Lawyers potentially could earn far in excess of £160k, though the vast majority would not.[3]
I would guess that working in finance is the single mostly likely way of earning over £160k.
I appreciate this may well be different in the US.
[1] https://www.gov.uk/government/statistics/percentile-points-f...
[2] http://www.bma.org.uk/support-at-work/pay-fees-allowances/pa...
[3] http://www.chambersstudent.co.uk/where-to-start/newsletter/h...
http://money.usnews.com/careers/best-jobs/lawyer/salary
No idea whether everyone equates "lawyer" to "partner" in the US - certainly not the case in the UK where most qualified lawyers are not partners (except in very small firms).
Lawyers does not automatically mean "partner" in the US, hence why I said "in this context". The OP is saying the majority of the 1% of income earners are things like doctors and lawyers. Not that "lawyers in general" are 1%ers.
[Edit: have an upvote]
> The 1% are your small town local doctor and lawyer
Which is, I believe, demonstrably untrue. "Small town" [x] will earn less than "big city" [x] in general, and there are few elite medical facilities or high powered law firms in small towns.
This may seem like pedantry, but it's important to watch for this kind of language: the talking point that "small town doctors" are in the 1% is a powerful tool in trying to convince people that "the 1%" are just plain 'ol folk. You wouldn't want to tax good 'ol Atticus Finch, would you? I mean, he's barely getting by as it is!
If OP had said "high performing doctors and lawyers" rather than "small town doctors and lawyers," that would be a much more accurate statement which would carry a very different connotation.
http://www.investopedia.com/articles/personal-finance/050615...
Interestingly, this is less likely to be the case in wealth terms; many people globally with a lot of wealth (e.g. in agricultural land) have relatively low incomes, and the opposite is also true.
Doctors in the UK are well-paid professionals, but - like scientists, artists, academics, engineers, writers and other members of the middle class - their influence on policy is essentially zero.
The biggest political change of the last few decades in the UK has been the absurd concentration of political power in the hands of speculators, bankers, property developers, creators of sweatshop industries, and a tiny number of "consultancies" that are hired to provide public services that used to be publicly owned.
A few of the biggest IT corps - most obviously Google and MS - are on that privileged access list.
No one else gets a say in policy. Voting is a sideshow.
Policy is set in secret meetings which are unminuted and off-the-record even if they take place in government offices.
The real meaning of "1%er" is anyone who can buy access to ministers - because it's been proven time and again that access is for sale - and influence policy for their own benefit.
I know less about the US, but so far as I can tell the setup is very similar, but perhaps less indirect. You pay for your senator or congressman or president on the way up, and then they do what you want, more or less, while they're in power.
There's a lot of show about caucuses and candidates and voting and flags are waved while pundits punditise. But the real decisions happen with money - euphemistically known as "favours" - on the table, and most voters are excluded from that process because they don't have the organisation, the social links, or - obviously - the money to take part.
If you are not playing at that level you are not a 1%er. Having a six figure salary does nothing to change that, because ultimately your income stream is just as susceptible to the whims of the people who do play at that level as everyone else's.
I tried plotting the difference 1999-2013 by percentile, first in absolute terms (£ difference):
Which support that the wealthiest part of the population (upper middle class) benefited the most from the past 15 years.
However if you do the same in relative terms:
it is the lowest part of the income distribution who benefited the most, seeing their wages doubling. The very much upper end too. But not the middle class.
Depending on how you look at it, it can be used as an argument both ways. Which is why I hate when people reduce something as complex as a distribution into one number. It's too easy to lie with statistics.
There are exception if your income is in the top bracket.
The only key impact of taxes is to cancel the revenue increase of the upper class. Even the top 1%.
A country could tax the crap out of the rich and misspend. No matter what, we should expect and insist on competency. Not this Reaganesque idea that the government is shit no matter what.
As he's quoting the £160k, which is from the table before tax, he must have used the before tax figures so that's not relevant.
The point is not so much that low incomes did 200%, it is that low income did much better than the rest of the distribution (relatively).
Handy image: https://img.washingtonpost.com/news/get-there/wp-content/upl...
[1] http://www.epi.org/publication/income-inequality-by-state-19...
Trouble with defining the 1%ers based on salary is that it avoids the really wealthy i.e. those with capital
It seems they want their taxes increased and that money sent to Bangladesh to make for less income inequality.
Despite their college degrees I suspect they are innumerate and have a difficult time understanding meanings of words that don't favor their privileged position in the world.
Yes, the middle class in America is losing people to the upper class at a 2:1 ratio to the lower class, if this continues 66% of people will be in the upper classes in the next few generations.
That's odd. I mostly see employed people at malls and in parks. How do you tell them apart? Or do you just assume that they're unemployed, because they're in a park, doing nothing?
Social assistance programs are so meager and inexpensive compared to the cut we give to the finance industry. It's ridiculous to begrudge social assistance to people who need it just because some people who receive it don't.
Frankly, I'm just not offended that some people don't work. There aren't useful things for a lot of people to do. I'm much more offended that some people are rewarded incomprehensible amounts of money which no human can possibly be worth, often for activities that are actively harmful.
This completely ignores that you can be better off than someone else and still live in a shitty situation, but it sounds so nice ..
That's why many philosophies boil down to: you're going to be dead soon, you might as well start enjoying it, and if you're not... well... you know what to do.
Only in America would people who borrowed money to take a 4 year sabbatical be complaining about being poor.
I pay a far higher percentage of my income as tax to the society I live in than the people in the panama papers.
Well you absolutely don't know that. And whilst no doubt some people _are_ avoiding tax, many are not. And btw overall the rich pay a far higher portion of their income in tax than the poor. In the UK for example the top 1% of earners account for 30% of the total tax take (up from 20% 10 years ago). The top 3,000 pay more than the 9m bottom.
If you earn a salary that puts you in the literal 1%, you probably pay an effective tax rate of 30-50%. I don't know how low your income needs to get to reach a 15% tax rate on income, but it's really low.
1. http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-...
2. http://www.csmonitor.com/USA/Elections/President/2012/0119/U...
> I don't know how low your income needs to get to reach a 15% tax rate on income, but it's really low.
I was below 15% in the low $70k range for sure. We'll see what it is this year.
Some people are so rich they don't even appear on the rich lists. I don't know how much tax they pay, but I suspect it isn't much.
Generally, if you can literally fit the people who own most of the economic assets of a country into a small hall, you have a serious democratic deficit.
If you're in the top 3000 people by income in the UK, you get to ride the same crappy trains as everyone else, drive the same crappy roads (unless you try go everywhere by helicopter - hardly practical), get the same government services, have access to the same markets and the same products in those markets; how many companies produce luxury goods these days? Unless you're an idiot and buy diamond encrusted iPhones, the stuff in your house is going to be similar to other people's. You'll be eating similar meat, drinking the same water. You could collect rare art or something, but that's hardly a meaningful part of the national economy.
The top 3000 get pretty similar benefits from the economy as everyone else, they just pay a lot more in absolute terms for the privilege.
Um you're confusing equal access with equal benefit...
> you get to ride the same crappy trains as everyone else, drive the same crappy roads (unless you try go everywhere by helicopter - hardly practical), get the same government services, have access to the same markets and the same products in those markets
Yea, except by being the super rich, you're benefiting far more from all those same crappy assets. Think about a rich person in retail.... their millions/billions depend on the existence of all those crappy roads to bring them customers and products to sell them. When said roads disappear, you both lose access to them, but the rich person loses far more as his access to customers also depends on those roads.
Equal access and equal benefit are vastly different things. The rich benefit more from infrastructure than the poor because their businesses are built upon and depend upon them.
The poorly paid actually spend a much higher % of there income in tax than the top 1%. And their contribution has been rising as the income and wealth based taxes are cut and the consumption based taxes have risen.
I don't blame you for thinking that is the case though as this canard has been pushed heavily by the UK press.
You know when your grown up when you have a discussion with your parents about their wills and inheritance tax.
But that's a meaningless metric. How is it comforting to know that 99% of people in India or Ethiopia have no voice in US (or UK, in this case) politics either?
In my city's case, there are extreme amounts of outside capital flowing into Austin to try to take advantage of the hype pumped out by all the various vacuous media channels in this country.
All that wealth sitting out there, being used to drive up property prices so that average working folks can't afford to live in the city they supposedly live in.
This is historically inaccurate, at least for American politics. There, the use of the phrase "top 1%" goes back at least as far as debates over then-Governor George W. Bush's income tax plan in the 2000 election[1]. Gore frequently used it as 'wealthiest 1%', but he was clearly citing studies based on the income breakdown[2].
If you want somebody who will fight for you and who will fight to have middle-class tax cuts, then I am your man. I want to be. Now, I doubt anybody here makes more than $330,000 a year. I won't ask you, but if you do, you're in the top 1%.
[1] http://debates.org/index.php?page=october-17-2000-debate-tra...
> Houses are going up 24% year over year
That's called a bubble, such a rise is not sustainable.
Look, you're living in a place full of rich people, so you feel poor by comparison, that's expected, so deal with it or move.
For someone making $45k in the Midwest, a 3-bedroom house with a 2-car garage in an excellent school district is expected.
If the 1%er moves to a lower cost of living area, he will not be a 1%er anymore.
What distracts from the discussion is using a term which lumps mid-career doctors in with billionaires while only talking about the billionaires.
Confusion might not be the best word, but we should avoid perpetuating the notion that the entire 1% is to blame for average people not getting ahead.
Because it's a simple number to write.
Lay-people using this term have no idea that the 1% includes doctors and lawyers, they just assume it's ultra-rich bankers, executives, and hedge fund managers. Yes, that means that if you're incapable of understanding context it might sound like they're talking down on doctors and lawyers. But I assure you they're not.
> And "railing against" != confusion. If enough people believe something, certain people in that group can do some pretty messed up shit without exactly "railing" first.
What are you even saying?
That summary jumps seamlessly from a literal use of "the richest 1%" to "A global network of tax havens" without any indication that they've suddenly begun talking about a much smaller set of people.
Or browse articles about the 1% on occupy.com or Huffington Post:
http://www.huffingtonpost.com/news/top-1-percent/
Both sometimes use "1%" to refer to literally the top 1% wealthiest people, and sometimes to refer to the ultra rich. You can jump from a numbers-based article about where the 1% earn their money to a screed about how "the one percent" are putting out expensive videos downplaying the plight of minimum-wage workers.
It's a rare political term that actually has a pretty clear meaning. It's a bit vague in that it could refer to income or net worth, and nationally or worldwide, but it's way better than stuff like "liberal" or "conservative" or "terrorist." Using such a precise term as a lazy synonym for "the ultra rich" is ridiculous.
Hint: It's because they haven't suddenly begun talking about a much smaller set of people.
None of the links you posted are talking about the literal 1% as the problem. They'll reference statistics about the literal 1%, but only because the literal 1% includes the figurative 1%.
> It's a rare political term that actually has a pretty clear meaning. It's a bit vague in that it could refer to income or net worth, and nationally or worldwide, but it's way better than stuff like "liberal" or "conservative" or "terrorist." Using such a precise term as a lazy synonym for "the ultra rich" is ridiculous.
I totally agree with you, and personally I try not to use the term because I think using it shows poor communication skills: I think it's exemplary of everything that made the occupy movement largely unsuccessful. But it also shows poor communication skills to derail a discussion just to enforce the usage of your terminology, even if your terminology is more accurate.
There is no movement to overthrow doctors. Stop defending people who aren't under attack.
A few years back Cameron was condemning comedian Jimmy Carr and others for using Isle of Man tax structures. A big part of the Rangers football club collapse was their use of tax-avoidance structures to pay players that were ruled unlawful, and their subsequent inability to pay back taxes. Another part of the MPs' expenses scandal was abuse of the "primary residence" CGT exemption. Tax avoidance of varying levels and quasi-legitimacy seems to be quite widespread.
Doctors and lawyers aren't doing as well as they used to, qv the junior doctors' strike. The real money in the UK is finance and property.
You wouldn't know it by reading articles like this, and certainly things can be a lot better and fairer, but over the last 50 years, every single ethnic group in this country is better off when you look at this Census report on median household income: https://www.census.gov/content/dam/Census/library/publicatio.... Welfare programs have only expanded, and necessities like food and clothing have only gotten cheaper.
I admit it isn't staggering advancement, but 50 years is a blip on the grand scheme of things. At the same time we might have just been lucky. But things aren't dire and many in the 1% have contributed in ways that have made us all better off.
Real solutions to the tax dodging problem don't come by slinging emotionally charged statements like this around:
"In so doing, you rob your own society of cash for hospitals, schools, roads…"
Real solutions start by asking why wealthy people don't see value in publicly-financed goods and services, and if these people would have created more or fewer jobs under a more progressive tax regime, and if we want more jobs or more/better social services, and if we want new people in the top 1% every year. These are real tradeoffs that go beyond just negatively impacting the top 1%.
Which is totally irrelevant to the main point being debated: it's not about wealth relative to the past, but about wealth relative to everyone else in the present. The reasons are simple: wealth buys political power, and political power is inevitably used to further concentrate wealth in the hands of those who have a lot of it.
> it's not about wealth relative to the past, but about wealth relative to everyone else in the present.
Who is debating that, exactly? I said things can be a lot better and fairer. But steady improvement over 50 years is nothing to be scoffed at and needs to be recognized and analyzed if we want to preserve those gains for those most marginalized.
> wealth buys political power.... is inevitably used to further concentrate wealth
What if this was shown not to be the case? Would you still be okay with the inequality? And if it is the case, how does this make you and me worse off in the absolute sense?
But there hasn't been a steady improvement over 50 years. Here's what the OECD says [1]: "According to the OECD income distribution database, income inequality among total population in the United States has steady increased from 1974 to 2010."
And here's what the US Census Bureau says about poverty in the United States [2]: "In the late 1950s, the poverty rate was approximately 22 percent, with just shy of 40 million Americans living in poverty. The rate declined steadily, reaching a low of 11.1 percent in 1973 and rising to a high of nearly 15 percent three times – in 1983, 1993 and 2011. However, the 46.2 million Americans in poverty in 2011 is the most ever recorded."
[1] http://www.oecd.org/els/soc/OECDIncomeDistributionDataReview...
[2] https://www.debt.org/faqs/americans-in-debt/poverty-united-s...
Who is centralizing power undemocratically?
I would be okay with it, yes.
But since we have mountains upon mountains of evidence to the contrary (i.e. the wealthy corrupt the political system and make it serve their own ends at the expense of others), your hypothetical is rather meaningless.
>>And if it is the case, how does this make you and me worse off in the absolute sense?
Because it goes against the "one person, one vote" principle of democracy.
Do you mean the mountains of insinuation and innuendo in that article? Just because the Koch brothers want lower taxes and the people who engaged in these tax avoidance schemes do too, doesn't necessarily mean they are colluding to buy elections.
You might as well claim that Apple and Google are buying political power because of the billions they keep offshore, too. They buy power alright, just like all corporations that want to snuff out competition by influencing the laws in their favor. That also keeps the rich rich. But you don't hear of anybody attacking lobbyists, do you?
It's especially ironic in this situation because the Guardian itself uses offshore tax avoidance techniques to lower its tax bill.
That is not the reason they dodge taxes. Also, tax funded infrastructure and general stability are major factors in why any business is able to thrive but that success is assumed to be wholly owned.
So, the reason is...
> Also, tax funded infrastructure and general stability are major factors in why any business is able to thrive but that success is assumed to be wholly owned.
Just like politicians taking credit and blame for economic conditions. Is your argument that they dodge because think taxation is theft? Fine, figure out a way to get them to pay for the government goods and services they use. If they don't pay, they don't get to use them!
The Guardian has an editorial perspective and that doesn't get left behind on opinion pages. Why not implicate the Kochs in a story like this if you already have a set of opinions about them which would have them fit nicely here? You achieve guilt by association and you reinforce the notion that they are part of this evil cabal that you desire to lump them in with anyway... and you're more agreeable readers will cheer simply cheer you, rather than ask about any pesky facts that really tie them in with subject at hand.
They haven't endorsed a specific candidate yet, but they spent something like $400 million in 2015 and are planning on spending another $900 million this year. I'd say that's not exactly money on the sidelines.
http://www.politico.com/story/2015/01/koch-2016-spending-goa...
For example, I wonder if Soros, a 1%er that is also known for dedicating some degree of his wealth to political advocacy last I heard. I suspect that the Guardian largely agrees with his advocacy and thus would never appear in an article like this. Their goal in suggesting wasn't to point out the likelihood of spending as a fact, but rather to suggest they would use their spending for nefarious purposes... without even the benefit of my kind of qualification: they suggest a foregone conclusion. That's not factual reporting, that's opinion making.
In 1992, George Soros brought the Bank of England to its knees. In the process, he pocketed over a billion dollars. Making a billion dollars is by all accounts pretty cool. But demolishing the monetary system of Great Britain in a single day with an elegantly constructed bet against its currency? That’s the stuff of legends. -- http://priceonomics.com/the-trade-of-the-century-when-george...
In any case, the information I have doesn't paint the picture the same way you do. Drawing from the same link I posted above [1]:
each country set their currency’s value in Deutschmarks. They agreed to maintain the exchange rate between their currency and the Deutschmark within an acceptable band of plus or minus 6% of the agreed upon rate. ... The British government was obligated to keep the exchange rate within 2.78 DM to 3.13 DM. ... while the people of Great Britain dealt with a recession, the government’s hands were tied; they’d just have to ride it out.
You'll note the word "obligated" there. By 1992, it wasn't their right to decide whether to follow the market or not. They were bound by international agreements to maintain the exchange rate to the Deutschmark.
Soros retorted with a different strategy: “Go for the jugular.”
If Schlesinger’s quote could be used as the catalyst for the pound to devalue, why shouldn’t today be the day it happened? Instead of slowly building up a short position against the sterling, [Soros's] Quantum Fund could short sell sterling on an unprecedented scale today. Doing so would not only help hasten the tumble of the sterling, but also increase the fund’s profit.
It was this decision to “go for the jugular” that netted Soros’s firm over a billion dollars, toppled the Bank of England’s currency regime, and ultimately led to the disgrace of the Prime Minister. It also cost the British taxpayers billions.
...
As Europe slept, Soros borrowed and sold pounds from anyone that he could. The Quantum Fund’s position exceeded $10 billion shorting the pound. Other hedge funds got wind of the the trade and the report from the Bundesbank and started following suit, also borrowing and selling pounds.
By the time London markets opened for business and British treasury officials started their day, tens of billions of pounds had been sold and the the pound was dangerously close to trading below the levels mandated by the ERM.
The Bank of England was about to have a very shitty day.
... At 7:30 PM that night, Lamont held a news conference to announce that Britain would be exiting the ERM and floating its currency on the market. Soros and the speculators won.
So this wasn't some inevitable disaster. Soros largely caused the problem, manipulating the market by shorting 15 Billion GBP. In a market that was already shaky, Soros was the one to kick the animal spirits (to steal a Keynes meme) into action. It was likely that something would have happened, but Soros maximized the damage for his own profit.
Now, in what way are the Kochs literal villains?
[1] http://priceonomics.com/the-trade-of-the-century-when-george...
No he didn't, Soros exposed the problem of pegging a currency to an exchange rate they couldn't hold; a problem created by the Bank of England. You seem to think quoting an article you just read is educating me, it isn't; I'm a trader, Soros billion dollar trade is legendary among traders, I've known about it for years and you're clearly not educated in what he did or what it means. The problem here was the Bank of England pegging the currency, not Soros profiting from their inability to maintain that peg. The bad guy here is the Bank of England, not Soros.
And no, the Koch's are evil because they actively spend enormous amounts of money doing everything they can to destroy the political process and suppress votes, destroy the planet and deny climate change, and just generally prove themselves to be utterly disgusting and repugnant human beings who only care about maintaining their own power. They are the literal personification of the evils of excessive wealth.
Nor are the Koch's by any standard champions of the free market. The Koch's are crony capitalists eager to spend their billions messing with the political process to gain favor and legal protections for their businesses. This isn't championing a free market by any stretch of the imagination.
You won't find Soros doing that shit. Shit you're trying to sell his trading as being bad precisely because you can't find much else to call him bad for despite the fact that his billion dollar trade is in no way him being bad.
It's true that my knowledge of trading is from my personal experience in my own investments.
However, you're exhibiting precisely the same kind of blinders about the Kochs. It's clear that you don't understand their political positions, or exactly what they've done, you're just jumping on the partisan bandwagon.
Whatever lets you sleep at night bud. Couldn't be that I actually dislike them, oh no, it must be because I'm partisan or I don't understand them.
Estimated budget of Koch network in January 2015:
"The political network overseen by the conservative billionaires Charles G. and David H. Koch plans to spend close to $900 million on the 2016 campaign, an unparalleled effort by coordinated outside groups to shape a presidential election that is already on track to be the most expensive in history."
"In 2012, the Kochs’ network spent just under $400 million, an astonishing sum at the time. The $889 million spending goal for 2016 would put it on track to spend nearly as much as the campaigns of each party’s presidential nominee."
http://www.nytimes.com/2015/01/27/us/politics/kochs-plan-to-...
Budget was revised downwards in October 2015, likely due to the unpredictable nature of the GOP nomination and the Trump "phenomenon":
"Billionaire Republican Charles Koch said the Koch-backed network of political network of donors will spend $750 million on politics over two years, a significant amount less than the nearly $900 million expected."
"He chalked it up to people not contributing the way they expected."
http://www.politico.com/story/2015/10/koch-brothers-spending...
while the economy was melting down and U.S. banks were going broke, Koch Industries was moving corporate money out of the country and into the Luxembourg jurisdiction in order to dodge taxes and move nearly $1 billion around a Byzantine maze in order to ultimately cancel the debt and not impact balance sheets
I'm not sure to what extent this was really news, though, since an earlier (2009) report at http://ecobserver.blogspot.co.uk/2009/10/koch-industries-fai... states that
Public documents available on the Luxembourg government website, Legilux.lu, reveal that Koch operates a complex system of offshore companies and accounts in order to avoid paying US taxes on huge sums of corporate profits. Out of his Kansas office, Global Tax Director for Koch Industries, Craig M. Munson, manages these offshore corporations with the assistance of a shady Luxembourg company, ATOZ s.a., whose partners are primarily former Arthur Anderson staffers – the tax advisory giant that ceased to exist as a result of their felony conviction in the Enron “off-shore and off-balance sheet” debt scandal of 2002.
[1] http://priceonomics.com/the-trade-of-the-century-when-george...
Those guys are , if anything, living with the ghost of their father. Charles comes off like The Big Lebowski ( wheelchair Jeff ) only much more for real. My parents are Silent Generation and that's how they thought.
The "Koch" tropes in media are largely fabricated. I'm not a fan, just disappointed in the reporting.
I agree that that billionaires are in a different class from the lawyer and surgeon. But then again, the difference between billionaires and centibillionaires is also immense, and we have to draw the line somewhere.
I think the fundamental problem is everyone talks about capital gains as some flat thing. It needs to be progressive like income tax (or at least in the US, way more progressive than current income tax) to have the positive effects economists want so long as the gains are distributed across many people than centralized in the hands of few.
I'd say the same with waged income. In a theoretical better society we would even be taking income up to the happiness threshold and would progressively tax to an absolute income limit beyond that. And that is not just for bitternesses, sake, the problem we are going to face is that automation and the private ownership of automated production will produce literal money machines, where no human labor is required but goods are made and then sold which transfers money to you, that you then never spend back out again so long as you can own the whole supply chain. That situation is not sustainable - it is money flowing uni-directionally - and the consequences of uncapped income have precipitated how in the past five years we went from a little over 300 billionaires having more wealth than half the human population on Earth to just over 50 today.
The ideal thing here would probably be a progressive consumption tax, but implementing that in practice is rather difficul, unfortunately.
Oh, and there is no happiness threshold. Or more precisely, more money doesn't necessarily buy more happiness, but it does tend to buy less unhappiness (which is not the same thing!), albeit not linearly.
Progressive consumption taxes do nothing to ablate the central problem of the argument, the centralization of wealth as a means to distort society to your whims. The wealthier you are the less you spend on goods and services as a percentage of income and the more you save. Eventually most of your income just goes back into reinvestment to make you more money. The current model basically lets anyone business savvy enough just make perpetually more money, increasing their wealth... just for the sake of having more wealth. The majority of billionaires are not rich with a purpose of how they want to use that money, they just control incredible amounts of capital for the purposes of accumulating more. The Bill Gates are the exception, not the rule, and even then while Bill spends tremendous amounts of money for good he only spends money he is already making off a considerable fortune to begin with.
And those kinds of fortunes are what I am talking about.
> Oh, and there is no happiness threshold. Or more precisely, more money doesn't necessarily buy more happiness, but it does tend to buy less unhappiness (which is not the same thing!), albeit not linearly.
More money buys less unhappiness up to a limit[1]. It is simply the fulfillment of base needs in Maslow's heirarchy, and once you have enough not to worry about starving, homelessness, or sickness ruining you, you have a much better quality of life, less stress, and more importantly, peak productivity.
My argument is not that everyone has the same limit, or that it is constant regardless of inflation - it is of course a function of the real cost of needs, and varies from place to place. But that is why I argue to start taxation at a normalized threshold like this, to potentially extract the most revenue in the least harmful way possible.
[1]http://www.advisorperspectives.com/dshort/commentaries/Happi...
More money can buy less unhappiness to a _very_ large limit, much larger than $75K in the US. Most simply, any serious medical treatment you have to go through will quickly blow past the $75k number.
And of course even in this study the magic number is very much location-dependent, which makes it even harder to craft policy around it....
If you think this is true then clearly you've never tried seriously investing money. It gets taxed on its way to becoming cash (capital gains taxes if you simply sold at a gain). Then local state income tax. Then taxed again once spent (sales tax). Not to mention fees.
Even if your money is offshore -- which isn't illegal -- the IRS simply has to ask you about offshore accounts. You'd be smart not to lie to them.
It doesn't get taxed when sold at a gain (because it's exchanged per 1031 or similar tax code provisions). If it does, it's often subject to super-advantaged treatment over and above long-term capital gains (think Qualified Small Business Stock or the like).
But it's often not sold at a gain and sometimes never will be; see various carveouts allowing for basis step-ups upon certain transfers (which might be within a family or a network).
But why even bother selling at a gain and paying even those favorable cap gains rates? Much more favorable to take out a loan against the asset for some spendable cash. You can even deduct the interest payments.
None of what I've described even requires an offshore vehicle, which parent rightly describes as usually perfectly legal -- although if you do have the right kind of setup you can keep deferring taxes for, practically speaking, forever. (It does require that there be enough money in play to make the significant overhead worth it, of course.)
"[L]ocal state income tax"? Not if you live in WA and a good number of other places.
And you really, really can't count sales tax as part of the taxes on investment income. Not least because the stuff one typically "spends" the bulk of investment returns on is, in turn, other investments, which are not taxed as sales items.
Throwing in sales tax seems disingenuous, as that is applied the same regardless of your source of income.
So does income, so you're quite literally making no point. His point is that income is taxed far higher, you can't disagree with him and not address that fact.
What evidence do you have for this statement? It does not at all conform to my experience in the world. I live in NYC where it's not all that uncommon for a couple where both partners work to earn that kind of money and I've never once heard of someone avoiding taxes with any kind of offshoring.
There has to be a notion of net income after employment costs (including applicable student loans) – that might get you closer to those who have the means and motivation to hide their incomes.
Separately, and at every income level, there are tax evasion strategies—like stashing money offshore and under-reporting your earnings, or taking all your tips in cash and "neglecting" to tell the IRS.
Tax evasion is illegal, tax minimization is logical. (If you want to argue about the complexity and bias of the U.S. tax code, that's a different topic.) In of itself, an offshore bank account is perfectly legal.
You're conflating income with illegal activities, and suggesting it's "common" for high-income or high-net-worth to be, effectively, criminals.
However, a lot of people only hit those numbers occasionally. Win 2 million and your in the 0.1% for one year.
edit: The only reason for defensiveness about this on HN is that plenty of people here are in the 1% (I'm certainly in the 5%), and many of their friends and family.
The reason doctors in the US make multiples of the income of doctors anywhere else in the world is because of high-dollar lobbying (for their own sake), and payoffs from pharma and medical device companies in return for support. If doctors in the US were reduced to the salaries of doctors in the UK, the bottom would fall out of the yacht business.
Why Nonprofits are the Most Profitable Hospitals in the US: http://www.arbiternews.com/2014/04/08/why-nonprofits-are-the...
That said, I've noticed Bernie using the language: "The top one-tenth of 1 percent [of Americans] own almost as much wealth as the bottom 90 percent."
More importantly, he is married to the daughter of a Baronet, and is the cousin of a Baronet too, so, socially, very firmly a 0.1%er.
One of the other issues with money is that most of the people even those who are just in the 1% have to work to live, if you have access to sufficient finance to not worry about needing a job for the rest of your life one could argue that it's a problem. Even if you take out 100% of the money out of politics it's not going to be enough, because those who do not need to work to survive can invest 100% of their time into politics and driving their agenda forward while the rest lags behind.
Now I'm not arguing that there is a solution for it, but what people tend to focus too much is on flat sums and income inequality which is almost futile. You might dislike some one who's making 160K a year but in most cases they are just like you if they do not work they'll find them selves on the street just as fast (and sometimes even faster than you). So for the most part I discount those who work directly for their compensation from the so called "1%" while you might think that some CEO getting payed 700,000 is some wallstreet arsehole, the oil worker in Nebraska might think the same about a developer in NYC earning 300K a year.
True wealth allows people to focus on building dynasties and true power and if you want to focus on anything you might focus on that, that said we are 65 there's a good chance that we'll be considerably less supportive of things like inheritance tax when I'll have children and grandchildren to worry about.
PS: These numbers get crazy. I know a couple that has a little under 20 million, but don't quite think they have made it based on who they hang out with. And honestly there goals don’t seem that ridiculous. ~200k each after inflation from a diversified and conservative portfolio which will just snowball takes a lot more now than you might think.
In fact, there are probably legitimately influential people that wield more power than those much richer to them. One need only look at political "movements" to see that they're not always run by the rich and powerful. But rather, by those that can get large amounts of individual/normal people to agree with them and follow through. The oratorical figures, I'd say.
He has been saying (and publishing tax returns to show it) that he doesn't own any shares any more. And even when he did the amounts being talked about are in the hundreds of thousands range. Was there some new revelation in the past 24 hours that revealed Cameron to be a secret millionaire?