first loser

marginal rates will rise TO 50% and 40% under the candidates' plans, not BY 50% and 40%. big difference

"Does anybody still believe anything they hear?"

"Here's a question that still hasn't been answered (by lawyers, pundits, or even Kirkland & Ellis): does anybody still think that either of the candidates' tax plans bear any relation to what will actually happen once one of these guys takes office?"

Elie, you do not write well. You need an editor.

This is awesome! I love that all you big law types are willing to pay extra for others to sit on their ass. Swell fellas, you are.

Keep loving on your Obama.

Elie, you're really an idiot. Top marginal rates will rise TO 40% and 50%, not BY 40% and 50%.

I just wish these canidates would be honest with the American people. Our National Debt is spiralling out of control and until we get our spending in check and this economy at least on a shallower dive, it is going to keep growing. Taxes will have to go up, no matter who is president. If they just come to the table and say it and explain why, I would appreciate it and it could swing my vote. I hate higher taxes just as much as anyone, but to think that this country can get by without raising taxes is DELUSIONAL!

On that same note, I can't believe that Obama is still talking about Universal Healthcare. How is it going to be paid for? It would never make its way through Congress and I guess that is what Obama is banking on, he knows that it can't be paid for, and he can rely on Congress to stop it and he can spin it to "Well at least I tried." The only way to fix the system is to establish a system where all parties pay the same price for medical services. If you have Medicare, you pay X, Blue Cross you pay X, no insurance you pay X. We can't have a system like we have now where Medicare and Blue Cross pay X and no insurance pays 3X. I understand that those without insurance aren't going to pay anyway, but at least pretend to have a balanced system.

OK, I'm done with my rant, I feel better!

7 is an idiot. Why pay for insurance if when I get sick I have the same bill as the person without insurance? Seriously, did you think about your position at all before writing that?

Those charts are useless.

Why? Because they max out at $140k for a dual income family.

We need to see what the candidates plans will do to the marginal rates for $2150k-$500k individuals and families.

Hint: Obama will raise the effective marginal rate on these people a lot by increasing the federal income tax marginal rate on the top bracket AND increasing SS taxes (either by removing the cap or installing an additional SS tax for earnings above $250k).

Great news for associates. I guess whatever is left of our bonuses after our firms' debtor client trustees try to take them back will just go to the government.

Worry first about having income to tax. How secure is anyone's job these days?

Elie,

There's a difference between a decreased incentive and a "direct disincentive." If you still take home more money as a result of having earned more money, it's not a "direct disincentive."

Please explain the Walter Mondale/Jimmy Hoffa joke. Please, please let that have been a joke.

7, that wasn't a rant. That was a brain queef. I am embarrassed for you.

how much of my sa salary will be taxed?

have you guys read 'the secret'? i'm using that technique to get my 1L sa position...will post updates.

*thinks really hard about $3/week at sullcrom*

-nervous T-10 1L

http://www.theonion.com/content/news/report_60_million_people_youd

not to pile on 7, but you could make some effort to be logical and accurate. no one has proposed "Universal Healthcare,"--if that term even has any meaning. if you have employer-sponsored health insurance, nothing will change for you (except that your carrier might be forced to be more fair with you). if you don't have employer-sponsored insurance, you'll have the opportunity to buy into the federal gov't employee plan. simple.

If Obama's going to raise taxes, he should at least make some kind of personal gesture by selling some of his seven houses and applying the money toward the debt.

Sorry about my typo there (should read $150k-$500k).

Either way the point still stands. Charts that end at $140k (for a dual income family no less!) are worthless to us. What are McCain and Obama going to do to those of us that make $160k+ (or $300k+ if both you and your spouse word

-9

...why does this post have any relevance to a legal blog?

17- i think you mean McCain.

20- I think you've been trolled.

The marginal tax rate is not the same as the overall effective rate. Keep that in mind. A chart of the overall effective rate would be interesting and useful.

19: Exactly ------

Oh well - it's time.......

MysTTTal

just saying.

How the hell am i disincentivized? As far as I can tell, i still make more the more hours I work. More money results in more incentive to make more money. How many people do YOU know that took a lower paying job just to avoid taxes?

22- Yeah it would be nice.

But what would be better would be if this was actually relevant instead of stopping at $140k.

Of course Ellie wouldn't point that out because it would just make Obama look much worse than McCain. At least David looked out for us (even though the Obama is the Messiah people would scream to no end every time David pointed out, correctly, that Obama would be much worse for our pocketbooks than McCain would be).

All of you idiots whining that Obama will raise taxes are idiots because, unless we have a smart spend/save ratio (which we haven't had under a republican president in 30 years) we'll have a 80% tax rate in the future or else the government will go bankrupt.

i'm interested in whether the marginal rates change by or to certain percentages only if my income is coming from the submarine law practice at WILDMAN HARROLD.

HOW DOES THIS AFFECT STARTING SALARIES AT WILDMAN HARROLD?

-nervous top 10 1L

I want to hear from someone who is planning to quit their BigLaw job to stay home and eat Doritos because their MARGINAL tax rate is going back to where it was in the 1990s. I all-capped "marginal" because if you make less than around 600k/yr your total tax rate will still be lower under any of the plans.

Anyone, anyone... Bueller...

26- The gov't can't go bankrupt. They print the money.

Also you think that Pelosi / Reid / Obama are going to spend less money than Pelosi / Reid / McCain? What are you smoking cause I could use some with what the markets have been doing the last couple of weeks.

The best government is always divided government. It prevents either party from going out of control. With the GOP in control of everything things haven't been great. But the answer to that isn't to have the Dems in control, it is to have divided government. Since the congress doesn't look to be changing anytime soon we need to elect McCain and not Obama.

16: A lot of Obama supporters haven't bothered reading his platform, and they just assume he supports whatever liberal position they have. Many of the positions the far left hate McCain for (against gay marriage, for drilling in Alaska, for an indefinite military presence in Iraq) are shared by Obama.

I'm sure there's the same issue with some McCain supporters, but I just don't have to interact with them on a daily basis.

This stupid political post rival's Elie's last stupid political post in the magnitude of its stupidity. From the stupid headline down to the stupid Mondale joke(?).

damn. scooped by 3. although, 3, you failed to state directly that Elie is an idiot.

-6

12 and 24 are correct. Elie is also a moron.

This page sucks now.

4, was there an ATL post about that?

30 is correct.

Divided govt >>>>> Bush/Delay rule >>>>>>>>>>>>>>>>>>>>>>>>>> pelosi/Osama rule

24 is absolutely right. Jesus, Elie, stop spewing false knowledge.

24: There is some amount of effort you would put towards earning $500,000. The effort you'd be willing to put towards earning $400,000 is smaller. I think that pretty much sums it up.

"4, was there an ATL post about that?"

Huh? I just cut and pasted two sentences from the post in which Elie makes common grammatical errors (pronoun agreement, subject/verb agreement). Him be have trouble all the times with him writing.

38 - the point is that a person will not work less to avoid an increase in marginal tax brackets. So says Marv Chirelstein, anyway.

The disincentive isn't to not work at a higher paying job, it is to work more hours. If after I bill 2200 hours I only get to keep half of my earnings, I might as well stay at home with the kids/spouse/bf/gf. (I should anyway, but most of us don't.) Why bill that 2201st hour if I don't get the same value as the 1901st hour. All of a sudden I'm working for a smaller wage.

i'm asking WILDMAN HARROLD for a pay cut so i can save money.

37- see 12. Proper attribution, bro.

-12

PS, 38 - You're a moron.

Money, get away.
Get a good job with good pay and youre okay.
Money, its a gas.
Grab that cash with both hands and make a stash.
New car, caviar, four star daydream,
Think Ill buy me a football team.

41, 29 here. If you can honestly tell me that you're not staying seeing your kids and spouse because of how the marginal tax rate will affect your bonus, then you're not a person; you're an example in some economics book. You are "Homo economicus", the economic man.

Let's assume you're in the top rate (you're probably not; it STARTS at 357k this year -- http://taxes.about.com/od/2008taxes/qt/2008_tax_rates.htm), which is 35%. In 2000, this rate was 39.6%. Let's assume the difference between 1900 and 2200 is the "special bonus" of $20k. That means that under the Reign of Terror that will be the Obama administration you will pay an extra... wait for it... $1000 in taxes on this bonus.

You can plug in a bigger bonus number if you want; I just wanted to give you some idea of how truly marginal this difference is going to be for most of us (non-partners). In reality, you're probably motivated by the cash either way -- whether it's 12k or 13k (the difference between the 2008 rates) -- not the tax rate. Or you're just a neurotic Type A lawyer who needs to be the top dog in your firm. Either way, I recommend you spend more time with your family.

Finally, most of us (non-partners) are NOT in the top rate; we're in the second highest rate. Even if Obama breaks his promise and entirely rolls back the tax rates to the 2000 levels (he has said he won't do this for income under 250k), the difference there will be 3% on your marginal dollar of income -- 33% vs. 36%. So you're going to forsake your bonus because it's 3 percent lower? Please. And you're bonus will be far lower this year because of the economy than any tax impact ever could be.

Dear 19 and 23

A small percentage of the people who read this blog earn a living. Changes in tax policy might affect their take-home pay and their estate planning strategy.

In addition, some also serve clients that might be affected by a change in tax policy under either candidate.

Ever heard of tax law? Look it up, then crawl back under that 1L rock.

41 - Your most salient point is in parentheses. Perhaps there is a breaking point - the top marginal rates have been in the 70-80% range I believe during the world wars. But Americans will continue to work without regard for entering a new income bracket.

45: The people the marginal rate increase would affect most are the ones deciding whether to stay in the big law market, or instead be a stay at home parent, professor, whatever.

46, I appreciate the irony of someone who needs to "earn a living" being concerned about "their estate planning strategy."

"Walter Mondale is now under the one of the endzones in Giants Stadium"

I ahd no idea Dorsey was in such trouble--officing not just IN New Jersey, not just IN a landfill, but actually UNDERGROUND in a landfill in NJ. Hope they got great terms on the lease.

8, I think 7 was addressing the situation where a health care service provider creates a false "standard rate" which is charged to persons without a group to negotiate a "discounted rate" for them. The former group ends up being billed 3x the amount of the latter group for the same procedure. This is different than how much members in each group pay--if you fall in the latter because you have insurance, you will obviously pay even less than you are billed.

This situation not only bills people who cannot afford insurance more than people who can, but it smacks of Medicare fraud, i.e. health care service providers in reality have a standard rate for services much lower than what Medicare reimburses them for--the rate they charge patients with private insurance.

MysTTTal

8, I think 7 was addressing the situation where a health care service provider creates a false "standard rate" which is charged to persons without a group to negotiate a "discounted rate" for them. The former group ends up being billed 3x the amount of the latter group for the same procedure. This is different than how much members in each group pay--if you fall in the latter because you have insurance, you will obviously pay even less than you are billed.

This situation not only bills people who cannot afford insurance more than people who can, but it smacks of Medicare fraud, i.e. health care service providers in reality have a standard rate for services much lower than what Medicare reimburses them for--the rate they charge patients with private insurance.

48, 45 here: point taken. Though with our jobs being such an all/nothing proposition of large income, I have a tough time seeing this being the deciding factor (5% difference on 200k is 10k. A decent amount of money, sure. But enough to make you take a different job or exit the workforce? Probably not.). Where it kicks in most in the legal profession is probably solos who decide to take a light schedule in December because they've had a good year. You really have to be an entrepeneur or small business owner to even allow marginal income factors to affect your behavior.

49
Because the real people who worry about what they're leaving the kids really don't earn a living. Too much irony in one day. I'll have to come back to ATL next week.

31: it sounds like you haven't read McCain's platform either. He's against drilling in Alaska (Palin is for it).

"For those of you who slept through Tax" ... there is no such thing as "THE marginal tax rate". It's different for different income brackets.

48, 45 here: point taken. Though with our jobs being such an all/nothing proposition of large income, I have a tough time seeing this being the deciding factor (5% difference on 200k is 10k. A decent amount of money, sure. But enough to make you take a different job or exit the workforce? Probably not.). Where it kicks in most in the legal profession is probably solos who decide to take a light schedule in December because they've had a good year. You really have to be an entrepeneur or small business owner to even allow marginal income factors to affect your behavior.

Elie:

How about a little fucking diligence before your credibly cite sources pushing an undisclosed agenda. As Paul Krugman succinctly put it "The Tax Foundation is not a reliable source", and just b/c someone else cites it, doesn't amke it more reliable.

Elie, why are theses charts "thankfully based on double income homes"? These charts show the rates for MARRIED COUPLES FILING JOINTLY, who get to have much higher total income before the top rates kick in. Those of us who are SINGLE will see these rates increases at incomes much lower than indicated on the charts.

Also along the lines of high-income-singles-are-royally-screwed, has anyone else noticed how Obama has subtly shifted his "your taxes won't go up" argument? He's been repeatedly stating that if you make under $250K per year your taxes won't increase, but his new commercial on taxes states that he won't raise taxes on FAMILIES making less than $250K. Since in Washington "families" is code for married couples, this strongly suggests that single folks under $250K will not be spared under the Obama plan. Yes, 1st year Biglaw associates, you better be ready to bend over and take it!

I think a lot of people are missing the point (or at least my problem with taxes). A lot of people may not consider 5 or 10% a big difference, but the problem is the total amount of taxes we pay. High income earners pay too many taxes already! If you live in NYC and you make... let's say 160k...right now, half of your income goes to taxes (federal, state, city, medicare, SS). HALF! The president should focus on making government smaller... getting rid of all of those organizations and agencies that are ineffective... rather than raising taxes to pay for people who would've been laid off or fired years ago in BigLaw.

"rather than raising taxes to pay for people who would've been laid off or fired years ago in BigLaw"

Oh, man, 61, talk about signing your own death warrant. The irony is DE-licious.

If you believe him, Obama will raise taxes on married couples making over $250k and singles making over $200.

Now, those with an advanced degree in mathematics from MIT might say "hmmm, 250k is 150k less than twice $200k." But those of us who are not math geniuses can boil this down to: married professionals are about to get SCREWED.

And that's where the disincentive comes in. Married professionals make choices: do both spouses work demanding law firm jobs and rack up a big bank account, or does one (usually the wife in our society) leave the workforce, or take a lower paying and less demanding job so she can spend more time at home?

Well, Dear Leader has announced with his tax policy that He would strongly encourage professional wives to leave the thinking work to the menfolk, and stay home and make babies. Single women may continue to put their degrees to use until such time as they catch a husband. Thank you Dear Leader!

62 - 61 here. I didn't sign my own death warrant because I don't need BigLaw... but I may have signed yours. Oops.

If Obama wins, I'm moving to Canada.

63, your point is transparently absurd. This imaginary couple is making such a decision based on a host of factors, not the least of which are 1) child care, which costs a hell of a lot more than any difference in taxes and 2) the intangible benefit of having the mother raise the child. Two-BigLaw couples are already getting (gently) screwed by the tax system, especially vis a vis people who get their income from investments and capital gains, homeowners, etc. But it's hard for me to shed that many tears over these folks pulling down 400-large (I'm in this group too). Please, focus on the difference between the status quo and a new system. Any honest person will say it's miniscule. Not only that, the benefits we will enjoy from having a better economy will dwarf any tweaking of the tax code.

While we're on the subject of irony, Paul Krugman pointing out that a source may not be credible is simply amazing.

To 12, 24, 34,37, and 38: your undergraduate microeconomics professors are all shaking their heads in disappointment right now.

65, you won't be missed.

The Tax Foundation is not reliable: http://krugman.blogs.nytimes.com/2008/08/24/the-tax-foundation-is-not-a-reliable-source/

I started working WAY harder when Bush cut my tax rate in 2003.

Sorry for falsely implicating you 38, I misread your comment. You are correct.

-- 68

Elie, GET SOME FUCKING CRITICAL THINKING SKILLS.

Any journalist who covers public policy or who has been in Washington for more than two seconds knows that the Tax Foundation has a serious right-wing bent (they are the conservative counterpart to CBPP). Their "reports" should be taken with the same amount of salt you would apply to reports from any other partisan organization.

Do a little more than just copy-paste their press release, you idiot. This is supposed to be your job, after all, and you are supposed to be a professional. (Hahahaha.)

Wait, I thought the flock was told it was patriotic to pay more taxes? I hear the top taxpayer will be in line for Trotsky's Order of Valor at the next convention of the Peoples Congress.

Goodbye 65!

Wait, I thought the flock was told it was patriotic to pay more taxes? I hear the top taxpayer will be in line for Trotsky's Order of Valor at the next convention of the Peoples Congress.

@24. You are retarded.

At some point people realize that the price they pay for the next dollar earned is no longer worth that dollar. Increasing the tax rate increases the price an individual must pay, especially for hourly workers, to obtain the next dollar.

We can argue about what rate is appropriate. We can argue about whether we should care about people who choose to work fewer hours. What is not in doubt is that higher tax rates will, at some point and for some people, create a disincentive for work.

77 - please don't insult "retards" with such an accusation. They're clearly smarter.

77 - "higher tax rates will, at some point and for some people, create a disincentive for work."

This sentence is not doing a lot of work here. 90%? 5 people?

26 = an idiotic redundant idiot.

@79.

Fair enough - the sentence isn't doing much work. I didn't have time to do an empirical study before posting. "Some point" will differ depending on non-work obligations, the type of work, the person's belief about what his or her taxes are being used for, or whether a spouse or s/o is employed.

For an attorney working intense, stressful, and intellectually draining hours I think the disincentive point will be substantially lower than 90%. Maybe getting a few attorneys out of the office a bit earlier wouldn't be such a bad thing.

79 - higher tax rates create a disincentive for people near the cutoff points. If your income is near the bottom of a higher tax bracket, then you make less than those earning the max amount under a lower tax bracket. This especially hurts low income workers who pass up a promotion (and the opportunity to make more down the road) because they can't afford to pay the additional taxes.

The dumbasses here who worry about their potential tax liabilities are about as astute as someone wondering whether they should put granite or marble in their brand new house on the shore while a Category 5 hurricane is heading directly toward it.

It's a shame that so many half-intelligent people waste their brain power on such bullshit. Keep billing hours and worrying about taxes as Rome burns motherfuckers.

And all that precious time spent in the office - y'all can't get it back. It's gone. Just like all that illusory wealth in the stock market.

@82 - how did they let you graduate 8th grade without understanding how marginal tax rates work?

82 here... I should clarify - this is the way many low income earners think. Just ask them.

63, you've got it all wrong. The marriage penalty isn't a disincentive to work, it's a disincentive to get married. It doesn't encourage stay-at-home motherhood, it encourages divorce.

Most - make that all - dual lawyer couples I know are smart enough to know that the only difference between being married and cohabitating is a piece of paper. If President Obama tells them that that piece of paper is going to cost them $30,000 a year, then they're not going to go out an get it. And those that have it will turn it in.

Honestly - a marriage license doesn't make a couple love each other anymore, and the distribution of assets in the event of a potential break-up can be accomplished by contract. So since Obama's marriage penalty will cost two lawyer families each year amount tequivellant to one year of private college tuition, why in the world would any couple with a lick of sense in their heads get, or stay, married?

Obama doesn't want women barefoot and pregnant. He wants them divorced.

High marginal tax rates are not a disincentive to work only if you value your leisure time at zero. If that is so, like #24, then you are not human and you don't need to sleep or entertain yourself.

Say that you value your leisure time (reading, working out, sleeping, etc) at $20 an hour. If your per hour pay is $40, you would only work extra (overtime, self-employed work, getting a more-pay-more-hours job, etc) if your marginal tax rate is less than 50%. The more you make, the higher your marginal rate will be under a progressive system. Higher marginal rates would affect more people whose leisure time value are at the margins.

The left-wing ignoramus who try to bring up the fact that marginal rates were over 70% back in 60s and 70s are clueless. Those mythically high marginal rates affected basically zero people, because all high earners converted their income to capital gains (taxed at 30% or so), passed their income to a corporation (46% rate after plentiful deductions), or took huge itemized deductions (personal interest, rental depreciation, horse raising, tax shelters, etc) that are now limited or eliminated.

When did the eliminate that option? You can still take it as an SCorp. And are there any statistics showing that anyone ever has let up on their work because they are worried about their marginal tax work.

And even if some lawyer does lay off the billables because of taxes, what work is anyone reading this blog possible doing that the world could not do without.

Any asshole passing up a promotion because they are worried about the taxes they might have to pay in the future is an asshole and a fool who does not deserve the promotion.

82 - You're stupider than your counterparts. You're likely also a low earner. Marginal tax rates can't take money out of your pocket.

88, S Corps are taxed at the same rate as the person, because the income is pass through, so S corps don't make any difference.
Back in the 70s, individuals were taxed at 70% max, while C corps were taxed at 46%. You put all your income in the C corp and let it accumulate, and then your heirs liquidate the corp with no tax because of the step up of basis at death. Nobody sensible ever paid the 70% marginal rate.

Let me put it this way. If marginal tax rates went down to say 10%, do you think some people would work more hours? Obviously yes. Then why should the converse not be true when marginal rates go up?

If the marginal tax rate went up to 99%, you seriously think people will work the same amount as they do now? After all, they are still keeping 1% so technically they still get more money for each hour worked.

@89. You seem to be missing the point.

It's not just that someone would pass up a promotion simply because of the taxes, it's that a person might decide that the additional responsibilities entailed by the promotion might not be worth the additional money afforded by the promotion. The money afforded by the promotion will be affected by the tax rate.

@88. I don't have statistics. However, I suspect that when skilled workers (usually women) step out of the workforce for a few years to raise children, their marginal tax rate will affect their decision as to whether they should return to the work force.

For instance, lawyer wife quits to be with kids, while lawyer husband continues with his job. After little brats hit elementary school, lawyer wife wants to return to work. In the meantime, lawyer husband has made partner. No matter where lawyer wife works, about half of her salary will be gobbled up by taxes.

Lawyer wife says, "I could give a majority of my earnings to the government. Or I could spend two hours at the gym every morning, putter around doing non-profit stuff, and be working on my third martini at 3pm."

See how that works? Not so complicated, eh?

Oh, and Rome is burning. See @83.

I always take into account my marginal tax rate when planning my weekend, that is why I will be working until 2:47 p.m. on Saturday and not a minute more.

If the wife could earn 100K a year, she would go to work at a 40% but not at 50%?

@94. Possibly, though a ten percentage point difference might not have a huge effect - I don't know. It just depends on the values of the individual.

the "marginal tax rate", while a useful tool in dictating macroeconomic policy... is pretty much a bunch of hooey when comparing Obama and McCain's policies here. An increase in the marginal tax rate means pretty much nothing to the overwhelming number of average americans... under Obama's plan you don't have to worry about higher taxes until you break $200,000 something most people won't ever do..and not because of the tax disincentive.

96 - it doesn't matter if most people will never break 200k. Obama talks about what's "fair." Fair is NOT taking half or more of any portion of your income... money you worked hard to earn.

That said, I have no problem with Obama's plan to increase capital gains taxes as long as income taxes are so high.

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until on day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20."Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men --- the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too.
It's unfair that he got ten times more than I!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

Focusing on marginal rates is the easiest way to frighten idiots about taxes.

Once again, the Obamaphiles are silent about the marriage penalty. Defenders? Anyone? Bueller? Bueller?

Maybe this is part of Obama's attempt to straddle the gay marriage issue. He's going to tax marriage so heavily, that homosexuals will want to stay single! Very clever!!

Last time I read the Constitution, the Prez doesn't set tax rates.

Congress sets tax rates.

Congress will be Democratic.

Therefore, McCain is a rambling old man.

He doesn't know e-mail, he doesn't know the economy, and he keeps telling us he'll do stuff that he can't. I'd like to see him singlehandedly lower the tax rate, fix Social Security, and find Bin Laden. For fuck's sake, give us all a break.

101 = law student jackarse.

What the constitution says is not the political reality. The political reality is that while congress votes on the budget, the President must sign it, and in all but the most lopsided congresses, a presidential veto of the budget shuts down the government, which none of these rent-seeking pols want.

So the reality is that congress works very closely with the pres in setting a budget, and a pres can easily win a few points with an opposition congress, such as tax cuts or take hikes, depending on his fancy.

You really put in print that McCain doesn't know how to use email? Even the dems gave up on that one.

http://www.politico.com/news/stories/0708/11670.html

@ 101 - funny you mention that you don't think McCain can "lower the tax rate, fix Social Security, and find Bin Laden." ...that's exactly what Obama plans to do. But, well, I guess he is The One, and since so many people are proud of their country for the first time, he'll probably do all of that, cure aids and create world peace.

Who accepts the premise that tax increases of this magnitude are an actual disincentive to work? I was a working lawyer for 30 years and a big law firm partner for the last 20 years of that. In New York, with the AMT, law firm partners have all been paying an actual 45 - 50% of gross income in federal and local tax for years. No one, ever, didn't work because their marginal tax rate went up, or worked harder because their rate went down. Life, and the reasons for work, are more complicated than that. That supposed direct line between marginal tax rates and work is pure Republican agitprop, never proven by any real analysis. One ought not to be so quick to accept that theoretical nonsense. if your comp goes up $100K , at a 50% tax rate you still get to keep half. Good for a year's worth of my kids college tuition. That was always enough to make a difference to me, and to everyone else I know.

If you are so concerned that earning slightly more will put you in a higher marginal tax bracket (i.e. promotion or bonus), put that amount in an IRA and shut the hell up.

What schlock. Can everyone please read comment #12 again?? I'll rephrase: there is a difference between a direct disincentive and a decreased incentive.

Further: we don't pay taxes in a vaccuum. We make decisions based on a large number of psychological and economic variables, not just taxes.

Further: there are markets. For a bunch of rich conservative lawyers, you people don't have much faith in economics. What happens if the marginal tax rate goes up for overworked, overpaid associates? Their effective hourly take-home wage goes down. So they have a decreased incentive to work longer hours. So MAYBE people will work less (only people who make over $200k and work a lot, so we're really just talking about biglaw associates here).

What's the result? If the firms need work done, they'll find a way to get it done. That could mean hiring more associates, so the aggregate number of man-hours worked remains constant. Higher demand for associate jobs makes them more secure. Yay! Or, it could mean raising salaries to induce existing associates to work harder. Yay!

Either way associates will be okay. And if neither of those things happen, it indicates that the valuation of their work before the marginal tax hike was out of whack. If you like efficient markets then you should embrace such a correction.