Let me tell you about my buddy John.
John is a bachelor. He majored in electrical engineering many years ago, works part time with his father on this father son business they put together. He bought his first house about 20 years ago, paid it off in 7 years by living frugally and ever since then has continued to live frugally his entire life. Over the past 20 years he has ebbed and flowed between regular day time work and working on his business with his dad as it suits him, for he does not really need that much money to live. However, he did a 7 year stint at one place which brought in an inordinate amount of money (he was paid $150 for 1/2 an hour of work) to the point he could pay CASH for two rental properties, which now today he collects rental income from.
Now the man majored in the right field and combined with his experience he can make bookoo coin if he so desired. If we were paid $300 per hour I'm sure we would too. But when he is offered a job or a position at one company or another he simply turns them down because of one reason and one reason only;
"The taxes aren't worth it."
Now this is an important point to understand in that it will explain why not only none of us will be collecting social security, but why this stimulus will utterly fail, just like the new deal.
First off, yes, John makes enough money to live. However, he is not "living the high life" as some would think. The man has enough residual income from his investments to make a decent living. Yes, he COULD go and work more and make nearly $500,000 per year, but he had an observation that should be taken to heart by all people;
"Why would I waste my time working more in life when not only is my life finite, but any additional work I do at this point will be taxed at 60%? Obama can tax my income, you can't tax my free time."
Understand that there comes the point in a person's life that they realize all they have on this planet that is of any worth is their time. And while money is nice, certainly vital, it is not so up to a certain point. There will come a level of income where one does not need to earn more to survive. Oh sure they may like to have some luxuries, but even then, there will come a point in time where one makes enough money to survive. Now if any level of production beyond that is taxed at such a high rate all one does in working that extra bit is essentially commit themselves to slavery, then why on God's green earth would people do such a thing? Additionally, why would "rich" people who are presumably already at that level of income go beyond the call of duty and work more? Take the logic an additional step further and factor in the fact that if people realize time is the only real thing of value they have (which I think with Obama, more and more people will), they will be reluctant to give that valuable resource up so easily. Ergo one can expect practically NO ONE who values their own life and time would be altruistic enough to work more at a 60% tax rate to support the parasites...errr....I mean the losers....ummm....err...I mean....Obama socialists....umm....errr....I mean "less fortunate" masses of the nation.
Now, this bodes ill for Obama's plans because since it's those "evil rich" people who pay the majority of the taxes. And with tax rates going up for the most productive members of our nation, why are they all of the sudden going to apply less value to their time and start slaving away, working as much as they did before to basically pay for a bunch of losers who can't (or better said, WON'T) support themselves? It's quite simple, they'll become like John, they won't. They will realize, like he did, "You can't tax free time, and free time is all one has on this planet."
Worse still, from a budgetary standpoint, is all this promised future spending. Precisely how do you expect to pay for all of this when you have deterred and disincentived all the productive members of society from producing the profits and revenues necessary to be taxed to raise the taxes needed to pay for the bribe money to vote for the democrats through "social programs"....errr....I mean...uhhh...how are you going to raise tax revenues when the tax rate has shrunk the tax base to near nothing? Is your mommy going to pay for it like she did your Harvard degree? Promise $10 trillion in stimulus via taxing "rich people" at a 75% tax rate. 75% of nothing is still nothing (study the Laffer Curve you morons). The simple truth of the matter is you won't. All Obama has done is shoot himself in the foot by penalizing the most productive members of society to the point they've become like John and realized sleeping in and drinking coffee with his friends and working the occasional 3 hours per week with his dad is infinitely more valuable than waking up at 6 AM to suffer a 1 hour commute to slave away for some asshole boss for 8 hours while you suffer a 2 hour commute back, while 60% of all the income generated from this hellish experience goes to pay for the Peggy Josephs of the world to live. The hosts of this nation (the John's) will simply not work denying the parasites of this world (the Peggy's) their bribe money from the socialist party.
Because after all, you can't tax free time.
And that my capitalist, self-respecting, freedom loving friends is about the only thing you can do right now when the majority of the populous is having "Obasms."
Don't work unless you have to.
Go to school.
Stay at home.
Write a book.
Play some video games.
Cut your spending.
If you can get by on a minimal level of income or work, the by God do it.
Because if you go that extra mile and are taxed at 65%, then all you really are doing is committing yourself to being a slave.
And you know something, life is just too damn short to be somebody's bitch.
On a related note.
Your friend is doing a version of "going Galt."
ReplyDeleteGood.
More people need to, because when the parasites end up living in darkness without medicine, heat, or food, they might come to their senses and realize socialism isn't working out for them.
But probably not.
The reason socialists/liberals will always default to 'taxing the rich' is because they truely have no conceptual understanding of wealth creation. Most of them really are economically illiterate and see everything as a zero-sum trade off. To them if X gets wealthier then Y must be getting poorer - therefore it is common sense and morally correct to redistribute wealth from those who are accumulating 'too much' to those who don't have enough.
ReplyDeleteI'm thinking that the Laffer Curve would be a good test to illuminate this basic stupidity. Draw two simple charts (tax revenue on the Y and tax rate on the X). On one chart draw a straight upward sloping line, and on the other draw a simple inverted-U. Ask the person which curve makes more sense. I wonder what percentage of liberals would see the straight line as more realistic ?
Is your friend John's last name Galt?
ReplyDeleteI would agree, however, the only flaw is that for every John that doesn't want to pay the taxes on the income is some other person willing to step up and take their place. But -- taxed enough, eventually even the deepest of talent pools will run dry.
ReplyDeleteA few interesting points to be made about this.
ReplyDeleteOne of the reasons that so many people think Obama's wealth redistribution is a good thing is that very few people think they are rich. They look at the Bill Gates of the world, and think, "There's a bloke that has more money they he could ever use. He should be forced to give it to the less fortunate." What they do not understand is that for every Bill Gates, there are a thousand neighbors and friends that will be severely impacted. The socialists have a tough time defining the rich.
What I also like is the fact that your friend chooses to live below his means. Too many people complain how tough it is to afford healthcare, while sipping a $4 coffee, talking on a $69 a month cell phone plan, and smoking away $10 a day. If 20% of the population stopped drinking Starbucks and bottled water, and instead dedicated that money to paying their bills, the foreclosure crisis would not be happening.
And, finally, the last item. Too much "hopes and dreams" not enough reality. The difference I have seen between liberals and conservatives is that conservatives live in the world the way it is, and liberals want to live in a world the way it should be. Funny thing about 'should be' generally it isn't.
That "free time" tax loophole may be closing. Just listen to the murmuring in Washington about mandatory "volunteering."
ReplyDeleteSocialists figure there are enough suckers out there who, like the ditzy heroine of "Atlas Shrugged," will keep working no matter how bad it gets.
Ah, yes, fear mongering. "If I work hard, they'll make me a slave and take 60% of my income!!" Funny how even at the top rates, including state and federal, the tax rates are nowhere near such, and of course its quite easy for someone making that amount to live in a state with no income tax. And then the absolute crushing poverty of hundreds of thousands of dollars in annual disposable income, well, I don't know how anyone could bear that burden.
ReplyDeleteAnonymous, it's not that people don't work because they're afraid of taxes. They don't work because they don't want your sorry ass (and the other worthless human scum like you) to take the chunk of it they feel entitled to.
ReplyDeleteRe the taxes, suppose you are self employed, so you get to pay both halves of the social security taxes - so what is that 15% off the top, throw in Medicare for another 3%, now you're into Obama's new 39% bracket and your're in Minnesota's new 9% tax bracket for "the rich".
ReplyDeleteOnce you're in the highest bracket, assuming Obama doesn't change the cutoff for social security, every dollar of income is taxed at nearly 50%.
If Obama dumps the SSI medicare cutoff, once you're in the top bracket, we're talking 66% of earnings. Why bother.
But, I plan to eventually go John Galt myself... although in my case it's called semi-retirement. I'm hoping to run my own consulting business working as much or as little as I want.
I have minimal debt, a very small amount left on the mortgage and live frugally now. Still chugging the max into the 401K and awaiting the market to recover.
Maybe split time in a low/no tax jurisdiction during the seven coldest months and return up here for the other 5 months just to minimize taxes.
"And then the absolute crushing poverty of hundreds of thousands of dollars in annual disposable income, well, I don't know how anyone could bear that burden."
ReplyDeleteAh, the old thieves excuse:
We only steal from the rich! It 'doesn't hurt them'.
I guess it makes it alright then. I don't suppose you'll donate your address so I can point out some poorer citizens to rob your home?
And you all do realize what a disaster for the winder economy this man is?
ReplyDeleteHe could be working, creating taxable income, hiring other people who would be taxable - and gainfully employed - buying stuff, starting a business which would employ people and buy stuff, and so forth.
The problem that socialists never seem to get is it's not what they _can_ see, it's what never happens because they've erected barriers to entry (psychological, financial and legal) and people just look around and go, to heck with all that, I'm not going there: the risk - pain the posterior - reward
equation doesn't seem favourable.
Opportunuity cost.
The barriers doen't have to be huge, by the way, just as lowering the pressure in your tires doesn't have to be much before your formerly fun ride because a wallowing nightmare with blowing tires.
"Going galt" only has to affect the margins to have a huge snowballing long term effect, because from the margins come the future Microsofts, GM ( in it's prime), Home Depot's, and Boeings.
The socialist anon made a post about "social obligation" and "why don't you take a political science course."
ReplyDeleteI refuse to post such idiotic statements and will thusly make fun of them here;
"POLITICAL SCIENCE?"
Not a real subject. A hobby or an excuse for lazy children to think they're actually majoring in a subject when in reality it's a fluff and worthless degree.
He also pointed out emigration is an option.
Yes, it is you moron. It's called capital flight. People just can't pick up and move, but they CAN move their money and they HAVE BEEN.
Getting mighty sick and tired of little children who will do everything in their warped little minds to rationalize taking money away from the productive and giving it to their lazy sorry asses who "major in political science."
No real surprise, why do you think Europeans have so much paid vacation time? A 10% raise isn’t even 5% more cash in your pocket, but another day off is another day off.
ReplyDeleteI heard years ago that the Canadian Liberals were digging for ideas to get more tax revenue. They taxed us on the income we earned, they taxed us on the income we spent, but it drove them up the wall that they couldn't tax us on the money we saved! "It's just sitting there doing nothing! And we can't get at it!"
ReplyDeleteLike it belonged to them . . .