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

uCruiser.com Ticker

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iVillage Member
Registered: 07-11-2006
Thu, 11-06-2008 - 10:07pm
I disagree. I think society does have a vested interest in giving those with a passion for medicine and the aptitude to do it the means to do it. Otherwise only children of the "wealthy" will be able to become doctors and that just seems silly and unAmerican to me. What a waste of ability.

uCruiser.com Ticker
iVillage Member
Registered: 07-11-2006
Thu, 11-06-2008 - 10:12pm

>>if they want to tax the "rich" then there needs to be a better system of quantifying it.. because income level alone simply doesn't suffice.<<

I haven't looked at the numbers in years, but last I knew the disparity in wealth distribution is exponentially more uneven than income distribution. So yeah, income taxes are not going to be the key to saving the economy.

uCruiser.com Ticker
iVillage Member
Registered: 04-24-2008
Fri, 11-07-2008 - 7:01am

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Time will tell.

iVillage Member
Registered: 07-11-2006
Fri, 11-07-2008 - 8:57am

>>it is relevant that housing costs are more expensive in areas<<

Since we are only talking about the extreme end of the income salaries, the "housing costs" DO seem to be irrelevant.

At a salary of 250K a person can afford a decent apartment, a condo, or even a house, just about anywhere without only the most remote exceptions - they may need to make some compromises.

uCruiser.com Ticker
iVillage Member
Registered: 12-18-2005
Fri, 11-07-2008 - 10:48am

not so much...because the whole point is that in some areas, $250k income is not on the extreme end....more like middle to high.


as someone once claimed...her area has not a single person making more than 250K/year...if that were true, than we would need areas where the percentage of people earning that much would have to be much above 5% to make the countrywide percentage equal 5%.


so there are some areas where 250K is rare, there are some areas which it is not as rare...and in those areas where there are more people making more money, the cost of living is more...


so it equals out in terms of salary and standard of living...


HOWEVER...IF the govt was going to select a salary value, and call it "rich" it does not accurately include people with the same standard of living.


some people can't figure that out...


if i live in the middle of nowhere, and cost of living is low, it would be easy for me to think...damn...$250K is a lot of money....those people are rich!


but if i live in a bustling metropolis where cost of living is high....it is more likely that $250k wouldn't go as far, and someone of that income would still need to be wise with expendatures to make ends meet.

-Kristen

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iVillage Member
Registered: 09-21-2004
Fri, 11-07-2008 - 1:43pm
I was referring to a purchase price, not rental.
iVillage Member
Registered: 07-24-2006
Fri, 11-07-2008 - 2:03pm

Actually your math is WAY off!!!

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iVillage Member
Registered: 12-18-2005
Fri, 11-07-2008 - 2:32pm

oh YES ! so VERY helpful! thank you!


do you expect someone to spend 100% of thier take home pay on a mortgage?


i was told when i bought my homes to plan to spend ~ 1/3 of my take home pay on housing... (i was recently informed that some banks go with ~ 1/3 of Gross pay) i never heard anyone suggest using 100% take home pay on housing.


by the way, you neglected escrow in your mortgage payments...


and by your math, saying a person with an income of 250,000 could afford a 1.8mil house, that would leave them $309 a week spending (living) money....


if you include real estate taxes, that person already can't make ends meet as tax on that house in my town would be more than $651/week.


and it depends what you call "pretty nice living"...in this area, you would be hard pressed to find a decent house with 4 bedrooms, 2 bathrooms for less than $600k....that is relevant when people claim that people with that income are living the highlife.

-Kristen

Photobucket
iVillage Member
Registered: 08-25-2008
Fri, 11-07-2008 - 2:43pm
even though it's an ad cited by NVCC, the underlying statistics are still correct.
iVillage Member
Registered: 08-25-2008
Fri, 11-07-2008 - 2:49pm

Then set up a scholarship fund.


Because you believe it doesn't give you (through the government) the "right" to take money from others to pay for someone's med school.

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