Example: middle class versus the wealthy

[dank69]

I'm sorry - I thought by explicitly stating 'Depends on how much extra work I had to do to get that second million.' people would understand that it depends on how hard that extra work that would be. I really don't know how to make it any clearer for you

Besides you asked how much harder the work would have to be so I GAVE YOU AN EXAMPLE! I never said it was true in all cases I just gave you something you asked for

I asked you how hard work has to be to not be worth $250K free and clear. You replied 100% more work. This is not a clear answer to my question.

First of all, If you currently work 1hr/week then 1 extra hour/week is not worth $250k? Secondly, assuming you meant 40h/wk -> 80h/wk, this is still not an answer because I doubt you would work 79h/wk if you wouldn't work 80. I asked for the cutoff point. Thirdly, you will have a hard time convincing me that you wouldn't work 80h/wk if it meant an extra $250k in your pocket at the end of the year. Finally, the whole reason I asked was to point out to you that claiming 'depends on how hard I have to work' is a nonsense cop-out answer. $250k net is a lot of money to everyone. You don't see Bill Gates walking down the street handing out $250k checks for no good reason even though he could afford it.

Most non billionaires who have a chance to take home an extra $250k/yr are not going to refrain because they don't get to keep the other 75%. The idea is bullshit. More money is more money.

When you can just make up fairy tale ideas of how to make an easy second million anything is possible.

I am using extreme examples to illustrate holes in his logic.

 

[Genx87]

I asked you how hard work has to be to not be worth $250K free and clear. You replied 100% more work. This is not a clear answer to my question.

First of all, If you currently work 1hr/week then 1 extra hour/week is not worth $250k? Secondly, assuming you meant 40h/wk -> 80h/wk, this is still not an answer because I doubt you would work 79h/wk if you wouldn't work 80. I asked for the cutoff point. Thirdly, you will have a hard time convincing me that you wouldn't work 80h/wk if it meant an extra $250k in your pocket at the end of the year. Finally, the whole reason I asked was to point out to you that claiming 'depends on how hard I have to work' is a nonsense cop-out answer. $250k net is a lot of money to everyone. You don't see Bill Gates walking down the street handing out $250k checks for no good reason even though he could afford it.

Most non billionaires who have a chance to take home an extra $250k/yr are not going to refrain because they don't get to keep the other 75%. The idea is bullshit. More money is more money.
I am using extreme examples to illustrate holes in his logic.

Extreme examples are what you are presenting that is true. And using your logic making that second million could also be twice as hard.

So why dont you stop with the silly extreme examples which nobody believes, except you, to prove your point? I know people who make millions of dollars a year. They work harder than the rest of us. You and I put in our 40ish hours a week. They live thier work and are compensated for it.

 

[Exterous]

If you're earning in the top 1% You'll not be using those funds to buy much at all... you deposit your paycheck, dividend check and interest check into your bank account and then find the best place to park it....

It depends on how you live. There are a lot of people who make between 350k and 1M that went into forclosure because they were over leveraged. Being a high income earner does not guarantee you have a high net worth

I asked you how hard work has to be to not be worth $250K free and clear. You replied 100% more work. This is not a clear answer to my question.

First of all, If you currently work 1hr/week then 1 extra hour/week is not worth $250k?

What if working that 1 hour invovled getting you so close to death that the second hour would kill you? Would that then be worth 250k? Not to me.

I asked for the cutoff point.(snip) Finally, the whole reason I asked was to point out to you that claiming 'depends on how hard I have to work' is a nonsense cop-out answer.

Well - you aren't ever going to get a general cutoff point that will apply in every single situation and I very clearly qualified my examples. 'It depends' is not a nonsense cop-out answer because there are waaaaaaay too many details to cover. You just pointed out a variety of them. There are also:
How much debt
Family size
Age
Health
Retirement plans
Expected outlays
Personalit
Job type
How much you enjoy the job type
Other percieved and actualy financial obligations

Each and every one of those could modify the view on what constitutes enough work to make that next 250K worhtwhile. That is why you got a rough example with the very clearly stated 'ignoring a host of unspecified financial situations'

I am using extreme examples to illustrate holes in his logic.

I clearly qualified my examples by saying 'it depends', 'ingoring a host of unspecified financial situations' and 'There is a gray line as to when taxes make it 'not worth the effort' as it will varry by person and financial situation. There may be portions of diminishing returns as well. Definately a hard value to pin down'

This should make it clear that my answer was never intended to be 100% absolute thus your extreme examples in no way affect what I was saying

 

[LunarRay]

It depends on how you live. There are a lot of people who make between 350k and 1M that went into forclosure because they were over leveraged. Being a high income earner does not guarantee you have a high net worth

The 'worth' related to that home in forclosure is simply the difference tween the value and the mortgage. They may have lost that but not their employment earnings. The issue I spoke to was spending...

What I said was:

Originally Posted by LunarRay
If you're earning in the top 1% You'll not be using those funds to buy much at all... you deposit your paycheck, dividend check and interest check into your bank account and then find the best place to park it....

 

[dank69]

It depends on how you live. There are a lot of people who make between 350k and 1M that went into forclosure because they were over leveraged. Being a high income earner does not guarantee you have a high net worth



What if working that 1 hour invovled getting you so close to death that the second hour would kill you? Would that then be worth 250k? Not to me.



Well - you aren't ever going to get a general cutoff point that will apply in every single situation and I very clearly qualified my examples. 'It depends' is not a nonsense cop-out answer because there are waaaaaaay too many details to cover. You just pointed out a variety of them. There are also:
How much debt
Family size
Age
Health
Retirement plans
Expected outlays
Personalit
Job type
How much you enjoy the job type
Other percieved and actualy financial obligations

Each and every one of those could modify the view on what constitutes enough work to make that next 250K worhtwhile. That is why you got a rough example with the very clearly stated 'ignoring a host of unspecified financial situations'


I clearly qualified my examples by saying 'it depends', 'ingoring a host of unspecified financial situations' and 'There is a gray line as to when taxes make it 'not worth the effort' as it will varry by person and financial situation. There may be portions of diminishing returns as well. Definately a hard value to pin down'

This should make it clear that my answer was never intended to be 100% absolute thus your extreme examples in no way affect what I was saying

Thank you, that is exactly my point. All of those things affect the decision on whether or not it is worth it to a greater degree than how much you are taxed on the profit.

 

[Exterous]

Thank you, that is exactly my point. All of those things affect the decision on whether or not it is worth it to a greater degree than how much you are taxed on the profit.

No - it cannot affect it more than the degree to which you are taxed because the degree to which you are taxed determines the income level you have to weight those decisions against. You cannot make an effective and accurate decision without knowing what your income will be. At most I will give you that both sides are equal in the equation

 

[Exterous]

The 'worth' related to that home in forclosure is simply the difference tween the value and the mortgage. They may have lost that but not their employment earnings. The issue I spoke to was spending...

What I said was:

Originally Posted by LunarRay
If you're earning in the top 1% You'll not be using those funds to buy much at all... you deposit your paycheck, dividend check and interest check into your bank account and then find the best place to park it....

Sorry - my point was unclear. I pointed out the high income =/= net worth to show that just because someone is earning a lot of money doesn't mean they are 'parking' it somewhere to become a high net worth person. Many high income earners spend as much or more than they can afford to (So when the housing market tanked they had no savings to fall back on and save their house)

 

[dank69]

No - it cannot affect it more than the degree to which you are taxed because the degree to which you are taxed determines the income level you have to weight those decisions against. You cannot make an effective and accurate decision without knowing what your income will be. At most I will give you that both sides are equal in the equation

The amount you are taxed is only going to be a factor when your take home is not a large amount of money. Once your take home hits a certain point, say $250k (but probably even less in most cases), the amount not taxed just becomes gravy.

 

[trenchfoot]

And let's not forget how over these many years the top 1% have been milking the system by corrupting every single politician and their mothers into seeing things "their way". This corrupting has been going on for the longest time, and now when they are finally "asked" to give back something they got through corrupting the government at all levels, they'd have us forget all of that bilking they enjoyed for all that time?

 

[Genx87]

The amount you are taxed is only going to be a factor when your take home is not a large amount of money. Once your take home hits a certain point, say $250k (but probably even less in most cases), the amount not taxed just becomes gravy.

You would think that in the land of fairy tales. Back in the land of reality tax rates far lower than that cause people to shelter their money or move to less taxed countries.

 

[Ninjahedge]

Capitalism depends on a strong middle class.

You do not have anybody to sell to, you can't SELL anything. You go back to a medieval dual-class system that was never marked for its progressivism or breakthroughs in just about anything.

This squelching of the middle class will stagnate our development, as we will not get a good batch of "new blood" coming up through the ranks to work and discover new items. China being an example of a lack of a strong, educated middle class where the best that is being done is cheap and fast imitation of what everyone else does.

Farm analogy: You need to keep the grounds fertile or you will end up growing crap.

 

[Ausm]

The amount you are taxed is only going to be a factor when your take home is not a large amount of money. Once your take home hits a certain point, say $250k (but probably even less in most cases), the amount not taxed just becomes gravy.

Depends on your lifestyle, I know alot of people who make over 250K so asshole deep in debt they make a burger flipper at McDonald's look like Daddy Warbucks.

 

[LunarRay]

Sorry - my point was unclear. I pointed out the high income =/= net worth to show that just because someone is earning a lot of money doesn't mean they are 'parking' it somewhere to become a high net worth person. Many high income earners spend as much or more than they can afford to (So when the housing market tanked they had no savings to fall back on and save their house)

IF they are still earning over the threshold to be 1%ers that is the bit taxed mitigated by loss on the house etc.. Spending on creating a home is different than spending on a created home.

I see what you mean, however.

I speak to the disposable portion of that 350k or so... it is a lot more than that of the middle class person. OF course there are more middle class than 1%ers so the full effect of the numbers is the middle have more in total to spend than the 1%ers.
IF you tax the 1%ers 90% on that which would be investment income versus some number that equals a 0% difference in Revenue to the Government you'd stimulate the economy more creating the possible need to employ more to fill that need... but only if you can dis-incentivize the middle class investment notion and incentivize spending. Same for any class. The rich simply have nothing much to spend on after a point... they invest no matter the tax rate... and equilibrium always sticks its nose into stuff in some manner...
You want folks to incur debt as much as possible while regulating the 'bubbles' so to avoid calamity... IOW, government does their job.

 

[Exterous]

Depends on your lifestyle, I know alot of people who make over 250K so asshole deep in debt they make a burger flipper at McDonald's look like Daddy Warbucks.

Exactly. I think a lot of people overestimate the financial well being of those making between $150k and $1M. Making more doesn't necessarily equate to being more responsible with money

 

[Exterous]

The amount you are taxed is only going to be a factor when your take home is not a large amount of money. Once your take home hits a certain point, say $250k (but probably even less in most cases), the amount not taxed just becomes gravy.

Which means I would be even less willing to work harder for an extra $250k on top of my first $1M (unless some other variable makes that extra $250k more important than gravy). The consideration of tax rate still very much comes into play because that determines how much 'gravy' I have and how willing I am to work to attain that said gravy

 

[Ninjahedge]

Exactly. I think a lot of people overestimate the financial well being of those making between $150k and $1M. Making more doesn't necessarily equate to being more responsible with money

Being irresponsible does not relieve you of responsibility.

 

[Exterous]

Being irresponsible does not relieve you of responsibility.

Your point? Its not like I said anywhere that it did. This particular post was an attempt to show that everything over $250k is not necessarily gravy

 

[Ninjahedge]

Still, that $10K you earn above $250K is a lot less important than that $10K you earn above $30K.....

So I do not think people think that that money is 100% solvent, but the fact is, if you have enough cash to even THINK of owning a big house, or nice car(s) or a flat screen TV, you are probably better off than the just-above-welfare family looking at OTA broadcasts on their 2nd hand Trinitron after driving home in their Chevy Nova.......


Siting the worst case/extreme in any scenario does little to discuss the merits of the meat of the issue.

 

[dank69]

Which means I would be even less willing to work harder for an extra $250k on top of my first $1M (unless some other variable makes that extra $250k more important than gravy). The consideration of tax rate still very much comes into play because that determines how much 'gravy' I have and how willing I am to work to attain that said gravy

I dunno, the Koch Bros. seem to be working pretty hard to continue to increase their income. The reality is that the amount of money you have rarely influences how badly you want even more.

 

[Budarow2]

France has the best idea

5-17-2012

http://news.yahoo.com/blogs/ticket/...-french-tax-increase-god-bless-140144896.html

Will Smith baffled by proposed French 75% tax increase: ‘God bless America’


During an interview this week with a French TV station, actor Will Smith said he supported the idea of paying higher taxes—but he was shocked when the reporter told him about a proposal from France's new president to raise the marginal tax rate to 75 percent.

"I have no issue with paying taxes and whatever needs to be done for my country to grow. I believe very firmly that my ability to sit here—I'm a black man who didn't go to college, yet I get to travel around the world and sell my movies, and I believe very firmly that America is the only place on Earth that I could exist," Smith said. "So I will pay anything that I need to pay to keep my country growing."


That's when the interviewer mentioned that France could have a 75 percent tax rate on income over 1 million euros.


"Seventy-five?" Smith gasped. "Yeah, that's different, that's different. Yeah, 75. Well, you know, God bless America."

We seem to be just like Frace (in 1791 that is)...except the "clergy" in 1791 has been replaced by todays federal government.

 

[Exterous]

I dunno, the Koch Bros. seem to be working pretty hard to continue to increase their income.

Your example only shows that the current reward they are getting is worth the effort/energy they put into it but otherwise has little to do with a 75% tax scenario.