U.S. was $50,233.00 in 2007? So that couple’s true discretionary income — because yes, private school is discretionary — is more than the total income of more than half the people in the U.S.
jeff meyer says:
… I’ll go with this one: http://www.roadmap.republicans.budget.house.gov/
Wow!
Should’ve read that page before posting the link.
Or did Jeff really want to destroy every smidgeon of credibility, now and for all time?
Parenthetically, if the
http://www.samefacts.com/2010/09/economics/the-whining-of-the-rich/comment-page-1/#comment-48624
post has accurate info, write it up and send it to the local news; people have a right to know.
@RDWalker: Well, whom do you think should pay the costs of the government. And if you think those costs too high, as others have asked, what do you think should be cut? The only common denominator answer to that one is “foreign aid” – which turns out to be something well under 1% of the federal budget and of which a large fraction goes to Israel. As DeLong said, quoting Friedman, “to spend is to tax”. You want less taxes. So what’s it going to be?
Emotional Truth/Objective Truth: battle royale or kerfuffle? Real numbers are besides the point.
I am sure Linda Lay actually believed that she was “poor” when she went on the Today show to claim impoverishment after Enron collapsed. I am sure that the traders of AIG felt they were unfairly put upon when bonuses their were questioned.
Cognitive dissonance is a helluva drug
http://www.youtube.com/watch?v=dpDkYZWeeVg
Warren Terra says:
“Jeff,
That site doesn’t work on my phone. But I read Ezra Klein on the Republican plan (well, on the one plan from a Republican that anyone was taking as being a remotely serious effort; his name escapes me), and it was magical thinking. It involved cutting taxes, while stating that tax revenue would mysteriously be 19% of GDP (it’s 18% now, if I recall), and the cuts were all vague promises about future efforts.”
Shorter version – Mr. Hard-Headed Productive Businessman just handed out a load of bullsh*t. Whether it’s because he’s a liar, or can’t figure out that clear and obvious lies about money are clear and obvious lies (which is an odd lapse for a HHPB) isn’t clear.
I am just amazed to hear economists actually talking about positional/context/prestige externalities (see also Krugman’s post on this today).
It’s like hearing doctors talking about germs in the 1800s.
The guy works for a university (gets government money through various channels) & his wife is a doctor working at a hospital (government money through medicare, medicaid, etc.).
Their salaries are only at the level they are *because* of government subsidies on education & health care. Before those subsidies, college professors were fewer, & worse paid (except for very elite ones). And doctors & the rest of health care personnel, the same.
The reason is easy to discover: The rich had most of the money but were only a small fraction of the population. “Regular” people either couldn’t pay, or couldn’t pay much, for the services of professors & doctors.
The government subisidizes the upper middle class to a large degree.
Love the straw man argument. Its a fine illustration of the epistemic rigor one can expect from the “reality-based” community.
You don’t know what the hell you are talking about.
I used to live a few blocks from there, somewhat closer to the University. First of all, Henberson and his wife are virtually forced to send their kids to private school; I’d consider putting them in those public schools as nothing short of child abuse. I mean, literally. I guarantee you would not send your kids to the public schools around there. They SUCK. BADLY.
Next, that $330,000 figure for real estate includes tiny apartments, condos, and 1400 square foot townhouses.
I could go on for an hour as to the other ways you have NO IDEA WHAT YOU ARE TALKING ABOUT, but those will do for starters.
Chester, it’s hard to tell if you’re being sarcastic or not. If sending your kids to a public school constitutes child abuse, the problems is clearly *not* what the professor is paying in taxes. The problem is the schools.
And what’s so bad about 1,400 square foot townhouses? My first house was 824 square feet. We had two kids there before we moved. If I hadn’t gotten the better job when I did, we could still be living there, raising our two kids in a small house and sending them to public schools we weren’t thrilled with. My current house is about 1,400 square feet. Seems plenty roomy to us.
When your “poor me” rant includes “What do you expect them to do, live in something that’s the average home size from 1970?” (http://www.infoplease.com/askeds/us-home-size.html) you’re sure to lose plenty of people living in houses smaller than that.
hahahaha….Mike, when I grow up, I want to be able to write just like you. The best part was the set up:
“So how does our third-of-a-million-a-year law prof/doctor couple and their three kids, barely scraping by already and falling before our eyes to the very bottom of the top 1% of US families by income, make out under Obama’s rapacious soak-the-rich commie attack on all that is holy and American and fine?”
Its astonishing to me that you discuss another man’s wealth as if you have some claim to it. You would leave him with just enough to get comfortably by on. No opportunity to build any personal wealth. We all see where you are headed …
[...] is, and has been, as bad as some have described it. See I played with a tax calculator, as others did before me, and came to the same conclusion. That under the most severe tax accounting possible [...]
[...] later posts responded to personal attacks asserting that Todd was essentially lying about his personal finances and, from Brad DeLong, that he was whining when he should be happy about how well off he really is, [...]
The riches must pay more taxes to make their communities nicer with schools, roads, public transportation, cops, firefighters, and such, or else we’ll burn the motherfucker down and leave ashes for everybody! I should think the riches would be better off if they thought of their taxes as keeping a lid on the lower classes.
I still doubt Jeff gets it, or thinks he does while missing the point completely. Lets say Jeff makes and sells widgets in a three state area. Jeff ships widgets by truck, and gets the raw materials from a local river port. Well jeff your taxes dont just go to pay the cadillac driving welfare queens that haunt your nightmares, they go to keep the river dredged so your container ships dont crash and sink in the river, your taxes go to reasonable highways that enable you to ship product, it goes to work programs that helped your truck drivers get CDLs after their previous job was shipped overseas, or the local public utility with caps that provide certainty as well as a police force that ensures someone with a bigger gun doesnt just kill you and take the business, or at least makes them think twice…..Jeff does seems at least like a productive person and he is right about a few things, but the real fight should be on adding many more tax brackets than exist now because compared to inflation those rates are not as progressive as they once were, but rather have stalled while incomes skyrocket for the top 1%. 250gs is not superrich for many areas of the US, but that was set when that number was equal to millions today
Janus: if your “post has accurate info, write it up and send it to the local news; people have a right to know.”
I did, as a letter to the editor and in emails to 2 different reporters. I attached cost breakdowns of similar projects to show what things should really cost. I included a spreadsheet of sales comps reported on Trulia.com to show that all 74 homes sold in the town during that time period had an average price $63,000 less than these apartments. Result? Nothing. Not a thing. Not even one followup email.
I live in a very blue area, 3 to 1 democrat. I suspect that the press doesn’t want to upset the machine.
My next step is to lay out my argument with each of the 5 city council people. But I can’t yet. My project is at a critical stage in the approval process where I need the good will of the Town staff and council people. I’ve invested millions at this point and would take a serious loss if these government folks (who you guys worship) should respond vindictively.
WillD
I understand that my taxes go to pay for all those things as do yours. I understand that those things help my business and me to prosper, in the same way that they help you to prosper. You seem to suggest that I should pay a higher percentage of my income than some do in order to pay for those things. Perhaps you base it on the theory that I use those things more than you so I am disproportionately more responsible for their costs. Or perhaps you’re just more towards the marxist ‘from each..to each’ end of the scale. First, I DO pay a higher percentage and it is certainly more than the difference between our marginal rates. There are taxes at every stage of the process of production. Property taxes, sales taxes, gasoline taxes, transfer taxes, etc. Not even counting those categories, fees to my local government at least 20% of the cost of the finished product. All of those categories of taxes exceed my net income by two or three times. If I went Galt as you folks like to say and spent down my capital for the rest of my life I would probably not have to pay any more income tax. But society would lose more than just my income taxes, it would lose all of those other taxes and fees that I pay – taxes that far exceed my net income. I think many of you fail to grasp that there is more at stake then just the incremental change in the marginal rate. No, i’m not threatening to go Galt. I’m just saying when people make a ‘fair share’ argument they should look at all the taxes. And yes I know that everyone pays sales taxes, gas taxes etc.
I’m just saying, and I know this audience is deaf to this point, there really is a point where the net take home after taxes does not justify the risk of capital loss. When that happens business pulls back, layoffs happen, and the economy recedes. The news today is full of headlines about businesses not investing, not hiring, and that capital is just sitting on the sidelines. Most of you will scoff and say ‘it’s just another 3%. what a selfish bastard’. As if small amounts don’t tip the scale. The same people will choose a different gas station for a tiny marginal savings. They’ll quibble over how much tip to leave even though it is a tiny amount.
What’s the point anyway? I don’t know why I bother. I know i’ll never change your minds. I guess I’m just trying to educate you. There is no point in trying to convince. The only way is to outvote you. Fortunately, this round of elections, the tide is turning a bit. Perhaps you’ll get the idea that somewhere in this range of taxing and spending is the upper limit. I assure you that I understand there is a lower limit too.
Warrent Terra asked for my proposal for spending cuts. I pointed at Rep. Paul Ryan’s plan which has spending cuts.
Jim and others push Ryan’s plan aside saying it cuts taxes in a way that makes revenue projections fall short.
Hello. The topic was spending cuts. Any shortcomings Ryans plan may or may not have on the revenue side are separate from his spending cut proposals.
Hello, Mr. Law Professor and Dr. X, your university gets tens, if not hundreds, of MILLIONS each year from the FEDERAL GOVERNMENT – in good times and bad, which is why you and wifey still have jobs. If WE ALL did not pay our taxes, the federal government would not be able to afford you! You would have an extra $50K per year (no student load payment) if you too had been born with a silver spoon in your mouth. Quit yer whinin because you can’t budget. You can’t pay a lousy 3.9 percent more for all the benefits you have!
A minor correction. MOH: ¨He is also whining about his and his wife’s education loans, $500,000 …¨ Henderson actually wrote: ¨My wife has school loans of nearly $250,000 and I do too, although becoming a lawyer is significantly cheaper.¨ This in´t clear, but I read it as ¨I have student loans outstanding too, but significantly less.¨If that´s so, we should reduce the estimate to say $400,000. Still seems an awful lot.
Notice too the snobbery and sneer of the moan that ¨we can’t afford fancy accountants and lawyers to help us evade taxes¨. It would pay the Hendersons to listen to an honest accountant with a qualification from a run-of-the-mill university and more experience of ordinary household budgets than they have. I´ll take his word on the lawyers, though; he trains them.
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[...] Which elicited this response from Michael O’Hare (an excerpt): Because Obama proposes to let the Bush tax cuts expire only on “incomes above $250K”, I was surprised that Prof. Henderson expected to be importantly worse off under the president’s plan, so I went here and plugged in what seemed to be reasonable numbers. He says his family’s “combined income exceeds the $250,000 threshhold for the super rich (but not by that much)” . I tried $140,000 each for him and his wife, $5000 in charitable deductions, and a 5% mortgage on a million-dollar house, which is what would cost about $15K in property tax per year in Chicago, with 80% 20% down [thanks JHA]: $40,000 per year in mortgage interest. [...]