tskeeter
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Post by tskeeter on Aug 30, 2012 12:00:39 GMT -5
I find it interesting how many people don't seem to understand how increasing taxes on the rich is likely to affect them. While we don't fit into the President's definition of rich, I think what would happen if our tax rate went up is a fairly good approximation of what will happen when taxes are increased on people who earn larger incomes.
If our federal income taxes were increased by a percent or two, it wouldn't really affect us much. Nor would it affect our neighbors, who have similar incomes, much. We would all tighten our belts a little. We would eat more meals at home, rather than eating out. While what DW and I do doesn't have much impact, when you consider that our neighbors will be cutting back, too, there will be some impact on the restaurants near our homes. Due to the decline in business, the restaurants will have to cut back. A cook, a bartender, and five servers will lose their jobs. And we'll do some soul searching. And some of the folks in the neighborhood will discontinue their house cleaning service and/or their lawn service. A person who cleans houses or mows lawns will lose their job, or lose their business.
Those of us who live fairly comfortably will feel the squeeze a bit. Some of those who provide us goods and services will lose their jobs, their businesses, and maybe their homes.
So who will feel the impact of increasing taxes on the rich more? The rich? Or the people trying to work their way up the economic ladder?
Do you think this example is far fetched? To truly appreciate the economics of tax policy, all you have to do is read the letter to the editor of the New York Times from boat builder Joe Meglin, which was published on 1/3/1991. Mr. Meglin's letter provides a first hand account of what happened to the boat building industry when additional taxes were imposed on people purchasing certain types of boats.
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Post by Deleted on Aug 30, 2012 12:10:33 GMT -5
Households earning more than $250k represent ~2% of the population.
I don't think that tax increases happen in a vacuum, but you may be overestimating the impact of the hit on local businesses.
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Post by Deleted on Aug 30, 2012 12:19:11 GMT -5
I think you're asking the wrong question. Could the rich afford it? Of course they could.
But why should they have to pay? Because some politicians overspent a pot of money and now feel the need to raid someone's bank account to pay for it.
And a better question is what is the plan to make sure you don't have to come back looking for more again? Because based on the budget, it looks like we're in for another 10 years of this kind of spending.
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workpublic
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Post by workpublic on Aug 30, 2012 12:22:29 GMT -5
Because some politicians overspent a pot of money and now feel the need to raid someone's bank account to pay for it.
that's the reason many people are "former" middle class.. yes the "rich" can pay. but the middle class can't.
they've just about took it all from the middle class. looks like "the rich" are the only turnip left with any juice. ;-)
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giramomma
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Post by giramomma on Aug 30, 2012 12:27:02 GMT -5
If our federal income taxes were increased by a percent or two, it wouldn't really affect us much. Nor would it affect our neighbors, who have similar incomes, much. We would all tighten our belts a little. We would eat more meals at home, rather than eating out. While what DW and I do doesn't have much impact, when you consider that our neighbors will be cutting back, too, there will be some impact on the restaurants near our homes. Due to the decline in business, the restaurants will have to cut back. A cook, a bartender, and five servers will lose their jobs. And we'll do some soul searching. And some of the folks in the neighborhood will discontinue their house cleaning service and/or their lawn service. A person who cleans houses or mows lawns will lose their job, or lose their business. Those of us who live fairly comfortably will feel the squeeze a bit. Some of those who provide us goods and services will lose their jobs, their businesses, and maybe their homes. See, but I don't believe this entirely. I'll even expand your definition to those who live fairly comfortable to the middle class. In the past 3 years, when the economy has been terrible, and reportedly, while everyone has suffered, restaurants, movie theaters, and professional sporting events are packed with people. And not just on the weekends. It's weeknights, too. We have a good amount of higher end restaurants (for us, that's 30-40/plate in a MCOLA) , and none of them have closed. I don't know of anyone at my workplace that has had to cut back. In addition to the economy sucking, it was decided that we need to pay more in benefits. I'm pay $300/month more in benefits. And we haven't had any raises etc in 4, years. I'm guessing it will be another 6 or 8 before we get raises. Yet my coworkers are still going on trips to Hawii, backpacking, updating their houses, and getting their lawns mowed. I provide educational services (lessons) to my clients' kids as a part time job. Typically, one would think that cutting "extras" would be first to go. I've been working at capacity since 2008, and in fact, my rich clients are willing to pay me MORE money than I charge. Granted, it's not much, but the difference would pay for a house cleaner once a month. So, I hear your argument that high taxation means less disposable income. I think, though, that despite all the medias doom and gloom, that people's lives would not be so dire with less disposable income. Because if that was the case, we'd already see restaurants, entertainment venues, technology providers (from smart phones, to iPads, to cable companies) reduce their workforce and/or go under.
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susanb
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Post by susanb on Aug 30, 2012 12:27:05 GMT -5
I posted this in another thread, but it is relevant here, so Last year DH and I "made" enough to put us in the top 1%. However, we own an LLC, which is a pass through entity. So, while we technically "made" over 500k, only about 100k of that ever touched our personal accounts or was used for personal uses like paying our bills. The other 400k stayed in a business account and we did horrible, greedy things with it like make payroll. We had to pay taxes on it, even though we never got to access it, and we would be included in the stats of DINK's making half a million a year.
The bottom line is that literally every dollar of that 400k that was not taxed was spent on purchasing services and employing people. Any tax increase will result in less spending on purchasing services and employing people. Not out of ideology, but because we have a finite amount of money available.
Since LLC's are widely used by small businesses and all profits must be passed through to members at the end of the year, I am guessing that there are many people who appear to be making 250k + but are really just small business owners, actually living off of less and leaving that money in their company.
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workpublic
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Post by workpublic on Aug 30, 2012 12:33:55 GMT -5
250K, 500K = peanuts when talking about "rich" in America. hit the 10 mil+ folks with tax increases. not the mom and pop businesses.
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Formerly SK
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Post by Formerly SK on Aug 30, 2012 12:34:20 GMT -5
I find it interesting how many people don't seem to understand how increasing taxes on the rich is likely to affect them. While we don't fit into the President's definition of rich, I think what would happen if our tax rate went up is a fairly good approximation of what will happen when taxes are increased on people who earn larger incomes. If our federal income taxes were increased by a percent or two, it wouldn't really affect us much. Nor would it affect our neighbors, who have similar incomes, much. We would all tighten our belts a little. We would eat more meals at home, rather than eating out. While what DW and I do doesn't have much impact, when you consider that our neighbors will be cutting back, too, there will be some impact on the restaurants near our homes. Due to the decline in business, the restaurants will have to cut back. A cook, a bartender, and five servers will lose their jobs. And we'll do some soul searching. And some of the folks in the neighborhood will discontinue their house cleaning service and/or their lawn service. A person who cleans houses or mows lawns will lose their job, or lose their business. Those of us who live fairly comfortably will feel the squeeze a bit. Some of those who provide us goods and services will lose their jobs, their businesses, and maybe their homes. So who will feel the impact of increasing taxes on the rich more? The rich? Or the people trying to work their way up the economic ladder? Do you think this example is far fetched? To truly appreciate the economics of tax policy, all you have to do is read the letter to the editor of the New York Times from boat builder Joe Meglin, which was published on 1/3/1991. Mr. Meglin's letter provides a first hand account of what happened to the boat building industry when additional taxes were imposed on people purchasing certain types of boats. Ummm....anyone who pays more taxes will have to cut back on discretionary spending. Your scenario is not limited to the rich.
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susanb
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Post by susanb on Aug 30, 2012 12:37:01 GMT -5
250K, 500K = peanuts when talking about "rich" in America. hit the 10 mil+ folks with tax increases. not the mom and pop businesses. Agreed, but a lot of tax discussions have centered on people who make 250k+ and people who are in the 1%. I am just trying to show that the 1% isn't always what people might think at first blush.
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justme
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Post by justme on Aug 30, 2012 12:40:13 GMT -5
I wonder if anyone's done the stats on the percent of household help the ~2% employ. I would think they would employ a fair number, if not the majority of household help (gardeners, nannies, cleaning services, etc) as you'd think they have more disposable income.
Though beyond that, figuring out the real impact is murky. Human behavior is that when you have less money you spend less, though there's also KUWTJ as well as some that would decrease their savings to keep spending the same. But I'm also sure there's a number of people making $250k+ in places like NYC where there's not as much room in their budget, so decreasing their take home pay will most certainly have them spend less.
There's the basic economics of the more you tax, the less people spend. Also, if you look at our history a high tax rate corresponds to not high tax revenues, tax revenues increase a lot once taxes were lowered. (Historical proof of the Laffer curve, at a certain point increasing taxes actually decreases tax revenue.) Are we at the tipping point where more taxes decrease tax revenue? I don't know. What I DO know is that increasing taxes on the rich will NOT solve the government's problem. There's a youtube video of someone doing the math that even if we set tax rates to 100% of the rich (both individuals and companies) it would barely put a dent into our debt. The problems isn't taxes, but it's a lot safer for politicians to go after the rich than go after the poor/entitlements.
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HoneyBBQ
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Post by HoneyBBQ on Aug 30, 2012 12:44:56 GMT -5
250K, 500K = peanuts when talking about "rich" in America. hit the 10 mil+ folks with tax increases. not the mom and pop businesses. Totally agree. You make less than a mil a year, you're not worth bothering with IMO.
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tskeeter
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Post by tskeeter on Aug 30, 2012 13:15:35 GMT -5
Households earning more than $250k represent ~2% of the population. I don't think that tax increases happen in a vacuum, but you may be overestimating the impact of the hit on local businesses. Sarah, I think you're under estimating how the definition of "rich" is going to change over a fairly short period of time. And how the fear of being subject to tax increases will affect the behavior of people who are not currently affected. Many of us are old enough to remember when AMT (alternative minimum tax) was imposed. AMT was an attempt to make sure that 155 very wealthy taxpayers paid at least a minimum level of federal income tax. Since it was originally imposed, the reach of AMT has expanded so that in 2008, 3.9 million taxpayers paid AMT. For 2012, it is estimated that 45% of taxpayers with household incomes between $75K and $100K will be subject to AMT. I don't think that a household earning $100K today is remotely close to the lifestyle enjoyed by the 155 taxpayers that AMT originally targeted. But that doesn't mean that you won't be paying AMT on your $100K income next April. So, let's look at an example. Let's assume that you are a couple of teachers with about 10 years of experience. You live in a moderate cost of living area, so you earn about $60K a year each. Take your $120K household income and assume that your compensation keeps pace with inflation of 3% a year. In about 25 years, your household income will grow to $250K and you will be "rich". And you will be subject to the tax rates of a rich taxpayer. Now, if you save a bit of your salary each month and invest it, you will have investment income. You'll become "rich" in less than 25 years. Maybe it'll only take 15 or 20 years before you're paying the tax rates of the rich. When you study human behavior, it is pretty much a given that the fear of something causes a stronger reaction than actually being confronted with the thing you have been afraid of. During the downturn, we all watched as people with stable jobs, solid incomes, and healthy financial reserves cut their spending back in fear that they could lose their job, be subjected to a pay cut, or be subject to furlows which would reduce their income. You probably did some of this yourself. I know we did. And now, several years later, our spending has not yet returned to pre 2008 levels. People who do not earn $250K or more live in fear that they will be the target of the next round of tax increases. So they react to their fear by reducing spending and preparing to have less disposable income. And the closer a taxpayer comes to becoming the next target, the more strongly they will react and the more drastically they will adjust their spending. So, when you look at how tax policy will affect behavior, you can't limit your analysis to those that will be directly affected by any tax policy change. You need to also consider the behavior of those who are afraid they will be adversely affected by future tax policy changes. As for us, increasing taxes on those who earn more than $250k will certainly affect our behavior. We will reduce our spending in order to save more to be able to afford the retirement we desire while paying higher taxes, we will work an additional year or so, and we may plan to reduce the goods and services we purchase during retirement in order to stretch our retirement income after taxes further. And Shorty, down at The Lake Bar and Grill, might lose her job.
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Phoenix84
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Post by Phoenix84 on Aug 30, 2012 13:25:27 GMT -5
What you're describing is trickle down economics. While I think it's true, based on recent threads, many here don't believe in trickle down economics. To me it's common sense. If you increase taxes on the wealthy they'll spend less by that amount, and the businesses they patronize will cut costs by that much. The same thing happens if we raise coorperate and business taxes. The prices will go up as the extra cost is passed on to the consumer. The wealthy and businesses aren't just going to take tax increases on the chin out of the goodness of their hearts.
It's sort of the same argument as increasing the minimum wage. A businesses forced to increase their minimum wage will raise their prices accordingly, and on a macro level the minimum wage worker is no better off because all the bussinesses they patronize have raised their prices by a proportionate amount.
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justme
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Post by justme on Aug 30, 2012 13:29:47 GMT -5
Or they just won't hire more people and overwork the ones they have. Some argue that the reason teens have a ridiculously high unemployment rate is the minimum wage, also an arguement for low skill jobs. But that argument quickly degenerates into teens working for $0.25/hr.
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Phoenix84
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Post by Phoenix84 on Aug 30, 2012 13:30:57 GMT -5
"250K, 500K = peanuts when talking about "rich" in America. hit the 10 mil+ folks with tax increases. not the mom and pop businesses."
Yes, the 250k mark puts the additional tax burden squarely on the shoulders of small businesses owners. Worker bees don't make that much and the truely wealthy don't make a regular income like most of us do here. Most of their income in from investments and profits.
And in places like New York and San Diego, 250k family income is middle class.
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Phoenix84
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Post by Phoenix84 on Aug 30, 2012 13:33:42 GMT -5
"Or they just won't hire more people and overwork the ones they have. Some argue that the reason teens have a ridiculously high unemployment rate is the minimum wage, also an arguement for low skill jobs. But that argument quickly degenerates into teens working for $0.25/hr."
Yes that's true. MOst business owners feel if they are forced to pay $1 more an hour, they'll hire someone who is worth that money, or just go without. The consequence is usually the least qualified/inexperienced workers (teens, elderly, poorly educated) end up with high unemployment.
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phil5185
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Post by phil5185 on Aug 30, 2012 13:35:45 GMT -5
Taxing earners over $250k really has little direct effect on them, the live style of high earners is not affected by changing their taxes from 35% to 40%. But it has a big effect on business behavior. In the 70's we had a 70% tax rate. Consider the owner of a 50-man machine shop. If business is exceptional, big backlog, a businessman instinctively wants to expand the building, buy more machines, hire an extra 50 people. That allows him to keep meet demand, keep his prices low. But if someone (Jimmy Carter?) says the tax rate is now 70%, the owner cannot risk doubling the shop and hiring 50 new people, knowing that at best, he keeps on 30% of his earnings - and at worst life happens and he loses most of the 30%. So, instead, the business just keeps his 50 man shop and increases his prices until the backlog is manageable. The outcome - higher prices for users of his products, no new jobs. But the business's profits increase just from the price increases. Ie, the businessman does just fine, probably makes more net income than before, even tho he pays an extra few percent on taxes. And this ripples both downward and sideways across the entire economy. Slows the entire economy. Ironically, the Dems think that the wealthy can easily afford to pay more taxes - and they are right. But can the non-wealthy afford the economic slowdown of antibusiness taxes?
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tskeeter
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Post by tskeeter on Aug 30, 2012 13:42:46 GMT -5
I find it interesting how many people don't seem to understand how increasing taxes on the rich is likely to affect them. While we don't fit into the President's definition of rich, I think what would happen if our tax rate went up is a fairly good approximation of what will happen when taxes are increased on people who earn larger incomes. If our federal income taxes were increased by a percent or two, it wouldn't really affect us much. Nor would it affect our neighbors, who have similar incomes, much. We would all tighten our belts a little. We would eat more meals at home, rather than eating out. While what DW and I do doesn't have much impact, when you consider that our neighbors will be cutting back, too, there will be some impact on the restaurants near our homes. Due to the decline in business, the restaurants will have to cut back. A cook, a bartender, and five servers will lose their jobs. And we'll do some soul searching. And some of the folks in the neighborhood will discontinue their house cleaning service and/or their lawn service. A person who cleans houses or mows lawns will lose their job, or lose their business. Those of us who live fairly comfortably will feel the squeeze a bit. Some of those who provide us goods and services will lose their jobs, their businesses, and maybe their homes. So who will feel the impact of increasing taxes on the rich more? The rich? Or the people trying to work their way up the economic ladder? Do you think this example is far fetched? To truly appreciate the economics of tax policy, all you have to do is read the letter to the editor of the New York Times from boat builder Joe Meglin, which was published on 1/3/1991. Mr. Meglin's letter provides a first hand account of what happened to the boat building industry when additional taxes were imposed on people purchasing certain types of boats. Ummm....anyone who pays more taxes will have to cut back on discretionary spending. Your scenario is not limited to the rich. Your observation is absolutely true, skinny. The intent of my post was to point out that a tax the rich policy will probably have a greater adverse impact on the people at the bottom of the income scale than it will on the people whose taxes are being increased. Telling the populous that you will fix the economy by taxing the rich sounds good. I don't think you'd find as much support for this tax policy if you tell people, "I'm going to tax the rich and as a consequence some of you are going to lose your jobs."
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phil5185
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Post by phil5185 on Aug 30, 2012 13:44:23 GMT -5
What you're describing is trickle down economics. While I think it's true, based on recent threads, many here don't believe in trickle down economics. To me it's common sense. lol - this is a good example of Over-reaching Media. Reagan and Dr Art Laffer implemented the Laffer Curve, used it to demonstrate how tax rates could be optimized to maximize tax revenue. That went right over the heads of the Media - so they invented a pejorative to mock it - ie, 'trickle down'. As you say, 'trickle down' is a solid principle, it works well, and it has been used several times - JFK, RR, even Bill Clinton. Bush tried it - but the lesson there was you don't just lower tax rates, you must optimize tax rates.
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jeffreymo
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Post by jeffreymo on Aug 30, 2012 14:04:40 GMT -5
If the middle class gets hit with a 1-2% tax hike, the spouse that handles the finances might cut $1k out of the family entertainment budget. If the rich, say $10M+ get hit with a 1-2% tax hike, they demand that their accountants figure out a way for them to cut $100k to $200k out of their business expenses i.e. payroll.
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Deleted
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Post by Deleted on Aug 30, 2012 14:11:54 GMT -5
Households earning more than $250k represent ~2% of the population. I don't think that tax increases happen in a vacuum, but you may be overestimating the impact of the hit on local businesses. Sarah, I think you're under estimating how the definition of "rich" is going to change over a fairly short period of time. And how the fear of being subject to tax increases will affect the behavior of people who are not currently affected. That is a different issue. If you want to talk about who will be "rich" 25 years from now when we factor in inflation, we have to talk about the rest of the economy. What will Social Security look like in 25 years? Medicare? The defense budget? There are pros and cons to increasing taxes, and there are pros and cons to cutting government spending. But the issue on the table was how rich people would adjust their spending if their income taxes were raised. In which case, we're talking about 2% of the population. The local bar and grill was already going to go under if their only patrons were among the top 2% of earners. The example provided was yacht builders. Rich people buy fewer yachts in a recession. Well, if you are going to earn a living selling cheeseburgers, you need to be able to sell them to more than 2% of the population. If you are going to make a living selling yachts, you probably need to sell them to rich people in more places than just the U.S. Yes, if Susan and her husband have to pay an extra % or two in taxes, it will impact how much they are able to reinvest in their business. It will impact their employees and their customers. But if that 2% is the tipping point between a growing business and a failing business, they may have been doomed for failure anyway. More people will be impacted than just the very rich, but impacted isn't the same thing as harmed.
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morrisr2d2
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Post by morrisr2d2 on Aug 30, 2012 14:14:36 GMT -5
Britian is thinking of giving it a go... 'Emergency' Tax on the Rich Roils Britain Deputy Prime Minster Nick Clegg, leader of the Liberal-Democratic Party, has proposed a one-time tax on the wealth (rather than the incomes) of high-net-worth Britons. The details aren't clear, but Clegg says the country is facing an economic war caused by a prolonged recession, and needs to tax the rich in order to avoid social unrest. He told the Guardian that unless the country "hardwired fairness" into the budget, "I don't think the process will be either socially or politically sustainable or acceptable." Chancellor George Osborne shot back, saying the plan would chase out the rich and make the odds of full recovery even worse. Bernard Jenkin, the chair of the House of Commons' public administration committee, told the BBC that the tax could strangle the golden geese of Britain. "If the politics of envy made a country rich, we'd be very rich ... Most rich people are contributing far more in tax than other people." finance.yahoo.com/news/emergency-tax-rich-roils-britain-163209092.html
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workpublic
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Post by workpublic on Aug 30, 2012 14:24:45 GMT -5
i was going to ask if the royal family would be exempt. www.richest-people.co.uk/1 (1) Lakshmi Mittal and family £17,514m Down£4,936m Steel 2 (6) Alisher Usmanov £12,400m Up£7,700m Steel 3 (2) Roman Abramovich £10,300m Up£2,900m Oil, Industry 4 (3) Duke of Westminster £7,000m Up£250m Property 5 (4) Ernesto and Kirsty Bertarelli £6,870m Up£920m Pharmaceuticals 6 (15) Leonard Blavatnik £6,237m Up£3,237m Industry 7 (16) John Fredriksen and family £6,200m Up£3,450m Shipping 8 (5) David and Simon Reuben £6,176m Up£644m Property, Internet 9= (new) Gopi and Sri Hinduja £6,000m New EntryNew Industry, Finance 9= (7) Galen and George Weston and family £6,000m Up£1,500m Retailing 11 (8) Charlene and Michel de Carvalho £5,400m Up£1,000m Inheritance, Brewing, Banking is anybody on the list besides the duke, actually british?
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Post by BeenThere...DoneThat... on Aug 30, 2012 15:11:19 GMT -5
...but I don't wanna pay more than I do...
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susanb
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Post by susanb on Aug 30, 2012 15:17:55 GMT -5
Taxing earners over $250k really has little direct effect on them, the live style of high earners is not affected by changing their taxes from 35% to 40%.
But it has a big effect on business behavior. In the 70's we had a 70% tax rate. Exactly. A couple of percentage points in increased in taxes will have zero impact on our lifestyle. As Sarah pointed out, it also will not cause our business to fail. Every dollar we are taxed is one less dollar we have to cause very efficient stimulus to the economy in the form of buying services and goods and employing people with beneifits and solid salaries. Tax rates and attitudes about them also impact our plans for future hires and exapansion as Phil points out. I posted recently about letting an employee go. We are not going to replace him until absolutely necessary because we are very gun shy about what the future is going to hold in terms of taxation and the ever increasing number of legal responsibilities we have for our employees. We are not alone in our thoughts or in our reluctance to hire as a result of them.
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Post by Deleted on Aug 30, 2012 16:16:06 GMT -5
Exactly! There will be a couple of businesses that were circling the drain that will fail a little faster in the event of a tax increase. For the average healthy business, it means they will grow a little bit slower.
If a tax increase is on the table, it means we need to think really carefully about whether that revenue will produce enough benefit to offset the impact it will have on the economy. I would never suggest a tax increase be taken lightly. But people act like the sky is falling if anyone ever says the word "tax." Sometimes it is "worth it" - and when our deficit is this big, everything should be on the table.
We won't get out of this mess just tightening someone else's belt.
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movingforward
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Post by movingforward on Aug 30, 2012 16:23:30 GMT -5
Exactly! There will be a couple of businesses that were circling the drain that will fail a little faster in the event of a tax increase. For the average healthy business, it means they will grow a little bit slower. If a tax increase is on the table, it means we need to think really carefully about whether that revenue will produce enough benefit to offset the impact it will have on the economy. I would never suggest a tax increase be taken lightly. But people act like the sky is falling if anyone ever says the word "tax." Sometimes it is "worth it" - and when our deficit is this big, everything should be on the table. We won't get out of this mess just tightening someone else's belt. I agree. I think to get out of this mess we are going to have to both increase taxes a little and cut entitlements a little. The problem is that neither side wants to give an inch. I think unemployment is going to remain fairly high for a while which is going to make recovery slow but I would take a slow and steady recovery and be happy at this point.
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susanb
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Post by susanb on Aug 30, 2012 16:24:50 GMT -5
I agree, Sarah.
We are going to have to decrease spending and increase taxes to get out of this mess. Just one is not going to work.
However, until the governement manages my money better than I can, I don't think increasing my taxes is going to help people. It is kind of like loaning of gifting money to someone who is a financial train wreck. Unless the finanical train wreck improves their money skills, you may as well throw your money away.
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justme
Senior Associate
Joined: Feb 10, 2012 13:12:47 GMT -5
Posts: 14,618
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Post by justme on Aug 30, 2012 16:34:29 GMT -5
The average healthy business is already growing slowly. All those polls already say they're putting off hiring new people because they're afraid how Obamacare will shake out and the threat of new taxes. Actually increasing taxes will cause them to slow down even more (especially since the threat of raising them again won't go away with Dems in control, maybe not with Repubs either)...not really a good thing for a slow/struggling economy.
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tskeeter
Junior Associate
Joined: Mar 20, 2011 19:37:45 GMT -5
Posts: 6,831
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Post by tskeeter on Aug 30, 2012 17:46:49 GMT -5
So the restaurants you cite didn't close. How many did what our neighbors, who own a restaurant, did to keep their restaurant open? Our neighbors, let go a good share of their staff. Dad neighbor took over cooking full time, in addition to managerial activities. One cook lost his job. Mom neighbor returned to waiting tables, in addition to managerial activities. A server lost their job. Son neighbor also began waiting tables after school and on weekends (without pay). A second server lost their job. Business was down, two additional servers lost their jobs because the volume of business didn't justify their pay checks. Business was so slow that further cut backs were needed to escape bankruptcy. The three piece combo who worked Friday and Saturday night were let go. The restaurant is still open, but in total eight people lost all or part of their income because people began to spend less on entertainment.
Oh, and the neighbors lost their house because even after all the cuts, the restaurant couldn't provide enough income to make the mortgage payments.
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