03 March 2009

Underachieve To Pay Less Taxes

Here's a story I thought I'd never read. According to ABC News:

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.
Don't adjust your pixels, you read that right. For the first time in U.S. history the President of the United States has officially inspired Americans to intentionally underachieve.
No longer will hard work pay. Forget a lifetime's effort in order to gain a lifelong goal. Struggle, sweat and sacrificing for years to get some financial success and security will get you something new under Obama's punitive tax plan. You'll get a chance to pay somebody else's mortgage while at the same time undermining the primary appeal of hard work.
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 [the $250,000] mark should the Obama tax plan be passed by Congress and become law.

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 bama'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."
Less than 100 days in office and we are seeing CHANGE! An absolute change to attitudes about the American work ethic. Sound's like we finally found somebody to answer Jake Favell's request: "I'd like to have your advice on how to live comfortably without hard work."
And keep in mind that we're not only talking about individuals who make $250,000, we're talking about families. On top of that, based on what Obama has said in the past we can expect that $250,000 cap to drop. After all, the president has already shown that he struggles with telling the truth.

So now we'll have Americans finding ways to be less productive. The hardest working among us will be punished. The lazy have found their messiah.


  1. friedmsw said...

    Wonder what is going to happen when that $250,000 mark starts falling to $200,000 then $100,000?

  2. DB said...

    No way. I had to read that twice (and adjust my pixels lol). You never thought you would read this article for a different reason as I hope you realize how illogical what this lady in the story is proposing (and the journalist is poorly reporting). Trying to reduce your income to a certain "level" won't work the way she thinks it will to lower her taxes and will only lower her after-tax income. Taxes don't work the way she is claiming because taxes are progressively bracketed. You aren't taxed at the higher rate on any money you earn up to $249,999. So by reducing their income to below that level doesn't change the fact you will pay the exact same percent on the first $250K whether you make $250K or $260K.

    For instance, if you make $260K, the first $250K is taxed at the same bracket level as everyone up to $250K (the other bracket's work the same way as well). The higher tax-rate only affects that last $10K. The individual's entire income isn't based on the higher rate, only the income in that bracket.

    So, in my scenario, reducing the person's pre-tax income $10K (from $260K) to get under $250K results in $10K less after-tax income which is LESS than if she got taxed on that $10K.

    I understand the complaint about taxing the rich, but this flawed reasoning and misunderstanding of how the tax code works is poor form and not going to convince me or others to care about the arguments the "rich" are making if they don't understand how taxes work in the first place. Plus, journalists are idiots (as we all know) and this one is especially sloppy in his reporting to let this grossly inaccurate portrayal of the tax code through. Sadly, you only need a Journalism degree to be a journalist and no other specialty or education (I should know, I have a degree in journalism). I am questioning how these people even make that much money if they don't know how taxes work in the first place! You can't trust journalists or their accuracy, as you have pointed out many times over the last year.

  3. DB said...

    Now, what Friedmsw commented is a real concern because it lowers that bracket (as we already saw happen from whatever it was before $250K) or if the tax rate for individual brackets increases. The article could have taken those angle and been accurate, but misrepresenting how it works was sloppy. There are plenty of good arguments against the tax-code, but this journalist didn't present one. I seriously hope no one actually attempts to lower their income to pay "less" taxes or they are complete morons.

  4. Khaki Elephant said...

    DB, there are two problems. First is the fact that the $250,000 did hit the $200,000 mark and below in Obama's campaign rhetoric so we don't know what the number is actually going to be. And as I've mentioned before, Barack Obama is not a man of great integrity or honesty (to say the least)

    Secondly, we don't know what form this tax penalty will take yet. If it is only income tax on the amount that pulling them into that higher bracket, I agree. But if we're lookin at new limits in that bracket on charitable donations, mortgage interest and state and local taxes . . . or, a reduced value of their itemized deductions (which could be a healthy hit), then there is incentive.

    But, of course, my bigger problem is this illustration that people would even consider harnessing their success.

    The whole idea of punishing people because they have worked hard to earn more is so unAmerican that the dead may walk and we'll soon see the zombie founding fathers marching on Washington.

  5. DB said...

    Your first paragraph is a valid concern. I don't dispute that. This concerns me as well.

    Second concern is also valid, but my point still stands that "reducing pre-tax income to meet a bracket" is stupid. From what everyone is saying, he is simply manipulating the brackets. Even if he adds those things you say, my point still stands that lowering income to meet a bracket is illogical and counterproductive and isn't how taxes work. Regardless of "penalties", the brackets will remain and their stunt is stupid.

    Third paragraph...those people are idiots as I continually point out. It defies logic. Maybe they don't deserve that money anyways ;-)

    Your final argument can be used to argue against the current tax bracket that was in place before Obama took office as I assume your issue is with the progressive tax. Obama isn't creating the policy, he is just expanding it which, again, is a valid concern, but not the point of the article. The 16th Amendment makes taxation "American" (well, Constitutional) and most economists, including Adam Smith advocate the progressive tax. But that's not the point of this article.

    My point is that those people are advocating stupidity when it comes to taxes and the journalist enabled them. Further, any of these people who actually try and "lower" their income to avoid paying taxes are morons and I don't feel sorry for them at all.

  6. Anonymous said...

    I don't see these people as morons, DB. I see them as people who are making a statement as a matter of principle. If enough people do it, perhaps Mr. Obama and his administration will start to get the point.


  7. DB said...

    So they are martyrs? What they are doing will cost them money and won't send any worthwhile message. The message they will send is that they don't understand how their taxes work in the first place. There are far better ways to "make a point", but this is not one of them. I stand by my statement, anyone who does this is a moron who doesn't understand how their taxes work.

  8. Khaki Elephant said...

    I would argue that those the democrats label "the rich" (and I label "the successful") didn't get to where they are because they're stupid morons who don't understand tax codes. They know how to handle their money, which is why they have money.

    In this article the point is that nobody knows what form this tax on success will take, and those who understand finances enough to have made serious cabbage are preparing to protect themselves from government sponsored theft.

    Their stance, whether on principle or financial merit, still illuminates my whole problem with the left's class warfare. It is insanely against my sense of being an American to punish the hardest working among us in order to reward the slothful.

    As Mark Twain said, “Don’t think the world owes you anything, it owes you nothing. It was here first.”

    Obama's tax policy, like his mortgage bailout policy, wallows in the stink of feel-good, buying-vote handouts that do little more than reinforce bad behavior while spanking the most productive people in the country.

  9. DB said...

    I am not disagreeing with the arguments you are making, mind you. I am simply responding to the point of the post that implies that people are reducing their income to lessen their tax burden. Those people are morons...which was, is, and will be my point on this issue. I didn't say all rich people are morons, just the ones who conceive of illogical plans based on their own ignorance of how taxes work. Like I had said plenty of times, there are perfectly fine arguments against Obama's policy. This one is not one of them.

  10. Anonymous said...

    So, what's your answer, DB? Continue working hard and get fucked by the government for it?

    Oh yeah, that's really logical.

  11. DB said...

    Seriously Anonymous? Are you paying attention to what I am saying? Please reread my comments and follow along. The only thing I have offered complete dissent on is this article and the stupid ass point it tries to make as that point is illogical. I mentioned numerous times that there are plenty of valid arguments against Obama's proposals just not the one highlighted in the article You are just mindlessly stuck on ONE issue and assume I support all of Obama's tax proposals. Wtf is wrong with you? I don't want my taxes to go up anymore than the next guy, but I am not going to allow ignorance of the tax-code to go unquestioned.