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I want to start by apologizing to citizen k. My use of his/her comment as a foil in yesterday's diary was in-artful to say the least. I can see in hindsight how it would be embarrassing and even hurtful. I should have found a better way to make my point without using citizen k. It was uncalled for on my part, and it appears to have made things worse, not better. I apologize not only to citizen k, but also to all my readers. I will try to do better from now on.

From some of the comments I've read here and abouts, there seems to be a general sense that the reason some people shy away from progressive taxation policies is because they think "well, what if I won the lottery?" Now, I don't know how true this is. To the best of my knowledge it's more speculation than fact. But for the moment, let's assume it's true that there are people who are leery of supporting higher taxes for those who make more simply because they could someday, maybe, possibly, win the lottery.

The reality is, of course, we do need a progressive taxation policy. One which focuses on taxing the rich more. They use more of our resources to make their money. They should pay for it. I think any arguments I'd read here over this would concern what precisely that policy would look like.

But winning a few million dollars once in a life time is not the same as making millions of dollars every year. Just one million dollars could go quite far for a poor family if they could keep most of it. Does it really make sense to tax both the one time winner at the same rate as, say, Donald Trump? (Trump pays lawyers to avoid paying taxes, of course, which makes this all the more unfair. But I digress.)

So my suggestion is simple. If you win the lottery, you are only taxed on it at the rate you would have been taxed had you not won. I call it, as you may have guessed by the diary title, the Lottery Exemption.

This way, if you're not already wealthy, the higher tax rate doesn't affect you. You can rest easy knowing that just winning the lottery one time is not going to bump you into the top tax bracket.

This would alleviate the "what if I win the lottery" fears, and it should still allow for plenty of revenue. It's not like those rich guys are going away, after all.

The questions this ideas raise are, I think, obvious. Is the premise true? If so, is my suggestion feasible? Is there a better way? I'm sure I'm overlooking various aspects. What are they and can they be adequately addressed?

A Perfect Conversation is a group for republishing diaries that:

A) Challenge the DK conventional wisdom.
B) Provide information which may lead to new ideas.
C) Push for action that is innovative or not just playing defense.

The point is not to agree (or disagree) with these diaries. It's about challenging ourselves to rethink our political philosophies, activities, and issue positions.

I managed to catch up on a lot of reading today, so I hope you're ready for lots of links...just past the fleur de kos. (You're welcome, Youffraita. :))

Republished to A Perfect Conversation on April 12, 2011:

Diary Title
Diary Author
Dispelling myths in the Obama Wars thereisnospoon
I'm quoting kovie from the comments on this diary. "This is one of the most levelheaded and evenhanded diaries on Obama and his supporters/detractors that I've read...."
Tourists For Justice AZ Sphinx Moth
Here's an interesting idea for getting active. What else could we do as tourists to support our causes?
The 99-Percenters Economic Plan: Next steps tmo
Forget about just defending the social safety net. Let's push back with our own plan. Excellent idea!
German Town Shows How to Achieve Nuclear Free Future citisven
What an amazing idea! A German community took over their power grid by forming an energy co-op. Could something similar be done in the United States?
A full list of all diaries republished to A Perfect Conversation can always be found here. Feel free to check it out at any time.

Rec List from the Eclectic Boogaloo - April 12, 2011:

Diary Title
Diary Author
Japan Will Raise the Fukushima Nuclear Accident Rating to Level 7 HoundDog
They're Waiting 15 Hours Outside To Get Their Kids a Few Minutes of Health Care jpmassar
Top Comments (4-11-2011): Sixty Six Years Ago Tomorrow gizmo59
Dispelling myths in the Obama Wars thereisnospoon
Gigantic Gamma Ray Beam Discovered Pointing Directly at Earth FishOutofWater
Final Exit from sanity houyhnhnm
Tourists For Justice AZ Sphinx Moth
Overnight News Digest - iSeriously BentLiberal
10,000 Terabequerels of Radiation/Hr for Several Hours: ROV 46 middleagedhousewife
WI-SC Events v. 3.0 The Little Old Lady Speaks WineRev
Another Scott Walker Pawn: Where is AG Van Hollen's Outrage About Election Integrity Now? FlotsamInaWebSea
Colombia FTA: Rewarding Promises Instead of Performance Leo W Gerard
When Crazy Trumps Rational, It's Rational to be Crazy greywolfe359
Youth Kos 2.0 - Recommend Ideas for Discussion MattFromVermont
Ponzi schemes and other corrupt federal agent get rich quick schemes laserhaas
Obama To Back Simpson-Bowles? (Updated) david mizner
Weekly Audit: Government Shutdown Averted, But At What Cost? The Media Consortium
Deal or no deal? Planned Parenthood defunding edition David Waldman
Our Model of Public Education is a Problem Renee
“Why I left NOM and changed my mind on marriage equality” Clarknt67
No gays allowed at military families event indiemcemopants
The 99-Percenters Economic Plan: Next steps tmo
Taibbi: Waterfall TALF Opportunity: A Case Study in Welfare For the Rich Th0rn
The Daily Diversion: April 12, 2011 weatherdude
German Town Shows How to Achieve Nuclear Free Future citisven
Waukesha County Clerk Nickolaus Issues Statement: "Sorry", Will Not Resign Giles Goat Boy
I Was Wrong: No Cave on Debt Limit TomP
GOP's Roadmap to Ruin Spedwybabs
Action Alert: IL Civil Unions Under Attack mswsm
THIS IS the biggest stickup in American history. teacherken
Wisconsin recall: Republican Randy Hopper to face 2008 rematch Chris Bowers
AP: Budget "tricks" helped Obama save programs from cuts USArmyParatrooper
Interspecies Marriage. Abomination? Lifestyle Choice? Or Fundamental Right? The Candidates Opine. jpmassar
Budget Cuts: Cheers and Jeers, Sigmund Freud and Economic Theory psyched
Happy Talk from Reuters: How does Fukushima differ from Chernobyl? Joieau
We're Not Waiting This Time Stranded Wind
Top Comments: Jam Edition brillig
Red Bloggers: "It is becoming more and more clear that Republicans got played in the budget deal." timmyc
Fukushima Eyes: ROV 47 boatsie

Chapter 1

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Comment Preferences

  •  Tip Jar (5+ / 0-)

    There can be no left-of-center if the left is in the center.
    Have you seen a pest, critter, or bug? You need KosBusters!

    by Gabriel D on Tue Apr 12, 2011 at 09:45:02 PM PDT

  •  At one time we had income averaging (4+ / 0-)
    Recommended by:
    Gabriel D, OLinda, asterkitty, RiaD

    It was really designed for authors, artists, actors and other people who have very uneven income streams. If you had a high income year you could go back and average it over a three year period. You would have to pay the higher taxes for the prior two years as part of the averaging process. I always liked that feature and was sorry to see it go. It too would have handled the lottery issue, although in a somewhat different fashion.

    "let's talk about that"

    by VClib on Tue Apr 12, 2011 at 09:59:47 PM PDT

  •  Sorry, (1+ / 1-)
    Recommended by:
    johnny wurster
    Hidden by:

    I thought this was a diary.

    When the power of love overcomes the love of power, the world will know peace- Hendrix

    by Maori on Tue Apr 12, 2011 at 10:10:26 PM PDT

  •  "what if I won the lottery?" (3+ / 0-)
    Recommended by:
    Gabriel D, princesspat, RiaD

    There are other ways in which people believe--incorrectly, in the vast majority of cases--that they can "win the (virtual) lottery".

    In Silicon Valley, it's the belief that they, like a few lucky others, will join or invest in that startup is the next Google.

    In many places, it's that an unknown relative will die and leave them a vast fortune.

    In all cases, it's a matter of mathematical innumeracy winning out over logic and reason.

    But it's enough to get people to vote against their own best interests and give the wealthy their tax breaks.

    "Ridicule is the only weapon which can be used against unintelligible propositions." - Thomas Jefferson

    by rfall on Tue Apr 12, 2011 at 10:10:57 PM PDT

    •  Well, certainly it's illogical. (0+ / 0-)

      But there is a rationality to it, even if it's misguided. I'd rather not dismiss it, especially if that's really what's holding up broader acceptance of a progressive tax policy. (Not saying you are dismissing it. Just giving my thoughts.)

      If I'm wrong, and this isn't such a big holdup, okay, fine. We wasted an evening on what turned out to be a silly thought experiment. But if I'm right...well, you'll have just saved the lives of millions of registered voters.

      There can be no left-of-center if the left is in the center.
      Have you seen a pest, critter, or bug? You need KosBusters!

      by Gabriel D on Tue Apr 12, 2011 at 10:33:18 PM PDT

      [ Parent ]

    •  And you unwittingly provide an example (4+ / 0-)
      Recommended by:
      Gabriel D, in the Trees, RiaD, rfall

      of where liberals/progressives suck at messaging. I have been talking a lot the last few days as to how liberals lose the messaging war and how the GOP has prevailed. You give a clear example:

      But it's enough to get people to vote against their own best interests and give the wealthy their tax breaks

      Now Frank Luntz once said a key phrase: It's not what you say but what people hear.

      "Vote Against their Own Interests"

      What you (probably) mean: People vote for candidates who undermine issues that matter to them or something like that

      What people hear: That you think they're too stupid to figure out what "their interests" should be. That you think they can't figure it out on their own and need someone like you to tell them.

      •  Most People Don't Look At The World... (1+ / 0-)
        Recommended by:
        Gabriel D

        with only one characteristic in mind.  The world and our lives are very complex and peoples decisions are just as complex.  To imagine that many people vote for a candidate only because they feel they may win the lottery, is simplistic and not realistic.  Of course we still have "party line" voters that look at only one issue in the ballot box, but that issue is not hoping to win the lottery.

        On the other hand, constitutional amendments, referendums, etc.  because they are pretty narrow in their scope are often decided by a single issue.

  •  lottery (5+ / 0-)

    I've never bought that idea that everyone thinks they'll be rich some day, so they don't want to tax the rich more. I don't know what the reason is, but I just don't think it's that.

    It could be just that most of us are brought up to be nice, and we don't begrudge others what they have. Everyone is brainwashed to think taxes are all bad, so it's pretty mean to say out loud that you think other people should be taxed even more.

    I think most people also have no idea how much money the rich actually have. They just have no concept of it. It's like when I was given a $5000 bonus/tip by a client once, and was pretty discombobulated over it until I realized he was so wealthy that in relation to our net worth, it was as if I had given someone a bonus of about a dollar. People hear someone might have to give an extra $100,000 in taxes and think OMG, not realizing the super rich would not even notice it on their financial statement or in their lives.

    As to your idea, a one time unexpected windfall exemption for lottery winnings and other occurrences would be worth looking at. Or tax them at the higher rate after the first 1 or 2 million or so.

    The brilliant, liberal voice of Sam Seder is back! mp3 play, live stream, i-Tunes.

    by OLinda on Wed Apr 13, 2011 at 01:47:19 AM PDT

  •  Why progressive taxation isn't (4+ / 0-)
    Recommended by:
    johnny wurster, Gabriel D, RiaD, buckeye74

    always popular and why some working class people don't support it:

    1) The first argument I often hear deals with success. People work hard, play by the rules, and get compensated. Why should the government penalize them for success?

    2) The second argument focuses on where the government spends its money. Mostly this argument centers around the fact that people don't want their precious tax dollars supporting "those people" on welfare. Although welfare is a very small part of the budget, this is one major reason why people oppose progressive taxation.

    3) In some big metropolitan areas a salary in the low six figures for a married couple with two children--take suburban Washington, DC, for example--isn't "rich". While such a family isn't poor, they aren't awash in money either. They're afraid that "progressive taxation" means they'll be stretched even further when they are only "rich" because they live in a high-cost of living area.

    Now I've been talking a lot about messaging lately. And I'm going to make a point that you may not agree with. Telling people "they will never be rich" isn't going to work with them. Yes it is unlikely that most people will get rich.

    But people also want a better life for their children. And most Americans do believe that, if you work hard, play by the rules, do the right thing, and you get a break or two, you can improve your economic position. Telling people that they will "never be rich" runs counter to the principle of the American dream.

  •  The first step back to progressive taxation... (7+ / 0-) to fight back against the notion that taxes are a "penalty" or "punishment." This is the meme that right-wing pundits love to push: "Why do you want to punish my success by making me pay more if I make more?"

    Several years ago, the Wall Street Journal even called those with low incomes "lucky duckies," because they "pay no taxes." (First of all, that's not true. Everyone pays payroll taxes, but let's be generous and assume they meant "federal income tax.")

    Someone earning $1 million still has more than $650,000 left after taxes ("more than" because only the income above $383,00 is taxed at 35%). Someone earning $12,000 won't pay income tax, but they still have only $12,000.

    I don't know about you, but as one of the "lucky duckies," I'd much rather pay the high marginal rate on a million-dollar income and have $650,000 (hell, even $400,000) left than try to live on what I have to try to live on. And that goes for winning the lottery, too. God, let me win the Powerball, even the million dollars I'd get for matching just the five white balls, and I'd gladly give Uncle Sam his 35%. Hell, make it 50% -- because what I would have left would still allow me to get completely out of debt, buy a new car, re-landscape my yard, fix up my house and take a really nice vacation without having to worry about the fact that my vacation time is not paid.

    Taxes are not "punishment." They are not meant to "penalize success." They are what we contribute to society so that all of us can enjoy a better quality of life -- good schools, bridges that won't fall out from under us, food that won't poison us, police and firefighters to protect us at home and a military to protect us abroad, among other things. To buy into the meme of taxes as punishment is to buy into the meme of government as the enemy. I don't happen to buy into that at all.

    I vote we run Rick Scott out of Florida on a high-speed rail.

    by ObamOcala on Wed Apr 13, 2011 at 04:03:35 AM PDT

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