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Readers Speak: Four Ways to Tax the Rich

‘Dilbert’ creator Scott Adams, in his WSJ essay last weekend, shared some of his ideas about ways the government can squeeze more money from the rich.


They were, in short, terrible. In fact, that was the point. The “bad version,” he explains, is a television-writers’ technique to stimulate imaginations to engineer better solutions. And if the U.S. is wanting for anything in this moment of choking deficits, a deus ex machina for our budgetary woes certainly fits the bill.

The problem is that the current political structure–think short campaign cycles and 24/7 news– doesn’t allow for much room to brainstorm bad ideas, and thus, come up with better ones. So Adams turned the task over to his readers, in hopes that some of his “bad ideas” would inspire better ones.

Readers took his bait.  The Tax Blog reviewed some of the hundreds of ideas and comments Adams inspired, and the subsequent live chat he fielded. We picked a few of the more popular and thought-provoking (if not always feasible) approaches readers thought Uncle Sam could take to make the rich less tax-averse.

Knowing the destination of your dollars. In his live chat, Adams noted that many of his readers “liked the idea of linking payment with some clear and observed use.” Adams’s own “bad idea” involved redesigning the tax code to funnel taxes on the rich to social services like health care and social security. The structure would incentivize the rich to reduce the need for those services, or make them more efficient and cost-effective. Readers offered up several derivatives of his idea, from paying for a year’s worth of a specific family’s health care (with feedback) to letting top earners pick the federal-program recipient of their tax dollars.

Taxing Democrats and Republicans at different rates. Call it “getting what you pay for.” If you want to enjoy the benefit of government services, or believe your fellow Americans should, pay the taxes to fund them. If not, don’t—and you’ll be roadblocked from access to certain government services.  Outrageous? Sure. Creative? Definitely.

Taxing “vices.” Tax fast food to pay for the medical costs of obesity. Tax alcohol to pay for liver treatments. This reader’s idea wasn’t too far flung from a proposal already gaining traction in California. The California Cancer Research Act, now on the state’s 2012 ballot, proposes increasing tobacco taxes by $1 per pack, and using the revenue to fund cancer research and tobacco prevention and enforcement programs.

Donations. Some readers suggested donating time on the job–say, two weeks’ work and the wages you’d get–to the government. The unemployed would volunteer two weeks’ work (and the subsequent salary) in green industries. Everyone would be required to donate the same amount of time. After all, an hour is an hour, no matter how fat your wallet is. The exercise would be one of shared pain, that is, a burden we despise less if everyone bears it equally, says Adams.

Other ideas: a flat tax, a consumption tax, paying for naming rights to monuments and structures, taxing celebrities and professional athletes at a special (higher) rate, and the list goes on. WSJ is asking readers to vote on its top six picks.

Readers, what “bad” ideas can you add to the dialogue?


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    • MI It depends on what you mean by ecniomoc development’. Taxation regimes have existed for a very long time, with most societies in history that have had any form of Government also developing a tax and tribute structure. These tax regimes have always stimulated some form of accountability. The most obvious examples of this accountability generating Governmental change would be the French and American revolutions, both of which took some form of No Taxation Without Representation’ as a central element of their ethos. Both were developed relative to other states at the time, but obviously under-developed compared to most states now.England, too, had a working system of tribute and taxation prior to the Industrial Revolution, though the fact of ecniomoc development necessitates changes to how tax is structured and collected by changing the economy and participation therein.

    • First a practical reosan: They have the money.Yes they do. And, for the overwhelmingly vast majority of them, they got that money legally by themselves – no lotteries, no huge inheritance, no gov’t giveaway . . .Second, a fairness reosan: They get vastly more benefit from the government than the poor. Property in the modern sense is a purely governmental creation. Bill Gates, for example, is immensely wealthy only because we have a system of police and courts that protect his exclusive right to sell these little plastic discs that cost 20 cents to make for hundreds or thousands of dollars apiece. In primitive societies, a man’s only property is his wife and what he can carry with him, and those can (and regularly are) stolen by anybody stronger or better at ambush. A more detailed version of this argument and the libertarialn fallacy in general will be discussed in a forthcoming post on my blog (button on my name at top).You’re kidding right? With all the benefits given to those who pay no taxes whatsoever? Is their life as opulent as Gates’? No. But to say that he “is the recipient of more benefits from the gov’t” is contrafactual.He is wealthy because 1) he had the business sense to have a product millions of people want and 2) because society as a whole has deemed it right that he be allowed such protection as you describe.You are partially correct: without such protection, a person may own only that which s/he personally can protect. Thousands of years ago people figured out that this was a bad arrangement and produced laws to prevent theft, coercion, etc.Without such protection, even for such evil monsters [/sarcasm] as Gates, you would be asking that the entire concept of private property be abolished. SocialistComrade, is that where you are going with this?J at TAotB

    • , I only rent the place so renovating is out of the qusoiten.Back to the topic of shoes, my friends kept telling me that I needed to pay more for quality if I expected them to last. Bought a cheap pair last year and they’re still in good shape. If I went for a major brand, I’d be looking for it to last five years at this rate. My current shoes look like they’ll last another year though, whereas it’s hard to imagine my friends having ten year old shoes.Then there’s work boots, I just bought a new pair of those. My supervisor at work made an interesting observation, everyone at the plant replaces theirs on a roughly yearly basis. For one reason or another they stop meeting safety requirements after about a year at that place. He decided to just buy a cheap pair after that.

    • First, lets encourage fuel efficiency and reduce our dependence on foreign oil by raising taxes on petroleum based transportation fuels to at least $5 per gallon. Second, lets tax unearned income at the same marginal rates as earned income; this might permit reform and reduction of corporate income taxes. Third, lets extend medicare to all (substituting Medicare for Medicaid) but pay for it with a national system of value added taxes, removing the medicare portion of payroll taxes, and freeing the states of their Medicaid burden. Fourth, lets end the tax free status of municipal bonds for newly issued debt, requiring the states and cities to have the same cost of capital as the private sector. Fifth, lets encourage seniors to work past full retirement age for social security by relieving them of payroll (but not income) taxes at that age. Finally, lets have a 50% marginal rate on income above one million dollars, but tax gifts and inheritances as ordinary income instead of the current system of gift and estate taxes.

    • 1. There is probably no household in this country that pays no tax. They may pay no Federal income tax, but that is less than half the total taxes collected. If you have a car, you pay about 19 cents per gallon in gasoline tax (federal) plus up to 50 cents/gallon more in state/local taxes. If you have any job, you pay Soc Sec and Medicare tax (about 8%; lower this year and next). If you smoke cigarettes, taxes in NYS where I live are close to $5 per pack. If you own a home, you pay property taxes; if you rent, you pay your landlord’s property taxes. Most states have sales taxes; it’s close to 9% in NYS. And I’m just starting… And you know what? despite all the different names for all the different taxes, they pretty much all go into one giant bucket (the Feds give block grants to the states, who give block grants to cities/towns/counties, where people pay money to the Feds).

      2. There is a limit to how much tax you can collect from the richest folks. It is around 25% of their income. Go much above that, and they change their behaviors. Maybe they don’t work, or maybe they move their business out of the country, or maybe they just move their money out of the country, or maybe they hire a bunch of high-priced lawyers to “restructure” their wealth and income. Just look at history; the evidence is clear.

      3. The only way to cover the deficit with taxes is to raise everyone’s taxes by 30-40%. Total govt spending (fed + state + local) in 2010 was about 45% of GDP. Total taxes collected was 32-34%. Do the math. And since everyone is paying taxes, and there is a cap on how much you can tax the rich… Well, then everybody’s taxes will have to go up 30-40%. Or, as someone above already commented — It’s the SPENDING, stupid!

About The Tax Blog

  • The Tax Blog brings together a team of award-winning tax journalists from the Dow Jones network and around the web to examine the tax issues, changes and legislation that affect families, investors and small business owners. Our contributors include Tax Report columnist Laura Saunders (WSJ), Tax Guy columnist Bill Bischoff and senior reporter Jilian Mincer (SmartMoney.com), retirement-focused reporter Anne Tergesen (WSJ), wealth management writer Arden Dale (Dow Jones Newswires), TaxWatch columnist Eva Rosenberg and personal finance reporter Andrea Coombes (MarketWatch), and reporter Alyssa Abkowitz (SmartMoney). They’ll provide the latest news and insight, mine the tax code for tips and loopholes, and answer your questions about tricky tax situations. Contact the The Tax Blog with ideas, suggestions or tax questions at thetaxblog@dowjones.com.