France to introduce 75% income tax rate on earnings above 1 million euros

[OmCheeto]

Putting 75% income tax on earnings above 1 million euros means killing the incentive to earn above 1 million i.e. killing incentive to grow/open business.

I've never understood this logic.

If Jacques the Ploomaire' is making http://emploi.trovit.fr/salaire/plombier-chauffagiste euros a year, it's going to take him a long time make a million. If instead, he decides to start his own business, and succeeds due to some bizarre marketing scheme, he'll be able to make 1,000,000 euros a year, and never be bothered by the new tax. His post tax income would be 32 times what he made as a simple Plumber. Imagine that, a whole 32 year career, reduced to 1.

And what if he made 2,000,000 euros? He'd be bringing home only an extra 250,000 euros a year. But that is still 12 times his past take home pay. Let me do some more math for you:

income____equivalent plumber take home pay in years
1,000,000_32.3
2,000,000_45.7
3,000,000_59.1
4,000,000_72.5
5,000,000_85.9

It looks to me like Jacques business, no matter how big it gets, is going to be profitable for him.

I simply do not understand poor little rich plumber tax logic, in any nation.

Numbers are based on the wiki entry on income tax in France, 2009, and the new 75% rate
_0.0%___________0___________5,875
_5.5%_______5,875__________11,720
14.0%______11,720__________26,030
30.0%______26,030__________69,783
41.0%______69,783_______1,000,000
75.0%___1,000,000__10,000,000,000

 

[nsaspook]

I think 'Jacques the Ploomaire' will make the very logical calculation that being on vacation will be better than working for small fraction of his pay if his yearly earnings exceed 1,000,000 euros.

 

[OmCheeto]

I think 'Jacques the Ploomaire' will make the very logical calculation that being on vacation will be better than working for small fraction of his pay if his yearly earnings exceed 1,000,000 euros.

Depends...

on how big a house his wife ultimately wants.



There are so many variables. But for me, it's all about the bed* I sleep in.

*Both literally and figuratively. A nice bed is awesome. A nice nation to live in, is equally awesome.

ps. I am so left wing, I would like to move to France to start my new business. But... the jerkwad chef at work posts all the menu items in French, so I don't know what I'm ordering. And when I ask what it is, he says, in his demeaning stupid fake French accent; "You don't speak French? Oh! Poo poo blah blah blah blah." ... I think he knows that I hate him.

 

[gravenewworld]

Did all of the rich people move out of the good 'ol US of A when they were taxed over 90% in the upper bracket under Eisenhower?

 

[rootX]

The desire for economic growth implies a state of inadequate provision. In 500 years do you think governments will still be chasing economic growth, or will society be in such an obvious state of "post scarcity" (ie - there's enough for everybody to live in serious luxory, bar things like fifteen gold plated lemurs each) that things like equality are given more priority? Not to mention the significant negative aspects of unnecessary economic activity (AKA economic growth). 75% taxation on post 1 mil seems a pleasing and optimistic appraisal of the state of affairs in France IMO - no need to maintain a "Darwinian killing field" interpretation of free-market competitiveness, where it's all astronomical wealth inequality and winners/losers, if you're living in an effective post scarcity economy.

"Post scarcity" is a crackpot (over speculative) concept.

 

[nsaspook]

Depends...

on how big a house his wife ultimately wants.

Now you've done it, turned a logical economic decision into a lose/lose scenario. Negative feedback reduces gain and happiness. The visual of poor Jacques forced to toil under a sink by a demanding spouse is not pretty.

http://hollywouldink.files.wordpress.com/2012/06/funny-plumber.jpg

 

[2AlphaMales?!]

"Post scarcity" is a crackpot (over speculative) concept.

People being contented with a decent standard of living is not an over speculative concept.

Saying it's necessary for annual millionnaires to have greater than a 25% of further income financial incentive to work "harder", or else France is doomed to fail as a country...now there's a crackpot (paranoid) idea.

 

[OmCheeto]

... Negative feedback reduces gain and happiness. ...

Do not, speak, in engineering terms, to me, in P&WA!

Negative feedback occurs when information about a gap between the actual value and a reference value of a system parameter is used to reduce the gap. If a system has overall a high degree of negative feedback, then the system will tend to be stable.

Negative feedback produces stability.

Taxes as feedback:

Somalia: ~zero taxes, ~zero stability
USA: ~lowest industrialized national taxes, high stability, and we have to buy what we want
France: ~highest industrialized national taxes, high stability, and cheese and wine galore!

Conclusion?

None... Other than, don't move to Somalia.

But seriously, how some people view taxes strikes me as bizarre. I view taxes as the equivalent of rent. The more you pay, the better the accommodations.

Would you rather live rent free in Somalia, or pay half your wages to live in France?

My apologies to anyone here at the forum who is from Somalia, or may have relatives in Somalia, but it is #1 on the list of failed states, which would make an interesting topic on its own. The USA and France are almost tied! And what the hell makes Finland the least failed state?

 

[KiwiKid]

Negative feedback produces stability.

I heard China is also quite stable.

 

[nsaspook]

But seriously, how some people view taxes strikes me as bizarre. I view taxes as the equivalent of rent. The more you pay, the better the accommodations.

Would you rather live rent free in Somalia, or pay half your wages to live in France?

Rent as taxes is great. Pay forever, own nothing and make some-else rich.

Somalia? Easy choice, I'd pay 120% in taxes not to be there. I 'visited' the disputed areas around Kenya and Somalia after the Soviets left in the late 1970's, some of our guys even made the trip to Mogadishu (Our HQ was in Mombasa, Kenya). Even then almost all the armed forces of the many sides were doped up on khat, extremely trigger-happy and a child's live was worth less than a stick of gum.

http://www.justice.gov/archive/ndic/pubs31/31482/

 

[JonDE]

People being contented with a decent standard of living is not an over speculative concept.

Saying it's necessary for annual millionnaires to have greater than a 25% of further income financial incentive to work "harder", or else France is doomed to fail as a country...now there's a crackpot (paranoid) idea.

Is this 75% actually going to be the effective tax? For some reason I highly doubt it.

 

[OmCheeto]

Is this 75% actually going to be the effective tax? For some reason I highly doubt it.

The original article seems to imply that it is a marginal rate:

http://www.businessinsider.com/france-millionaires-tax-2012-7

We think this means that if you make €2 million euros, you would pay 45 percent on the first €1 million and 75 percent of the second €1 million to the government, or a total of €1.2 million.

bolding mine

Odd way to start that sentence.

 

[CAC1001]

Argh! Did I miss something?

I'm in favor of the 75% French tax.

In a world where people can become multi-billionaires, with the flick of an IPO, I think we need some leveling.

How does a tax create any leveling? We get leveling through the product the people provide that makes them a billionaire through said IPO. If you tax it highly, then that money goes to the government, and then to other people who didn't do anything to deserve the money in the form of government social programs. I am fine with safety net programs, but programs based on redistribution of wealth out of some notion of equality of outcome I believe are wrong.

Technology, along with the sheer number of people on this planet, makes it possible for anyone with a $1 idea, to become incredibly wealthy, instantly.

Wish I could think of some of these ideas, although if a $1 idea makes you wealthy, then it's more than a $1 idea!

Also, I don't know if France is very high stability-wise as far as industrialized nations go. This is a country where thousands of cars get burned every year by disaffected youth and where people (youth) rioted over the government wanting to raise the retirement age from I think 60 to 62.

 

[Ryan_m_b]

that money goes to the government, and then to other people who didn't do anything to deserve the money in the form of government social programs.

An obvious point is that governments pay for far more than that like transport infrastructure, education, healthcare, law enforcement, national defence etc. Also it really depends on what you think people should do to "deserve" something. In many societies just being alive grants you access to free healthcare, education, protection under the law etc. If that isn't a social program I don't know what is.

 

[CAC1001]

An obvious point is that governments pay for far more than that like transport infrastructure, education, healthcare, law enforcement, national defence etc. Also it really depends on what you think people should do to "deserve" something. In many societies just being alive grants you access to free healthcare, education, protection under the law etc. If that isn't a social program I don't know what is.

A country like France, which already has higher taxes and miniscule defense spending in comparison to a country like the United States, should already be able to afford things like transport infrastructure, education, healthcare, law enforcement (which is a local government priority unless the French have a nationalized police force), national defense, and so forth. No need for high taxes for purposes of wealth redistribution.

Protection under the law I do not see as a social program, as enforcement of the law is one of the core functions of government (that's one of the reasons you form a government in the first place).

 

[Ryan_m_b]

A country like France, which already has higher taxes and miniscule defense spending in comparison to a country like the United States, should already be able to afford things like transport infrastructure, education, healthcare, law enforcement (which is a local government priority unless the French have a nationalized police force), national defense, and so forth. No need for high taxes for purposes of wealth redistribution.

It's not really a question of need but one of values. We've already touched upon the discussion somewhat in this thread: the question of what constitutes a fair wage and the extent to which high earners become rich off of other's labour.

Protection under the law I do not see as a social program, as enforcement of the law is one of the core functions of government (that's one of the reasons you form a government in the first place).

Then we have very different understandings of the term. To me a social program is a policy designed to improve a specific facet of life for the collective (i.e. society) as a whole.

 

[CAC1001]

It's not really a question of need but one of values. We've already touched upon the discussion somewhat in this thread: the question of what constitutes a fair wage and the extent to which high earners become rich off of other's labour.

I don't believe in any such thing as a "fair" wage. "Fair" is one of those arbitrary terms meant to stir up emotions in people but can have numerous different meanings. Wages are determined by market forces in a free economy. I also do not see it that high earners become rich off of other's labor. High earners become rich off of their own labor, which the market prices and for which they are paid a corresponding amount.

Then we have very different understandings of the term. To me a social program is a policy designed to improve a specific facet of life for the collective (i.e. society) as a whole.

To me a social program is an actual government program that is meant to try and do what you describe, but that is different from the core functions of the government. A society cannot function without a government or law enforcement from said government. Core functions of government are things like rule of law, protection of private property, protection of human rights, etc...these aren't social programs. Social programs are the additional things created.

 

[Ryan_m_b]

I don't believe in any such thing as a "fair" wage. "Fair" is one of those arbitrary terms meant to stir up emotions in people but can have numerous different meanings. Wages are determined by market forces in a free economy. I also do not see it that high earners become rich off of other's labor. High earners become rich off of their own labor, which the market prices and for which they are paid a corresponding amount.

*shrug. Definiting market forces as fair is certainly one position but not the only significant one.

To me a social program is an actual government program that is meant to try and do what you describe, but that is different from the core functions of the government. A society cannot function without a government or law enforcement from said government. Core functions of government are things like rule of law, protection of private property, protection of human rights, etc...these aren't social programs. Social programs are the additional things created.

Like I said, we clearly have different ideas over what social means and the role of government.

 

[Pythagorean]

It's actually been shown, thoroughly, on a large dataset, that income inequality is one of the biggest factors of social unrest:

Richard Wilkinson:



The only way the other viewpoint gains popularity is through propaganda, lobbying, and super-PACs. Not to mention, MAJOR conflicts of interest (US economic advisors having their fingers in profits from too-big-to-fail economic giants)...

From there, it's fairly straightforward to read between the lines.

 

[CAC1001]

*shrug. Definiting market forces as fair is certainly one position but not the only significant one.

I don't think market forces are "fair," as I don't really think the word holds. In a free market, you get paid according to how society values what you produce. Now this isn't to say that we can't have some social programs/safety nets in place to provide for basic things like healthcare, income, food, etc...for a person who ends up out of work temporarily and unable to produce anything. But no one should think they are entitled to higher pay if society doesn't value whatever they produce all that much.

Going back to the French tax, as such I see any tax meant for pure redistribution purposes (i.e. someone thinks it's "not fair" for some to make lots of money) as wrong. In a free economy, no one can make lots of money unless they are providing something that the public wants and voluntarily chooses to buy.

 

[CAC1001]

It's actually been shown, thoroughly, on a large dataset, that income inequality is one of the biggest factors of social unrest:

I don't think that holds water. The United States has some of the highest income inequality and among the least social unrest of all the industrialized countries. Income inequality is just another term used to stir up emotional passions in people but that has little ties to reality.

The only way the other viewpoint gains popularity is through propaganda, lobbying, and super-PACs. Not to mention, MAJOR conflicts of interest (US economic advisors having their fingers in profits from too-big-to-fail economic giants)...

From there, it's fairly straightforward to read between the lines.

IMO, income inequality is a meaningless statistic. It has no relation to the actual standard of living of the population, the actual wealth (goods and services) they enjoy. Remember, income doesn't exist in some pre-set fixed pie that must be divided up among society, it is just what people receive in exchange for whatever they produce. And society isn't separated into fixed classes.

I think people confuse income inequality with standard-of-living inequality. If one small 1% of society is living large while the other 99% is living mired in total abject poverty, and to top it off, that 1% is living off the backs of the 99%, then yes, social unrest, maybe even revolution, can occur. But that isn't the situation we have with modern market capitalism.

 

[russ_watters]

It's actually been shown, thoroughly, on a large dataset, that income inequality is one of the biggest factors of social unrest:

Richard Wilkinson:

That comes from his book and it is nonsense and has been thoroughly debunked in previous threads. It was not well received in academia:
http://en.wikipedia.org/wiki/The_Sp...l_Societies_Almost_Always_Do_Better#Reception

 

[russ_watters]

I disagree: they're useful but only amongst those with similar values.

So...if people already agree they will agree on why they agree? That doesn't strike me as being very useful. If there is nothing objective that can bridge a gap in opinion, then all of thus is just pure opinion.

I do think trying to bring as much objective fact into a discussion as this is important, but as we saw above, much of what is available and popular/publicized isn't necessarily of good quality.

With relevance to this thread I have no real idea who you mean when you say "left".

I find that very hard to believe, but I'll try to clarify:

On the far right side of the typical economic spectrum is unfettered capitalism. On the far left side is pure government ownership (socialism). The middle can be tough to define (by country, internationally, attempted statistical measurement) but at the very least we can say for certain that someone who favors a policy that would move the laws of a country to the left is left of that country's center on that particular issue. Someone who doesn't favor that policy could be right leaning, centrist or slightly left (less left than the policy) -- but my statement wasn't about them.

 

[russ_watters]

The desire for economic growth implies a state of inadequate provision. In 500 years do you think governments will still be chasing economic growth, or will society be in such an obvious state of "post scarcity" (ie - there's enough for everybody to live in serious luxory, bar things like fifteen gold plated lemurs each) that things like equality are given more priority?

I don't know about 500 years from now, but a couple of points:

1. If a country is growing, it requires economic growth (absolute) in order to maintain a constant standard of living (per capita).
2. Unless everyone lives in extraordinary luxury, a continuous increase will be desirable.

...75% taxation on post 1 mil seems a pleasing and optimistic appraisal of the state of affairs in France IMO - no need to maintain a "Darwinian killing field" interpretation of free-market competitiveness, where it's all astronomical wealth inequality and winners/losers, if you're living in an effective post scarcity economy.

Huh? France is most certainly not a post-scarcity utopia. Maybe with 500 years more economic growth it'll get there, but for today, it isn't anywhere close.

 

[russ_watters]

An obvious point is that governments pay for far more than that like transport infrastructure, education, healthcare, law enforcement, national defence etc. Also it really depends on what you think people should do to "deserve" something. In many societies just being alive grants you access to free healthcare, education, protection under the law etc. If that isn't a social program I don't know what is.

Yes, and the basic difference between a capitalist and a socialist (yes, again I know it is simplistic to cut the spectrum in half -- that doesn't make it inaccurate or non-instructive) is that a socialist doesn't think that just giving a person all those things just because they are alive will have any effect on their productivity while a capitalist does. Frankly, while I think the evidence on that isn't that great, the few test cases we do have show that the capitalist side has more evidence. See, for example: The USSR (strongly socialist, poor productivity, collapsed) and China (increase in capitalism = decrease in poverty).

The other flaw isn't per se a socialist one, it is more of an age of voter/shortsighted one: people can vote themselves more benefits and vote themselves lower taxes (better yet: vote others higher taxes at the same time!) which can lead to fiscal problems such as the ones Europe is seeing now -- and the US is following.

We've already touched upon the discussion somewhat in this thread: the question of what constitutes a fair wage and the extent to which high earners become rich off of other's labour.

Ouch, really? No one said any such thing earlier in the thread. Before it was about fair pay for the labor the rich do. Now you're saying the rich primarily just get that way by leeching off of the labor of others. That's frankly pretty insulting to people who have done very positive things to get rich.

 

[russ_watters]

*shrug. Definiting market forces as fair is certainly one position but not the only significant one.

CAC didn't call it fair. The word I would use is "functional". Perhaps even "proven". In the 20th century, a large number of countries emerged from industrialization and saw spectacular gains in standard of living. The ones that did the best (most of the western countries) started with a high degree of economic freedom and all have gradually reduced that freedom. The ones that did the worst started with central planning (your "fair"). Some with central planning that didn't reduce the central planning and institute freedom, like the USSR and North Korea, did terribly while others that have become more free, like China, are improving.

Like I said, we clearly have different ideas over what social means and the role of government.

The danger I see is in taking an idea that was working and changing it because you don't think it was "fair" enough. What if it becomes more "fair" but falls apart? IMO, that's a significant risk, particularly in light of what we're seeing in Europe right now.

Perhaps you think we've advanced enough and it is acceptable now to slow or stop that advancement in favor of government provided equality of outcome, but I don't -- and I think that you and others who hold similar opinions underplay the risk that this experiment with increased socialism could lead to economic and social collapse.

 

[Pythagorean]

That comes from his book and it is nonsense and has been thoroughly debunked in previous threads. It was not well received in academia:
http://en.wikipedia.org/wiki/The_Sp...l_Societies_Almost_Always_Do_Better#Reception

What you've said above is a bit misleading. The line between nonsense and controversial is not difficult to make out... from your own wiki link:

He later noted that, "The Spirit Level is strongest on Wilkinson's home turf: health. The links between average health outcomes and income inequality do appear strong, and disturbing".

In their response to the Wall Street Journal they said ,"...we use income inequality data from the United Nations, rather than the OECD, because the OECD data were not intended primarily for cross-national comparisons. However, even if we test our results using the OECD measures we find 28 of 29 relationships are still significant".'

He claimed that only one of the correlations in the book—that between infant mortality and income inequality—stood up to scrutiny, and that the rest were either false or ambiguous. Wilkinson and Pickett published a response defending each of the claims in the book and accusing Saunders in turn of flawed methodology.

and lastly:

In response to criticism of the book, Wilkinson and Pickett posted a note on the Equality Trust website which stated: "Almost all of the research presented and synthesised in The Spirit Level had previously been peer-reviewed, and is fully referenced therein. In order to distinguish between well founded criticism and unsubstantiated claims made for political purposes, all future debate should take place in peer-reviewed publications."

So, you're fighting peer-review with talking points (referencing a wiki and a forum discussion). Not only that, but Wilkinson goes further than correlation and has provided valid social mechanisms in his peer-reviewed literature. The burden if proof is still yours.

There is no doubt that further statistical analysis is required to refine Wilkinson's points, but there's also no doubt that income inequality makes some contribution to well-being. Using the buzzword "nonsense" is misleading.

 

[rootX]

So, you're fighting peer-review with talking points (referencing a wiki and a forum discussion). Not only that, but Wilkinson goes further than correlation and has provided valid social mechanisms in his peer-reviewed literature. The burden if proof is still yours.

There is no doubt that further statistical analysis is required to refine Wilkinson's points, but there's also no doubt that income inequality makes some contribution to well-being. Using the buzzword "nonsense" is misleading.

I briefly looked at http://www.equalitytrust.org.uk/why/evidence. The book mainly compared European, N.A. countries along with Japan. In evidence, they showed how European countries are performing better than USA in terms of Physical Health, ... etc. Now, these are simply statistics. Does the book simply provide author's interpretation of these statistics? Even if the data is peer reviewed but are the interpretations peer reviewed? How author can reach at a conclusion just by looking at few countries in present times? I have small economics background and these problems are often discussed in economics. In my knowledge, no one has ever managed to come up with as strong conclusions as the author of The Spirit Level. It's really easy to come up with conclusions in areas of social science but such conclusion rarely stand too far in time.

Just looking briefly, I am not very impressed with substance presented in the link. But proper criticism would obviously require time and in depth study of the book.

He later noted that, "The Spirit Level is strongest on Wilkinson's home turf: health. The links between average health outcomes and income inequality do appear strong, and disturbing".

In their response to the Wall Street Journal they said ,"...we use income inequality data from the United Nations, rather than the OECD, because the OECD data were not intended primarily for cross-national comparisons. However, even if we test our results using the OECD measures we find 28 of 29 relationships are still significant".'

He claimed that only one of the correlations in the book—that between infant mortality and income inequality—stood up to scrutiny, and that the rest were either false or ambiguous. Wilkinson and Pickett published a response defending each of the claims in the book and accusing Saunders in turn of flawed methodology.

Correlations don't mean as much as causation.

 

[russ_watters]

What you've said above is a bit misleading. The line between nonsense and controversial is not difficult to make out...

It has been a while, but I think we deemed "The Spirit Level" an unacceptable source for PF. We're discussing in the mentor's forum and will get back to you.

 

[nitsuj]

CAC didn't call it fair. The word I would use is "functional". Perhaps even "proven". In the 20th century, a large number of countries emerged from industrialization and saw spectacular gains in standard of living. The ones that did the best (most of the western countries) started with a high degree of economic freedom and all have gradually reduced that freedom. The ones that did the worst started with central planning (your "fair"). Some with central planning that didn't reduce the central planning and institute freedom, like the USSR and North Korea, did terribly while others that have become more free, like China, are improving.
The danger I see is in taking an idea that was working and changing it because you don't think it was "fair" enough. What if it becomes more "fair" but falls apart? IMO, that's a significant risk, particularly in light of what we're seeing in Europe right now.

Perhaps you think we've advanced enough and it is acceptable now to slow or stop that advancement in favor of government provided equality of outcome, but I don't -- and I think that you and others who hold similar opinions underplay the risk that this experiment with increased socialism could lead to economic and social collapse.

France hasn't just "started" out. It's what, the 5th largest economic powerhouse in the world? And with so few millionaires, how un-capitalist of them.

Comparing taxing the few wealthiest at the top is not even remotely the socialism of such failed states as USSR & N.Korea who clearly had a different goal for CONTROLLING every aspect of their state.

You have changed my opinion on whether this is a good move for France holistically, but is sure as heck wasn't that comment.

 

[russ_watters]

France hasn't just "started" out. It's what, the 5th largest economic powerhouse in the world?

What I mean is the vast expansion of socialistic policies is newer than the emergence from industrialization and much of the expansion in standard of living. In the US, for example, socialism started creeping in during the great depression. Other countries got their nationalized healthcare after WWII, while we haven't. And in the last decade or two, social spending has expanded greatly in many countries, which is part of the reason for the fiscal problems countries are having today.

Comparing taxing the few wealthiest at the top is not even remotely the socialism of such failed states as USSR & N.Korea who clearly had a different goal for CONTROLLING every aspect of their state.

I didn't say they were equal, I said they were moving in the direction of where the USSR started. It is a fact that the USSR and the Western countries started on opposite ends of the spectrum and it is a fact that all of those other countries have moved to the left, some more than others, and most are still moving in that direction today -- this policy is an example of that.

I also have no idea why you would highlight "controlling" as if to imply it was a different goal than what socialism in other countries is about. Control is The fundamental aspect of socialism, where-ever it is found. It is its own ends for some social programs, but also a means toward providing a safety net or wealth re-distribution. But whether it is the goal or just a means to achieving the goal is really splitting hairs to me: it is a fundamental component of all socialistic policies.

For example: Social security exists in the US because you're too irresponsible to control your own retirement spending (according to FDR), so the government does it for you. There is also relatively small components of safety net and wealth re-distribution involved.

Nationalized healthcare starts with forcing people to buy-in to a health insurance system (control) for the purpose of better distributing risks and costs (redistribution) while also being a safety net. The way they are set up, the re-distribution is the primary effect for most people (in the US, most people already have insurance, but everyone would see their pay-in adjusted based on their income, some by vast amounts).

 

[russ_watters]

It's not really a question of need but one of values. We've already touched upon the discussion somewhat in this thread: the question of what constitutes a fair wage and the extent to which high earners become rich off of other's labour.

The more I think about this, the more disgusted and insulted I get. If someone ever implies the poor are lazy or have made their own bed, they get lambasted, but this is just as bad, if not worse (there is quite a bit of evidence of the effect of personal choices on outcome). This is straight out of the Marxist propaganda handbook and it is a twisted way of looking at the issues because:

1. While it is always the justification for laws like this, the laws themselves have no test for the value of someone's labor on the "taking" side. It doesn't matter how someone makes their income, income at the same amount is taxed the same. There is some difference on the "giving" side, but not much. So this bit of propaganda is a red herring to distract from the fact that you don't really know how hard any given person is working when you take taxes from them: I think you have to assume that the rich person didn't earn their money through hard work because you know in your heart that if they did it wouldn't be quite as "fair" to take it from them - and you're all about "fair".

2. This law and similar ones under consideration in the US are red herring propaganda pieces in themselves. They have little effect on the fiscal picture and are therefore bandied about for the purpose of creating exactly this discussion. And since few people are rich (in the US, the popular distributions are the 1% and the 99% right now), there is a lot of political capital to be gained by picking on them. And:

3. Though the game is presented as a 1% vs 99%, the people who get hit the hardest in the US are the 10-20%. Doctors, lawyers, engineers. We are the ones who pay the highest taxes on a total % of income basis in the US. But broader than that, in any progressive taxation system with redistribution, some fraction will be on the give and some will be on the take. Your logic therefore requires expansion to cover everyone on the "giving" side: If redistribution is "fair" because the poor work harder than the rich, it also must mean that the lower middle class work harder than the upper middle class. And that insults me.

 

[nitsuj]

I also have no idea why you would highlight "controlling" as if to imply it was a different goal than what socialism in other countries is about. Control is The fundamental aspect of socialism, where-ever it is found. It is its own ends for some social programs, but also a means toward providing a safety net or wealth re-distribution. But whether it is the goal or just a means to achieving the goal is really splitting hairs to me: it is a fundamental component of all socialistic policies.

For example: Social security exists in the US because you're too irresponsible to control your own retirement spending (according to FDR), so the government does it for you. There is also relatively small components of safety net and wealth re-distribution involved.

I think you made the distinction with "means" / "end". i.e intent

I guess you and I weigh the importance of the states intent differently.

In any case Russ, I do agree with your take on this topic (wealthy/poor/who "earns it"), I'm just a little more left than what's said in your posts.

I've said it before, capitalism is a game with winners and losers. Standard of living is not (health/education/ect).

 

[KiwiKid]

I think capitalism can be adequately described as "there are winners and losers, but as time goes by, both groups enjoy higher standards of living. Wealth is not a zero-sum game."

 

[NeoDevin]

I think both sides of this discussion are coming at it backwards. On the right, we have Russ arguing "everyone gets what they deserve", on the left, we have Ryan arguing "there's no way anyone deserves to make that much money" (I'm paraphrasing and exaggerating here, as the specifics aren't very relevant to my point, so don't get bent out of shape if you feel I've slightly misrepresented one side or the other).

In my opinion, it is better to start from the question: "What is the minimum standard of living our society should accept for it's members?" I think we can all agree (maybe not?) that basic police protection, rule of law, emergency medical services, etc. are a minimum standard, but disagree on other things (other health care services, minimum housing standards, fire protection, etc.). Once a society decides on some minimum threshold below which we consider living to be "inhumane" (and different societies could well decide on different standards), then we can figure out how much it will cost. Add in the cost of things that the society considers valuable, but that the market is less well suited to provide (anyone here in favor of fundamental physics research at the LHC?), and then we can start talking about what a reasonable tax rate is.

If we start with the question of: "What is the purpose of the taxes in the first place?" We can come up with a tax rate designed to address that.

Additionally: To address the argument that high tax rates discourage: innovation, individual productivity, etc.; when applied to the super-wealthy (we can argue about where to draw the line of super-wealthy later, if you insist), this argument is absurd. After some point¹ people stop deriving any additional satisfaction from increased income anyway. Beyond this point people are working strictly because they want to work, not because additional income helps them out. Think of it this way, is Bill Gates really motivated to work by the thought of being worth $62 billion, rather than his current $61 billion? Would he be discouraged from doing anything if his next billion was taxed at 99%? Alternatively, would he be motivated to do anything if his next billion was completely tax free? I think the answer to all three of these questions is a clear "no". Bill Gates will continue to do whatever the heck Bill Gates feels like doing. To sum: Anyone making more than, say, $1 million/year is not motivated by the next million, rather they are motivated by what they are accomplishing. Thus, taking away some large portion of that next million will not have a significant impact on their desire to continue producing.

1 Link "Emotional well-being" plateaus at ~75,000 USD, while "life evaluation" rises with the log of income (which means diminishing returns).