When Will We Hit The Tipping Point?
There is a tipping point for everything.
Every year, I'm fortunate enough to be able to attend one or two Packers games at Lambeau Field. Typically, I stay until the end of the game - even though it means that I have to fight traffic when I leave the stadium. Occasionally though, the Packers are either so far ahead or so far behind that I decide to head for the exit and get a head start on my ride home. For me, that margin of victory (or defeat) is the "tipping point".
You can probably think of hundreds of examples. Maybe you'd be willing to pay $100 to see your favorite performer in concert but tickets cost $250 - so you decide that it's just not worth it. Maybe you really like a particular restaurant but prices have increased so much that you just can't justify going any more.
You get the idea.
In today's Wall Street Journal, there is a great piece on taxes and "the tipping point". Specifically, the question becomes: when do taxes become so onerous that it's just not worth it for people to work harder?
In 2006 (the last year for which data is available), 220 million people were eligible to vote and 89 million - 40% - paid no income taxes. If Barack Obama's tax credit plan kicks in, another 18 million voters will be removed from the tax polls. This will mean that 49% of eligible voters will not pay taxes.
In addition, another 24 million people (about 11% of the electorate) pay almost no taxes (less than $1000).
This means that we are quickly approaching a situation where 60% of the electorate pays little or nothing in taxes - and are therefore being supported by the rest of us.
Later today, for the people who still are paying taxes, we'll talk about whether there is a tipping point? In other words, is there a point where it's simply not worth it to work extra hours or invest in your own business because the government will just confiscate more and more of your extra earnings from you?
We'll also talk about what it means for society when more and more Americans have no financial incentive to be more productive?