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At first, I thought nobody would be as stupid as to actually complain about the idea of increased taxes by saying that he, personally, only had $400,000 left over after “feeding his family” and paying his taxes.
And indeed, when I watched the interview with this Tea Party guy John Fleming, I thought for a moment that I was right, that he was actually saying something different. I thought he was saying that he was talking about money he needed to invest in his business and create jobs.
But then… the guy has $400,000 left out of a $6 million business after he has paid all of his business’ operating expenses and his personal and business taxes and met his family’s needs? Really?
This isn’t a Silicon Valley entrepreneur from the late ’90s. He’s not exploring exciting new ways to transform our economy. Nor is he producing high-paying jobs with futures. This guy owns Subway franchises.
So you’re saying, you can’t contribute to paying down the deficit because it might… hamper your ability to open another Subway every year or so? And your failure to do that is going to kill the economy?
I suppose you could argue that he’s right. I could mount such an argument if forced to. But not even I would be persuaded.
Actually, was he even saying that? Since he is deliberately mingling his business revenues with personal income, it’s confusing. But another way to look at it is that he takes home $600,000, which seems to be a whopping 10 percent of his businesses’ total revenues. And then he seems to say that his family’s needs are fully met with one-third of that, and I suppose that’s true. A family could, just maybe, scrape by on 200k a year if they were really careful.
And then he’s got $400,000 left over. He’s making out like this is his businesses’ money rather than his money, but then he is deliberately confusing the two.
It just gets worse and worse…
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Did he steal the money? Did he trick people into buying sandwiches? Do customers have options to eat at other restaurants.
He takes the risk. He hires the people who work in the stores. He deserves to keep every single penny he can keep no matter how jealous you may be of his wealth. And if he wants to buy a stable of tiny giraffes with the money, more power to him.
Why not start with the premise that what a person earns is his versus your notion that the government (community) gets first cut?
There you go with that class warfare again, you job-killer!
He only has $400,000 left?!?!? Wow. I wish I had his problem.
I lived in Louisiana for five years. One thing I learned is that they like their politicians to be brazen: from Huey Long to David Vitter, it’s a long standing tradition.
Brad, you’re engaging in class warfare. Of course he should keep all $400k without paying a nickel of tax on it. Your’s and my grandchildren will be more than happy to pay for all the trillions of dollars the government spends for defense, the space program, roads, airports, SS, medicare and other stuff. Geez and I though you were more sympathetic to the plight of the rich.
Doug, first of all, in no way am I jealous of this guy. I wouldn’t be him for anything.
Second, you’re missing the point. The topic under discussion isn’t about him. He’s a member of Congress. This is about what is wise tax policy for the nation.
Where he went wrong was in allowing his own finances to become the example, because they make a HORRIBLE case for his position.
He should have declined to talk about his personal finances. I would have. In fact, were I a member of Congress, I would have taken umbrage that anyone would suggest, even by implication, that I might make tax policy based on considering my own personal situation.
That’s not to say that it’s necessarily wrong to use yourself as an example, if you are in some way an illustration of the common situation that you are trying to describe. That can even be helpful to the conversation. (Sometimes. That was my conclusion in using my own situation to talk about health care several years back. I was reluctant to do it, but mine was the only situation I knew all the details of, and it illustrated my point. I also thought my willingness to talk about such stuff might make people a little more willing to listen. I was sort of right, and sort of wrong.)
But he just devastated his own argument by letting the conversation become about him.
I’ll take it another step: He could have spoken of some other businessman who has $400,000 left over after all of his own and his business’ needs are met, and asserted, abstractly, the libertarian argument that none of that should be taxed. I wouldn’t have agreed with him, but he would be creditably arguing a philosophical point.
But when it’s HIS money, and it’s not a hypothetical, and HE is one of the people charged, as a member of Congress, with dealing with the nation’s debt problem, he comes across as someone to whom no sensible person should ever listen.
Basically, he just failed an IQ test. Regardless of his political philosophy, this is someone I would never consider hiring to represent me in Congress or anywhere else.
Remember the “too big too fail” excuse for our multi-trillion dollar problem (engineered crisis)?
Just an excuse for globalists to wound the splinter in the eye of world socialism, which remains U.S. capitalism. When Obama goes, resurgence of our economy will be phenomenal.
No one and no thing is too big or important to fail.
If our leaders in Washington had allowed U.S. statutory law to run its course, including big name corporation bankruptcies galore, and not paid foreign banks billions in TARP funds (U.S. taxpayer dollars), we could still call ourselves a nation of laws.
Consider CEOs who were not only saved from lawsuits by shareholders, but Wall Street fat cats who still managed to get million dollar bonuses. Folks, you are missing the real targets of your wrath: the “lawyer-political complex” centered in D.C.
Every last one of our career politicians should be sent home, in my opinion.
Uh, Juan… the “too big to fail” thing is something I associate with Bush, not Obama. In fact, I was just watching video of W. talking about his bailout of the financial sector…
It was on the same site as the above video, several clips down (actually probably a bunch of clips down, because I had gone to lunch, and came back, and video was still on, and Bush was on)…
I guess telling the truth is sin #1 in Congress. You concern yourself too much with the narrative instead of the facts. And, really, you may not recognize that you have an issue with a guy spending $200K to support his family but it’s obvious to me. You think that’s too much, right? Your statement “A family could, just maybe, scrape by on 200k a year if they were really careful.” comes off exactly as you intended – to make him look like some greedy s.o.b.
I know we don’t have to worry about Lindsey Graham telling us how he became a multi-millionaire as Senator.
@Brad
Where did “Juan” mention Obama? He’s 100% correct. We aren’t a nation of laws, we are a nation of lawyers.
When Obama goes, resurgence of our economy will be phenomenal.
-Juan
A return to the good ole days of 2008 with the collapsing financial sector, soaring gas prices and a nation on the brink of panic. Yes, I long for the days of GOP rule.
If nothing else, what people will come away from Brad’s blog with is this… if a person pays their bills and has an extra $50 in their checkbook, they are being paid $50 too much.
I’ve never see so many people expecting others to live paycheck-to-paycheck as I do here. To be successful here is viewed as doing something immoral and those who do need to be dragged out onto the floor for it.
Doug asks is this guy is “stealing”. Not in a technical sense but he’s been given a huge windfall because of the economic downturn. This guy’s attempt to become a victim because he might have to pay taxes illustrates a very serious problem with many wealthy in our society. Even though our current system has enabled folks like this to create a huge amount of wealth for themselves (in large measure by shear luck) they are extrodinarily selfish and try to hoard this wealth while millions suffer through horrible times.
In addition, he is likely to benefit from the high unemployment rate, since he has no incentive to pay a high wage to lure what would be a limited labor force under a low employment situation. This suggests he can easily make bigger profits even while sales are a bit sluggish.
When I recently worked in the fast food industry it was astounding to see how wages were pretty good in 2006-2007 but as times worsened the crass nature of the franchise owner sent wages dropping while the workers did more. It was simple math. With slower sales there were fewer workers who were lower paid. There was no incentive to pay more but a huge incentive to require more work. Who could leave given the limited prospects of finding other work. And everyone else was doing it, hence real wages fell like a rock over the 06-10 period.
He takes the risk.
-Doug
That’s hillarious. He’s a franchise owner of a chain of Subways. It’s almost like owning a money printing machine, hardly any risk at all.
Doug… read what Juan said. In the middle of the first half of his message, between two mentions of “too big to fail,” he writes, “When Obama goes, resurgence of our economy will be phenomenal.”
That’s where he mentions Obama.
Also, Doug, obviously that bit of humor did NOT come off exactly as intended. This guy said quite clearly that, with $200,000 he has taken care of his family’s needs (unless he was speaking literally when he said “fed my family,” which seems a bit unlikely no matter how inflated prices are at his local supermarket). And I was agreeing with him that he had indeed done so. I certainly didn’t expect anybody to object to my laughing a little as I said I agreed. Yeah, duh, I think he HAS met their needs.
Again, to get to the matter at hand, he’s making $600,000, which means that after he’s taken very good care of his family, by his own account, he has $400,000 left over. (Again, the guy wouldn’t have sounded quite as ridiculous if he had simply asserted that his family needs every dime that he makes, so get out of his face. But he himself is saying that they only need a third of what he makes. I didn’t say it; HE did.)
Finally, unlike Steven’s non sequitur example of coming in and scooping up every bit of someone’s $50, I doubt that anyone would suggest that every bit of the $400k should be taken from him. But HE is suggesting that he shouldn’t pay a dime of it. That’s where his argument falls apart.
Let’s suppose a different situation. Let’s talk about a guy whose total income is “only” $400,000. He would expect to pay taxes on it, wouldn’t he? I certainly would. I would expect to pay taxes even though I needed to “feed my family” out of it, plus pay business expenses, and maybe even reward myself with a nice car and a nice vacation out of all that to reward myself for working so hard.
Now, look at the situation this guy has described. Out of his total income, he has already taken care of all of that, including both the expenses associated with his business as well as providing very well for his family. Good for him.
Then he says that, AFTER all of that, he has $400,000 left. Well, again, good for him. I wouldn’t want anyone to come to him and say, “Your taxes have now been raised — by $400,000.” I would oppose that. But I will also oppose the absurd idea that none of that should be touched by tax.
And I would DEFINITELY not accept his apparent belief that his situation presents an argument against raising taxes.
C’mon Brad. You left out the crux of his comment about the $600,000 earnings. The comment in whole, not taken out of context: “The amount I have to reinvest in my business and feed my family is more like $600,000 of that $6.3 million…….. So by the time I feed my family I have, maybe, $400,000 left over to invest in new locations, upgrade my locations, buy more equipment.”
Emphasis should be added on the last sentence. A few years ago, I was in business as a Sub S corporation and can vouch for the accuracy of his comment. Drew a small salary, reinvested profits back into the company, grew the business, hit a hard recession, had to use all of my hard earned profits to try to survive, closed the doors without declaring bankruptcy and cheating creditors. Paid everyone off by liquidating all assets and savings, including our home, and walked away with less than $5,000.
If I am correct, Doug is a business owner and probably operates under an LLC or Sub S corporation. If so, his total income is tied together, business and personal. If he is willing to share experiences, not private information, he is perhaps the best one to comment on what Fleming had to say. I would trust his input more than I would anyone who is not nor has ever been a business owner.
What would have been a fair question of Chris Jansing would be, “what is your annual income?” Almost willing to bet it is in the seven figure range or at least, the high six figures considering what television hosts on national cable networks are being paid. She admitted she doesn’t own a business and therefore, has no firsthand experience with the problems, pressures, exposures, or any of the downside potential.
As the president says, it’s math. OK:
$400,000 divided by 52 equals $7692.30/ week. If the Bush tax cuts were repealed, he’d pay an additional $300 per week.
That means that his new gross would be only $7392.30 week. If he needs that extra $300 to create jobs, that would be OK. But he’s not. That’s the bite on his take-home.
More math: After his family consumes $200,000 a year in food, he has $5.7 million to pay his 500 employees. If ALL of that goes to salaries, his employees make an average of $11,400 a year. But no, you’d have to deduct various overhead such as rent, supplies, etc. They certainly make much less than $11,400 a year.
So? He’s free to run his business the way he wants. The question is whether he should pay taxes at the same rate his employees do.
Fleming’s response: Class warfare! sloganeering.
Bad slogan, and they should be called on it. It’s the same as saying, We’re willing to fight to maintain classes of citizens in this country.
It’s also saying, in effect — I’ve got mine, and screw the rest of my community. Not exactly a smart stance for an elected representative.
No, Bart, I didn’t leave out the part about how he wanted that to grow his business. That’s in there. And that’s why I initially thought he wasn’t saying what he was widely being characterized as saying.
But here’s the thing — say, you’ve got $400k left over after you have done everything else, including having compensated yourself to your own satisfaction.
That’s great that you want to invest it (or some part of it, anyway) back into the business. But here’s the thing. He’s talking about this within the context of the argument in which HE is engaged over how to deal with the deficit and the national debt.
All sorts of things are on the table. Such as Medicare cuts, Social Security cuts, and repealing the Bush tax cuts. All sorts of ways of lowering the deficit.
Correct me if I’m wrong (I haven’t studied everyone’s current position on this; this is just what I’ve picked up on the fly), the president’s position is that we should cut Medicare AND raise taxes, but not cut Social Security.
OK, this clip doesn’t elaborate on this congressman’s position. But if it is a typical Tea Party Republican position (actually, increasingly, merely a typical Republican reaction without any other modifiers) he’s willing to go along with the Medicare cuts, but not the tax increase.
Fair so far?
OK, so this means that everybody at the table has agreed that it’s necessary to cut paying for Grandma’s medicine. Nobody WANTS to do it, but it’s been decided that the deficit is so dire that it’s necessary.
OK, next step: While apparently agreeing with that, along with Obama and everybody else, this guy is saying that while we cut Grandma’s medicine, we should not in any way impair HIS ability to build another Subway and employ a few people at minimum wage, because America needs so badly for him to do that.
Because that’s what he’s saying. He’s NOT saying that he has a God-given right to build Subways or, as Doug says, acquire a herd of miniature giraffes (and I DID appreciate that reference to my favorite recent commercial), because it’s his money by the grace of God, and it’s nobody’s business what he does with it. He’s not saying that at all.
No, he’s arguing that it’s too important to the NATION (much more important than Grandma getting her medicine, since we’re all willing to offer that up) that doughty entrepreneurs like him not be impeded in any way from investing further in the economy. Because, as I say, we need another Subway and a few more minimum-wage jobs more than we need any of the things we’re cutting.
Worse, he’s saying that not even a small PORTION of the money he wants to plow back into the business should be touched. (If Burl’s figures are correct, $300 out of his $7692.30/week.)
If everybody following me? Being a member of Congress is about setting priorities. And this is the way this guy sets priorities. Hence his lack of credibility.
And, my favorite pet peeve, he doesn’t pay Social Security FICA taxes on any income over $106,800. That’s quite a tax break when everyone earning less than that pays FICA on 100% of their income.
And let’s be perfectly clear. We’re not talking about tax “hikes.” We’re talking about tax restorations. The millionaire tax cut was passed on the explicit premise that it was temporary. Even Grover Norquist agrees. The tax cut was instituted so that the rich could do more “job creation.” It didn’t happen.
And we’re not talking about an unfair burden of tax levies on the very rich. We’re asking them to pay the same percentage that their employees do.
According to the latest polls, already more than 80 percent of Americans agree. If the president really pushes this concept, the number will grow higher, with dire consequences next election cycle for those who believe that the only reason our country exists is to make more money for the upper classes. They want class warfare, bring it on, baby.
To put it in even simpler terms, why do millionaires hate America?
All I can say is, you’d think that guy could afford a better hairpiece.
If Rep. Fleming invests 400k into his business that is a business expense which will be tax deductible in some fashion (perhaps over several years). The only money that ends up actually being fully taxed is the 200k. Not sure I understand the problem here. 200k after all expenses are paid is about 4 times what a typical family makes. Why is this guy whining and moaning about a small tax increase to help reduce a problem that REPUBLICANS claim to be a serious problem. This is about choices and frankly a small tax increase on rich folks is far more efficient in reigning in the deficit than cuts in Medicare or unemployment compensation, both of which would effectively take money out of the economy. It would be entirely pointless for Fleming to invest in expanding a business if there aren’t customers.
The bigger point to me is why are we even talking about deficit reduction now. It’s a jobs shortage that’s ruinining us right now, not too much debt. But if we decide as a nation that’s an important national priority then the LEAST painful way to deal with it is to tax folks like Rep. Fleming who can easily and painlessly afford it.
Just read Brad’s comment. He’s saying the same thing but his reads better. Atta boy Brad.
Thanks, Bud!
bud wrote:
“That’s hillarious. He’s a franchise owner of a chain of Subways. It’s almost like owning a money printing machine, hardly any risk at all.”
If it were easy, why aren’t you or anyone else here running Subway restaurants? The owner of a Subway I routinely visit is there just about everytime I go in… whether it be a Monday at noon, Saturday evening, or Sunday afternoon. Next time I go in, I’m going to ask him what it’s like to own a money printing machine. I just need to remember to tell him AFTER he makes my sandwich.
Lucy Van Pelt said it best. “Aaaaggggggghhhhh!”
“To put it in even simpler terms, why do millionaires hate America?” – Burl
Is that ALL millionaires or just conservative or Republican millionaires?
I love it when people use the saying, “business expense which will be tax deductible”. It’s the same people who honestly don’t know what they’re talking about. As with personal finance, you can take a deduction, it doesn’t mean you’re getting a dollar back for every dollar spent. It means that the deduction is reducing your taxable income by a dollar, which means you are likely to get back 20 cents. So you spend a dollar, get 20 cents back.
“I have, maybe, $400,000 left over to invest in new locations, upgrade my locations, buy more equipment.” – Fleming
“I thought he was saying that he was talking about money he needed to invest in his business and create jobs.” – Brad
Fair enough Brad. You did mention it but not in the way I interpreted what Mr. Fleming was trying to convey based on the question posed by Ms. Jansing.
For the record, I did my homework on Fleming. If Jensing had done her homework as she should have, maybe she should have pursued the fact that Fleming is also a successful family practice doctor in addition to owing 30 Subways and owning/running 130 UPS Stores in three states. He still sees patients when he is home.
After doing the research, I find myself unable to defend Mr. Fleming and his comment. If he still earns an income from his medical practice, I find the omission less than honest and misleading. If he were trying to be candid and forthright, he should have included that aspect of his financial resources. The apparent dishonesty in his answer is sufficient to dismiss anything he has to say as being credible.
However, I have to admit I have a biased point of view about tax increases after my own personal experience with one that contributed greatly to the recession and business closing mentioned in my earlier post.
The guy made a huge mistake using himself as an example. And he says he’s a member of the Tea Party. That’s not going to become a “click all” on our ballots, is it?
And, who watches all these stupid talking head shows? And why did this yahoo go on this one? So he can put the clip on his website so his supporters can give him more money?
And how did Lindsey Graham become a millionaire as a “public servant”?
Can I have my country back please?
The FICA deduction is a good point. I’ve heard estimates that making it across-the-board would really help the nation’s bottom line.
Seriously, the counter-argument is We Want Millionaires To Be Treated Better Than Average Citizens.
Class warfare? Only if you insist on creating classes.
Brad, thanks for the post. Steven must be an honor graduate of the Haley School of Accounting given his explanation relative to business expenses. I have a lot of Repub business friends who use their business assets for personal use and put many personal and family expenses on the business tab. It’d be interesting to look at the Rep’s actual financial statements relative to his hypocritical boasting.
Steven, I guess it depends on your life experience whether you see a franchisee as a hard working, hands on manager or not. When I worked in fast food recently I hardly ever heard from our “leader” unless he implemented some new “rule” that meant either, (1) more work or (2) lower pay. It was clear that he didn’t care about either his employees or customers. His ONLY interest was trying to rake in more money. And he could get away with it because people had to have a job and there was nowhere to turn. I was lucky. I could escape the system. Others were not so fortunate.
I wouldn’t have so much of an objection to paying higher taxes if I even halfway thought the government was being a good steward of the funds, spending it wisely, and being careful to avoid boondoggles, corruption, and graft.
The problem is that for the last 30 years or so (probably more) no one, neither the GOP, nor Democrats, nor faceless government clerks have done anything to make me think they even have the slightest inclination to be good stewards of our money that they take from us. Hence, I’m not inclined to keep giving them more.
Fix the spending nightmare, and then I’ll talk about raising your allowance.
Unless I can’t read correctly, the top tax rateshave fallen significantly since 1960, and that does not figure in tax breaks.
[Like] What Martin says about Social Security taxes.
@ Bryan — Other than the military contractors, I’m not sure I see a lot of boondoggles, corruption and graft. People grouse about Columbia, for example, but I spend a lot of time with the actual workers, and they work a lot harder on the whole than most in the private sector.
You posit a straw man to justify not paying your share for a better society.
Saw this thread at Daily Dish. Several folks put this guys numbers through the ringer. He has a few broken buttons.
http://andrewsullivan.thedailybeast.com/2011/09/all-up-in-flemings-business.html
Thanks for passing on the Andrew Sullivan link, Tim. I liked the first comment:
“While I agree it is unfortunate that the whole quote was not provided, I would still like to point out that the tax rate shouldn’t affect Fleming’s investment decision. He only pays tax on his profit. If he uses the remaining $400k to reinvest into his businesses, he doesn’t pay an income tax, as that is a business expenditure. In fact, a higher tax rate would give him more incentive to invest, as to avoid paying taxes. A lower tax rate would give him more incentive to pay the low tax and keep the cash. That’s part of the reason why we have had larger growth in times of high marginal tax rates.”
Mr. Fleming is a doctor? How can he possibly be a hands on manager of a Subway franchise? He couldn’t possibly devote more than a token amount of time to that, unless he only practices medicine part time. Either way it seems like something gets shortchanged. In any event his personal example is sufficient to refudiate his argument that he would invest more if taxes on the rich are kept low. As others have pointed out if his business profits were higher he’s have MORE not less incentive to re-invest in the business.
And he’s a US Congressman to boot! This guy must be superman to have that much time.
Obviously he doesn’t spend much time on the Subway franchise. He probably has some sort of regional manager to do most of the grunt work. The store managers do the vast majority of the work in those places spending 90+ hours per week dealing with all the myriad of headaches from customer complaints to inventory control to keeping the place clean. All the franchise owner does is rake in the dough. Not everyone can become a franchise operator. It’s a matter of being well connected, not a matter of hard work.
@Kathryn, as the kids say today: OMG, LOL.
“Other than the military contractors, I’m not sure I see a lot of boondoggles, corruption and graft”
Really? Come on! The Pentagon certainly has waste, but it’s not the only section of our government that has it. You know this, and you’re not convincing anyone that the government is a wonderful steward of our tax money. Or are you trying to convince yourself?
Let’s count the ways our government wastes our money, and I’ll go equal-opportunity here, big and small, just to be fair:
1. Solyndra (to be current)
2. $16 muffins by the DOJ (almost funny)
3. Embezzled funds at the Ag. Dept. (under Bush #43)
4. Medicare! (40% of all waste per the GAO) (Since…well..forever)
5. Redundancy piled on redundancy.
6. Earmarks (Throw a dart at a list of the members of Congress)
So, you’re going to say that NO ONE besides the Pentagon wastes money at the federal level? Come ON. You don’t get your own set of facts.
“You posit a straw man to justify not paying your share for a better society.”
Well…you’re pretty quick to attack me by saying that I’m putting up a straw man in bad faith to shirk my responsibility. I pay all the taxes that are required of me. If more are levied, I’ll pay them. But should they be levied? Maybe, but I don’t like giving an cocaine addict more money to go buy cocaine. You accuse me of shirking because I don’t want to give the addict more money. I think it’s irresponsible to continually give him more money when I know that it’s being spent on cocaine. Simply sticking your head in the sand and saying “He’s just hyper and likes powdered sugar” is the irresponsible position.
Well, I don’t know about all that, but I have decided this: My band’s first album (when I start my band, and when it records an album) is going to contain a cut called, “You Posit a Straw Man.”
@bud
“. It’s a matter of being well connected, not a matter of hard work.”
Bud, in your world is it just a fact that the only people who actually do anything are the lowest people making the least money? Do you ever appreciate people who create jobs, take risks with their own capital, start businesses? Or do you just imagine that anyone who feels like it could create a company from scratch and become a millionaire?
Your class-ism is off the charts.
@Bryan
You might as well give up. Brad’s blog is dominated by people whose sole purpose in life is to see that every dollar a person makes is spent on the government program of their choice. The nobility of spending other people’s money is a self-gratifying experience.
Brad’s is military and energy. Kathryn’s is
One more, just because it’s funny. Well, it would be funny if it was another country:
The Dept. of Homeland Security is coming up with multiple animated mascots to help kids prepare for disasters. Per Senator Johnson, (R-Wis) consolidating mascots used by the Department of Homeland Security used in marketing would also save money.
“That one would save only $2.6 million which isn’t a lot, but it just goes to show the waste that does occur in the federal government,” says Johnson.
Ok, I’m really done now.
Hey, Doug, I can’t wait to find out what Kathryn’s is…
And then I’d like to see you back up your hyperbolic (to say the least) statement that my, or others’ here, “sole purpose in life is to see that every dollar a person makes is spent on the government program of their choice.”
Quotes would be welcome. Just one saying, “Every penny someone makes should go to taxes” would do the trick.
Doug just keeps forgetting that he, too, IS part of our government.
Hey, Doug, you’re not just a capitalist tool – you are a citizen. Cool, huh, Comrade?
Doug, have you gone off the tracks with your psychic put-down assessments? Do you really believe your statements or are you just emoting?
Your class-ism is off the charts.
-Doug
So you don’t think being well connected has anything at all to do with Mr. Fleming’s ownership of Subway franchise? Seriously Doug he’s a doctor. He didn’t work his tail off developing some new and exciting fast food restaraunt option. I can’t obtain a Subway franchise because I don’t have those connections. It is just simply ridiculous to suggest that all wealth in this country is the result of hard work and risk.
What Doug writes is a lot more on target than what most of you others write and apparently believe.
Brad, you need to schedule a get-together as we need to meet each other as some of our comments might be tempered or we’d find out with whom we’re really commenting.
@bud
Apparently those medical degrees are handed out on street corners. Couldn’t be that he is both smart and driven to succeed. Nah, just another one of those lucky guys who somehow manage to get on a lifelong streak.
@Mark
Yes, I am part of the government. I am one of the contributors who pays more for the stuff everyone else on this blog wants. When my total tax expenses get above $50K per year, I start thinking that maybe that’s enough. Call me crazy.
@bud
” I can’t obtain a Subway franchise because I don’t have those connections.”
Really? Here’s the link where you can get all the information you need to start your own Subway.
http://www.subway.com/subwayroot/Own_a_Franchise/FranchiseFAQs.aspx
The only “connection” you need is a connection to a desire to work hard. $15K is the franchise fee.
And here’s a link to the actual expected costs to open a franchise.
http://www.subway.com/subwayroot/Own_a_Franchise/PDFs/Capital_Req_US_Canada.pdf
You need $115K to $250K. Are you willing to risk that much?
Doug you either didn’t understand my point or you’re being deliberately obtuse. I never suggested that Mr. Fleming didn’t earn his medical degree. In fact that’s exactly my point, he did devote a huge amount of his life to earning that degree, perhaps 90+ hours a week to it for 10 years. So how does that make him an expert in fast food operations? My best guess is he comes from a well-connect family that was able to get him a franchise deal. It’s just not plausible that he devotes a huge amount of time and energy to both his medical practice AND his Subway stores AND his congressional duties. So basically the Subways are run by others and he sits back and racks in the money. Any other conclusion is illogical. But that pretty much sums up libertarian philosophy now doesn’t it?
Neither of y’all is looking at this realistically. This is a doctor who made a lot of money and needed something to put it into — hence the franchises.
There’s no moral in that, good or bad. It doesn’t reflect on his character either way. It’s just an investment.
And Doug, come on: you’re supposing Bud, or I, have $250,000 lying around? Really? A physician who invests money in something like that isn’t some daring entrepreneur. He’s just a guy who made an investment. Nothing wrong with that. Nothing great about it, either.
@Brad
Bud said Subways are money making machines where you just start it up and watch the profits flow in. If that’s the case, any bank would be willing to loan you $250K to start the business.
The reality is that it takes hard work and intelligence to run any business well. There are no sure things as Bud would suggest. Even if the doctor is just an investor, he has to do the due diligence on hiring people to run his franchises and make the high level decisions AND risk his capital on those decisions.
If everyone could do it, they would. Most people can’t. I couldn’t do it.
I just get tired of all the excuses people use to denigrate those who are successful in life (economically). To think that it’s just pure luck is a mindset based on jealousy.
That’s what we need! A maximum tax cap! Everyone will get to pick where they start feeling not comfortable about what they are “giving” the Government. And they can then just call it a day.
Progressivism hasn’t got much of a chance in the face of such myopia. I’m being charitable in calling this outlook myopic.
I don’t believe that government can solve all our problems. But neither can rampant self-interest. A rational and progressive (yet still relatively “flat”) tax code that treats all businesses and all individuals (but which doesn’t confuse one for the other) with relative equality is the goal to aim for as a society.
It amazes me that so many people simply cannot see public policy from anything other than their own personal perspective. It’s especially disturbing to see such myopia in a congressman. The guy’s got some chutzpah.
It’s not pure luck. Nor is it pure virtue. It just is.
The issue before us is not how this guy got the money. Making money in business doesn’t make you either good or bad, in and of itself. The issue is his unwillingness to pay taxes on any portion of what he terms “leftover” money. Just to get us back to that.
This is one of the things that drives me nuts about these debates between left and right, Democrat and Republican.
They always want to paint things as being between good and evil, when they are not. This is about what sort of tax policy makes good sense for the nation under these particular circumstances. There’s a practical decision to make.
The left has a practical point to make — raising taxes (or rather, restoring taxes that were in place before) is one way to lower the deficit. That and the fact that the deficit will almost certainly never be eliminated simply through budget cuts.
The right (that is to say, classical liberalism) has good arguments to make, too. This is a terribly risky time to increase taxes, in terms of the risk of cooling the economy further. That’s compelling, and should always be seriously considered under such circumstances.
But instead of hearing those practical considerations calmly debated, we get all this emotional talk about whether this guy DESERVES to have this money. Liberals say no; “conservatives” say yes. When it’s utterly irrelevant.
Then, they go on to get madder and madder at each other, and start calling each other rude names, and next thing you know, each side is refusing to work in good faith with ANYONE who thinks the way that OTHER side does.
And then we get what we have in Washington.
And Mark, I don’t think he’s got chutzpah. That would suppose he understood what an outrageous position he was taking. I’m pretty sure he doesn’t realize that at all. Hence it doesn’t really take guts for him to say it.
I didn’t use the word as a positive attribute. I think of “chutzpah” as utter nerve – as in the guy doesn’t have to realize how outlandish his spin is to still have it come across to the rest of us as off putting.
Guts most definately wasn’t part of my intended meaning.
The right has good arguments to make, too. This is a terribly risky time to increase taxes, in terms of the risk of cooling the economy further.
-Brad
The folks on the left acknowledged that a looooooooooong time ago. And the president has worked tirelessly to try and compromise. But when the GOP keeps on and on about the risks of the debt and the Democrats try to compromise they get this whole class warfare nonsense thrown back in their face. And the president has finally realized that. He’s proposed a sensible jobs package that will not get through the House and he knows it. Essentially he’s on the campaign trail now and given up on effective governance. Too bad but it’s probably time to do that.
I guess it’s just in Brad’s DNA to try and make this a balanced problem of equal guilt between left and right. But in fact this is 110% the fault of the GOP as led by their tea party extremists. Heck even John Boehner can’t get a very conservative budget bill through the House because it doesn’t go far enough to the right. How does the president stand a chance.
@Brad
You left out the part about the right also wanting to cut government spending. It’s not just about taxes. Spending is the larger issue. There are many of us who believe that government does too much and does too much too inefficiently. Raising taxes to cover those inefficiencies has been the solution for too long and many of us are tired of it.
Social Security is a perfect example. Great idea (protect seniors from poverty) but unsustainable given the demographics. To cover for its poor design, the “solution” has always been to raise the tax or raise the cap. When it started it took 160 workers to pay the benefits to one recipient. Now it is 2 to 1. Where do we go from there?
@Mark
There’s no “giving” involved when it comes to the government. It is taken under the threat of fines, taking property, or incarceration.
So there is no level of taxation that would cause you to pause and think it was too high? If not, then why don’t you donate more to the government up to the point where that discomfort kicks in? For me, $50,000 dollars starts making me question what kind of government we are getting for that money. Your limit may be higher. I’d feel better about the $50K if I saw better results…
Doug, I “left out the part about the right also wanting to cut government spending” because I just wanted to talk about something I agreed with, without complication — the danger of tax increases cooling the economy.
All that stuff about the size of government is just too nebulous for me. The question of how much is too much, or too little, for the government to do just seems to me unanswerable.
There are things the government should do (build roads) and things it shouldn’t do (have “hate crime” laws). And there are good and bad ways to go about doing the things that it should do.
But this notion that there is some total measure of government in the aggregate — that there’s a line, where it is either too big or too small — just doesn’t make sense to me.
It does make sense to you, and to other people. And this creates a cognitive barrier, and a communication breakdown. When I say I disagree, I tend to be misunderstood.
So I stuck to something where we could agree.
Just an aside — the muffin thing sounded bogus on its face, and it is. Nobody paid $16 for a muffin. http://motherjones.com/kevin-drum/2011/09/great-16-dollar-muffin-myth.
Doug,
We, as citizens, contribute tax dollars to the state in order to support a government that gives us a civil society.
If we can’t even reach a common platform of understanding on that basic concept, then how do we discuss the ideas of amounts and methods and distributions?
There needs to be a button [LIKE what Mark said]. Consider it clicked.
“Heck even John Boehner can’t get a very conservative budget bill through the House because it doesn’t go far enough to the right. How does the president stand a chance.” bud
Are you referring to yesterdays vote on the temporary spending bill? If so, you might want to check your information. Seems it was the Democrat side who rejected the bill along with 48 Republicans.
There was an offset in the bill where another subsidy for auto makers was taken out. Dems objected and voted against the bill.
So, we take another chance on shutting the government down because the oft bailed out automobile industry is being denied another big subsidy check. Who will Democrats use as the strawman this time? Who will be denying Grandma and Grandpa their Social Security checks if the government shuts down? Who will come on television, shed some crocodile tears about soldiers not getting paid if the temporary bill isn’t passed by the 30th?
Just saying.
Doug are you whining or bragging. “For me, $50,000 dollars starts making me question what kind of government we are getting for that money. Your limit may be higher. I’d feel better about the $50K if I saw better results…” The dollar amount doesn’t tell us as much as what percentage might make you comfortable.
My tax contribution last year was used to buy a couple of bombs and they just blew the damn things up!
@Mark
I seem to recall you had very strong feelings about the shift in property taxes that raised the rates on commercial property. Why should those taxes be open for discussion as too high but my feeling that my personal taxes are too high be a case of my unwillingness to be a compliant member of society?
Commercial property is just paying for the same things I pay for. Revel in that opportunity!
@Susan G. A quote from the article you cited: “None of this is to say that DOJ didn’t overspend on its conferences. In fact, it sounds like they did—though in some cases this was just an artifact of applying overhead costs to the food instead of accounting for it separately.”
Sounds like they just said “Hey, we have X to spend on food for this conference, or we’ll lose that part of the budget for next year”.
Do you spend your money like that?
@j
I am whining. $50K is a large chunk of my household income.
I’d be fine with Herman Cain’s proposal of a 9% flat income tax, a 9% national sales tax, and a 9% corporate tax. Eliminate all the need for tax lawyers, tax shelters, loopholes, tax credits, etc. The percentage of our economy that is allocated to collect, avoid, lobby, prosecute, and arbitrate taxes is beyond ridiculous. If all those resources were actually spent on doing something productive, we’d have a much stronger economy.
@j
And I won’t tell you my income now, but $50K represents my total family income (my wife didn’t work while my kids were growing up) in 1995. So maybe that’s where my strong reaction comes from.
Bart, last time I checked the GOP had a substantial majority in the House. So by definition they are at fault whenever something fails to pass. In this case Boehner could not keep his caucus together to vote in favor of a bill that was extremely conservative. The Democrats may have bolted because it was too conservative but how do you explain 48 defectors? No, you can’t hang this albatross around the neck of the Democrats.
j wrote, “My tax contribution last year was used to buy a couple of bombs and they just blew the damn things up!”
What form do I use to specify where my money goes? I’d prefer it go to bombs rather than some multi-generation social program recipient.
“Bart, last time I checked the GOP had a substantial majority in the House. So by definition they are at fault whenever something fails to pass…….No, you can’t hang this albatross around the neck of the Democrats.” bud
So, the logic behind the bill not passing is that the house is controlled by Republicans, not Democrats and by definition, Republicans are at fault? Repeating your words to be sure there is no misunderstanding.
So, I guess the same logic can be applied to the years when Democrats had a substantial majority in the House and Senate yet failed to pass all of the legislation on their legislative agenda. Therefore, using your own logic, the failure is to be placed squarely upon the Democrats, not the Republicans?
At some point, the question needs to be asked. When is enough, enough? The subsidy was for research and development of energy efficient vehicles. There is a balance of approximately $4 billion of unused funds available in the energy program and that is where the $1.5 billion cut was to be taken. And, this is the reason Democrats voted against the bill en masse’.
Yes, this albatross can and should be hung around the necks of Democrats for the very reasons they spelled out for voting against it.
NEWSFLASH – The spending bill did pass and is going to the senate where Reid has already said it will be rejected. So, the senate is Democrat controlled and therefore, if the bill fails to pass, it is their fault – right? Your words, not mine.
Yeah, and there are a lot of those out there, now that we’re several generations into Social Security…
Those lazy geezers should work until they’re 100, and get off the dole…
Steven do you personally know or have any relationship with a “multi-generation social program recipient?” If you do, I wonder how they view you as a person and your attitudes.
For a short-time I worked in a small finance (legalized loan sharking) business in rural Georgia. I knew several families who were all on welfare and had no work history.
I’m sorry if I offend anyone with my views, but I grew up in the midwest where you worked or went hungry. It was culture shock when I moved South and saw that welfare was a way of life and not a bump in the road.
Brad didn’t allow my response to his reply to my comment… but it’s not surprising.
Doug and Stephen’s comments about capping and self-allocating taxes illustrate the problem.
If I thought it was even remotely possible to institute, I’d go along with Cain’s 9/9/9 arrangement. But we should all know better – just as we do with the idea of allocating our tax payments.
What the congressman was talking about is this same problem, but in reverse. His situation is like Warren Buffet’s – only the lite version. He has more money than he knows what to do with. That’s well and good – and not the issue here. What doesn’t make sense is the idea that for some people the tax system gives a big to giant discount. Social Security and Medicaid “taxes” are capped. It’s the same as with Stephen wanting to choose to pay for bombs; earn enough and one is suddenly able to take a pass on contributing to our nation’s tax revenues.
While some will say it should be that way; if one looks at it another way, it’s exactly the same thing as raising a state’s sales tax rate so that high value homes can see a tax payment reduction. Many see that as “good” as the poor end up paying to subsidize the better off. Like that’s some kind of retribution for all that they suck from the economy. If one is making seven figures a year – or eight or nine – then this is the same joke; only one played on the middle and upper middle classes. Anyone who earns enough to see their take home income rise as the welfare taxes fall off is probably at first quite pleased with this “benefit” of wealth. But as an income continues to climb, it would be hard not to see that the secretary is indeed experiencing more of a tax burden, relatively speaking.
For those who can’t envision that situation, there isn’t really any way to explain why it’s not the right approach. Graduated income taxes make sense. Just as punitive taxes on the very rich are not right, neither is shifting the tax burden to the less fortunate (in this discussion one is less fortunate if one’s income is < a million dollars a year - year in and year out). We've got to be fair in our tax structure - and broad. Everyone needs to contribute according to one's abilities. Otherwise everyone ends up feeling bitten in some way. And that perceived pain is easily converted to misplaced anger.
I get the grouse about Social Security caps, but seriously, if you don’t cap it, then you would have to be writing a check to Bill Gates when he retires for like, 30 million a month. its based on 35 years of yearly earnings. The cap is a way of keeping the defined benefit to a reasonable level without means testing. I am all for means testing, but its not a popular stance. Just realize why there is a cap in the first place.
@Steven–There were plenty of welfare lifers in Chicago in the 80s. Welfare reform has most likely taken care of most of this, but also realize that there is a culture here that has been unsuccessful in recovering from the effects of slavery, Reconstruction, the Great Depression (Tobacco Road is in Augusta) and Jim Crow…and picking yourself up by your bootstraps is quit difficult–think about it!
@ Tim– You don’t cap the amount of salary subject to FICA, but you can certainly cap the payout.
Kathryn, right.
I’m certainly not living under the dillusion that I will get back what I pay out in social security (or medicare). It’s just a tax.
If we are going to actually propose that FICA is a personal prepayment plan; then I wholeheartedly agree that we should take the system private.
But it’s not. It’s a tax.
@Tim – Bill Gates is only taxed on that cap, but he also collects the same SSI payment as someone who meets the cap exactly.
@Kathryn – It’s been nearly 140 years since slavery was abolished… how much longer do we have to wait? How long did the Chinese in this country toil until they picked themselves up, how about the Irish? Both of these groups were “slaves” well after the civil war ended.
@Kathryn – Why would you cap payout if the person contributed his share into the system? Do you suggest we do things like cap 401K’s and IRA’s as well? Because the wealthy are going to do a lot better at retirement age on those than the average Joe.
Well, it’s been a few days since I read the article, @Bryan, but I believe the overhead costs they were talking about were the hotel’s overhead costs for the meeting rooms and other related items (were drinks included in that? I can’t remember), not DOJ’s overhead for the year. As far as how I budget — yes, I’d say X amount is reasonable for the conference, and not worry about if the hotel line item was for meeting room space or food.
Now, whether they worked out an overall good deal with the hotel for the conference, I don’t know — my point was just that the “$16 muffin” meme tells one nothing about whether the money was well-spent or not — and that they didn’t really spend $16 per muffin. They spent X dollars on meeting space and refreshments, and it all got lumped onto the bill under food.
Think about the economic concept of diminishing returns. Who is hurt worse, the family making $10B and now has to live on $9B, the family making $100,000 and now has to live on $90,000, or the family making $10,000 and now has to live on $9,000? Any commodity becomes less valuable as there is more, including money. A dollar is not nearly as valuable as income increases. To me it makes sense to pay more as my income increases.
@ Steven –you cap payout b/c Social Security is not supposed to be your sole retirement plan–it’s a baseline sustenance for everyone. The rich can and usually do put plenty aside in other ways. We do cap 401(k) and IRAs already–you canonly put a certain flat amountinto an IRA (conventional one, anyway) and only up to % of your income into a 401(k).
@Bob — It’s the marginal propensity to consume — the poorer you are, the greater the % of your income you must spend to survive. The higher the income level, the greater amount you are able to save–it isn’t one-to-one–the better off you are, the more likely you are to have higher living costs because of lifestyle expansion, but at some point, you just can’t/won’t spend it all, so you invest, a/k/a saving.
and the slavery thing —
the other ethnic groups who were “enslaved” were not enslaved for so long, nor with such deep cultural roots…and slavery, Jim Crow, etc. hurt everyone down here, not just black people, and that sort of long-time, deep-seated cultural damage takes a very long time to fix.
@Kathryn – so what kind of time-frame are we talking about… decades, generations, centuries? Is there any advantage for them to wrap it up earlier?
@Steven — of course there’s every advantage for them to wrap it up earlier. The problem is that without a lot of help, it’s not gonna happen very quickly! Down here, those who have privilege often see no reason why they should help out those less fortunate. Some, like me, do—I want a just society, one where it matters as little as possible in what social position you were born. I readily acknowledge that I have had enormous advantages over some poor kid in a small town in the middle of nowhere!
Amen, Burl.
And I’m sure that’s what Doug meant.
@Kathryn – “some poor kid in a small town in the middle of nowhere”
I have a friend who fits that description to a tee… she’s now an office managing partner at O’Melveny and Meyers… you’ve probably heard of them.
I’ve lived down here for over 20 years, I don’t see that big of a difference between the poor down here and the poor in the midwest, except for the way the ones down here know how to work the system a whole lot better. The ones back home know if they want to eat or keep from embarrassing their family name they need to go to work everyday. Many down here don’t have that concern.
Doug says “my wife didn’t work while my kids were growing up.” I think what he meant was she didn’t receive a salary. Raising kids is actual work.
Doug says, “I just get tired of all the excuses people use to denigrate those who are successful in life (economically). To think that it’s just pure luck is a mindset based on jealousy.”
I get tired of all the excuses people use to denigrate those living in poverty. To think that it’s just laziness, incompetence, and stupidity is a mindset based on arrogance and privilege.
To not acknowledge that it is a combination of both circumstance and ability that is responsible for either situation is just unrealistic.
However, it is also important to acknowledge the role that government funded services and infrastructure provide in allowing your risk-takers to achieve their economic success. I think the question dividing the nation is whether tax rates are appropriate on the class of risk takers to pay for the benefits they receive. I think the disagreement is over what “appropriate” is.
The Irish and Chinese may have been subjected to conditions that were like slavery but they chose to come here and were able to do so with their families and their cultures intact. Having access to such resources makes a huge difference in one’s ability to recover.
Steven, maybe this perspective will give you an insight to the difference between your Midwest attitude and the real world of the South. I don’t think your experience… gives you any valid picture of the real South and the economically disadvantaged, both white and African-American.
http://www.thestate.com/2011/09/25/1984564/nine-ways-the-civil-war-changed.html