Thursday, March 12, 2009

Save the Rich

Dan Kennedy's latest article is how foolish it is for Obama to tax the wealthy. Apparently it's designed to punish married married people a lot more than single wealthy people.
As I understand it, Obama’s tax attack begins at $200,000 of income for an individual but only $250,000 for a married couple. So, if I earn $399,000.00 and my wife is a stay-at-home Mom, we should divorce and “live in sin,” and I should shift $199,500 of the income to her.
I suppose if the only reason you are married is the tax break, that would be true. But I doubt that this is really designed to punish married people. Rather it has to do with how much money it really takes to live; there are entire families living on less than $50,000, so it shouldn't be impossible for a couple to live on $250,000.

4 comments:

Anonymous said...

It's a legitimate question, even if it is being asked in an asshatted way. Should a married couple face a heavier tax burden than two similarly-situated unmarried individuals?

It's not about whether $250,000 or $50,000 is enough to get by on; it's about the married vs. single tax situation, and it's a question of fairness, and it raises a legitimate social value issue if marriage is economically disadvantageous.

Surely you aren't saying that once your income reaches a certain threshold above the poverty level that you no longer deserve fair treatment?

Bryant said...

Since I favor a progressive taxation system, that's exactly what I am saying. Progressive taxation implies that those who make the most pay the most, not just in a flat amount, but as a percentage of their income. That's not fair, strictly speaking. It punishes people for making more money by taking away a larger percent of money.

I would argue that society as a whole is still more "fair" to the wealthy than it is to the middle class or the working class. They are compensated in other ways for having a lot of money.

Anonymous said...

But I'm not talking about fair as between a rich man and a poor man. If I was, then I would concede your point that in the aggregate, the rich person is able to reap far more benefits from society than is offset by his expanded tax burden.

But that's not what I'm talking about.

I'm talking about fairness between the rich married versus the rich unmarried. Or two similarly situated couples with high incomes, one of which is married and the other is not. Is it fair to place a greater tax burden on the married couple, when they are otherwise identical? And what does it say about us if we impose a higher tax burden on the married?

It seems like you are saying "look, they make so much money anyway even after taxes, who cares if the taxation scheme makes sense. They need to shut up and be glad they have what they have."

Bryant said...

You are probably right - the rich unmarried are clearly getting a break - which is why I hope they lower the boom on any single person making over $125,000.