In the midst of the hysteria by the top two percent over Obama's tax plan (TEH SOCIALISMZ!! AAIIIEEE!!!), this article by ABC News about people who make more than $250,000 per year and are trying to lower their annual incomes below $250,000 makes one realize that professionally successful and wealthy people can be fucking morons:
President Barack Obama's tax proposal - which promises to increase taxes for those families with incomes of $250,000 or more -- has some Americans brainstorming ways to decrease their pay, even if it's just by a dollar.A 63-year-old attorney based in Lafayette, La., who asked not to be named, told ABCNews.com that she plans to cut back on her business to get her annual income under the quarter million mark should the Obama tax plan be passed by Congress and become law.
"We are going to try to figure out how to make our income $249,999.00," she said.
"We have to find a way out where we can make just what we need to just under the line so we can benefit from Obama's tax plan," she added. "Why kill yourself working if you're going to give it all away to people who aren't working as hard?"
Of course, Obama's plan increases taxes on your income above $250,000. It's not like you pay a penalty on the income below $250,000. I hope she doesn't deal with tax law (or represent the innocent...):
Because we have a marginal tax system, said Schatsky, what Obama's plan means is that the amount of tax you pay on each incremental dollar is higher only when your income is pushed into a higher tax bracket.
"But to focus keeping your income below a quarter million dollars is not going to have any spectacular magic for individual tax payers," said Schatsky. "The difference between $249,999 and $251,000 will probably have zero tax impact."
Here's some like-minded 'wisdom' from someone who places small power tools inside people's heads (a dentist):
Dr. Sharon Poczatek, who runs her own dental practice in Boulder, Colo., said that she too is trying to figure out ways to get out of paying the taxes proposed in Obama's plan.
"I've put thought into how to get under $250,000," said Poczatek. "It would mean working fewer days which means having fewer employees, seeing fewer patients and taking time off."
"Generally it means being less productive," she said.
"The motivation for a lot of people like me - dentists, entrepreneurs, lawyers - is that the more you work the more money you make," said Poczatek. "But if I'm going to be working just to give it back to the government -- it's de-motivating and demoralizing."
Currently, every dollar over $250,000 is taxed at 35%. Under Obama's plan that would rise to 39.6%. Even if Obama manages to fulfull his campaign promise of reinstituting payroll taxes on income above $250,000, that would make the total federal tax burden on earnings above $250,000 45.825%--she would still keep 54 cents on the dollar on income above $250,000. Let's say the good Doctor Poczatek has $500,000 of taxable income. Under the free-market Bush, the 'last $250,000' is taxed at 35%, meaning she owes on that half (Mad Biologist takes off shoes to do complex arithmetic).... $87,500, keeping $162,500. Under TEH SOCIALISMZ!!! (and I'll include the Social Security increase), she pays $114,562.50, keeping $135,437.50. If Obama doesn't raise the Social Security cap (MINI-SOCIALISMZ!!), she pays $99,000, keeping $151,000.
Either way, it is an increase, but, even in the worst case scenario, she would still be over $135,000 richer (which is 'only' 270% more than the median pre-tax income). I think that would be incentive enough. But if it's not, I'm sure there are a few well-heeled Democrats willing to pick up the leftover business.
Greed and stupidity: it's like a Reese's Peanut Butter Cup, but evil.
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It's amazing how fucking stoopid right-wingers are!
I don't get it either. At that income level you could afford to hire an accountant to do your taxes for you--these folks are probably paying one anyway to deal with business details. And if that accountant is worth even a tenth of his hourly rate, he will tell you that the object of the game (assuming you are playing the game) is to maximize your after tax income. That's why we have a marginal tax system in this country: it's exactly so that people have no incentive (at least as far as tax laws go; other perverse incentives may apply) to try to come in under a particular income.
I think you're missing the point. Rich people may say they're lowering their income below 250k. In reality you can rest assured that they will just make sure it appears that their take home income is below 250k. Accountants can do wonderful things....
There's a great deal of point missing going around. A lot of these people right near the $250k mark aren't as interested in keeping those few extra dollars for themselves as they are in keeping those dollars out of the hands of an irresponsible federal government. A nonviolent tax revolt, as it were.
I'm an order of magnitude below the $250k mark in my own income, but I myself disagree with what you call TEH SOCIALISMZ and am therefore actively trying to look for new ways to starve the beast. Looking for every deduction, refusing to invest in treasury bonds, etc. It makes very little difference, but repeated a few million times by disgruntled taxpayers and I think it will have an effect.
Oh wonderful, one of the baby-Galts show up in comments. Joy.
"keeping those dollars out of the hands of an irresponsible federal government"
And of course, I'm sure you were working hard to starve the beast when it decided to spend enormous sums of money invading a random Middle Eastern country, etc., etc. Right?
Defense spending isn't really spending. Everyone knows that.
Errr... no. The point is that there's nothing special about getting your adjusted income below 250k because the tax rate in question is a marginal rate. Going from $250,001 to $249,999 is not going to result in any noticeable change. I'm starting to understand why so many people are so vehemently against our progressive tax system. They don't have a clue how it works.
"And of course, I'm sure you were working hard to starve the beast when it decided to spend enormous sums of money invading a random Middle Eastern country, etc., etc. Right?"
I've been a deficit hawk since long before Bush was in office. Of course, I should also note that the entire cost of the Iraq war is lower than either of the TARP bailout or the stimulus.
The combined spending on the Iraq and Afghanistan wars will surpass the combined total of TARP and the economic stimulus sometime this year. And that cost will keep growing, and growing, and growing...
http://www.infoplease.com/ipa/A0933935.html
There's a much simpler solution for you Matt. There are plenty of countries with no government to speak of, no taxes at all (that anyone would make you pay at least), no spending on any public goods (like police, roads, etc.) and so on. You can just move there and enjoy and let the rest of us live in what we'd call the developed world. I've already lived in a country where there's no government institutions with any power to speak of, I suggest you have go and see how much fun it is.
Oh and thank you for disabusing me of the notion that there's a ceiling on how much of an idiot a fellow physics grad student can be.
"A lot of these people right near the $250k mark aren't as interested in keeping those few extra dollars for themselves as they are in keeping those dollars out of the hands of an irresponsible federal government."
I suppose it's much more profitable to give it to the highly responsible stock brokers and bankers.
These people will not be missed.
sorry for the double post, but it occurs to me that we should encourage this kind of thinking, especially among lawyers, bankers, and others in the "financial services industry." Clearly, our economy will be better if these people have less incentive.
Gee, we should have bought three or four then.
A DENTIST is making more than $250k?? I am in the wrong profession.
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sorry for the double post, but it occurs to me that we should encourage this kind of thinking, especially among lawyers, bankers, and others in the "financial services industry." Clearly, our economy will