Hard work = $250,000 ?
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| Fri, 10-24-2008 - 9:07am |
I’ve read repeatedly that the $250,000 is hard earned money that the government has no right to tax. Personally, I don’t believe that hard work consistently results in high salaries and I’m not convinced that people who make more money work harder or deserve more than most people. Most people, I believe, do work hard and most people are rewarded with 25,000 – 45,000 salary. Not all some hard workers make more and some make less. What do you think? Is the Just World view valid?
http://www.princeton.edu/~rbenabou/beliefs7csend.pdf
most people have a strong need to believe that they live in a world that is just, in the sense that people generally get what they deserve, and deserve what they get. When confronted with data that contradicts this view they try hard to ignore, reinterpret, distort, or forget it —for instance by finding imaginary merits to the recipients of fortuitous rewards, or assigning blame to innocent victims.
Because of their imperfect willpower, individuals constantly strive to motivate themselves (or their children) towards effort, educational investment, perseverance in the face of adversity, and away from the slippery slope of idleness, welfare dependency, crime, drugs, etc. This is another recurrent finding from the sociological evidence. In such circumstances, maintaining somewhat rosy beliefs about the fact that everyone will ultimately get their “just deserts” can be very valuable. Furthermore, if enough individuals end up with the view that economic success is highly dependent on effort, they will ultimately represent a pivotal voting block, and set a low tax rate. Conversely, when individuals anticipate that society will carry out little redistribution, the costs of a deficient motivation to effort or savings are much higher than with high taxes and
a generous safety net. Each individual thus has greater incentives to maintain his belief that effort ultimately pays, and consequently more voters end up with such a world view.
For instance, data from the World Values Survey shows that only 29% of Americans believe that the poor are trapped in poverty, and only 30% that luck, rather than effort or education, determines income. The figures for Europeans are nearly double: 60% and 54% respectively. Similarly, Americans are more than twice as likely as Europeans to think that the poor are lazy (60% versus 26%).
Indeed, 59% of Americans agree or strongly agree that “in the long run, hard work usually brings a better life”; this view commands much less support in Europe, ranging from 34% in Sweden to 43% in Germany.
Is the “American dream,” according to our theory, just a self-sustaining collective illusion?


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Hi Julie, I don't know if you meant to write that last response to me, or if it was directed at me....but in case we got our wires crossed, i have always agreed with you.
I hope you didn't mistake me for one of the people who claim that people who earn 250k/year didn't earn it.
-Kristen
oooppps nope I meant to have it to All :)
Sorry
whew
;-)
i also wanted to thank you for sharing y our story, it was touching, and inspiring.
i have a (kind of) similar success story in my family.
I shared it on here once.
that success story in my family has made me even more of a believer that
-Kristen
Hi Kristin,
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I'm not sure where you are going with that...there are a lot of topics that come up in the different threads, including arguments that increasing taxes on the top 5% of the population is unfair, that it is socialism, that it is like holding a gun to someone's head and demanding their money, that it means taking from the deserving and giving to the undeserving, and that in general, people in our country have the attitude that they shouldn't have to work hard for what they get. Is my argument not relevant to these arguments, and to the candidates' proposals?
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Well, usually yes. But the point about belief in a "just world" is that people assume that those making that much must be working hardER than those not making as much; that degree of work equals degree of pay, and while that is true to some extent, its not a perfect correlation. That's the point I'm trying to make, which you seem to agree with in your next statement.
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I agree with you, it won't. We can't make life fair and having a society that functions well requires allowing some unfairness to exist, potentially even the "unfairness" of having those who make more pay taxes at higher rates and those who make less paying less.
me: <>
you: <>
do you have an example of someone making over 250K who didn't get there w/work/risk/sacrifice?....i don't mean just one person, i mean do you believe that there is a large enough percentage of them in the top that you can judge them all by that?
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-Kristen
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I think the examples of people not working hard for what they get is salient in my mind because of my own personal experience. I went to a private school where my dad was a teacher and I saw a lot of kids go on to be successful people because they were given unfair advantages through their parents and their parents' connections. I had to work twice as hard as they did to get to where I am now. Some of these kids were the laziest kids I have ever known. But there were other kids too who had a lot and were also taught to work very hard. I know that the few "bad apples" that I experienced shouldn't spoil the whole bunch. But similarly, I think that hardworking people like my dad shouldn't be categorized as lazy and entitled just because he is in a lower tax bracket and has less disposable income. I'm not saying that you have made that claim, but I have seen it implied elsewhere on the board.
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Yes, you are right!
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The progression has shifted a lot over the last century, both up and down. I think like Ashley (goobersnot1) said, the key is to find the set of rates that has worked best for our economy. That's what we need macroeconomists with their fancy computer simulations and formulas for. I'm not a macroeconomist, and I don't think they can even know with absolute certainty what these different tax plans will do. And I agree with you that some people out there misunderstand that we already have a progressive tax system.
i think we pretty much agree....
and i think we went to the same school ;-)
....well mine was public, but ranked higher than most (sorry that should probably be..."a lot of")
-Kristen
OK, I'll say it. I don't think the average person making $250,000 works all that much harder than the average person making 25,000-45,000. I never made any statement at all that said that those making 250,000 didn't work as hard as those making less.
As for "earning" it, that's kind of subjective and case specific. If you've seen the L-curve, you know that the higher the income the fewer the people who can attain it. It makes the most sense to me that the people in the highest percentages had some lucky breaks along the way.
>>"Churn and burn" refers to the highly unethical practice of unnecessarily moving your clients investments around for the sole purpose of generating higher commissions and trailer fees for the advisor and the company they work for.<<
Did you mean to imply that some people who make a lot of money, do so by making unethical decisions that essentially steal money from others? Personally, I've heard way too many stories like this to think it's uncommon. It contributes to my sense that some people who earn a lot of money don't deserve it and didn't get it from hard work. Your husband's ex-boss is a case in point.
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