Tuesday, April 14, 2009

The Tax Man Cometh

I was going to post a wall of text today, dealing with my concerns over the economic direction of this country. Rather than beat people over the head with my fiscally conservative philosophy, I’d rather just say that taxing the rich and expanding the nanny state isn’t a good idea.

Consider these numbers:

This year my wife and I paid 15% of our income (adjusted after deductions) in federal income tax. A family making an adjusted $150,000/year would pay 20% of their income in federal tax and a family making an adjusted $250,000/year would pay 25% of their income in federal tax. Finally, a family making an adjusted $500,000/year pays twice what I pay as a percentage which is 30% in federal tax. That equates to $150,000 in taxes.

And those are the 2008 tax figures. Taxes are going to become much more punitive over the next few years. Sure, they can afford it, but does it make it right?

235 years ago if this kind of taxation was going on, we’d be dressing up like Native Americans and throwing tea into Boston Harbor.

I think the picture above sums up my opinions on the subject pretty well.
(Picture courtesy of the Tax Day Tea Party website http://taxdayteaparty.com/ )

Here's a link to the proposed tax increases in the Obama budget:
This is the last I'll say about real life economics for a little while. Now that 3.1 is out, it's back to the Auction House and more WoW related material.


  1. Wait. So collecting taxes by force is socialism?

    By that definition, Thomas Jefferson, Ron Paul, and Milton Friedman are all socialists. All of them supported some sort of forced taxation (albeit not necessarily on income).

  2. You either missed the point entirely or are trying to bait me into an argument.

  3. It's not the latter, honestly, and I don't think it's the former. I know what you're saying - that you think the government is taking too much of our money in taxes. I agree. I'm probably not as outraged as you are, but still.

    My point is simply that taking taxes by force is not necessarily socialism, which is what your picture seems to imply.

    Or maybe the picture is saying the reverse - that socialism takes taxes by force? In that case it's true enough, but you could just as easily write "Libertarianism" on the sign if that's the case. Governments, even small ones, use force or they're not governments at all. That's just how it goes.

    Either way, I don't buy it.

  4. You may be pondering the picture a bit too much. Of all the people I've shown the picture to, you are the only one to misinterpret it so I'll clarify.

    Yes, Government is force and taking taxes is done with force. If you don't pay, there will be consequences. That's not a problem because taxes are necessary for the government to run. I'm not an Anarchist.

    The problem lies with income redistribution. The picture is representative of the Government fleecing those with money by gunpoint and giving it to the poor. It's an over the top dramatization. Don't over think it.

    There's another term for "taking from the rich and giving to the poor" and that is "stealing". Obama calls it "spreading the wealth around".

  5. I think the Red Guy is stealing from the Blue Guy in the picture. This is a representation of the Government stealing our hard earned money through the tax system, right? Most of Federal Revenue goes towards Defense, Paying Interest on the Debt or redistributing money from the middle class and rich to the poor. Can't do without a National Defense, we are stuck with the interest payments but we can certainly argue with the wealth redistribution.

    I am personally in favor of a flat percentage tax with a 20 thousand dollar exemption (the only exemption). Set the percentage at 20. That way the poor pay no taxes (those making under 20k). But we all get that benefit so it is not fundamentally unfair.

    Under this system, if you made:

    20k you pay $0 in taxes.
    50k you pay $6,000 in taxes. 12% of income.
    70k you pay $10,000 in taxes. 14.28 % of income.
    100k you pay $16,000 in taxes 16% of income.
    120k you pay $20,000 in taxes. 16.67% of income.
    250k you pay $46,000 in taxes. 18.4% of income.
    500k you pay $96,000 in taxes. 19.2% of income.

    This way the tax is still progressive (the type of tax system liberals love) and we do not penalize the poor.