Chicago professor: It's tough to get by on $250K!

That was because his wife is pissed at him.

 

It's a bullshit argument. The country has some big bills to pay and blowing out the deficit to give affluent people a break won't help. The patriotic thing for affluent people to do right now is to stop whining and pay your taxes.

 

Yeah, but this guy & others like him will cut back by letting go of/reducing the hours of his nanny & lawn guy.

So, the tax aimed at the rich, hits the little guy.

And if the Government spends the money, instead of the Law Professor and his wife, we'll get results like $111 Million spent to create 55 jobs:

http://articles.latimes.com/2010/sep/17/local/la-me-stimulus-audit-20100917

 

Ah yes, those trickle down economics that worked so well they got us into this mess in the first place.

 

We're not talking about some theoretical, trickle down situation.

We're talking about a direct employee-employer relationship.

His money comes out of their pockets if he cuts back.

 

Okay, but that $111 million had to go somewhere, didn't it? It didn't just disappear off the face of the earth.

I'm not following the logic here.

"If we let the rich keep their money, they'll spend it and it will trickle down to the rest of us. If we let the government spend it, they'll squander it and a few rich people will end up with it!"

 

OK, you tell me where it went.

I think the answer is that it stayed in a small community of government employees, agency budgets, and government contractors.

Maybe it payed for a study. Maybe it filled some gaps in a government budget. Maybe it payed for signs, mailings, and other marketing materials to tell the public about how well they were spending their money.

Maybe it bought a few votes by rewarding a donor with a favored contract or beneficial piece of legislation.

But it didn't create jobs. It didn't "stimulate" the economy. There was no "multiplier" affect.

It didn't get into the hands of the people who needed it most & who expected help.

And it didn't make whole any laid off nannies or lawn guys.

 

The tax hit may create some tough decisions and affect spending by people near the bottom of the bracket, but it will affect spending less and less as you move up the ladder. I'd dare say it will have a generally negligible affect on the spending habits of people who make more than, say, $500,000. Much more important for the country to reign in the deficit than to pander to the rich people threatening to withhold jobs, which they didn't plan on creating, anyway.

 

Will they? Or will they simply reduce their savings rate and 401k contribution? I think that's the big point, that trickle-down assumes some great economic engine because someone making $250,000 has an entire staff running what amounts to a household small business. In reality, it's just a lot more money for someone who's rich to play the stock market.

 

Disagree.

Rich people aren't dumb. They didn't get rich by wasting money and they see giving the government additional money as a waste of money.

Look at John Kerry. Where'd he register his boat? Why? Answer: to pay less taxes.

Look at what happened when a luxury tax was imposed on boats:

http://www.pbs.org/newshour/bb/budget/budget_1-1.html

Rich folks will spend less if their taxes are raised. It's pretty simple, their spending is based on their income. It just is. Maybe not for Warren Buffett or Bill Gates. But they're the super rich and are barely relevant to the discussion.

 

Agreed. I really like how no one in that "other" party is rich, so they can really understand the normal people.

Very clearly, one party's political leadership is full of rich people, while other is packed with people who worry about finances every day, just like the rest of us. No rich people there, no sirree.

 

The stock market is flat over the last ten years. Not a lot of wealth being created there.

I'm sure this guy will cut back in all kinds of areas.

Maybe he needs the nanny because he & his wife both work.

So, maybe it's the piano teacher who takes the bigger hit. Maybe it's the pizzeria owner down the street because they decide to eat tuna sandwiches for Friday dinner instead of picking up a pie on the way home from work.

But the money is coming from somewhere & if it goes to Washington D.C., it's not coming back to his neighborhood.