G & J, in cahoots?

From: Dave Long (dl@silcom.com)
Date: Tue Mar 20 2001 - 12:09:16 PST


Why do I find it strange when Mr. Bone and Ms. Schuman agree?

> Right now, it's VERY, VERY difficult to make the leap from upper-upper
> middle class and financially independent.
> ... the bottom line is that the system right now makes it very easy for
> those who are at some magic number --- my estimate of that number is
> around low 8 figures --- to accumulate increasing wealth, while those
> just below that magic number are penalized most.

So both of you say that there is a class,
either "working poor", or "upper-upper
middle class" (they both mean about the
same here), that The Man is keeping under
His thumb?

> And yet, for every one of us that's had a liquidity event and managed
> to generate real dinero, there's ten of us we know who are living in
> shared houses where there's six geeks and a T1.

What's wrong with that? If one is in favor
of unbridled competition, one should not be
surprised when winners do better than losers.
Whether one plays roulette or high tech, the
final distribution looks pretty similar.
Wonderful thing about capitalism, that?

Say there were a conspiracy of OSNELUR: why
would those of us who weren't members of it
have any right to complain? We could have
taken risks, made sacrifices, worked harder
at picking OSNELUR parents.

-Dave

> This is all a direct result of progressive income tax, onerous
> short-term capital gains tax, ABSOLUTELY INSANE regulation of securities
> and commodities trading, myriad Byzantine tax laws, and the "infinite
> regress" of taxation that occurs when an asset appreciates, so you sell
> a little to pay taxes, which generates another taxable event, which you
> sell to cover... (recurse infinitely until you're destitute.)

Substantiate this direct result claim?

- progressive income tax: Why would this
  not affect those over the low 8 figure
  amount? (was that wealth or income?)

- onerous short-term capital gains tax:
  How is this onerous? It's no more than
  the income rate, and still progressive.

- insane regulation:
- byzantine tax laws:
  Maybe you have something here. Care to
  elaborate on something better than a
  conspiracy theory basis?

- "infinite regress" of taxation:
  There is no infinite regress. "Tax
  basis" ensures convergence, with no
  need for infinities. (ever try to
  move from point A to point B?)

> the aggregate tax rate across the board once income's into six figures
> is about 2/3, so I'm going to put in *at least* double the effort to
> actually achieve a net gain of about 33%.

Two bits of free advice:
- change states, get off the payroll, form
  a C corp -- it shouldn't be difficult to
  cut 22% or so off that aggregate rate
- follow the invisible hand, and get other
  people to put in the effort which makes
  the income. (capitalism, remember?)

> > regarding percentage of taxes paid (another post i'm too lazy to look for
> > now) is it not true that anything over $800k in income is not taxed?

Not true. However, as Yangkun pointed out
earlier, it's only income, not wealth, with
which the IRS is concerned. For most of us,
d/dt(wealth), income, and tax burden are all
highly correlated, even over single periods,
but they need not be.



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