New York Times business reporter Andrew Ross Sorkin wrote a piece on Sunday (5/15/11) that tried to advance the argument that $250,000 actually isn’t that much money to make in a year. The complaint is that politicians who advocate raising tax rates on income above $250,000 have chosen an arbitrary dividing line–above it you’re rich, and you’ll be taxed accordingly.
Articles like this are annoying for obvious reasons–we’re being asked to listen to wealthy people complain that they’re not that wealthy, once you factor in the private school tuition and a hefty mortgage. But they often mislead in other areas–especially when it comes to how much wealthy people pay in taxes. Ross Sorkin mentions a Manhattan father of two with a household income of $262,000 who sees his tax bill potentially going up, and he says, “I don’t understand why people like us are lumped in with millionaires and billionaires.”
As Dean Baker points out, anyone who understands marginal tax rates should know that someone making slightly more than $250,000 would pay a higher rate only on that income above that amount–which, in this case, would amount to a few hundreds dollars at most in extra taxes.
The article goes on to discuss tax policy and budget deficits, and Ross Sorkin makes this point:
much of the income of the country’s wealthiest people comes from investments, which is taxed at the long-term capital gains rate of just 15 percent.
So far, neither Democrats nor Republicans dare talk about raising the long-term capital gains tax out of fear that it would reduce crucial investments that could produce jobs.
No one talks about raising capital gains tax rates? The Congressional Progressive Caucus’s blueprint, the People’s Budget, offers an array of options for raising revenues, including this:
Tax capital gains and qualified dividends as ordinary income: This policy would eliminate the preferentially low rates on long-term capital gains and qualified dividends (currently 15 percent) and again tax all capital income as ordinary income under the marginal tax rate structure. The tax rate on long-term capital gains is scheduled to rise to 20 percent in 2013 and dividends are scheduled to be taxed again as ordinary income.
So someone’s talking about it after all.
Part of Ross Sorkin’s point is that more tax brackets would help clarify the difference between earning a mere $250,000 or, say, many millions of dollars. A fine idea–and also part of the People’s Budget. If reporters gave it more attention, they might discover that the answers are staring them in the face.
Not only that, but it’s actually one of the recommendations of Obama’s cat-food commission as well. Actually, in the cat-food commission report they list treating capital gains income equal to wage income for purposes of taxation as an additional consideration. It’s not an official recommendation, but its listed as “something to think about”.
If its something that progressives support AND the conservatives on his right-wing commission are even backing, WE NEED TO BE PUSHING ON THIS!
Perhaps Franklin actually said …
“In this world nothing is certain but death and unfair taxes.”
And paid-off politicians to make certain they remain unfair.
ah yes, the people’s budget. i remember hearing about that on democracynow and when i was watching episodes of the daily show and colbert report (which at times do highlight things that go unnoticed by the mainstream press or are barely mentioned) – nothing. even though i believe i heard e.g. bernie sanders, one of those pseudo-progressives’ favorites (not meant as an attack on sanders but stewart and that whole pack), speak about it.
considering the mainstream media is supposed to have a liberal bias and the public media supposed to even more so – where is this information?!
(of course i know that this “liberal bias” is just bullshitting by the right wing… if anything, corporate and public media have either a corporatist and/or right wing bias…)
Not surprising at all that Mr. Sorkin purports not to have heard about the People’s Budget.
The focus of the NYTimes is predominately to insure, defend and advance PAPER WEALTH in our country and to give the investor class as little guilt as possible as they amass their wealth.
Labor wealth is in most cases considered a business loss and a threat to investor wealth for the most part.
Plain and simple!
If you’re a fan of free markets, then you need to get behind equalizing taxation rates on earned and unearned income and let the MARKET decide the best allocation of capital. ‘Til that happens, I don’t want to hear any more whining about taxes from rich people.
Well, Lex, You’re going to keep hearing the “whining,” so get used to it, or seek enlightenment elsewhere. You may not know this, but there’s really no such thing as a “free market.” Or, perhaps it’s better to say that some markets are freer than others. How would “the market” decide on “the best allocation of capital”? What does that mean? Is that what happens when Wall Street criminals demand and get little or no regulation and then pull off the heist of the Century? Was that “the Market” working, it’s Invisible Hand massaging the money out of 98% of us so the two percenters could party on? Me, I’m sick and fucking tired of hearing the whining and caterwauling about the glorious Marketplace and it’s eternal wisdom. It’s just a catch-all phrase for an amoral, criminal, bankrupted, libertarian third-rate intellectual bullshit criminal enterprise.
I think we need a lot more education about the function of tax brackets. I understood how they worked when I took applied economics in high school. There is still widespread misperception that a top rate of 39% would apply to all income. It would only apply to the top slice of money after deductions and exemptions and after the bottom slices had been taxed at the rates applied to those in the middle and lower classes. Even if we taxed income over $250,000 at 90%, that would be 90% of non-capital non-business income over $250,000. If I had $250,000 in income left after deductions and exmptions, then only anything above that would be taxed at the 90% rate and would still leave me far better off than those below me on the income scale.
Tim” let the market decide” is simply saying let those who’s wealth it is(those who created it)decide what to do with the profit of their exertions- instead of government.Government that feeds its own growth.
The problem with the peoples budget(terrible name)is the line that says “they offer an array of options for raising revenue”followed by ideas for tax this and tax that.The only way we should be thinking about raising revenue is through increased economic expansion. Taxing at higher rates to an ever shrinking pie is classic liberal “feed the ever growing machine”.If anything the government does is seen to inhibit in any way (including philosophically) , the growth of business ..it is not open for consideration.The goal is recreation of wealth.It is funny…I have always thought that Obama care would hurt business.Today it was disclosed that 20% of ALL exemptions from this punitive healthcare bill will be diveed out in Nancy Pelosis district!!!!!My God my God.The true believer. Obamas hammer. Winning in her district the right to opt out because………(WAIT FOR IT)………..IT WOULD HURT BUSINESS!When will you learn?As far as raises in taxation WE will fight you tooth and nail.We don’t believe your mathematic reasoning,your philosophy’s,or even the fairness of your re distributional ideas.Mostly we feel the final destination of the peoples wealth is a rat hole known as the Fed.You are thieves saying pay more for less.The only real expansion/betterment is in the number of thieves(ie government).Today BB gave Obama a tutorial in leadership.Simple and to the point.You are wrong.We do not agree.Goodnight.Could not say it better myself.
Jobs are not created by rich people, they are created through necessity. The idea in that taxing the rich would thwart job growth is a long held right wing misconception, a piece of corporate mythology created by people who speculate or in other words, create nothing!
It’s all well and good to comment about an issue that needs the attention of citizens. It’s even more important to ACTUALLY DO something significant that will allow necessary changes to be made to improve our country.
Here is a link that will interest many of you.
http://signon.org/sign/public-funding-of-elected
To Michael Shaw
Jobs are created by the public sector.For the sake of profit.Profit enough(i.e create wealth)And you become part of the hated upper class as the left sees it.Now isn’t this the silliest thing for a capitalist country to believe in?
That’s right, Michael Shaw, Thanks for sharing that.