Why Taxes Are Good For The Wealthy

The LA Times has an interesting editorial from a wealth venture capitalist on taxes in America:

For nearly the last decade, I’ve paid income taxes at the lowest rates of my professional career. Before that, I paid at higher rates. And if you want the simple, honest truth, from my perspective as an entrepreneur, the fluctuation didn’t affect what I did with my money. None of my investments has ever been motivated by the rate at which I would have to pay personal income tax.

….No one particularly enjoys paying taxes, but one lesson we should have learned by now is that for the good of the country, we need to tax people like me more. At a minimum, we need to return to the tax rates of the Clinton era, when the economy performed far better. Simply taxing the wealthiest 2% of Americans at the same rates they were taxed before the Bush tax cuts could reduce the national deficit by $700 billion over the next 10 years. Remember, paying slightly more in personal income taxes won’t change my investment choices at all, and I don’t think a higher tax rate will change the investment decisions of most other high earners.

What will change my investment decisions is if I see an economy doing better, one in which there is demand for the goods and services my investments produce. I am far more likely to invest if I see a country laying the foundation for future growth. In order to get there, we first need to let the Bush-era tax cuts for the upper 2% lapse. It is time to tax me more.

Word yo.

Ezra Klein once made the point that he had never seen someone quit their job or sell their company because they were being taxed too much. I agree, its not like wealthy conservatives or Wall Street CEO’s have ever decided to take a smaller executive bonus because of taxes.

“Whoa there, a $30 million retirement package. Do you know how much that is in taxes? I think I’ll pass buddy.”

At the same time people often overlook the positive externalities that come from properly taxing Americans. Tax cuts might make you feel warm and fuzzy on the inside but the ultimate goal of any economic policy should be to strengthen the economy, rather than promoting one’s fanatical die hard beliefs that what’s mine is mine.  Ultimately, if your economic philosophy can be summed up as “Screw you I got mine”, you are wrong.

(h/t) to Kevin Drum


Austan Goolsebee: He Slices, Dices, Creates Jobs and Makes You Laugh

Apparently Obama’s new Economic Advisor does stand up comedy. Yes, I’m being serious. Yes I have a video.

Austan Goolsebee. Tria-athelete, economist, stand up comedian.

Apparently Rich Is Rich No Matter Where You Live

Or at least that seems to be what the latest census bureau information indicates. From Ezra Klein’s blog:

Arguments over income taxes tend to get bogged down in arguments about who is really “rich.” And what you hear then is that rich in Ohio and rich in New York City are different. But how different?

According to the Census Bureau, only 6.3 percent of New York City’s households pulled in more than $200,000. So if you’re a household making $250,000 or more, you’re easily in the top 5 percent — even in New York City.

Take that Republican demagoguery!

One of the central republican retorts any time discussion of taxing the rich is brought up is that someone who is “rich” somewhere “normal ” like Kansas City wouldn’t be considered “rich” in a more expensive place like New York. But as the data above shows that someone in New York city that makes $250,000 or more still makes a lot more than most people in their geographic area. Sure they might not be able to live the glamorous “New York” life style but they still earn more than enough to take care of themselves.

Of course, this data only shows the upper class as defined by New York city, but considering that NYC is regularly quoted as the city with one of the highest, if not the highest living expenses it should be a suitable representation of expensive towns.