OMG! What if the wealthy have to pay more . . .

Oh, the horror!
Apparently, something akin to panic has set in among the richest Americans, who are contemplating the possibility (although it seems increasingly remote) that they may be asked to make a small financial sacrifice to restore fiscal health to the nation that has given them so much. That’s right: Many among the wealthy are anxiously eyeing news from Washington about a possible tax increase.
That proposal hasn’t been debated anywhere with more fear than on Wall Street, home to some of the nation’s wealthiest and greediest capitalists. From the NYT:

Worried that lawmakers will allow taxes to rise for the wealthiest Americans beginning next year, financial firms are discussing whether to move up their bonus payouts from next year to this month.

At stake is a portion of the hefty annual payouts that are a familiar part of the compensation culture on Wall Street, as well as a juicy target of popular anger. If Congress does not extend the Bush-era tax cuts for the highest income levels, a typical worker who earns a $1 million bonus would pay $40,000 to $50,000 more in taxes next year than this year, depending on base salary.

Goldman Sachs is one of the companies discussing how to time bonus season, according to three people who have been briefed on the discussions. Pay consultants who work with major Wall Street companies say that just about every other large bank has also considered such a move in recent weeks.

With tax politics in Washington unpredictable, bank executives have spent months sketching out several options for their bonus plans, including the possibility of an earlier payout. Lawmakers have been trading accusations across a partisan divide, but after this weekend, it appears likely that a compromise will extend the tax cuts for all income levels.

Even so, the banks’ discussions about bonus timing underscore how focused the industry is on protecting every dollar of pay.

That’s rich. These are folks who manufacture nothing and whose collective scheming brought the nation — indeed, the world — to the brink of financial collapse. Yet, they have absolutely no sense of responsibility to the overall good.

And just how bad would it be if tax breaks for the filthy rich were allowed to expire? They’d still be paying less in taxes than they did under the Clinton administration, when the economy was healthy.

My, my, my. It helps you understand why the term “robber barons” had such meaning during the 19th century.

421 comments Add your comment

Mr Awesome

December 6th, 2010
10:27 am

Way to push class warfare Cynthia, classy as always. 40 or 50K is a pretty big sacrifice.

Mr Awesome

December 6th, 2010
10:28 am

When does one go from being just rich “filthy” rich?

Hostage

December 6th, 2010
10:31 am

I see that the only way to extend UI benefits is to give the tax break.

When the unemployed spend that money on necessities then the right can say ‘SEE THE TAX BREAK SPURRED THE ECONOMY’

ByteMe

December 6th, 2010
10:33 am

The difference is not $40,000 to $50,000. It’s exactly $30,000 on $1 million. In other words, for every $1000 they make above $250,000 they’d have to pay an additional $30 in taxes. Oh, the humanity! They might as well jump out of the window now.

B Cosby

December 6th, 2010
10:33 am

Why should the rich pay more than their fair share? The percentage of income taxes paid should be the same for all. “robber barons” In modern US parlance, the term is used to describe unscrupulous industrialists, i.e. Bill Gates, giving $60 billion to charity, Warren Buffett gives 85% of $44 billion to charity. “robber barons”!Did Oprah offer up anything of this magnitude.

Fletch

December 6th, 2010
10:35 am

But Cynthia, if I make $1,000,000 a year, and my taxes go up, I might have to pay $200,000 in taxes. That would only leave me $800,000 a year or $66,666.00 a month to live on. How can any reasonable person expect to survive on that? In addition, if my rate goes up from what I’ve been paying for the last 10 years, how will I be able to suddenly start hiring and decrease the unemployment rate? I pray that the GOP gets it’s way, because it would be too damaging to the economy if I were to suddenly forced to start paying taxes at the rate I used to pay before the tax breaks breaks were put in place.

Kamchak

December 6th, 2010
10:36 am

These are folks who manufacture nothing and whose collective scheming brought the nation — indeed, the world — to the brink of financial collapse. Yet, they have absolutely no sense of responsibility to the overall good.

But…but…but…Econ 101 Phlogiston Economics proves that if the rich shower us with their largess trickle on us, all boats will rise.

Georgian

December 6th, 2010
10:38 am

What Cynthia is not reporting is those SMALL business owners that will be hit hard by this move. Typical to make it seem it only hits the upper portion.

SpaceyG

December 6th, 2010
10:39 am

I sure hope they’ve settled this filthy-rich tax thing by Christmas. As if holidays with elderly cranky parsimonious white southerners weren’t insufferable enough.

ByteMe

December 6th, 2010
10:40 am

@Georgian: define “SMALL business owners”. Do you mean the Koch brothers? Define “hit hard”? Is $30 less of $1000 really being “hit hard”?

Fletch

December 6th, 2010
10:41 am

Georgian – I am a small business owner ( roughly 200 employees). based on my cost analysis for 2011, even with a tax increase of up to 35%, I’m not hurting. However, unless there is a demand for my product, hiring will remain the same. So if you want to let me keep my tax break, that’s awesome. However, please don’t expect that it will make a dent in the unemployment rate anytime soon.

MarkV

December 6th, 2010
10:43 am

The attitude of the rich – some of them, bacause not all of them want lower taxes – is selfish, but at least understandable. The behavior of Republicans in Congress with regard to the tax matters (as well as many other matters), on the other hand, is cynical, and hypocritical.

Bubba Bob

December 6th, 2010
10:45 am

I’m ok with the wealthy paying more. Why aren’t we also talking about massive spending cuts? We can’t expect people to pay more without showing we’ll be responsible with the money.

Georgian

December 6th, 2010
10:46 am

Fletch,

How much income does your “small” business generate?

ByteMe

December 6th, 2010
10:47 am

@Bubba: where would you start that has a political chance of passing Congress?

ctucker

December 6th, 2010
10:48 am

Georgian@10:38, I’m with those who are calling for definitions. Are you including among those “small” businesses, for example, law firms in which the partners average gross personal pay of upwards of $500,000 a year? I know several of those partners, and they can well stand to pay more

Jack

December 6th, 2010
10:49 am

This piece has absolutely nothing to do with taxes. It has everything to do with trying to convince certain voters that they are put upon by successful people and that producers are evil and should be punished. It’s a liberal’s feeble attempt to promote the Marxist agenda.

granny godzilla

December 6th, 2010
10:49 am

Class warfare?

Yep, the 5% have declared it upon the 95%.

And while that 5% has got most of the $$$$$ it appears they actually have very little class.

Georgian

December 6th, 2010
10:49 am

ByteMe,

Don’t be ludacris….

ctucker

December 6th, 2010
10:49 am

Fletch@10:35, Amen.

ctucker

December 6th, 2010
10:49 am

B Cosby@10:33, Please define “fair share”

granny godzilla

December 6th, 2010
10:50 am

Groucho Marxist!

He never met a man he didn’t like, but in your case he’d make an exception!

Just so much duck soup.

ctucker

December 6th, 2010
10:50 am

BTW, B Cosby@10:33, Warren Buffett and Bill Gates’ dad think the rich should be paying more in taxes. So I certainly don’t include them among the “robber barons”

ByteMe

December 6th, 2010
10:51 am

@Georgian… I’m not being a rapper… or ludicrous in my questions. I’m calling out your broad statements for what they are: talking points with no clear basis in reality. Step up to the plate and define what you mean.

Fletch

December 6th, 2010
10:52 am

Georgian,

Let’s just say that it’s enough to put me in the “increase” category. Having said that, please don’t get me wrong, I’m all for low taxes. However, there is a difference between someone wanting low taxes, and the myth that is floating around out there that somehow no one will hire anyone if their taxes revert back to 2000 levels. i have a hard time believing that hiring has sluggish for the last 2 years simply because the business leaders just weren’t sure what the tax burden might be for 2011. As I stated earlier, cost analysis as well as P and L forecasts are a part of any business plan. I can adjust the numbers either positive or negative to see where my margins fall. If demand picks up, I hire more people, if it falls, I re-crunch the numbers and make the appropriate adjustments. Rarely do I sit on my hands waiting for the uncertainty to go away.

Georgian

December 6th, 2010
10:53 am

Tucker,

Standing to pay more and having to pay it are two totally different things. You’re basically saying, okay you made way too much money this year. Its not fair to that dead beat sitting on their tush at home with 6 kids and 2 on the way. You are going to have to pay more taxes so we can give some assistance to those good folks at the bottom of the chain. You don’t deserve to spend your own money on yourself, your family, safeguard your retirement, or save for the future. Give your money freely to those who don’t do anything to earn it. After all, we’re the federal government and we know better than you what to do with your family, your money, your career, your business, and your life.

DC

December 6th, 2010
10:54 am

Punish the rich!! How dare they accumulate more money by starting business, employing people and creating jobs. Don’t they understand that we MUST punish that type of behavior?

Mr Right

December 6th, 2010
10:55 am

Fletch

December 6th, 2010
10:41 am

So if you want to gave more to the Gov to waste go ahead and give it if you want to!

Georgian

December 6th, 2010
10:56 am

Fletch,

Would you rather have your money to expand and grow as you see fit, or allow the feds to raise taxes and spend it as THEY see fit?

Bubba Bob

December 6th, 2010
10:57 am

Byte,

I have no idea what would pass. That’s the problem. Look at the compromise that is brewing:

GOP – let us keep taxes down on the wealthy (reducing revenue) and we’ll let you spend more.
Dems – let us spend more money (more debt) and we’ll let you keep taxes down

The result = less revenue and more debt. Both sides are nuts.

Ragnar Danneskjöld

December 6th, 2010
10:57 am

OMG! What if the government had to make do with less. One wonders why people love Big Brother so much, when all it does effectively is kill people, deprive people of freedom, and waste money.

Jimmy62

December 6th, 2010
10:57 am

Last I checked, half the people that ran Goldman Sachs are in the Obama administration, and the people that urged home loans for everyone and said we could not do anything to rein ion Fannie Mae and Freddie Mac are Democrats.

The rich didn’t cause this, politicians being in bed with corporations caused this.

Bryan G.

December 6th, 2010
10:58 am

I’d rather all Americans keep their money as opposed to have to give more to the government.

As I understand it, raising taxes on the “rich” will lead to $700B in increased revenue over 10 years. By my calculation, that is 5% of the National debt and only about 7% of our annual deficit.

The solution to our problems lies on the “outgo” side of the balance sheet and not in the “income” side.

granny godzilla

December 6th, 2010
10:58 am

From TPM

“The Republican National Committee will enter the 2012 presidential election “between $20 million and $25 million in debt” as a result of poor fundraising and financial mismanagement. “It’s the biggest debt the national committee ever had going into a presidential election cycle,” said former RNC General Counsel David Norcross”

And you expect us to allow these folks to lead the way on the economy?

D’UH

ByteMe

December 6th, 2010
10:58 am

We have hedge fund managers taking their millions in pay as “capital gains” and being taxed at 15%. We have super-rich people paying a smaller percentage of their income than that. We have no estate taxes (this year) and a contingent calling them “death taxes” in order to keep all of it “in the family”. We have the super-rich pouring their money into one Congressional Party or the other in order to affect tax law so that they can keep even more of their money.

We are seeing the re-emergence of an all-powerful oligarchy. This country went through the same problem over 100 years ago and it took some serious populist actions to get it under control. Some would call it “liberal” to attack these people, but it’s really just populist.

So why is it that support for lower tax rates for people making more than $1,000,000 per year is highest among people who will NEVER IN THEIR LIFE make that much in a year short of winning the lottery?

Tracy

December 6th, 2010
10:59 am

The kicker to this entire issue is the fact that the two richest men in this country (Gates and Buffett) both support raising taxes on the wealthy. Then again, what would Buffett know about money ? Come on, a guy born middle class who self-made his way up to 2nd richest man. I’m sure he knows nothing about the economy **sarcasm alert**

quod erat demonstrandum

December 6th, 2010
11:00 am

CT, they already pay more than their fair share – geez, where is the left’s fairness doctrine for the successful?

Keep up the good fight!

December 6th, 2010
11:00 am

No BONUS for BILLIONAIRES!

They get the same tax break on the 1st $250,000 that everyone else does. Why must they have more?

Bubba Bob

December 6th, 2010
11:00 am

Granny,

And what do the Dems know about leading us out of this? Spending more is sure to help…..

Bryan G.

December 6th, 2010
11:01 am

If Gates and Buffett want to pay more….they can send treasury a donation.

Bubba Bob

December 6th, 2010
11:01 am

Tracy,

With all due respect to Buffet…he supported the first stimulus package and after it passed called it ‘half Viagra and candy” and said we needed another one.

If he’s so smart why did he support something that was 1/2 Viagra and candy? Because it helped him out.

Fletch

December 6th, 2010
11:01 am

Georgian,

My money already expands and grows due to investing and diversification. We’re talking about a miniscule amount of income being re-allocated for taxes. Unless you are in the 2% club, you’re taxes wouldn’t go up anyway, so you are still free to provide for your family, expand your money, or stuff it all into your mattress. For those in the upper 2% (myself included), they won’t miss it anyway.

Mr Right

December 6th, 2010
11:02 am

The solution to our problems lies on the “outgo” side of the balance sheet and not in the “income” side.

When are you going to run for President, seems you are the only one that has it figured out!

Keep up the good fight!

December 6th, 2010
11:04 am

When they actually cut spending and pay down the debt, THEN we can discuss tax cuts. Until then, the call for tax cuts is just more of the Republican No-Tax and Spend.

granny godzilla

December 6th, 2010
11:05 am

Bubba Bob

They knew enough to – guess what – lead us out of the worst of it.

Keep in mind that the GOP told us late into the process that it was only a “mental recession”….

Mental indeed.

Mr Right

December 6th, 2010
11:06 am

For those in the upper 2% (myself included), they won’t miss it anyway.

Then give it now, why wait ? Come on put your money where your mouth is!!

Bubba Bob

December 6th, 2010
11:06 am

Granny,

So they led us out of the worst of it all by themselves? Not giving Bush credit for getting TARP going? I was against it but he did lead it out. I’m surprised that you forgot that.

quod erat demonstrandum

December 6th, 2010
11:07 am

Class warfare is not something that comes to mind when talking about America. Here we all have the same opportunity to make good or not.

Here if you work hard you can achieve success and grow rich.

For many on the left, they feel that if I get “rich” someone else gets poor. Or for those in mid-town, wealth does not grow or contract, it remains constant and it just gets moved around.

Typical ignorant progressives.

B Cosby

December 6th, 2010
11:08 am

@CT 10:49 “Fair Share” Calculate fair tax proportional to income. CT’s definition: Everybody else but me should pay taxes. I shouldn’t have to because I’ve had such a hard life, or my ancestors did, or I’m a Sagittarius, or a vegan, or simply because I’m so cool.
CT@ 10:50 Your article referenced the filthy rich, it did not single out certain people or groups. “These are folks who manufacture nothing”. There are some good people in the world, believe it or not some are even white. B Cosby says stand on your own two feet and stop looking for someone to blame and trying to figure out, Where’s mine?

ByteMe

December 6th, 2010
11:08 am

@Bubba: my recipe would be the following:

- End both wars and spend less than half the money on increased border (including ports) security.

- Get rid of the social security income cap (solves that problem immediately).

- Increase Medicare payroll percentage by 0.5% (solves that problem for a good 30 years).

- Increase the tax on imported oil by $0.50 and then take away some of the giveaways to the oil companies. Funnel half that money to states for transportation projects ONLY (states are having a bad time, so this helps them as well as decreases unemployment payments and further increases tax revenues by putting more construction people to work).

- Then tackle the issue of doctors getting paid more to run unnecessary tests, just because they have a financial interest in the medical testing company (to cut Medicare costs).

It’s better than the garbage they’re doing now.