It’s not selfishness, really, it’s just a rational response to a confiscatory policy:
President Barack Obama’s tax proposal which promises to increase taxes for those families with incomes of $250,000 or more — has some Americans brainstorming ways to decrease their pay, even if it’s just by a dollar.
A 63-year-old attorney based in Lafayette, La., who asked not to be named, told ABCNews.com that she plans to cut back on her business to get her annual income under the quarter million mark should the Obama tax plan be passed by Congress and become law.
So far, Obama’s tax plan is being looked at skeptically by both Democrats and Republicans and therefore may not pass at all.
“We are going to try to figure out how to make our income $249,999.00,” she said.
“We have to find a way out where we can make just what we need to just under the line so we can benefit from Obama’s tax plan,” she added. “Why kill yourself working if you’re going to give it all away to people who aren’t working as hard?”
The attorney says that in order to decrease her income she’ll have to let go of clients, some of whom she’s been counseling for more than a decade.
“This means I’ll have to tell some of my clients we can’t help them and being more selective in general about who we help,” she said. “I hate to do it.”
And this attorney isn’t alone:
Dr. Sharon Poczatek, who runs her own dental practice in Boulder, Colo., said that she too is trying to figure out ways to get out of paying the taxes proposed in Obama’s plan.
“I’ve put thought into how to get under $250,000,” said Poczatek. “It would mean working fewer days which means having fewer employees, seeing fewer patients and taking time off.”
“Generally it means being less productive,” she said.
“The motivation for a lot of people like me – dentists, entrepreneurs, lawyers – is that the more you work the more money you make,” said Poczatek. “But if I’m going to be working just to give it back to the government — it’s de-motivating and demoralizing.”
Or, as John Galt put it:
I swear, by my life and my love of it, that I will never live for the sake of another man, nor ask another man to live for mine.
One quote from the article sums up quite nicely the world we’re heading toward:
“What Obama is doing is pitting the poor against the upper middle class,” said Morici. “He’ll tax the rich for the health benefits everyone else wants.”
But what if “the rich,” just say no ?
March 3rd, 2009 at 9:59 am
People who are this successful need some kind of outlet. They won’t be able to just work less and be satisfied with that. I hope they’ll consider doing some volunteer/charity work. It keeps you working in the field you love, and it allows you to choose who is being benefited.
March 3rd, 2009 at 10:03 am
Oh please. This is fake posturing and terrible reporting. The tax rate at 250,000 is not going to be 100%, you will still be making more money with an income of 260,000 than 250,000. With all the people with real problems like losing their jobs and becoming homeless, I can’t seem to squeeze a tear out for the wealthy whose taxes might go up 3%, back to what they were under Reagan.
March 3rd, 2009 at 10:11 am
The rate is irrelevant.
What is relevant is that people may finally be saying it’s time to tell the government “no” when they come for more of their hard-earned money.
March 3rd, 2009 at 11:14 am
-Doug Mataconis
Good luck with telling them, “No.” As a middle-class citizen, I am all too happy to watch the wealthy squirm at the idea of coming a measly 3% closer to actually paying a fair share of their load. So please, do tell the tax man, “No, I won’t pay this unfair (totally fair) tax.” I can’t wait to see the wealthy cry when they get a new bill from the IRS two years down the road with a 22% interest rate on top of their original 3%. Oh, and please tell them, “No” again when that day comes, so I can revel in the joy of the wealthy wasting more money on lawyers to try to get them out of jail for tax evasion. Ahhh, one can dream, as it’s more likely that they will get away with it, as the rich always do. Where, oh where are my countrymen who would once sharpen their guillotines at this new sight of our wealthy masters?
March 3rd, 2009 at 11:19 am
This is fake or these people in the example are just mistaken. Only the dollars earned above $250,000 is taxed at a higher rate. See the calculator here: http://www.moneychimp.com/features/tax_brackets.htm
March 3rd, 2009 at 11:23 am
So, you want to punish success.
You sir, are evil.
March 3rd, 2009 at 11:23 am
You still don’t get it.
Why should they be taxed at a higher rate just because they are successful ?
Envy and greed are the only motivations I can see for this “soak the rich” plan of Obama’s.
March 3rd, 2009 at 11:25 am
What is relevant is that these people are lying, they are not going to turn away clients for fear that their marginal tax rate may go up slightly, they are pretending that they will in order to make news and drum up support, but when push comes to shove they will make the rational decision and take the higher income. Intellectually dishonest arguments don’t help your cause.
March 3rd, 2009 at 11:29 am
Adam has it right. It’s not like once you cross the $250K mark, the first $250K suddenly gets taxed 3% higher — only the marginal dollar beyond $250K.
If someone is already getting taxed 35% on dollars earned over $250K, do I really believe they’re going to stop working hard because those dollars are now taxed at 39%?
I understand (and sympathize with) their position. I just don’t think they’re really going to follow through.
March 3rd, 2009 at 11:38 am
The fundamental problem is that you equate wealth with working hard or being a good person. You live in a black-and-white world.
But let’s take the example of someone that started out poor, worked hard, started their own business, and succeeded. What percentage of those people would have failed to save up for their own business if they had had to pay a “fair” flat tax rate of 40% when they were poor? But now that they’re rich the flat tax seems more fair. Why do you want to make a system where poor people have to pay more taxes and it becomes harder to succeed unless you’re born rich?
March 3rd, 2009 at 11:39 am
How do you know they’re lying, Aaron ?
Or are you the one authentic psychic in the universe ?
March 3rd, 2009 at 11:40 am
I dislike taxes, too, but it sounds like the lawyer named in the article doesn’t understand that tax rates are marginal. If she makes $250,000.00, she’ll pay a couple cents more in tax than if she made $249,999.00. The higher rate only applies to money she makes over $250k. There’s never a point where increasing your gross income means decreasing your net.
March 3rd, 2009 at 11:40 am
Brad,
On some level, it’s not hard to believe that people in this position will cut back on reportable earning.
And it’s also not hard to believe that this is the last tax that Obama will impose on them.
March 3rd, 2009 at 11:41 am
Aaron,
And who said that a flat tax rate would be 40 % ?
Most proposals I’ve seen have it much, much lower than that.
March 3rd, 2009 at 11:44 am
I don’t get that impression at all.
It’s a simple calculation.
If it costs her X amount of hours to earn an additional, say $ 10,000 over $ 250k, and the government is going to take an additional $ 400-$500 dollars of that income is it worth her time to work the additional hours only to see more money go to the state ? Maybe she’d rather take the time off and golf, or go on vacation.
March 3rd, 2009 at 11:47 am
Whatever the flat tax rate is, it’s going to be more than the poor are paying now, right? So the end result would be that it would make it harder for the poor to succeed, and easier for the rich to succeed. Does that seem fair?
March 3rd, 2009 at 11:50 am
Not necessarily.
Most “poor” people pay no income taxes at all or get EIC refunds.
Every credible flat-tax plan out there provides that income will not be tax below a certain level.
March 3rd, 2009 at 11:55 am
It looks like Doug pasted the quote from Dr. Sharon Poczatek from at article from and ABC news article by Emily Friedman (http://abcnews.go.com/Business/Economy/Story?id=6975547&page=1). Doug doesn’t mention how the entire second half of Mrs. Friedmans article talks about the “marginal” issue. From the article:
“But to focus keeping your income below a quarter million dollars is not going to have any spectacular magic for individual tax payers,” said Schatsky. “The difference between $249,999 and $251,000 will probably have zero tax impact.”
March 3rd, 2009 at 12:03 pm
If income isn’t taxed below a certain point, that sounds like a progressive tax. Your principled stand on how evil it is to punish successful people with higher taxes starts to fall apart if you support that. So really we both believe in a progressive tax, we’re just haggling over the details?
March 3rd, 2009 at 12:03 pm
Bob,
Everyone with a brain know about marginal tax rates and how they work, there’s no need to mention them IMO
March 3rd, 2009 at 12:07 pm
No, it’s public policy. You don’t tax people who can barely afford to feed themselves.
You also don’t tax people MORE just because they are fortunate enough to be successful
March 3rd, 2009 at 12:07 pm
Hey Doug – I would have thought the same thing, but in this article we have a lawyer and a dentist who don’t seem to get it, so I’m not sure we can take anything for granted. I’m glad you and I are in the know though
March 3rd, 2009 at 12:12 pm
“*Fortunate* enough to be successful” is the key phrase. You DO tax people MORE if they are fortunate enough to be successful, because the end result is that MORE people are then fortunate enough to be successful.
March 3rd, 2009 at 12:19 pm
No, then fortunate was the wrong word.
If someone works hard, becomes successful, and ends up making millions of dollars, why should they be forced to pay a higher percentage of their income to the state ?
Any answer you give in favor will, I submit, be an admission that either (1) their money does not really belong to them, or (2) that they deserve to be punished for their success.
That is the not the kind of country I want to live in. And it’s why I hope Obama’s policies fail to achieve his patently obvious redistributionist goals
March 3rd, 2009 at 1:41 pm
Good lord, this discussion is sad …
http://blogs.tnr.com/tnr/blogs/the_plank/archive/2009/03/03/wealthy-idiots-meet-idiot-reporter.aspx
Doug, you could just apologize with a simple “I failed to understand marginal income taxes” and go on with your rant …
March 3rd, 2009 at 3:10 pm
I know perfectly well how marginal tax rates work, buddy.
The fact that some people might want to give more of their money to the government is something you apparently don’t understand
March 3rd, 2009 at 3:25 pm
[...] co-contributor Doug at his personal blog, Below The Beltway, and Bruce McQuain of QandO quote approvingly, and with the obligatory libertarian allusions to [...]
March 4th, 2009 at 4:36 pm
All of those people who make over $250,000/year could simply charge less and expand their products and services to more people. Duh, how hard is that for all of these brilliant doctors and lawyers to figure out? Nobody is requiring them to charge the absurd rates they do.
Yeh, I know Albert Switzer, Mother Teresa, all just smucks. Bernie Madoff, now he’s the Man!
March 5th, 2009 at 8:45 am
You really have to be sick in the head to “stick to your principles” when there are people in this country who work their ass off every day and still can’t afford healthcare for themselves and their families, and then you look at people make 250k, who may have a 3% tax increase, and the person you feel bad for, and sympathize with is the latter. Honestly, we are NOT talking about taking 70% so welfare queens can buy cadillacs, we’re talking about seeing a damn doctor. I hope conservatives in this country continue to talk about how “the country they want to live in” is one where their fellow Americans don’t live in fear of going broke because they got sick. A solid majority of Americans has wanted universal health care for some time, and right on cue, here come the scare tactics. “Look how unproductive Obama’s taxes are making me!!” Call the waaaaaaambulance. You’re sick in the head, and selfish if you think the current system works…
March 5th, 2009 at 8:50 am
Bob La Quey,
They also say things like, I don’t need the government to redistribute my moneys, I’ll just give to the charity of my choice. Why didn’t the idiots in this article just pay their employees more to lessen their income? Could it be cause they’re lying and are simply looking for anyway they can to “prove” how bad Obama’s taxes are? They know once the rates change, and maybe people are able to see the doctor when they need to, and the world doesnt’t crumble, there will be no going back to “the good old days”, when the number one reason for bankruptcy in this country was medical bills.
Doug, ABC was big enough to admit that the story they posted made no sense at all. Are your “principles” so infallible, that you can’t do the same? You didn’t even write the story, you just said you agreed with it, and as much as I’m enjoying your squirming to find the kernal of truth, can’t you just admit that these people are idiots?
March 5th, 2009 at 7:17 pm
[...] business owner, Dr. Sharon Poczatek, explained: “The motivation for a lot of people like me—dentists, entrepreneurs, lawyers—is that [...]