Letter to Feinstein

[CA renter]

The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore.
————————–

These arguments always ignore the most important aspect of wealth…where did the “rich” man get his money?

Does he sell goods/services where the margins are very high? If so, one could make the argument that he is:

1. taking “excess” money from his customers

OR

2. not paying his employees or suppliers enough (taking “excess” money from them)

OR

3. both

———————————–

Do the people who run the companies (in the case of many executives, often not taking any personal risks, whatsoever) deserve all the “excess wealth” or does it rightfully belong to the workers who make that company run? I’ve seen plenty of examples where the owners/executives can leave for extended period of time and everything runs smoothly (often better than when he/she is there). Take the executive’s secretary out for a day, and all hell breaks loose. Who makes more money?

Don’t even try to tell me that these executives/fund managers/deal makers are so much smarter or more capable than most highly-intelligent individuals. If nothing else, this credit/housing bubble has shown the falacy in that thinking. How many “regular” people nailed what would happen **years** ago, while these executives raped the companies (and the shareholders and employees and society) while claiming that they knew what they were doing? Even if they knew what they were doing (and intentionally stealing), where were all the geniuses who were supposed to keep this from happening?

[blue_sky]

“why is it so far fetch for the government to consider that as well when taxing those salary”

Because this creates a system that can be gamed. “Oh, it’s so expensive to live in RSF… I have to have a lower tax rate”.

You’re already getting this in expensive areas because you have larger deductions for mortgage interest and property tax that people who live in smaller areas.

“But you are denying them the incentive to work harder.”

By the time you are at 250K earned in your hypothetical “doing overtime” scenario, you long ago stopped paying CA/UI and SS taxes, and you long ago capped out your state tax rate so your marginal tax rate has in fact dropped.

[blue_sky]

“why is it so far fetch for the government to consider that as well when taxing those salary”

Because this creates a system that can be gamed. “Oh, it’s so expensive to live in RSF… I have to have a lower tax rate”.

You’re already getting this in expensive areas because you have larger deductions for mortgage interest and property tax that people who live in smaller areas.

“But you are denying them the incentive to work harder.”

By the time you are at 250K earned in your hypothetical “doing overtime” scenario, you long ago stopped paying CA/UI and SS taxes, and you long ago capped out your state tax rate so your marginal tax rate has in fact dropped.

[blue_sky]

“why is it so far fetch for the government to consider that as well when taxing those salary”

Because this creates a system that can be gamed. “Oh, it’s so expensive to live in RSF… I have to have a lower tax rate”.

You’re already getting this in expensive areas because you have larger deductions for mortgage interest and property tax that people who live in smaller areas.

“But you are denying them the incentive to work harder.”

By the time you are at 250K earned in your hypothetical “doing overtime” scenario, you long ago stopped paying CA/UI and SS taxes, and you long ago capped out your state tax rate so your marginal tax rate has in fact dropped.

[blue_sky]

“why is it so far fetch for the government to consider that as well when taxing those salary”

Because this creates a system that can be gamed. “Oh, it’s so expensive to live in RSF… I have to have a lower tax rate”.

You’re already getting this in expensive areas because you have larger deductions for mortgage interest and property tax that people who live in smaller areas.

“But you are denying them the incentive to work harder.”

By the time you are at 250K earned in your hypothetical “doing overtime” scenario, you long ago stopped paying CA/UI and SS taxes, and you long ago capped out your state tax rate so your marginal tax rate has in fact dropped.

[blue_sky]

“why is it so far fetch for the government to consider that as well when taxing those salary”

Because this creates a system that can be gamed. “Oh, it’s so expensive to live in RSF… I have to have a lower tax rate”.

You’re already getting this in expensive areas because you have larger deductions for mortgage interest and property tax that people who live in smaller areas.

“But you are denying them the incentive to work harder.”

By the time you are at 250K earned in your hypothetical “doing overtime” scenario, you long ago stopped paying CA/UI and SS taxes, and you long ago capped out your state tax rate so your marginal tax rate has in fact dropped.

[CA renter]

BTW, I totally disagree with the notion that high pay is the reward for hard work or even education (I can show you many hard-working PhDs who make very little money).

Seems to me that high wealth/income is most closely aligned with proximity to those who control money flow. Those who have the money, control where it flows, and vice-versa. Extreme wealth has very little to do with “hard work” or intelligence (other than knowing how to scam the system). The fact that cap gains & dividends are taxed at a lower rate than labor is a great example of this.

[CA renter]

BTW, I totally disagree with the notion that high pay is the reward for hard work or even education (I can show you many hard-working PhDs who make very little money).

Seems to me that high wealth/income is most closely aligned with proximity to those who control money flow. Those who have the money, control where it flows, and vice-versa. Extreme wealth has very little to do with “hard work” or intelligence (other than knowing how to scam the system). The fact that cap gains & dividends are taxed at a lower rate than labor is a great example of this.

[CA renter]

BTW, I totally disagree with the notion that high pay is the reward for hard work or even education (I can show you many hard-working PhDs who make very little money).

Seems to me that high wealth/income is most closely aligned with proximity to those who control money flow. Those who have the money, control where it flows, and vice-versa. Extreme wealth has very little to do with “hard work” or intelligence (other than knowing how to scam the system). The fact that cap gains & dividends are taxed at a lower rate than labor is a great example of this.

[CA renter]

BTW, I totally disagree with the notion that high pay is the reward for hard work or even education (I can show you many hard-working PhDs who make very little money).

Seems to me that high wealth/income is most closely aligned with proximity to those who control money flow. Those who have the money, control where it flows, and vice-versa. Extreme wealth has very little to do with “hard work” or intelligence (other than knowing how to scam the system). The fact that cap gains & dividends are taxed at a lower rate than labor is a great example of this.

[CA renter]

BTW, I totally disagree with the notion that high pay is the reward for hard work or even education (I can show you many hard-working PhDs who make very little money).

Seems to me that high wealth/income is most closely aligned with proximity to those who control money flow. Those who have the money, control where it flows, and vice-versa. Extreme wealth has very little to do with “hard work” or intelligence (other than knowing how to scam the system). The fact that cap gains & dividends are taxed at a lower rate than labor is a great example of this.

[blue_sky]

1. taking “excess” money from his customers

OR

2. not paying his employees or suppliers enough (taking “excess” money from them)

OR

3. both

CA Renter, your argument false (though it has not always been so, in many periods of history, wealth was generally accumulated by stealing it by force)

If case 1 is true, you should start a company and undercut his price, get all his business and you will be the rich one.

If case 2 is true, you should start a company and undercut his price, since you can also pay your employees and suppliers as much as he case, in which case you will get all his business and you will be the rich one.

In a system where competition is free that competition holds margins to reasonable amounts. For example, think the price of oil is high right now, think oil companies are making out like bandits? Go start finding more and you will be the rich one. Problem is, that’s a really expensive thing to do right now (drilling equipment is very expensive for example, because the market will pay a lot for it), and you’ll find that the margin you think is there isn’t nearly as high as you’d expect.

[blue_sky]

1. taking “excess” money from his customers

OR

2. not paying his employees or suppliers enough (taking “excess” money from them)

OR

3. both

CA Renter, your argument false (though it has not always been so, in many periods of history, wealth was generally accumulated by stealing it by force)

If case 1 is true, you should start a company and undercut his price, get all his business and you will be the rich one.

If case 2 is true, you should start a company and undercut his price, since you can also pay your employees and suppliers as much as he case, in which case you will get all his business and you will be the rich one.

In a system where competition is free that competition holds margins to reasonable amounts. For example, think the price of oil is high right now, think oil companies are making out like bandits? Go start finding more and you will be the rich one. Problem is, that’s a really expensive thing to do right now (drilling equipment is very expensive for example, because the market will pay a lot for it), and you’ll find that the margin you think is there isn’t nearly as high as you’d expect.

[blue_sky]

1. taking “excess” money from his customers

OR

2. not paying his employees or suppliers enough (taking “excess” money from them)

OR

3. both

CA Renter, your argument false (though it has not always been so, in many periods of history, wealth was generally accumulated by stealing it by force)

If case 1 is true, you should start a company and undercut his price, get all his business and you will be the rich one.

If case 2 is true, you should start a company and undercut his price, since you can also pay your employees and suppliers as much as he case, in which case you will get all his business and you will be the rich one.

In a system where competition is free that competition holds margins to reasonable amounts. For example, think the price of oil is high right now, think oil companies are making out like bandits? Go start finding more and you will be the rich one. Problem is, that’s a really expensive thing to do right now (drilling equipment is very expensive for example, because the market will pay a lot for it), and you’ll find that the margin you think is there isn’t nearly as high as you’d expect.

[blue_sky]

1. taking “excess” money from his customers

OR

2. not paying his employees or suppliers enough (taking “excess” money from them)

OR

3. both

CA Renter, your argument false (though it has not always been so, in many periods of history, wealth was generally accumulated by stealing it by force)

If case 1 is true, you should start a company and undercut his price, get all his business and you will be the rich one.

If case 2 is true, you should start a company and undercut his price, since you can also pay your employees and suppliers as much as he case, in which case you will get all his business and you will be the rich one.

In a system where competition is free that competition holds margins to reasonable amounts. For example, think the price of oil is high right now, think oil companies are making out like bandits? Go start finding more and you will be the rich one. Problem is, that’s a really expensive thing to do right now (drilling equipment is very expensive for example, because the market will pay a lot for it), and you’ll find that the margin you think is there isn’t nearly as high as you’d expect.

[Author]

Posts