Hard work = $250,000 ?
Find a Conversation
| 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?


Pages
>>If you really believe its all just hard work that determines earning, then of course you will think of graduated tax scales and welfare programs as unfair and disrupting the "natural order". But that belief is faulty.<<
Exactly.
>>How about years and years of working 80 hours a week. putting in the overtime and going the extra mile so that yes YOU are the one who receives the promotion and the raise. HARD WORK does mean sacrificing things that you might want to do..<<
You don't seriously believe that everyone who works 80 hrs a week and goes the extra mile, sacrificing along the way gets the promotion and the raise do you? I don't think I know anyone who hasn't done that and none of them get 250,000.
The point of my post is not to say that people who make a lot didn't work hard, it's just that I don't buy that they work "harder" than everybody else.
As the income goes up, IMO, hard work is less and less the key factor. For that reason I think it's perfectly fine to tax it at a higher rate.
To imply that they somehow they truly did something to deserve all that extra is an insult to hard workers everywhere.
We'll leave from Miami and stop at three islands: Jamaica, Grand Cayman and Cozumel, Mexico.
For those who are geographically impaired, like myself, the ship is cruising around Cuba.
;)
St. Maarten is the only island I've ever been to besides Martha's Vineyard (and Deer Island, he-he, for those who know Boston). I've never been on a cruise before. I'm really looking forward to it.
"harder" is immaterial.
What matters is the value that the person creates for the person paying them.
For example, take two people - let's be extreme:
Person "A" cuts lawns for a living.
you've got it backwards...
It's not that everyone who goes the extra mile and puts in the extra hours gets the promotion and $250,000.
BUT
That person is far more likely to get the promotion than the person who works 40 hours a week and just does what's required of them.
Also, your comment:
To imply that they somehow they truly did something to deserve all that extra is an insult to hard workers everywhere.
Is equally insulting to those who did work hard and smart and did earn it.
>>I think the more you make the more taxes you pay makes sense, within reason of course <<
I agree, not surprise, eh?
One concept that I am surprised hasn't come into the debate is the concept of disposable or discretionary income. It kinda factors into my belief in a progressive tax - along with the "you can't squeeze blood from a stone" factor. Every dime that people making under say, 12,000 a year, or 1000 per month goes to food, clothing, housing, transportation, etc. Any unexpected expense, a speeding ticket, a holiday, is impossible without relying on the kindness of others. At 2000 a month you can upgrade to reliable transportation or maybe a safe neighborhood and you can probably pay the speeding ticket, if it's your first one. At 3000 a month you can afford some "luxuries" a vacation, a dinner out occasionally, and a speeding ticket isn't the end of the world.
At some point the money you make is not as essential. You could for example, go on a cruise for Christmas with your whole family. I digress, to me it makes more sense to tax the "extra" money than it does to tax the "basic" money. If taxing one person who makes 250,000 a small percentage extra means that 10 children will have a roof over their head all year, I just can't see it as a problem. Even if someone else wants to call my belief "socialism".
Seriously, if you believe as I do, that people who work hard to make little money don't deserve to be homeless or hungry. Have you read Nickel and Dimed?
Pages