Because most philosophies that frown on reproduction don't survive.

Thursday, December 06, 2012

Sudden Compassion for the top 1.5%

[UPDATE: Here's what I get for writing a post fast without checking my memory of long-ago read books -- I went and attributed a book to Susan Estrich which she didn't actually write. Post corrected and thanks to Catholic Bibliophagist!]

Susan Estrich, a liberal commentator, is proud of the fact that she supported Obama's re-election, but she hopes that Obama won't take that re-election as a sign that he should, you know, support the tax policy which he campaigned on so hard when running:
Within days of winning the election, President Obama announced that his victory gave him a mandate to raise taxes on the "rich."

Come again? This was a two-and-a-half-point election. It reflected a painfully divided electorate. The only mandate I saw was to unite a divided country.
I did not vote for Obama because I think I am paying too little in taxes.

Like many people I know, I am "rich" by Obama's standards. I pay more taxes, percentage wise, than Mitt Romney and Warren Buffett, because I earn virtually every penny of my income.

I work. And yes, all those deductions that allow the truly rich to not work, or at least to not work all the jobs I do, make me angry.

I am all for closing loopholes. I am all for ending deductions for things I don't even understand. But I am not for putting a low cap on deductions that would make it all but impossible for the charities I support to raise funds. I am not for putting a limit on the mortgage deduction that would mean, as a practical matter, that "middle class" (not rich) people in California would be priced out of the housing market, and the charities I support would not be able to raise what they need to survive.

And frankly, I don't think I'm alone. As a matter of fact, on this one, I don't think 51 percent of all Americans are to my "left" — if that's how you define the higher tax constituency.
It may be that 51% of Americans are not to Estrich's left on tax policy (though if so, it's no thanks to her) but what she seems blissfully unaware of is that although most of her acquaintance may fall in the $250k+ income range, this is a very, very rarified income strata for most Americans. High incomes have taken a hit during the recession, so the recent figures jump around a bit, but to be hit by Obama's proposed tax increase on those making $250k/yr or more, Ms. Estrich is certainly within the top 5% of households and may be within the top 1.5% of households. (Wikipedia claims 1.5%. This fun little tool at the NY Times suggests 3%.)

House Republicans are in a pretty weak position trying to negotiate with Obama and the Senate in order to avoid going over the Fiscal Cliff. I'd been starting to wonder if it was necessary for Republicans to cave to Obama's desire to let the "Bush tax cuts" expire on those making over $250k in order to avoid even worse concessions. I continue to think that might not be the best thing for the economy, but after reading Estrich's column I will at least feel a certain satisfaction if rates do go up.


Catholic Bibliophagist said...

Actually, Nickled and Dimed, which I agree was a loathsome book, was written by Barbara Ehrenreich. However, I share your reaction to the article you've linked to.

Clare said...

My only comment.

JMB said...

Darwin, there are a lot of people in the metro-NYC area (and I'm sure Boston, Washington, LA, San Francisco, probably Chicago) that make 250K per year and are not rich. You have two high school teachers in NJ who after 15 years teaching will make that much. Or the police captain who's married to a principal who make that much. Or you have a young law associate at a NYC firm (not partner) who has a stay at home wife and three children who works 80 hours a week. This "conversation" about income is geographically relevant and it can't be taken out of that context. What's considered a high income in Kansas is, in a blue state like NJ, middle class. For example, A couple pulling in 250 K is bringing one after federal, state, local taxes half of that amount, if that. And to add insult to injury, the AMT kicks in so you always have to pay more to the man.

Darwin said...

Actually, the NY Times link is really cool for that, because it lets you put in an income and see what percent that income falls in in different areas.

So, for instance, $250k/yr is the top 3% here in Columbus, OH. It's the top 5% in NY City, the top 7% on Long Island, the top 6% in Boston, the top 4% in Chicago, the top 4% in Los Angeles and the top 10% in San Francisco.

Now, one probably has a whole lot more buying power for incidentals being in the top 3% of Columbus OH than being in the top 5% of NY City, since real estate is so much cheaper here, so that income level is doubtless a lot cushier outside a half dozen really expensive metro areas.

That said, while it's possible to imagine a middle class way of getting to a $250k income, that doesn't change the fact that even in New York that means a family making $250k is making more than 95% of other families. Republican that I am, I would much rather see taxes go down on everyone and solve our fiscal problems by cutting spending, so I've got some sympathy for Ms. Estrich on that front. What I don't get is where she gets off being an enthusiastic Obama supporter and saying that she thinks the rich need to pay their share, yet insisting that it's totally unreasonable for someone in the top 6% (apparently she lives near Boston) to pay more in taxes. However little she may feel rich, she is still better off than 94% of the people around her. I suppose it seems more attractive to her to only tax the "real rich", but the thing is there just aren't very many of them.

Sorry. I don't mean to rant at you. I guess I'm still working through my post-election bitterness against the "blue" states -- mine included.

JMB said...

I think we of the same mind of this - I'm still reeling from the election as well. But if you look at the town by town/county election results in NJ, a true blue state, you see that in the "more wealthy" exurbs/suburbs, Romney won. So the people who are actually affected by the "tax the rich" political ploy, did not vote for Obama.
By the way, a family making 250K in NYC is hardly rich. I suppose if you factor in all of New York State, that would appear to be true. I don't think you hit the "rich" status in NYC until you hit the seven figures.

Piraeus said...

"By the way, a family making 250K in NYC is hardly rich."

Well, there in the top 5%. I'm not sure what the cutoff is for "rich" but the top 5% seems like a pretty good place to be.

Darwin said...

A lot seems to hinge on what is meant by "rich". Sometimes people mean "has more income than the great majority of other people". Other times people mean some specific style of affluence: Mansions, yachts, not having to "work for a living", etc.

I hadn't known that the suburbs and exurbs in NJ leaned Republican. I guess, California boy that I am, I'm used to assuming that the more expensive the real estate, the farther left it votes.