37 Responses to “Question for You”

1. Comment by bill

   October 23rd, 2008 at 3:12 pm

   It does not matter the rate, after the current bailout spending bill I am going into the underground economy and the feds will get no more of my hard earned money.

2. Comment by bill

   October 23rd, 2008 at 3:13 pm

   I don’t give up! I simply refuse to give it to the feds to redistribute any longer.

3. Comment by Eric from FL

   October 23rd, 2008 at 3:21 pm

   As soon as I feel like I am paying to watch others not work. It is getting close.

4. Comment by Scott Bourne

   October 23rd, 2008 at 3:23 pm

   I think I am there already

5. Comment by ws1835

   October 23rd, 2008 at 3:30 pm

   What is my ‘break point’? It is the point at which I am no longer working mostly for me, and rather am working mostly for someone else. From my point of view, the fruit of my labor should be mine. Sounds simple, but somehow our elected representatives and their legion of dependents have ignored this concept for years.

   In this case, it would be a 50% net rate on each additional dollar of gain. Admittedly, I would not be likely to go backwards even if (and when) rates are jacked up. However, I am certainly NOT going to put forth any effort to make more if I keep less than half of the increase. That would seem to be the very definition of a “diminishing return”.

6. Comment by ws1835

   October 23rd, 2008 at 3:32 pm

   BTW, I believe Mr. Laffer has a curve that answers the question…….

7. Comment by TimBarton

   October 23rd, 2008 at 3:35 pm

   Considering your list of taxes federal, social security/medicare, state, local and property most Americans are already closer to 50%. Don’t forget to add sales tax too.
   I personally monitor my income and as the higher brackets approach try to make sure that the years income increases above the higher bracket by enough to net me more dollars. If I can’t exceed the bracket by enough I will slow down my work schedule and defer income into the next tax year.

   Back to your question, 50% will make me not work as hard.

8. Comment by Rick

   October 23rd, 2008 at 3:41 pm

   I don’t see a promotion or pay raise headed my way should B.O. get anointed (be lucky to just hold on to my job as it is), so it’s a moot point. I do, however, see my self supplementing my taxable income with cash, “tax free” income.

9. Comment by The J

   October 23rd, 2008 at 3:48 pm

   I dont think there is a give up point, but there is a point when it becomes a focus. I would rather defer income or pay more for a god tax accountant then pay the government. There is a lot you can do regarding legal tax avoidance strategies. at 35%, sure, Ill pay the tax. 45% its getting a little high, time to investigate more aggresive strategies. 50% - game over Ill pay as little as legally possible even if it costs twice as much in accountant cost - at lease he earned the money.

10. Comment by The J

    October 23rd, 2008 at 3:54 pm

    Taxes will increase on people over $250K but revenue collected will stay flat or go down thanks to tax strategies, wont be long until they decide over $150K is rich so they can make up the revenue. Not the first time its happened.

11. Comment by GW

    October 23rd, 2008 at 3:56 pm

    I’ll keep going as long as I can.

    I hide or defer from taxes as much of my income as I legally can now. But if Congress tries to cut into my 401K or pension fund, that may be the last straw.

    The real question is how far can the Government, at all levels, go before they destroy the country.

12. Comment by Doug

    October 23rd, 2008 at 4:11 pm

    Let’s see, if you add up what I already pay:

    5% State Income Tax
    25% (effective net rate) Federal Income Tax
    7.65% Social Security
    2.3% Medicare
    6% (average) sales tax on all dollars spent (less gas tax) or effective rate on capital gains on money I don’t

    That’s 45.95%.

    Now add in:

    2% equivalent rate for property tax
    7.65% money I don’t get because my employer hides paying 1/2 my social security tax

    and we hit 55.6%.

    Add in:

    0.5% effective tax rate on gasoline
    0.5% other taxes (vehicle registration, etc)
    12.5% pass-through of corporate taxes (corporations don’t pay taxes, it’s built into the price of the goods). 12.5% is probably very conservative.

    And we hit 69.10%

    And that doesn’t even include all of the other costs of government regulation that are passed through to me - cell phone taxes, utility taxes, cost of compliance with ADA, OSHA, etc.

    Some things above may be high, some may be low, so let’s round it up to 75% of my money goes to the Government including the compliance costs. Oh, and I don’t want to hear about how I’ll get the Social Security money back. The program will be long bankrupt before I get there, and besides, because I’m responsible and have provided for myself, I’ll be ‘means tested’ out of it.

    75%

    75%!!!!

    Hey Barak - you’re ALREADY spreading my wealth around, get your hands off! I don’t owe anyone anything. Charity at the point of a gun (or an IRS agent) is no different than any other forced labor, and 75% to the government is nothing but servitude and slavery.

    I’ll answer the original question with another one: Who is John Galt?

    We know who Wesley Mooch is: He’s in the office of the Secretary of the Treasury.

13. Comment by s.r.b.

    October 23rd, 2008 at 4:20 pm

    I think alot of folks are already there!

    But I would imagine that would be somewhere around 45% for me. That totally depends on everyone’s personal circumstances. We have three kids so any time that I am away from them “it had better be worth it”! There are some things that money just can’t buy!!

14. Comment by Robert Malec

    October 23rd, 2008 at 4:23 pm

    With socialism on the rise, we ain’t seen nothing yet!

15. Comment by nancy

    October 23rd, 2008 at 4:40 pm

    HEY BRIAN! GOOD QUESTION. I’M A SMALL BUSINESS OWNER, AND I REFUSE TO PAY MORE TAXES IF OBAMA GETS ELECTED. I WILL CLOSE THE DOORS, AS I WON’T BE ABLE TO RUN A BUSINESS, AND PAY THE TAX HE WANTS, PLUS PAY FOR HEALTH INSURANCE FOR MY EMPLOYEES! DON’T PEOPLE UNDERSTAND WHAT THIS MAN IS GONNA DO TO US? 35% IS ENOUGH, INFACT ITS TO MUCH…I WON’T WORK HARDER TO PAY MORE, I WORK 6 DAYS A WEEK AS IT IS. I GUESS OBAMA IS TRYING TO OPRESS US HARD WORKING MEN AND WOMEN. I THOUGHT THIS WAS AMERICA…LAND OF THE FREE..WHERE THE AMERICAN DREAM CAN BE ACCOMPLISHED IF YOU JUST WORK HARD, AND FOLLOW THE RULES….SEEMS LIKE THAT IS GONNA BE SNATCHED FROM OUR GRASP..:( GOD HELP US ALL

16. Comment by Proud to be an American

    October 23rd, 2008 at 5:11 pm

    I hate to say it…the time has come. Other than work where I subcontract I won’t be listed on anyone’s payroll. That don’t mean I won’t be working. I just won’t be listed. There are always ways around any situation. I have stopped spending on anything other than food, gas, utilities and a 4.25 interest rate mortgage that I will NOT pay one penny ahead. I’ll ride that out. Otherwise, I’m making Christmas presents, doing favors instead of buying gifts and going to the “barter” system for things I would normally have splurged on.

    GW 3:56pm had it right…
    The real question is how far can the Government, at all levels, go before they destroy the country?

17. Comment by Robert

    October 23rd, 2008 at 5:15 pm

    Currently, the state and federal government gets in excess of 50% of my earnings (payroll taxes[including what my employer pays "for me" instead of "to me"], state & federal income taxes, sales taxes, fuel taxes, property taxes, capital gains taxes, double taxation on dividends, etc). My only motivation for working is that I know that my taxes pay for entitlements and other government paid expenses my parents and/or children receive now or may receive in the future. If it were not for them, I would live in a Kenmore refrigerator box and “recycle” food from garbage cans like the idiots in Seattle (they do it to save the planet).

    I would say in an ideal situation, where our elected officials abide by the U.S. Constitution, people and markets are free, entitlements do not exist and people accept responsibility for themselves, their families and the communities they live in; then taxes in excess of 15% would be my “end of motivation” crossover point.

18. Comment by Kirk

    October 23rd, 2008 at 5:40 pm

    I’m a professional working 50-60 hours a week now trying to keep our company going. My wife is an RN working 40 per week. At what point do we say enough? If it is just us, I’d say we’re there now. Problem is, we still have three kids to provide for and baby boomer parents too. I never planned on the cost of keeping them afloat.

    Bottom line, what more can I do? I’m killing myself now trying to make it. Any increase at all will be the “point” for us. What will we do? I don’t know what I can do sans leaving the country. I’m tired…

19. Comment by 1776

    October 23rd, 2008 at 5:50 pm

    I like how everyone is focused on the tax burden while the thieves steal the money right in front of our faces and “FORCE” us to pay for their thievery. What difference does it make when they steal public funds for themselves while telling us “it’s in your best interests”.

    The country is on the brink of being ripped apart by the people we elected to “SERVE” us, the current president has setup rules and regulations to disarm and put the country on lockdown “if” civil unrest happens, has given other countries to the right to “police” this country in that event, either of the next to presidents are going to further that agenda either on the fast track or slow track (depending on candidate) and people are worried about how much taxes they are going to be paying??? How about worrying about having a constitution when this mess is all said and done!!! How about having RIGHTS when this is said and done!!!

    The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. -Thomas Jefferson

    It’s amazing how smart our founding fathers were.

20. Comment by HW

    October 23rd, 2008 at 5:58 pm

    In my industry, mortgage banking, we are already getting killed. Even if I did no sub-prime loans. The regulation is costing me 25% of my gross and add the taxes. Its already off the charts. Luckliy I live in Texas (no income tax for persoanl or businesses), or I would already be done. If BO creates what he is advertising on TV about adding by forcing small businesses to pay health insurance to all employees there will go 70 more jobs down the drain, because we will have to close.

    To answer your question: WE ARE ALREADY PAYING TOO MUCH IN TAXES AND REGULATIONS.

    This country is socialist we just don’t know it yet!!! Get ready we are fixing to be the government’s slaves.

21. Comment by Dave

    October 23rd, 2008 at 6:30 pm

    Brian, I own a really nice small business that employs 150 folks. I’ve been providing good paying jobs for over 30 years. There have been plenty of years that I’ve made over $250k. There have been plenty of years that I haven’t even gotten a paycheck.

    We’ve had some cutbacks over the past few months, but we’re still doing ok and making a little money. I seldom ever take a day off, but I did today. I am practicing my income limiting strategy. Since there may be no incentive to make any real money in the future I’ll just shift gears, work less, get rid of a few more bodies and enjoy making less money. I’m not going to take all the risk, work my rump off and give the taxman all the profits. Hmmm, I wonder if there are any other business owners that think like me.

22. Comment by Blake

    October 23rd, 2008 at 8:20 pm

    I have already given up. Enough is enough. The Federal government is going to have to look long and hard for what they want now. They have screwed me beyond my wildest imagination (or nightmare). Americans are fed up. Be they liberal or conservative or somewhere in between: Americans are FED UP!

    I am finished paying this pimp government.

23. Comment by Rod Tataryn

    October 23rd, 2008 at 11:14 pm

    Brian, I’m not convinced there is a specific percentage figure that will suddenly break worker motivation. I believe it is a sliding scale - ie; the more one is taxed the less motivated and vice versa. It will also vary with each individual and the individual’s needs, but make no mistake - all are affected and demotivated alike when more of their hard earned dollars are taken from them.

    The other huge factor in the equation is, “Where is the money going?” In times of national tragedy or war, most American’s are willing to contribute more of their income to collective security. But few are willing to work harder to support freeloaders, illegals, non-contributors, and bailouts. It won’t be long before the productive sector says “Enough!” Look at other nations - Underground economies increase rapidly with irresponsible spending of tax dollars. Our neighbors to the north are running underground between 15 and 20% of GDP. The working American’s sense of fairness is even keener. Redistribution will be met with revolt if history is any measure.

24. Comment by K. Ross

    October 24th, 2008 at 9:01 am

    We had a little thing called the Boston Tea Party a few hundred years ago. Shortly after that we had this thing called a revolution. We won our liberty from an oppressive government. “Taxation without Representation” was the very premise that we declared independence under. I’m not condoning a revolution, but what I am saying is that we are not being represented properly. In Federalist Paper 56 James Madison wrote that “ it seems to give the fullest assurance, that a representative for every thirty thousand inhabitants will render the (House of Representatives) both a safe and competent guardian of the interests which will be confided to it.” Madison hits the nail squarely “safe and competent”. In1929 a bill setting our number of representatives to 435 was passed. The numbers show that the average for each representative is close to 700,000. How much devotion to a group that large can one person give? I think much more attention would be given by them to special interest and other lobbying factions. Those factions surely have fewer representatives to work over. I am tired of a tax system that allows government to use it as a cookie every election cycle. I can only say that in order to force responsibility and good fiscal practice on behalf of our public servants, we should invest our efforts in the Fair Tax.

25. Comment by Nathania Johnson

    October 24th, 2008 at 10:04 am

    For me, it’s the ratio of tax rate to salary. If I’m “only” taxed 30% at $225,000, then there may not be any incentive to be taxed 50% at $250,000.

    But I’m also an optimist, and I would keep pursuing more income, because being taxed 50% of $500,000 would be better than the 30% of $225,000. But that point where the tax rate changed would be an adjustment, for sure.

26. Comment by Jack

    October 24th, 2008 at 10:14 am

    I’m already done, and it looks as if we will get Obama and then we will be “Jimmy Cartered” I remember those years well, and the present state of affairs is making me feel very much the way I did in the late ’70’s-early ’80’s. There are some tough times ahead. With the industry I’m in, it’s not a matter of how much more tax I will tolerate, but whether the doors where I work will be open come the 1st of the year. If such be the case, then increased taxation is no longer a concern.

    Along those lines, I know I can (and am prepared) to survive what I have described above, but I wonder how many 30 somethings will fail outright because they have never experienced any financial situation remotely close to what they are about to be faced with.

27. Comment by s.r.b.

    October 24th, 2008 at 10:25 am

    We all need to take another look at the Fair tax (flat tax)! If we did, this conversation would not even be happening! We all would want to keep working and putting in more hours to get ahead because we would get to keep 100% of what we make and WE would get to decide how to spend it instead of giving it to our wasteful government and letting them make that decision for us. I don’t understand why more Americans don’t get behind this plan and support it.

28. Comment by Steve

    October 24th, 2008 at 10:46 am

    I wish I had the knowledge to figure out what the tax rate would be if the idiots from the local, state and federal governments did not WASTE tax dollars. My guess is that we would actually have a balanced budget and a much lower tax burdeon.

    There would be no desire for a socialist government to redistribute the wealth because without wasteful spending more people would have more money.

29. Comment by David in Sarasota

    October 24th, 2008 at 10:49 am

    I’m already past that point, I am doing everything I can to by pass any tax I don’t care what it is. I’m even talking to my employeer about paying me in cash so I can hide as much as possible.

    I think it is HIGH TIME we went back to the Declaration of Independence and start over with the ORIGINAL CONSTITUTION OF THE UNITED STATES OF AMERICA!!!

    Lock and load…

30. Comment by Grant

    October 24th, 2008 at 11:07 am

    Cash economy! It is a fact that when taxes are raised the citizens come up with creative ways to avoid the tax. I think the Barter System might make a comeback in the near future if this wasteful spending continues.

31. Comment by Al

    October 24th, 2008 at 11:13 am

    I own my own tax consulting firm (ironically), and currently employ four professionals, each with families. I pay my people very well and of course, that trickles down to their families’ quality of life. However, managing the practice takes a lot of my time. So far, it’s worth it because I still am able to retain more than I give to the federal and state government. Under Obama’s plan, that prospect would rapidly reverse course. I would say that, at the point where I give over 50% of my earnings to government, I’d probably just downsize and work on my own. My guys are talented and would find jobs, but probably wouldn’t get paid as well as I’m paying them right now.

32. Comment by Peter

    October 24th, 2008 at 11:15 am

    I’m a business owner as well.

    90% of all businesses fail in the first year, so if your lucky and WORK REAL HARD/TAKE A HECK OF ALOT OF RISK and survive the numbers, then you get to look forward to lawyers trying to take your money (in our lawsuit happy society), higher tax bills, and keeping the returns above the inflation rate.

    We basically take a heck of alot of risk to start up a company, and then those risks just keep coming. Where is the incentive anymore to start a business in the US? No wonder outsourcing jobs to other countries seems very attractive. I just have basically been an idiot with my idiotic mid-west values. I believed in working hard, increasing my value proposition for the clients I serve, improving the smarts and wisdom of myself and my employees, solving real market problems and servicing needs, and hiring American.

    Make my day, increase my taxes even more, and I will be forced to cut back on revenue & employees and spend more time with the family instead of trying to solve problems and service needs in the marketplace. Actually, this seems attractive to me. My family deserves time with their husband/father as oppossed to me working for nothing for the majority of months in the year.

33. Comment by Bill RUTH

    October 24th, 2008 at 11:46 am

    I believe in a FairTax or Flat Tax situation, rich people will still be rich, poor will be poor, and the middle class will still have the American dream. And there will be enough money to run the government. Why tax the American spirit out of the people just because Barney Frank knows he can or Warren Buffett says he can afford it? How about taxation with representation, not the norm taxation without representation (a problem that was supposed to have been corrected via the American Revolution).

34. Comment by Al

    October 24th, 2008 at 12:16 pm

    I think under an Obama presidency, we’re more likely to see “representation without taxation,” since Mickey and Minnie and ACORN and all his friends are given an opportunity to vote, yet pay no tax. Under his plan, 49% of Americans who will pay no tax will be able to receive proceeds (refundable tax credits) from those who do, and will each get a chance to vote 76 times to boot! Great deal until the money runs out.

35. Comment by J Click

    October 24th, 2008 at 1:40 pm

    Personally, I was raised with a strong work ethic and will always work hard……. the point of balance I try to bring to life is quality of life and enjoyment of life and family. If I am busting my hump so the government can take it away and give it to someone “less than motivated” then that is unacceptable. The government has forgotten what “freedom” means because they continually want to enslave people to entitlement programs thereby holding them in bondage to the handout from the government and never letting them experience the joy, independence, and true freedom of knowing they can make it on their own and do not need governement to solve their every problem.

36. Comment by Donna

    October 24th, 2008 at 2:09 pm

    Personally, I have already turned down promotions because all it would do is up my taxes and take more time away from my family. I work to live, not live to work. If Obama raises my top tax rate, I’m thinking of downsizing my inclome in order to be on the receiving end of those handouts…

37. Comment by Mitchell

    October 24th, 2008 at 2:41 pm

    40% is max pain for me.

    I would very much like to see the country get rid of the current tax system and going to a split tax system:

    1. Flat tax rate at 12.5% with the only deduction being charitable contributions

    2. A national sales tax of 2.5%.

    3. A corporate tax rate of 12.5%.

    4. A capital gains tax of 12.5%.

    This puts everything on the same playing field and I would think that it would actually propel the country forward and never look back. This would actually allow people to work as much as it would to play the market, because there would be more take home pay.