Poor little rich folks

Jonah Goldberg pities the poor, over-taxed rich:

Indeed, to hear leading Democrats talk about the “richest 1%” — a diverse cohort of investors, managers, entrepreneurs and, to be sure, some fat-cat heirs — one gets the impression that wealthy Americans are a natural resource, to be pumped for as much cash as we need.


Silly Democrats. Everyone knows that oil is that natural resource, and instead of just pumping it, we should throw money at expensive wars of aggression and destroy wildlife refuges in order to secure more of it.

But now this vision simply defines liberal economics. John Edwards’ unending campaign for president is based on the idea that there are two Americas and that everyone will be better off when un-rich America mugs rich America. According to Democrats, it’s greedy to want to keep your own money, but it’s “justice” to demand someone else’s.

Apparently poor people don’t pay taxes, they just “mug” rich people for their money. You can almost hear Jonah finishing that second sentence in his head: “…kind of like what black people do in real life!”

Michael Boskin, Rudy Giuliani’s economic advisor, said, “There is no — let me repeat — no example in the last quarter-century of a large, complex economy that has been successful with high taxes.” He adds, “The Western Europeans have seen their standards of living decline by 30% in a little more than a generation because of their high taxes.” The U.S., meanwhile, has outperformed the competition over the last quarter of a century.

That’s funny. Of course, the Giuliani campaign has a bad habit of just making shit up, but I’m sure this time they’re using accurate statistics.

And who are these people who never pay taxes on anything, ever? Can someone let me in on the secret?

48 comments for “Poor little rich folks

  1. W. Kiernan
    November 13, 2007 at 10:56 am

    Michael Boskin, Rudy Giuliani’s economic advisor, said, “There is no — let me repeat — no example in the last quarter-century of a large, complex economy that has been successful with high taxes.”

    An economic advisor who is as keyed in to reality as Giuliani’s foreign affairs advisor Podhoretz! What an all-star team.

    Yo, Michael! Put down the bong for a minute and have a look at this.

  2. November 13, 2007 at 11:31 am

    It’s strange that he should choose the last quarter-century, because in the UK we have had a permanent obsession by our politicians for cutting taxes over that period (well, actually, about 28 years).

    In that time our health provision, education provision, public transport network, job security, poverty levels, personal debt and fear of crime have all become very much worse.

    I’d love to know what measurements he’s using to determine “decline by 30%”!

  3. Brian
    November 13, 2007 at 11:49 am

    I am not a fan of Jonah Goldberg or his cohorts at National Review, but I do share his sentiment regarding tax policy. This is a conundrum I have faced for years. I am pro-choice and socially liberal, but left-wing economics is just plain crazy in my mind (not that the Republicans are that much better). This type of redistribution talk from the Left however drives me nuts. It is why I find it hard to vote at all.

  4. ellenbrenna
    November 13, 2007 at 11:57 am

    “Indeed, to hear leading Republicans and business leaders talk about the “average American” — a diverse cohort of white collar workers, freelancers, entrepreneurs and, to be sure, some of the very very poor — one gets the impression that middle class American workers are a natural resource, to be pumped for as much labor and profits as we need.”

    There I went and fixed it for Jonah.

  5. ChrisR
    November 13, 2007 at 12:02 pm

    I hope you’re not criticizing tax cuts for the ultra-rich because they really work!

  6. MikeEss
    November 13, 2007 at 12:18 pm

    Dammit! ellenbrenna beat me to it!

    The rest of us 99%-ers are a resource for the 1% but apparently that’s okay…

  7. November 13, 2007 at 12:28 pm

    To wit Office Space:

    What would you say…Jonah Goldberg does here?

    Seriously. I’ve never understood this guy’s relevance. Famous because his mother was marginally famous during the Lewinsky scandal. How does that make any sense?

    As for the creative output, it’s nothing but run-of-the-mill wingnuttery that you can get from, oh, about a billion other places.

  8. nonskanse
    November 13, 2007 at 12:35 pm

    Oh dear… who was it that told everyone his tax rate is effectively something like 17%? Some billionaire… because it’s all capital gains and very little “income”.
    I’m all for a low capital gains tax to a point (helps the market, helps my little 401k when I retire many years down the road), but really after the first 100k or so a year in capital gains the rate could convert back to the income tax rate.

    However, to be fair, I know some people who do think that the rich should be paying for nearly everything, simply because the rich are…rich… and these people aren’t. Very few, though. Very few. This Goldberg fellow is kind of silly.

  9. ChrisR
    November 13, 2007 at 12:40 pm

    Nonskanse,

    Are you thinking of Warren Buffett?

  10. Jemima
    November 13, 2007 at 12:48 pm

    My standard of living has declined? I wasn’t aware… I’m from Denmark (in Western Europe for those of you who never realised that tiny blotch on the map was actually a country), and our taxes haven’t changed much over the past years. Neither has our standard of living. Mind, there is still a lot queuing in the health-care system, but in my book that’s okay as long as I don’t need to bring my VISA when I need to see a doctor, nor when going to school. Either way, we may not be a large economy, but we are complex. And Sweden, Germany and France would count as large economies anyway, and as far as I know, their taxes are considerably higher than the American ones, and that would in American eyes count as ‘”high taxes” I gather ;P

  11. LS
    November 13, 2007 at 12:53 pm

    John Edwards’ unending campaign for president

    As opposed to… everyone else’s unending campaign for president??

  12. ellenbrenna
    November 13, 2007 at 12:54 pm

    In America when a conservative talks about quality of life they are actually talking about raw GDP and corporate profits.

    It is not quality of life as most people understand it but they manipulate the phrase because they cannot say outright what they really mean. They really are mendacious bastards.

  13. nonskanse
    November 13, 2007 at 1:12 pm

    ChrisR
    YES. Thanks

  14. Jen
    November 13, 2007 at 1:36 pm

    I’m all for a low capital gains tax to a point (helps the market, helps my little 401k when I retire many years down the road),

    No it doesn’t- distributions from 401(k)s are taxed as ordinary income. The average person with few investments beyond an employer sponsored plan gets little to no benefit from a low capital gains tax.

  15. stnemmoc
    November 13, 2007 at 1:38 pm

    Yay! Feministe doesn’t jump on the euro-bashing train! Ellenbrenna, I totally agree: any time conservatives talk about standard of living in Europe it almost always seems like they really mean unemployment and GDP. I’m not sure how useful the Gini index is, but this Wikipedia article is interesting.

  16. stnemmoc
    November 13, 2007 at 1:43 pm

    Or better yet, this one.

  17. November 13, 2007 at 1:50 pm

    Pretty interesting fact that proves the fat cats are getting even fatter: the wages of the richest 3,000,000 people have increased steadily since 1987, while the wages of the rest of the 297,000,000 people in this country have actually decreased.

  18. a
    November 13, 2007 at 1:53 pm

    Hey now, Jemima, I know what Denmark is, and I could even find it on a map. Shocking! I might be a little lost if you asked me to locate Kyrgyzstan, though.

  19. SoE
    November 13, 2007 at 2:04 pm

    “The Western Europeans have seen their standards of living decline by 30% in a little more than a generation because of their high taxes.”

    Hm, my parents didn’t have iPods and broadband internet when they were my age. And yes, some Americans don’t believe us but even in Europe we now have fridges and bathrooms and TV sets (unlike during the 70’s).

  20. SoE
    November 13, 2007 at 2:06 pm

    Ah, that sounds like we didn’t have any fridges and toilets back then. Of course we had, just not every family could afford those.

  21. nonskanse
    November 13, 2007 at 2:26 pm

    The average person with few investments beyond an employer sponsored plan gets little to no benefit from a low capital gains tax.

    Oops you’re right. Must remember “think before submit” Still it helps the market by making investing in the market a better choice, and helps my other investments when I cash out, though they be small.

    So What is the right amount for gains tax? I want everyone to pay fairly but I think middle class people who invest shouldn’t be suddenly punished just because the rich get taxed at 17%..

  22. Hector B.
    November 13, 2007 at 3:38 pm

    Taxing me on the fruit of my labor only discourages me from working. All taxes should be on capital gains, because those took no effort to receive.

  23. John Landahl
    November 13, 2007 at 3:48 pm

    “There is no — let me repeat — no example in the last quarter-century of a large, complex economy that has been successful with high taxes.”

    What they don’t bother to mention is that during what economic historians call “the Golden Age of Capitalism” — the 1950s and ’60s — the highest tax rates in the US were above 70%, and in some years up to 91% (data). In other words, the richest people in the country were being taxed at more than three times their current rate throughout two decades of unprecedented economic growth.

    Not coincidentally this was also the period which saw the construction of most of the public infrastructure Americans take for granted today. The Keynesianism of the “Golden Age” is what made all that possible, and it ended because the rich decided they weren’t getting rich enough fast enough. As is obvious today, they figured out how to fix that little problem.

  24. Skwee
    November 13, 2007 at 4:00 pm

    Especially after all the statistical jokes Rudy pulled, why is he citing him as a reliable source of information?

  25. Bolo
    November 13, 2007 at 4:02 pm

    Ah, that sounds like we didn’t have any fridges and toilets back then. Of course we had, just not every family could afford those.

    A co-worker of mine was talking about “how low the standard of living” in Europe is compared to America… because you guys “have fewer cars, air conditioning is still a luxury…” etc. I didn’t have the heart to tell him that (1) fewer cars are necessary because of your infrastructure and (2) air conditioning is less necessary because your major cities, except those right around the Mediterranean, tend to have very pleasant summer temperatures (provided weather.com’s seasonal averages are correct).

    I mean, the average summer high in July in Paris is 75, while the average winter low in January is 34. Most other places in western and central Europe are like that, barring major elevation changes (and that keeps temps down anyway). As you move east you start to get the “continental climate,” so you get more varied seasonal temperature swings out in Germany, Poland, and further east (Russia being the most extreme). As you move north, things tend to just cool down, especially as you move away from water.

    I think a lot of that “lower standard of living” crap comes from Americans expecting the rest of the world to live in the same climates we do and own the same amount/types of stuff we do. For instance, I live in Phoenix, AZ. Air conditioning is a necessity for almost 6 months out of the year, when temperatures are at least in the upper 90s and repeatedly hit 110 to 115F at the peak of the summer. It’s also almost impossible to not drive to get places, so the two of us own two cars–one car per person, and we don’t even have kids to take anywhere!

    The way we live is crazy and provides no standard of comparison for “good living.”

  26. Kristen from MA
    November 13, 2007 at 4:13 pm

    John Edwards’ unending campaign for president

    The wingers are deeply afraid of an Edwards win, which is why his bloggers were so viciously attacked and why Coulter slams him every chance she gets.

  27. Rhiannon
    November 13, 2007 at 4:23 pm

    Taxing me on the fruit of my labor only discourages me from working. All taxes should be on capital gains, because those took no effort to receive.

    I like that plan.

  28. November 13, 2007 at 4:25 pm

    Yay! Feministe doesn’t jump on the euro-bashing train!

    Well, two out of the three of the Feministe bloggers are Euro-living at the moment, so we can’t hate too much…

  29. November 13, 2007 at 4:30 pm

    The way we live is

    …the result of a significant historical divergence away from the European experience by virtue of generally untapped land to the West after the U.S. infancy, a Civil War in lieu of socialist revolutions, and lack of damaged infrastructure after World Wars I and II.

    In other words, not “crazy.” Logical, given historical precedence, actually. Global warming and peak oil might put an end to this way of life, or maybe it won’t. In either instance I’ll put my money down on the American populace to adapt, as it isn’t necessarily as stupid/lazy/whatever-quasi-racist-slam as portrayed by certain European intellectuals.

    HTH.

  30. EG
    November 13, 2007 at 5:42 pm

    As I recall, that land was being tapped. Just not by the United States. What you’re saying is that US’s imperialist program was more successful, ultimately, than Europe’s.

    Further–socialist revolutions? Are you thinking of the ill-fated Paris Commune? The quickly co-opted German socialists? Because the US had its share of short-lived leftist uprisings, general strikes, etc.

  31. November 13, 2007 at 5:53 pm

    Well, two out of the three of the Feministe bloggers are Euro-living at the moment, so we can’t hate too much…

    And the third hates the other two for being in Europe while she looks at several hundred iterations of the same powerpoint presentation.

  32. Ms. Clear
    November 13, 2007 at 5:57 pm

    I love how the rich like to deny that they are rich. Therefore, they shouldn’t be taxed, because $300 K per year just isn’t that much money.

    But of course, anyone who can’t get health insurance on $50K a year for a family of four is a lazy schlub who just wants to get welfare.

    It’s a nice, self serving contradiction. Comes in handy at times.

  33. November 13, 2007 at 6:44 pm

    And who are these people who never pay taxes on anything, ever? Can someone let me in on the secret?

    Leona Helmsley said, “Only the little people pay taxes.”

    The image of Helmsley was sealed when a former housekeeper testified that she heard Helmsley say: “We don’t pay taxes. Only the little people pay taxes.” She was convicted of federal income tax evasion and other crimes in 1989 and served 19 months in prison (and two more months in house arrest), after receiving an initial sentence of 16 years.

  34. Caren
    November 13, 2007 at 7:12 pm

    One good thing from W’s reign–clear proof that ‘trickle-down’ does not work.

    Social Security isn’t in trouble either. Would someone like to explain to me why someone who makes $45,000/year pays SS on their entire income, while the rich get to stop paying SS on their wages after $102K? Poor $45K pays on 100%, but $300K pays on only 33%–>and the more you make, the less percentage-wise goes toward SS.

    Wouldn’t it make more sense to tax the dollars OVER $102,000? Yes, you’d have fewer payees, but I bet you’d have more total money.

    Of course, that would be called “class warfare”. Funny how it’s never called that when it’s the rich taking from the poor.

  35. a second kate
    November 13, 2007 at 7:12 pm

    I love how the rich like to deny that they are rich. Therefore, they shouldn’t be taxed, because $300 K per year just isn’t that much money.

    Sure, $300 K is a lot of money, but I don’t think that’s all it takes to make someone “rich”. My definition of rich is “in a position such that it is almost inconceivable that you could lose it all.” That requires possession of assets. If you’re getting $300 K per year in salary, but have little saved or invested, you still could be one major illness away from poverty. It happened to my family – my father, the sole bread-earner, became ill and we lost everything. If you don’t have actual assets, you ain’t really rich – upper middle class, yes, but not RICH. There’d be a lot fewer people voting Republican if they actually could recognize that they are in fact NOT rich, and that tomorrow they might very well need the social programs that they look down on today.
    That being said, the upper middle class should be expected to pay their fair share just like everyone else.

  36. November 13, 2007 at 8:35 pm

    The province of Ontario has really high taxes and we’re doing wonderfully.

  37. Leo
    November 13, 2007 at 8:41 pm

    $300K in NYC is far from “rich.” Not struggling by any means but nowhere near rich. Normally working pretty hard for that salary too. But of course $300K in NY is definitely taxed at a “rich” person’s rate.

  38. November 13, 2007 at 10:39 pm

    The whole “Western Europeans have had their standard of living decline by 30% in the last few decades” bit is mind-bogglingly bizarre. How, how, how, did he arrive at this statistic? I remember visiting my Viennese relatives as a boy in the 1970s (and Austria’s taxes are up there with the best of ’em), and more recently in this decade, and seeing greater prosperity at every level of society. Same with my German family in Essen and Hamburg and my English family.

    And Lord knows, the Germans with their high taxes produce garbage like Mercedes and Porsches; we, with our splendid economic climate, produce Mercuries and Pontiacs.

  39. justanotherjane
    November 13, 2007 at 11:45 pm

    Agreed Leo, I was thinking the same exact thing about San Francisco. $300K is not a lot. It’s comfortable, but not rich by any means.

  40. willa
    November 14, 2007 at 12:07 am

    I live in New York (currently Brooklyn), and I will never make anything even resembling 300K. Is this money needed for a co-op? 300K compared to the real rich in NY is of course a different matter than 300K compared to everyone else. But it’s still a lot more than most people will see in their lifetimes.

  41. EG
    November 14, 2007 at 12:36 am

    I’ve spent my life in NYC. $300K is plenty enough to make you rich. It won’t make you a millionaire, but you’ll be in fabulous shape.

  42. exholt
    November 14, 2007 at 3:08 am

    My definition of rich is “in a position such that it is almost inconceivable that you could lose it all.”

    Then who could conceivably be considered rich by this definition? Even multi-billionaires such as Bill Gates and Warren Buffet could lose it all if they encountered one catastrophic calamity or a series of unfortunate events.

    What’s the minimum income and/or value of assets needed before someone is considered “rich”? Are you sure there is no one who has been able to achieve this criterion of being “rich” by earning $300k/year or even a fraction of that amount?

    Having grown up and worked in NYC, $300k/year or even a fraction thereof would place most of my co-workers and their families in great financial comfort and security. Correct me, if I’m wrong, but most have to work with far less than $100k/year, much less $300k/year.

  43. a second kate
    November 14, 2007 at 1:41 pm

    O.K., the bigger picture of my view is that I consider what really defines poor/middle class/rich is one’s level of financial securuity –

    poor – insecure on a day-to-day basis. Forced to make choices between basic needs (medicine or food? food or heat? etc.). Now, that includes a lot of “middle class” people with no heath insurance in our society.

    middle class – almost completely dependent on income from work such that a fairly common type of personal catastrophe (major illness, job loss during an economic downturn, plant moving overseas, divorce, etc.) could make the family poor very quickly. This will include a lot of young people with high incomes who will probably become rich.

    rich – multiple sources of investment income, assets and/or access to social networks such that it would take a string of casastrophies to bring it down. This may include many older people who, while they don’t have a great deal of money, have the joint security of owning their own homes, social security, private investment income and children who will step up and care for them should they become ill.

    So, basically, my criteria for the difference between middle class and rich is – if you get sick, how long can you go on meeting your family’s basic needs without working? If the answer is not “indefinately,” you’re one major illness away from poverty and that’s a serious enough level of insecurity to be middle class.

  44. a second kate
    November 14, 2007 at 2:02 pm

    That being said – there are a lot of high-income middle class people who can damn well afford to be paying more in taxes. It’s just that insisting on calling them rich when they have good reasons for not feeling rich is counterproductive. There are also a lot of financially secure elderly people who are paying quite enough already.
    I think we should focus on capitol gains and bringing back the “spoiled rich-kid tax” (also known as the inheritance tax). I’d also like to see a terraced system, rather than one with different percentages (so, no one pays on the first $10, all pay 10% on the next $10 and so on, up to the highest rate of, whatever).

  45. a second kate
    November 14, 2007 at 2:03 pm

    I meant, different percentages for the entire taxable income.

  46. Nathanael Nerode
    November 15, 2007 at 2:10 pm

    Some dissembler working for Giuliani wrote:
    ‘“There is no — let me repeat — no example in the last quarter-century of a large, complex economy that has been successful with high taxes.”’

    Um, that’s a really weird timeline to choose. “Last quarter-century” means “since 1982”, which year he probably chose to exclude *every single large, complex economy including the US* from the early 1930s through the late 1970s. Under Eisenhower the top tax rate was 91%, in one year 92%.

    And he wrote “large, complex” specifically in order to exclude all the wildly successful Scandinavian countries. Sweden did well with top tax rates *exceeding 400%* (which was arguably excessive; I think they’ve backed it down to 100%).

    And as written his statement is *still* not true because of continental European countries like France and Germany.

  47. Nathanael Nerode
    November 15, 2007 at 2:18 pm

    The *only* legitimate justification for low capital gains rates is that capital gains tend to be “bunched” — you get a huge lump in one year and nothing for several years — and therefore they can kick people up into higher brackets than they ought to be in.

    However, lower rates are not an appropriate solution to that problem. The correct solution is to allow capital gains to be recognized over several years (something like depreciation), so as to “even out” the income. Anyone who has to figure out cost basis in property for capital gains isn’t going to find this a significant burden.

    I agree with Hector B. at #22 that taxing *only* capital gains, not wages makes sense philosophically, but I think you wouldn’t actually get enough money to fund the government. But it is completely obvious that capital gains, and dividends, just like interest, should be taxed at least at the same rate as wage income, and probably higher.

    Currently, because Social Security and Medicare tax apply to wages and not to other income, as well as because the infamous Bush capital gains tax cuts, the effective tax rate on wages is always higher than the effective rate on capital gains. Very wrong.

  48. November 16, 2007 at 12:25 am

    Income is income. What is this bullshit that cap gains get taxed at a lower percentage than labor? Why does sitting on your ass get taxed at a lower rate than busting your ass? Why do we not have more tax brackets? $200,000 should not be in the same bracket as $2,000,000 should not be in the same bracket as $20,000,000 should not be in the same bracket as $200,000,000. Jeebus, people wake the fuck up already!

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