"I'm rich; tax me more!"Follow

And you'd get even more if you could put a certain percentage of your income, with no cap, into investments and have it not count as taxable income until you took the money out. The important part of that sentence is bolded. (I'm personally kind of annoyed that I only get to take, on average, about 20% of what goes into my 401(k) for the purposes of the existing tax credit. I wouldn't begrudge people who invest 100x more - or even 10,000x more, or more - than my current ~$500/year to be able to deduct all of that until they pulled their investment, regardless of whether or not it's for retirement purposes.)

EDIT to add: Also, if you're putting $15M a year into "living expenses", every year, you're doing something wrong. I'm tempted to say that a requirement that people invest a certain percentage of their pre-tax income would be a good idea to counter things like this, but I'm pretty sure that would be counterproductive despite the increase in overall invested money.

Edited, Oct 1st 2010 6:25pm by MDenham

Yes, you would. If your objective was to get greedy mcrichguy to actually invest his money instead of just blowing it on an expensive lifestyle you could do things like that. Want to take a wild guess which side of our political spectrum, despite constantly attacking rich people for spending money on themselves instead of investing it, opposes that sort of thing?

You'd almost think they oppose such incentives specifically so that they can make the argument they're making and convince people to support them politically to "get those evil rich people". But that would just be tinfoil hat territory, wouldn't it? ;)



But virtually every single liberal would oppose it. Why? I have no clue. It should be something they support if they actually believed in the arguments they use. Which is one of the reasons why I often talk about the disconnect between what the people on the left claim to care about and the policies they support when voting (either for representatives, or as representatives themselves). Somehow they get convinced that instead of removing polices put in place to block investment they should instead punish rich people for not investing enough by... wait for it... creating further disincentives to investing.

Crazy, isn't it?



It's just an example. I could have used an example where the guy making 50M/year pays 20M in taxes and spends 1M on his living expenses and puts the remaining 29M into his investments, and the result is the same (in fact it's more clear and obvious that an increase of 10M in taxes not only will but *must* come out of his investments). But I wanted to illustrate an example of a completely greedy self-serving rich guy so that the liberals couldn't counter it.


Obviously, the rich guy who invests most of his earnings is going to have to reduce that investment by the amount his taxes increase. My point was to show that even a guy who invests only half of his wealth will do the same thing. The degree to which he's already spending the money on his own lifestyle is presumably also the degree to which he'll resist reducing that lifestyle as a result of the tax increase. The more greedy he is (which is presumably the intended target of all of this), the more he's just going to reduce investments instead of personal expenses.


The only reasonably consistent case in which that tax wont reduce investment is where the rich guy is super ridiculously greedy and just spends all his earnings on himself without putting any of it into investment. In that case, it'll just come out of his expenses. But I think you and I know that this is an absolute rarity. The overwhelming majority of wealthy people put the majority of their earnings into investment. It's why they are wealthy in the first place. Outside of dumb celebrities and sports figures and lotto winners, everyone else with significant amounts of wealth and earnings are going to invest the lion's share of the remainder. The reality is that 1M/year example is much more indicative of the reality of the top 2%.


But the liberals wont believe that, so I gave them an example they can accept. It doesn't change the result though.

Um... I'm going to have to disagree. Conservatives will tend to support anything which decreases taxes. Being able to claim any amount of money put into investment on your tax return would be pretty strongly supported. I'm not sure where you're getting the idea that government taxing us less is "big government", but you're flat out wrong.

Hah! Cute. False, but cute.

It's nice that you assume that the majority of the top 2% of earners are conservatives too!

Not that it's big government, just that it's an unnecessary (or, as I said, "too much") government intrusion into what you can do with your money in this case.

To be honest, from what I see of your arguments, the apparently ideal tax code is one where there are no specific-use deductions. There's the standard deduction and per-dependent exemptions, and that's it. Any sort of deductions for other reasons is an unnecessary government intrusion into what you're doing with your money.

Found the perfect demotivator for Gbaji:

http://verydemotivational.com/2010/10/02/demotivational-posters-stop-talking

God, your hypothetical super rich guy really needs to fire his accountant.

If we spend trillions on infrastructure, we can hire those people - either directly or indirectly through government contracts with private companies - instead of just giving them government handouts. They get an honest living and a hand up instead of a handout, and we get to repair our disintegrating roads and bridges. EVERYBODY WINS!

We're going to need more rivers.

You're, of course, helping by not ******* women out of wedlock like any good Christian, amirite?

I think Varus's crying has that covered.