
How Much Will Your Taxes Jump? - krohling
http://online.wsj.com/article/SB10001424127887323689604578220132665726040.html#project%3DWEALTH0105%26articleTabs%3Dinteractive
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rayiner
And this is pretty much why I have switched from the WSJ to Bloomberg Business
Week. It's Wall Street news for people who can't help but laugh at info-
graphics with single moms earning $260k standing with their sad looking young
children.

Also: I'm trying to figure out what's interactive about this "interactive
graphic."

Also: It's amusing to play "guess the profession." Mine: the single mom and
the single women are lawyers--senior associates but not partners. The single
mom is divorced. In the family of six, the dad is an MD at a bank, but in one
of the less cash-cow divisions. The wife is a college educated stay at home
mom. The retired couple: the man is a retired NYPD deputy chief, and the woman
is a retired teacher. The single woman lives in Manhattan, the single mom
lives in a gentrified part of Brooklyn, the retired couple has a nice place in
one of the gentrified parts of Harlem, and the family of four lives in
Greenwich and the dad commutes down every morning.

~~~
Zimahl
Hah, I felt exactly the same way. How ever will the parents with 4 kids making
$650k per year ever be able to survive without that $21k taken in taxes? Will
they not be able to remodel that master bath at their 2nd beach home in
Nantucket for another month? Will they have to slum it in the penthouse of the
4-star hotel in Cancun for Thanksgiving this year?

~~~
dguaraglia
God forbid, the mom might actually have to skip _one_ luxury D&G bag this
year! OH THE HUMANITY!

But seriously, though, $260k single mom? What alternate universe do the
editors live in?

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freehunter
I don't like that the headline has changed. Sure, it may have been
editorialized, but if the editorialized headline was inappropriate, the whole
submission should have been removed. Without the original headline, this post
makes no sense.

If you're confused, the original headline was along the lines of "WSJ - Out of
Touch?". The implication was that with the WSJ saying their idea of a retired
person makes $180,000, their single parent of two makes $260,000, etc, the WSJ
is out of touch with the common person's actual salary, especially during a
recession.

~~~
tthomas48
Especially during a recession? 95% of Americans are never going to make that
money ever. The state of the economy is irrelevant.

~~~
freehunter
Well especially during a recession there are some Americans who _could_ be
making this much, or even _used to_ make this much, but are un- or under-
employed. Some may have retired with that much, but the falling stock market
decimated their retirement.

It wasn't meant to read much into >_>

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grecy
Look at those poor, sad retirees struggling to make ends meet on only
$180,000/yr, with no change to their taxes.

Four children on $650,000, what a horrible life those kids are going to have -
those parents look so stressed and tired.

That single person on $230,000 looks pissed off they'll have to contribute a
whole $2,900 extra. How horrible for her.

~~~
caseysoftware
I'm nowhere near the $230k mark but - based on my first paycheck so far - the
increase will be well more than a mortgage payment for me.

~~~
r00fus
Based on your comment, I can only surmise that your "nowhere near $230k"
remark means you are really well past that mark in income, or your mortgage
payment is indeed quite low.

~~~
caseysoftware
Well below that.. and my mortgage payment is reasonable for the area (Austin,
TX) but ridiculously low compared to SF, DC, etc.

I don't think it's the raw dollars that matter but what the alternative for
those dollars are (aka opportunity cost).

~~~
muzz
If you were affected by the _highest possible_ increase in payroll tax ie 2%
of the first 113k of payroll income, that would be $2260 per year, or $188.33
per month.

You must have a very low mortgage payment.

~~~
vubuntu
He meant 'a mortgage payment' .. meaning one month's mortgage payment. If not,
then yes $188.33 is highly unlikely to be a monthly mortgage payment even for
the affordable Austin, TX area.

~~~
caseysoftware
$X * 2 paychecks/month * 12 months > mortgage payment

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zalzane
this has to be the stupidest graphic i have ever seen

not only does it assign unrealistic income values, it uses different income
brackets AND different deduction possibilities for each scenario. I walk away
from this graph with absolutely no knowledge.

~~~
grecy
> I walk away from this graph with absolutely no knowledge.

This graph is showing there are people out there earning a lot more than you
and I, so we need to put our noses to the grindstone, stat!

No more talking about extended vacations, citizen.

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frendiversity
Most single moms I know make at LEAST 7 figures, come on. What do you think
these poor people are, some kind of slave class?

~~~
Scorponok
Can you imagine trying to raise 2 children on less than $260k? Thanks Obama :(

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ck2
People making $260k a year are making $5,000 per _week_

Somehow I am just not worried about them.

There are tens of millions living on one tenth of that in this country and
even millions living on one 1/20th

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JohnGB
That is one most biased examples of reporting I have seen. Blatantly trying to
manipulate peoples perceptions by leaving out the cases that will apply to the
vast majority of people.

I'm really disappointed that the WSJ would lower themselves to that.

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usaphp
Why does that married couple with 4 kids look so sad while making 650K/year!

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omellet
Only if you think they're trying to keep in touch with the average person.

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dmm
The median household income in the US is something like $45K/year. The people
in these examples are paying more than that in taxes every year, except for
the retired couple struggling along on $180K.

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tortilla
When did the Onion buy the WSJ?

~~~
wutbrodo
You're almost right... NewsCorp (i.e. Rupert Murdoch) bought them in 2007.

------
DavidBradbury
I like how the 'poorest' person in the infographic makes $25k per year in
investment income. Assuming an average rate of 8% in returns from an low-risk
and diversified portfolio, that person has roughly $312,000 in investments.
Man they have it hard.

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aresant
There is no incentive to pay higher taxes as an individual.

Country prosperity and supporting social services are nice concepts but ask
any CPA how the average high earner feels about being "business partners" with
the govt.

So an honest suggestion - what if there were some small incentives created in
govt controlled systems for high earners?

Pay the highest tax rate? Free carpool lane access for the next year.

Nothing insane, but some direct positive benefit in a transaction that
overwhelmingly feels negative.

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hudibras
And don't forget to multiply each of the "investment income" numbers by 25 for
a rough calculation of their wealth, assuming a 4% return on investment. For
example, that family of six with $180,000 of passive investment income has net
worth of $4.5 million. They could move almost everywhere in the U.S. except
Manhattan and San Francisco and never work another day in their lives.

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tzs
Wow. I knew I was below the Wall Street Journal's target audience, but I
didn't realize how far below, assuming those four examples are meant to by
typical WJS readers.

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towski
How can you be mad. They are showing you the numbers right there on the page.
It's not like they're lying. How can they be out of touch if they know the
numbers?

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ComputerGuru
I'm a little surprised at the comments here on HN. I expected a much less
sarcastic and "chip on the shoulder" attitude.

No one is saying that rich people can't _afford_ to pay more taxes. It's not a
question of they're going to starve and be out on the streets. The real issue
is, approaching 50% taxes (EDIT: state + federal + medicare/medicaid + social
security) is in conflict with the American concept of capitalism. The fact of
the matter is, there is nothing proportionate about how much you benefit to
how much you pay. The more you make, the more you pay to Uncle Sam both as a
proportion of your income and as an actual number.

It is not a question of how much can you "afford to give" while remaining well
off - I think it's a much more core issue at hand: is someone who makes (to
bring this closer to home) $250k as a single individual, perhaps doing
freelance software development and consulting, culpable to the tune of $80k
out of their salary to help everyone else out?

Yes, it's a moral question. It's a philosophical question. And it's also a
legal question: even if they _are_ morally obligated - is it the government's
job to enforce that?

Many people I know in that bracket actually give that much or more in very
directed donations to non-profit entities (meaning they're no longer in that
bracket thanks to tax deductions) because they feel they a) distrust the
government to wisely spend their money to solve the problems, b) they should
have a say in where their money goes, and c) it is not the government's job to
take and redistribute wealth.

As for those that _don't_ make such donations - can you absolutely say they
must?

Also remember, these tax hikes are really not targeted at the so-called
"filthy rich" that have been the focus of all the ire and angst in recent
years by groups such as "Occupy Wall Street" - they just affect the upper
middle class. Capital gains taxes are ridiculously lower than income taxes.
Your wall street bankers and trust fund babies don't have "income" in the
traditional sense. You're not taking this money from people that have invested
money and are making more money explicitly not doing anything, these taxes are
on the upper class of _working_ citizens.

The biggest targets are small business owners, startups, lawyers, doctors,
engineers, and others of their kind. Can you say for an absolute fact that
they _owe_ ~40% of their annual income to the government? I can tell you for a
fact that the difference between a freelancer in high demand earning
$250k/year vs $100k/year is a matter of the hours you work. If you kill
yourself to work around the clock to make more money.... you are rewarded with
higher taxes. It's not a different _class_ of people that are being taxed
higher - it's just people that have worked harder for longer and are, as a
result, more well off. This is literally the anti-thesis of core American
values: work harder and be, quite frankly, punished for it.

(I'm not saying everyone can automatically make $250k/year by working harder
and that if you don't make that much then you are lazy - I'm saying the
difference between $50k/year and $350k/year is a matter is a matter of
quantity, not type; whereas the difference between $250k/year and $200MM/year
is a different beast.)

At the end of the day, people need to decide if you are paying for services
provided by the government or if we are asking the upper middle class to
subsidize the rest of the country. There's nothing inherently better or worse
about one or the other - it's a matter of philosophy. At the end of the day,
are our core principles capitalistic or socialistic? There's something to be
said for both, and I'm not saying it's wrong to have socialistic taxes such as
those that were just recently repealed in France - but if that's the case, we
need to own up and admit that is what we want.

It is an exercise in futility to ask to levy taxes on the middle class and
above to subsidize the cost of a welfare nation _while pretending that is not
the case_. If that's what you want to do, fine. Nothing in the constitution
(despite what your favorite talk show might say) says a thing (explicitly)
about capitalism vs socialism one way or the other. It's a democracy and we're
free to choose our own path. But let's not do one thing while pretending to be
another.

~~~
rayiner
> The fact of the matter is, there is nothing proportionate about how much you
> benefit to how much you pay.

I strongly disagree. I think how much money you make is a very good measure of
how much you benefit from the existence of government and civilized society.

Take the family of four. The father sends his kids to public school in
Connecticut. But he works at an investment bank. He draws his salary from the
economic activities of companies he provides M&A advice to. Those companies
benefit from having a work force educated at the public expense. Does the
father just benefit from the education his own kids receive, or does he
benefit from the educations of the workers at each of his clients?

> The biggest targets are small business owners, startups, lawyers, doctors,
> engineers, and others of their kind. Can you say for an absolute fact that
> they owe ~40% of their annual income to the government? I can tell you for a
> fact that the difference between a freelancer in high demand earning
> $250k/year vs $100k/year is a matter of the hours you work. If you kill
> yourself to work around the clock to make more money.... you are rewarded
> with higher taxes.

No, you are rewarded with more money. If I work more and make $250k instead of
$100k, I still have $80-90k extra in my pocket. As someone taxed over 40%, I
don't think "man, I'm sick of carrying the weight for all these other people."
I think: "all these other people ultimately generate the wealth that allows me
to live the way I do." There is a point at which I'd be upset and contemplate
moving, but we're not near that point.

The fact is that anywhere else I'd want to live has higher taxes. That's the
relevant criterion at the end of the day. My dad, an extremely ambitious man,
left Bangladesh (taxes around 8% of GDP) for the U.S. (taxes around 26% of
GDP) completely unconcerned about the increased taxes. Do I ever think: "man,
it'd be great to go back to Bangladesh and pay low taxes!" Of course not. When
I tell my wife "hey honey we should move there" it's never to a low tax place
like Botswana. It's France, Germany, Canada, etc. Hell, I could save a lot of
money and move to Texas but I'm not willing to do that either. Taxes pay for a
pleasant civilized society.

Indeed, it's the doctors, lawyers, engineers, etc, who benefit from that the
most. We don't have "fuck you" money. We can't go to a low-tax jurisdiction in
the middle east and set up a luxurious bubble for ourselves amid the squalor.
We live in cities, use public transit, and have to interact with everyone
else. We get to live very well in pleasant surroundings as a result of these
taxes.

~~~
ComputerGuru
> I think how much money you make is a very good measure of how much you
> benefit from the existence of government and civilized society.

Please explain how a web designer making $250k a year freelancing out of an
apartment in NYC is "benefiting" from the government more than a $30k/year
individual on welfare.

~~~
rayiner
How much do web designers make in Somalia? How much do construction workers
make in Somalia? Compute the incremental benefit for each of those people in
moving from Somalia to NYC and you have your answer.

~~~
ComputerGuru
Seriously? Talk about a strawman. No one is comparing how much taxes are in
Somalia to NYC. Tell me how much more a web designer in NYC benefits from the
government than another random person _in NYC_ taking welfare.

~~~
rayiner
It's not a straw man at all.

You asked: "Please explain how a web designer making $250k a year freelancing
out of an apartment in NYC is "benefiting" from the government more than a
$30k/year individual on welfare."

How do you measure how much someone benefits from the government? Your comment
suggests you're looking only at the value of services directly received, but
that's not the proper way of computing the total benefit. You have to do a
marginal analysis, looking at the incremental benefit as you go from "no
government" to "government."

The economic insight here is that your benefit from the existence of
government is not a fixed amount valued by the services you utilize directly.
Rather, it's a percentage of the incremental gain in wealth that is enabled by
the existence of government. And because societies without government
basically cannot create more than subsistence-level wealth, that increment is
a big number.

~~~
yummyfajitas
_You have to do a marginal analysis, looking at the incremental benefit as you
go from "no government" to "government."_

That's not a marginal analysis. A marginal analysis would be going from
"slightly lower taxes, slightly less government" to "slightly higher taxes,
slightly more government".

You seem to want to debate (all by yourself) primitive tribal society vs
civilization.

~~~
rayiner
The question was: "how does someone making $250k benefit more from government
than someone making $30k living on welfare?" My point is that how you
calculate how much you benefit from "government" (not bigger or smaller
government, just government in general) is not just a function of direct
services received, but the incremental gain in wealth going from no government
to the government you have. Ergo, the fact that the guy making $250k in NYC
would lose a lot more than the guy making $30k if there was no "government" he
benefits more from the existence of "government."

This is not an argument about the desirability or optimality of bigger or
smaller government or higher or lower taxes. That should be an empirical
fight.

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leothekim
Just what about those income levels is representative of the rest of the
country? It is not telling me anything.

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patmcguire
Apparently they all found out the one weird trick for making money online.

