Hard work = $250,000 ?

iVillage Member
Registered: 07-11-2006
Hard work = $250,000 ?
376
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?

http://www.princeton.edu/~rbenabou/beliefs7csend.pdf

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iVillage Member
Registered: 05-20-2003
Mon, 10-27-2008 - 3:27pm

It would certainly be more proportionate than our current income tax system. There would still be issues though. For example, how do you determine an individual's wealth? Would you apply it like a property/real estate tax? If so, would US citizen's holdings in other countries be exempt?

The other option IMHO is to go to a flat federal income tax (and roll FICA into the flat tax). Give a generous deduction for each individual and dependent; therefore, the bottom will pay less taxes than they do now (since they'd have no FICA taxes). You'll still end up with a graduated marginal tax rate. Then, tax EVERYTHING, all income, from any source. IMHO, it would be easier and more fair.

iVillage Member
Registered: 09-08-2006
Mon, 10-27-2008 - 3:32pm

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iVillage Member
Registered: 09-08-2006
Mon, 10-27-2008 - 3:38pm

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Yes, the more desperate a person is for survival the more vulnerable they are

 

iVillage Member
Registered: 09-08-2006
Mon, 10-27-2008 - 3:41pm

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iVillage Member
Registered: 09-08-2006
Mon, 10-27-2008 - 3:52pm

<< You'll still end up with a graduated marginal tax rate. Then, tax EVERYTHING, all income, from any source. IMHO, it would be easier and more fair.>>


We have talked about this and I agree it would be more fair to tax all wealth instead of just income.

 

iVillage Member
Registered: 02-06-2003
Mon, 10-27-2008 - 3:57pm
iVillage Member
Registered: 10-02-2008
Mon, 10-27-2008 - 4:22pm

"I think when we acknowledge this fact, we won't be so resentful when people who earn 0 or 1 percent of

KAREN

iVillage Member
Registered: 04-24-2008
Mon, 10-27-2008 - 4:32pm

Can you explain how you got to 50%?

iVillage Member
Registered: 01-12-2008
Mon, 10-27-2008 - 4:33pm

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WOW--that is really interesting, and a good point.



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siggy aug 09
iVillage Member
Registered: 10-15-2008
Mon, 10-27-2008 - 4:36pm
Simply because 40% ( or around that amount) don't pay federal taxes due to refund.....does NOT mean they use social services or even qualify for them. I am in that 40% and I have never used a social service. And further more..even if something truly horrible did happen to me and my family..I am legally unable to use them....due to the fact that I had to sign a certain afadafit to get my DH into the country. It would still be a hand out.....as I have not heard of many who do not classify welfare as a handout.
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