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People who net $20M a month should have to pay more in taxes

Wednesday, November 21, 2012
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People who net $20M a month should have to pay more in taxes

Don Cazer [Nov. 18 letter] made a staunch defense of the rich as far as taxes are concerned.

As has been proved, percentages can be used and misused, and they do not necessarily divulge the true facts. The fundamentals of fairness in taxation can only be examined using discretionary income, not gross income.

Discretionary income is after-tax income less the amount necessary to meet current expenses. If one nets $3,000 per month and pays $1,200 for rent, $300 for auto, $1,000 for food and utilities, and other expenses, he has about $500 per month for all other expenditures. That comes to $6,000 per year! If his income taxes are $6,000, then his real tax rate is 100 percent.

The top 400 taxpayers in 2009 had an average annual income of $344,831,528. Their average tax was $57,242,034, or 16.6 percent of gross. If these 400 had to pay at the same rate as the top 5 percent of taxpayers, or 20.9 percent, then each one would pay an additional $14,827,790 in taxes, leaving them a monthly gross income of $22,730,145. With expenses of $2,730,145 per month, they still have $20 million per month, compared with $500 per month.

The additional income tax on those 400 people would be an additional $5.6 billion annually and would hardly disturb their standard of living. Using the discretionary income model I have suggested, their tax rate would be 26.5 percent vs. 100 percent from above.

There is a difference between soaking the rich and having them pay more for the privilege of getting more every year. I believe that the threshhold for defining the rich should be moved from $250,000 to a more realistic $6 million per year.

In today’s environment, $250,000 is the level at which accumulation begins. Individuals at this level should not be restricted in their ability to economically advance. These are the people, not the mega-rich, who spur employment and create new industries. The argument that the top people will stop investing if taxes are raised is beyond ludicrous, No one is going to put $10 million to $20 million a month under a mattress. It will be invested as always.

Enhancing the ability to improve one’s standard of living and provide for adequate education of one’s offspring is a reasonable goal of taxation. Coddling those for whom a maximum standard has been reached or exceeded is false logic and poor policy. Mr. Cazer asked, “What is a fair share?” I do not know, but I know we have not arrived there yet.

Frank Elfland

Charlton

Jumping the gun on Black Friday sales gone too far

As if Black Friday wasn’t enough, we now have to contend with Greedy Thursday. Why wait till 8 p.m.? Why not just stay open all day so no one gets to spend the day with their family!

The poor workers have to cut their time short with their families to be mistreated by pushy, greedy shoppers. What is the matter with everyone that we can’t just put one or two days aside a year — out of 365 days — to just enjoy our families and friends, and sit back and relax without having to worry about being at work or getting the best deals?

What’s that, you say? Those who are working should be grateful? Well, they are — and they would like to show how thankful they are with their families!

You know, if no one showed up to these sales, all the stores would just stop ruling our lives with their manipulating ways. Remember when you go to the early sales, they are manipulating you, taking apart a great tradition in this country and making it just like any other day.

Please keep Thanksgiving a family day.

Denise Crisci

Scotia

Floodwater not too tasty a topping for pizza

What’s wrong with this picture?

Years ago, I owned a pizzeria on High Bridge Road in Rotterdam. My son now owns it. I never had a problem with water, but times have changed. Whenever there is a storm, the water runs right over the road and through his front door!

He notified the town of the problem and they said, “It’s the county’s problem.” He notified the county and they said, “It’s the town’s problem!” So he decided to see where the problem was.

Originally there was a natural outlet for the excess water. It used to run its natural course under Sartoli Road, which is off Kings Road, then enter a watershed area. But someone created a dam by dumping tires and whatever, blocking the water.

Both the town and county have bulldozers. I guess what they don’t have are drivers! In that case, my son can drive one!

Frances Payette

Rotterdam

Pleasant blast from the past in ‘Scrapbook’

A mysterious stranger left an unsigned letter in my mailbox. In opening the letter, a happy ghost of the past (30-plus years) delighted my day.

The Nov. 12 Gazette Scrapbook printed a 1969 photo of a 25-plus singles club I created. My accomplished passion for a singles social club became a reality.

The Gazette Scrapbook always evokes cascades of unforgettable friends and laughter memories.

No, I never married and never regretted my decision.

Rob Curtiss

Schenectady

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November 21, 2012
8:05 a.m.
biwemple says...

Stores might do better for their employees welfare by simply staging some kind of Thursday 'web-buster' online only deals. Entice consumers to their websites for sales they can only get via online on Thursday, and leave the stores closed until Friday morning. We have the technology in place all over, let the web servers do the work and give employees some down-time with family, friends, etc. These stores might actually make more money too, since if they run out of some 'hot item' with limited stock on the floor, they can perhaps back order the item at that price and they don't lose a customer walking out the door frustrated and looking elsewhere to get it.

November 21, 2012
10:22 p.m.
JLibertarian says...

Mr. Elfland:

I am not going to argue with your numbers although I would like to know where you got how much taxes the top 400 earners paid. The problems with you tax the rich people are many. Chief among them is envy, one of the seven deadly sins. Who cares how much anybody makes for a living? Do these people somehow harm you? Do they take food out of your mouth? Do they take clothes off of your back? Do they prevent you from living in a place out of the elements? I think the answers to all of these questions are no.

So, what gives you the right to ask them to give up more of their hard-earned money to government? It is not a privilege to earn more money than someone else. It is the abilities of those people that causes them to make more money. Let me explain somethings to you. Your data shows that the top 400 earners paid an average tax rate of 16.6 percent of gross income but that is not what everyone is taxed on. We are all taxed on taxable income. There are nearly 50 percent of Americans that do not pay federal income taxes. There is not enough money made by the top 5 percent to cover all of the money that you and your ilk want to spend. This nation spends more money per student than any nation in the world. It is not money that is needed to improve education. And taxation is not meant to be used to improve one's standard of living. That is just plain ludicrous!

You can not improve someone else's standard of living by taking money from someone else by taxing them. It doesn't work and never will. That is because the only way to improve one's standard of living is to do it yourself by getting a raise, a promotion, a better paying job, starting your own business that nets more money, etc.. Those that rely on others for their livelihood will never amount to anything. They will become lazy and bored and lose their ambition.

One other comment. Your example of the person who nets $3,000 a month in which you speculate that his income taxes are $6,000 and that amounts to 100% is just plain stupid. First of all, you start out with his net monthly pay so his income taxes were all ready taken out of his pay. Second, a $6,000 income tax doesn't equate to 100% tax rate because he nets $3,000 a month which is $36,000 a year. I already explained that net means taxes were taken out but lets for arguments sake use the $36,000 as taxable income, that would make the person's tax rate only 16.7 percent. Hey, guess what? That is just about the same as your mythical top 400 earner.

November 23, 2012
12:40 p.m.
wmarincic says...

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20.” Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now paid $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

November 23, 2012
12:42 p.m.
wmarincic says...

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man, "but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"

"That's true!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up because he wouldn't divide the money as fairly as they thought he should.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists, and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

November 23, 2012
3:22 p.m.
dan says...

Hasn't that story been proven not valid a long time ago? When paying taxes, you don't look at how much people "get back", you look at percentages paid. The way they redivided the money to pay the $80 was fair and unlike real-world tax cuts where the rich get a bigger percentage. In the example, the richest guy got a 16% cut, where the average cut was around 25%. In the real world, more often the rich get 50% cuts, and the middle class get 10%. Since the 1950's, the rich have seen 80% tax cuts, and the middle class have been put through tax increases, when talking percentages. And that's what people are complaining about. If the story reflected real life, almost all of the $20 savings would go to the rich guy. And that's what people would complain about, not the fair cuts like in the story.

November 23, 2012
10:22 p.m.
wmarincic says...

Right Dan and the top 10 percent pay 80 percent of the taxs and if they go which many are and mostly democrats at that , then who will pay the taxes?

November 24, 2012
6:04 p.m.
wmarincic says...

BTW I don't know where this story was invalidated.

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