World Series of Poker
Peter Eastgate of Denmark is this year's winner in Las Vegas' World Series of Poker.
With the title, comes a check for $9.1 million. A tidy sum.
One would think that Mr. Eastgate could return to his Danish homeland and afford a $1 million home.
Ah, but Denmark is a socialized country.
Mr. Eastgate will have the pleasure of paying taxes on his winning of 59% ($5.37 million), leaving him with $3,730,000.
Then, that million dollar home comes with a Value Added Tax of 25%. So, the $1 million price tag, is actually $1,250,000.
Hence, Mr. Eastgate after paying taxes and buying a $1 million home will have exactly $2,480,000 left over.
If, he's as good a poker player as his title suggests, I'm betting his next big wager will be a change of residency.
With the title, comes a check for $9.1 million. A tidy sum.
One would think that Mr. Eastgate could return to his Danish homeland and afford a $1 million home.
Ah, but Denmark is a socialized country.
Mr. Eastgate will have the pleasure of paying taxes on his winning of 59% ($5.37 million), leaving him with $3,730,000.
Then, that million dollar home comes with a Value Added Tax of 25%. So, the $1 million price tag, is actually $1,250,000.
Hence, Mr. Eastgate after paying taxes and buying a $1 million home will have exactly $2,480,000 left over.
If, he's as good a poker player as his title suggests, I'm betting his next big wager will be a change of residency.
This is an ongoing series you have about how the rich are burdened with taxes and 'are likely to move away' as a result of the onerous taxation. But I would suggest another possibility. Maybe Mr. Eastgate loves his country and would prefer to live there for the rest of his life. Maybe he didn't always make the right bet on the right hand and maybe when he got sick or injured, the socialized health care system took care of him. And now he is happy to give back to that system. And maybe he is grateful for the sharp education he got, all the way through college, that honed the analytical skills that now earn him a great living. Maybe he plays poker because he loves it and he lives in Denmark because he loves it. But I don't know a thing about Mr. Eastgate. I'm just suggesting that there are possibilities other than "live where it's cheapest". If that were the top criteria, we'd all be living in Mississippi. Or Mexico.
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Are you suggesting it's "patriotic" to pay a large amount of your income? Here's another situation...
A daughter comes home from college full of her professor's liberal ideals of wealth redistribution, and the social injustices of the free-enterprise capitalist system.
She explains all of this to her father, a lifelong Republican.
He says, "Janet, what is your GPA at school?" She replies that she has a 4.0 and she works really hard, and takes all the hardest classes, she studies while others are out partying and having fun.
The father then asks, what about your friend Amy? She replies "Oh, she has a 2.0 GPA"
The father then says to his daughter, why don't you go to the Dean's office when you get back and tell them that you want to give 1.0 of your GPA to your friend, so that way you both have a 3.0, which is still a respectable GPA.
The daughter gets upset and says "Amy goes out and parties all the time, never goes to class, and takes all the easy classes. I've worked hard to get my GPA, why should I give her part of it!"
The father just smiles and says "Welcome to the Republican party!"
Back to your post, what did the government do to help Mr. Eastgate learn poker? Was government at that table telling him when to fold or raise? Was the government at the table telling Mr. Eastgate that the other guy is bluffing about his 3 Jacks?
Like it or not, those with money are generally those that own the businesses. These are the same people that employ you and sign your paycheck. If you tax their business profits even more or implement programs that severely limit your profit margin, would you stay in that state? or country? Remember, business of business is to make a profit, not be an extension of government programs or to implement ideological theories.
Ronald Reagan put it best: "Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."
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That's a great old fairy tale you tell, but it misses the point entirely. All the students have to pay the tuition to support all the infrastructure of the institution. If your daughter fell for that, she should have chosen a better college...
And regarding your question to me, that also misses the point entirely. I did not say that our government did something to assist him. But in any case, he probably enjoyed many benefits of our tax dollars while he was in this country, just as you would benefit if you went to Denmark by driving on their roads, riding in their buses or trains, eating food that has been regulated in some way to make sure it is safe.
I'm glad you asked if paying taxes is patriotic. I don't resent paying taxes. I get frustrated with all the paperwork, wish we could do something about that, but I don't mind writing the check. Do I wish I had more money? Sure. But I recognize that paying taxes is just part of being in this great club of ours. And the graduated tax rate doesn't stop me from trying to make more money. I live where I do because I like the people, I like the music, I like the weather and I can make a living doing what I love to do. But ultimately, no, I don't think paying taxes is patriotic. It's just a thing we have to do.
But if you supported the war in Iraq and the war in Afganistan and then you complain about paying taxes, I'd say that's pretty chicken-shit. Unless you actually went over there in uniform, in which case you can complain all you want.
And I commend those who start businesses and make money while contributing to the public good by a good or service provided. I'm one of those people too. I haven't gotten a "paycheck" in years except for the several days a year I substitute teach at the local school.
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I agree that paying taxes is something we have to do, but to think the level of taxes that we are paying now or proposed to pay in the next 4 years has is just based off our wars in Iraq and Afganistan is misguided at best. Government spending is out of control across the board. That's where the increase in taxes comes into play. We have to pay for the games the politicians play and the promises they make. Look at my post a few weeks back on the idea that increasing taxes actually has a negative effect on the economy and government revenues. Why should our tax dollars bail out Wall Street screw ups, or Detroit, or American Express? We're at a about a trillion dollars right there. We spend $12 billion dollars a year educating illegal immigrants in this country. As an educator yourself, and a future educator myself, I think we can agree $12 billion dollars would go a long way if it wasn't being spent in the wrong way. Or how about a couple million for the mating habits of fruit flies? Or the ever famous "bridge to nowhere"? There is a lot of fat that can be cut, and yes, the wars in the Middle East doesn't help the situation.
Now you have Obama proposing even more spending! Check out this article:
http://www.cato.org/pub_display.php?pub_id=9746
This is why taxes are going to go up.
Lastly, it is not chicken-sh*t to criticize taxes while we fight in Iraq and Afganistan. Is it chicken-sh*t to criticize tax money paying for abortions? I'm a taxpayer and someone that has NEVER missed an election since I turned 18 many moons ago. As far as I'm concerned, I can complain all I want and that doesn't make me chicken-sh*t. My step-son is in Iraq right now as I write this, and he signed up for an extended tour also. Last time he was home he was criticizing the proposed tax increases also. You don't agree with the wars I'm guessing, and that's fine with me, but I'm not going to label you as anything as you have done others.
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Please don't quote me the Cato Institute.
We can agree that spending is way out of control, but we would probably disagree about what spending is worth our tax dollars. To use your example, the study on fruit flies was part of an attempt to treat Autism. And it has, as I understand it, been rather 'fruitful'.
And, I did not call anyone anything. The cost of these wars is approaching and will exceed a trillion dollars. That is so far above and beyond the programs you mention (not the bailout). I get so sick of hearing conservatives complaining about their tax dollars going to fund abortions (something I'm not even sure actually happens), but they support spending a trillion dollars to bomb, destroy, kill and maim and that's not a problem.
What a waste. A waste of money, energy, will, trust, innocent civilian lives and our own young soldiers. And what has been accomplished? What has been achieved? And how does any of that balance against what we've lost? Talk about wasteful spending. But don't compare a "couple million" on scientific research to a THOUSAND BILLION DOLLARS in unnecessary and poorly fought wars.
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Bill,
Nearly every small business that I talk to are making DRASTIC plans with the coming Obama presidency. Just today, I met a business owner that WAS planning on opening a new division and adding 30 employees by Spring. The plans are now scrapped based on Obama's enthusiastic support of Card Check.
The story on my blog was simply an illustration of how onerous a socialized state can become, when taxation is seen, by some, as "patriotic".
Our country was founded on "small government" principals and letting the individual thrive. Sadly we've moved far away from that notion, in that all solutions have to come from the Government.
More than 1/2 of all employment in the US is found in small businesses. Those same small businesses have heard nothing from Obama that gives them "hope" for their future.
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Great post Bob. I hear you loud and clear. I have certainly considered the economic situation in recent decisions about whether to borrow and spend money on a risky project within my business. I don't have to worry about card check, but I do have to consider a lot of other factors. I worry about the public's ability (or priority) to buy my product. People are hurting financially. I host about 12 concerts at year at Freyburg Hall, and we have seen attendance plummet. And those that do come buy less beer, and fewer CDs. And I have no idea when things will turn around.
You can talk about 'fear of Obama's policies' but don't you think that many people are just not very confident in the ecomonic situation?
Look at this mess we are in. This is a result of real policies that our government has administered. I told everyone who would listen to get out of the stock market last fall because I was reading about the coming trouble. This has been the most irresponsible government we've had in my lifetime, and the corporate atmosphere is shameful. And there has been almost no accountability for any of it.
But you know what? In the end, we will wend our way out of the woods. And there will be growth, and there will be new opportunities and there will be a bunch of people who work really hard and some of them will get rich. But some will sit out and hold onto their money. I plan to work hard and be part of the solution. And not out of civic duty, but because I want to. And because what else am I going to do?
With all due respect Bob, card check and paying taxes are two totally different issues. And if people are fearful about Obama's policies, that's just people making decisions in their own best interest. But were they making those decisions the same way when the Bush Admin. and the Republican House and Senate were driving our country into economic ditch? Were they even paying attention?
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I'm not going to argue about the war. There are more reasons why we are there from cleaning up the messes of European colonialism to economics to oil. And you're right, we do have different ideas of how tax money should or should not be spent.
What is wrong with Cato? Those are honest numbers with possibilities of how Obama would have to pay for his promises.
This is about taxes and where they should be. What happened when Hoover raised taxes after the stock market crash of 1929? The Great Depression. FDR did what he could, but most economists believe that we didn't recover until about 1952.
Obama has proposed trillions in new social spending. We've been down this road before: LBJ's Great Society was a failure. Also, this country has spent $11 trillion dollars fighting poverty to what ends? So more spending supposedly paid for with higher taxes is the answer? If you have a car and you keep spending money hand-over-fist to fix it every other week, will you keep throwing good money after bad? Probably not, you would scrap it and find a different car. Likewise, we need to examine these programs, put in real oversights, scrap the ones that don't work, replace it with something that does and check the spending.
Taxes should be low on incomes and businesses. In my economic geography class, we saw a video that showed how Ireland is becoming a boom country because of their tax rates. More jobs expand the amount of people being taxed and the amount of revenues collected.
Every time taxes have been cut, government revenues have gone up. JFK did it, Reagan did it, and Bush did it. When you punish success with excessive taxation, what incentive do people have to try to succeed? I'm sure you have a great work ethic, and please understand me, I'm not questioning that. However, humor me for a minute. If you worked at a job where you knew that you will never get a raise, would incentive would you have to work to your fullest? Likewise, if you knew the new boss plans on cutting your wages by 5%, would you stay at that job, and what incentive do you have to do a good job? Now, don't get me wrong, I don't think those bozo CEOs that ran their companies into the ground should get their "golden parachutes" or be rewarded in anyway for good behavior. However, replace that guy in a job with a business. Why would a business stay (who is most of the time owned by someone with money) in a place where they are taxed and profits cut? So now, you're not only cutting into business profits, but also incomes. Why would a businessman stay in business or open a business? This is what higher taxes do. They don't raise government revenues, they cost jobs, they get spent by politicians who promised the moon and the stars to get elected. Beware the patron/client relationship. This is the same style of governing that makes up most of Latin/South American politics. This is not what we need here.
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I appreciate your thoughtful responses. Clearly you are a thoughtful and passionate person. I think we just see things a little differently.
You state that every time taxes have been cut, revenues have gone up. Stipulating that that is true, do you believe that is a sustainable program of growth? There are a number of things that 'rev' the economy, but just like we can't spend our way out of trouble, we can't cut our way out of trouble. The problem is that 'revving' is temporary. If you cut taxes to rev the economy, how long does it rev? How low can you go and still see an increase? The people who have run this country since 2001 have been taking us down this path and it has been an utter mess. I'm not saying that it's just about the Bush tax cuts. It's been a lot of things.
Anyway, let's take your analogy for minute, about the person who works at a job who knows he's never going to get a raise. That's not me, my income rises and falls based on my own ability to "go get it", but I understand your premise and your analogy. But it made me think about the millions of Americans who actually do have the jobs you described. I know many, many people who have worked the same job, for essentially the same pay for years, decades. They might get a cost of living raise every three years or so, but pretty much the only improvement they see is through seniority, better choice of shifts, job security, etc. Why do they do it? Why would we expect them to keep doing it? They know that nothing is going to change, and if it does, it probably won't be in their favor. And there are a lot more Americans who are in that position than who are in the position of a small business owner.
And please understand, I agree that small business owners are the engine that drives the economy or at least a big part of it. But if people who are in static jobs are the ones who get squeezed at every turn, why would they continue on their path?
I don't think our taxes are excessive. I don't think think anyone in this country pays excessive taxes. We have some of the lowest personal tax rates of any industrialized nation. Maybe we should lower corporate tax rates and compensate by raising personal tax rates. I would be for that. But someone's got to pay for the things that we have come to expect from our government: roads, schools, defense, grid, etc. Almost everything our government does is for the basic stuff, very little of it goes to feed and house the poor. It seems to me that the conservative people I know should be the first ones to say, "you know what, we have these expenses and we have to pay them, let's all pay our share". Let's be responsible, pay our debts, live on a budget and part of that is putting money aside to pay for it. That's taxation.
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I really don't think that federal income taxes as they stand now are too excessive. And you're right, we should pay our debts and live on a budget. Obama will probably raise our taxes by not doing anything because the Bush tax cuts are set to expire in 2010.
Tax cuts do rev up an economy. However, I agree that the bounce we get can only last so long.
I do worry about Obama's plans about taxes on income and business. I'm a poor college student. 32 years old, been in college just shy of a decade, still working on my bachelor's (reminds me of that scene in Tommy Boy when Tommy gets off the plane). I earned 10,500 or so last year at my minimum wage job. My boss has a company with about 80 employees scattered throughout the area. Now, the restaurant and hospitality business are industries closely tied to the economy. Tuesday's USAToday had an article about how the hotel industry is looking to only fill about 60% of their rooms next year. If what was said in the campaign comes true, the costs to my boss would be enormous at a time when the industry is suffering the most. I honestly believe that my boss would shut the door than watch his profits sink any lower. That's just one company, the same thing is happening all over the US. If we lower corporate rates to be able to compete with other industrialized nations, I think that would help the economy more than anything.
The problem with taxing or adding fees or other charges to business is that they make businesses flee. Look at Illinois, we have 3x the worker's comp rate, high corporate taxes, and numerous business fees. Remember when Gov. Rod raised trucking fees? Illinois lost 50,000 jobs. A friend of mine once told me a saying they have in Indiana: the best thing for business in Indiana is being located next to Illinois. Multiply that on a country wide scale and we see our jobs fleeing to other parts of the world.
So to sum it up: keep income taxes as is, lower corporate taxes, curb government spending, and don't implement any new programs that we can't pay for.
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Huge fan of the World Series of Poker. I had no idea that Eastgate would have to fork over so much of his pot to his government. I wouldn't blame him a bit if he wanted to slip our of the Denmark to a country with less absurd taxes. There are some very good points made in these post so far, but I will have to side with Brian; keep income taxes as is, lower corporate taxes, curb government spending, and don't implement any new programs that we can't pay for. That is the way it needs to be. As for the World Series of poker, I feel sorry for Mr. Peter Eastgate!
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