A question about the "rich paying their fair share" charge...

[Atreus21]

Sorry about the shitty format..

Is that capital gains?

 

[woolfe9999]

Well, I found the capital gains tax rate on wikipedia:

http://en.wikipedia.org/wiki/Capital_gains_tax_in_the_United_States

Could you clarify your point?

I would imagine that the seriously wealthy make most of their money on wealth realized from investments.

I think the point is pretty self-evident. In your OP you cite the income tax rate for the top 1% as 38%. Besides the problem with all the loopholes they take advantage of to avoid income tax, most of their money comes from capital gains and that is taxed at 15%. In our system, money that you earn from the sweat of your brow is generally taxed more than money you earn from investments.

 

[Paul98]

How about giving us the top .1 and .01%,...

This is the problem I see with most of these graphics we stop at such an insanely low number compared to how much people make. Do we really think people making 300k, and 20 million a year are the same?

Many people think they are "rich" when are no where near rich, far closer to the poor than the rich. But they don't want to think that because they hate the poor. So they think they are part of the rich and fight for the "rights of the rich." Then when someone talks about the rich not paying there fair share they think they are talking about them.

 

[novasatori]

and where is the payroll tax in your figures?

it is 36% of federal revenues after all

 

[Atreus21]

I think the point is pretty self-evident. In your OP you cite the income tax rate for the top 1% as 38%. Besides the problem with all the loopholes they take advantage of to avoid income tax, most of their money comes from capital gains and that is taxed at 15%.

First, 15% is for long term capital gains. The short term is 35%. Secondly, the wikipedia article I cited said that "this is intended to provide incentives for investors to make capital investments, to fund entrepreneurial activity, and to compensate for the effect of inflation and the corporate income tax."

In our system, money that you earn from the sweat of your brow is generally taxed more than money you earn from investments.

For short term capital gains I agree. That should be taxed like hell, both for the reason you say and there ought not be an incentive for short term investments, which are inherently insecure. For long term investments I disagree. The person held his or her money in a position of risk for a long term, and they ought not be penalized excessively for it.

 

[blackangst1]

The funny thing is, the same people who say the rich dont pay their fair share are the same ones who cry that we're in a race to the bottom. Lets say, for example, we taxed ALL income at, say, 60% for income earners in the top 2%. So approximately earners of $250,000 and above. The overall lifestyle's of those people/families would be dramatically different. No, Im not insinuating they'll have to bum it in a 5000 sqf house instead of a 20,000 sqf mansion. But their lifestyle would certainly change. Their wealth would decrease, they would scale back on things probably. What was that about a race to the bottom? They want to drag the rich there.

Funny thing is, if this plan were implemented, there will still be those who cry because OMG he still took home $500 million last year boo hoo he doesnt pay enough!

I would like an honest answer too. What exactly is a fair share? Hell, in my example above, think of what percentage the top 5% would pay in revenue vs everyone else. Im not seeing the fair in that.

 

[MomentsofSanity]

I think the point is pretty self-evident. In your OP you cite the income tax rate for the top 1% as 38%. Besides the problem with all the loopholes they take advantage of to avoid income tax, most of their money comes from capital gains and that is taxed at 15%. In our system, money that you earn from the sweat of your brow is generally taxed more than money you earn from investments.

This link shows data broken down for each segment. Top 1%, 5% etc... including the bottom 50% the right complains about. This includes total income by group. I should add it's from 2008 and the income in the top brackets has gone up considerably more than the bottom.

http://www.taxfoundation.org/news/show/250.html

 

[blackangst1]

I think the point is pretty self-evident. In your OP you cite the income tax rate for the top 1% as 38%. Besides the problem with all the loopholes they take advantage of to avoid income tax, most of their money comes from capital gains and that is taxed at 15%. In our system, money that you earn from the sweat of your brow is generally taxed more than money you earn from investments.

And guess what. Change capital gains to income tax rates and there will be no more wealth transferred to the bottom, and the rich will continue to get richer. What then?

 

[Argo]

Tell you what - I'll take half your money, and pay the taxes, lowering yours. Deal?

Interesting analogy you have here. What I heard was: "I'll steal something from you, but then donate half of it to charity, so you'll have nothing to complain, right?"

 

[QuantumPion]

Interesting analogy you have here. What I heard was: "I'll steal something from you, but then donate half of it to charity, so you'll have nothing to complain, right?"

I have a better idea. You keep the money that you make (if any) and I keep the money I make.

 

[Fern]

I think the point is pretty self-evident. In your OP you cite the income tax rate for the top 1% as 38%. Besides the problem with all the loopholes they take advantage of to avoid income tax, most of their money comes from capital gains and that is taxed at 15%. In our system, money that you earn from the sweat of your brow is generally taxed more than money you earn from investments.

Wolfe, you're confusing the percentage of tax they pay with the rate of tax they pay.

38% is not the rate, it's the percentage.

Fern

 

[Brovane]

and where is the payroll tax in your figures?

it is 36% of federal revenues after all

Exactly. These figures only talk about income taxes. They always seem to leave out all the other taxes, like payroll taxes, sales tax, property tax etc.

 

[lyssword]

The dream is to rake in money with no labor, and rich are good at doing that. The better you can exploit and rip people off, the more successful you'll be.

 

[Fern]

I don't know if this has ever been posted before.

-snip-

The only discrepancy I can see in the slightest from these numbers is that people in the 11-25% bracket pay 5% more in taxes than the top 6-10% bracket. That's a problem, yes, but I don't think it gels very well with the image of horrible greedy overlords that rich people are portrayed to be at least on this forum.

But could someone explain to me what is meant when they say the rich don't pay their fair share? Fair share of what?

Those people (11-25% bracket) pay more because that group is so much larger. Individually they pay less, but when added together their huge numbers means, as a group, they pay more than the (smaller) 6-10% group.

Fern

 

[Brovane]

What loopholes can I take advantage of? Imagine a two income family in the top 5% of wage earners. Most deductions are gone and AMT starts taking a chunk.

Please tell me about the loopholes and tax breaks! I would like to take advantage of said loopholes and tax breaks!

Well first off you need to get your income in other ways besides having it reported on a W-2. As soon as you get your income through Capital gains, self employent (1099) etc. you can start pulling all sorts of shenigans to get extra tax breaks. Basically the working people that have the majority of there income reported on a W-2 get every cent tracked. However if you get income from other sources all sorts of oppurtunities open up for you.

 

[TheSlamma]

Well first off you need to get your income in other ways besides having it reported on a W-2. As soon as you get your income through Capital gains, self employent (1099) etc. you can start pulling all sorts of shenigans to get extra tax breaks. Basically the working people that have the majority of there income reported on a W-2 get every cent tracked. However if you get income from other sources all sorts of oppurtunities open up for you.

Don't forget your section 98b election..

oh and make sure to go out and buy some pieces of art for say $15,000.. in a couple years have it appraised at 70K then donate em.. boom

Edit: paul98 had the correct answer for spider though. Brag all he wants he is not "rich"

 

[dmcowen674]

I don't think it gels very well with the image of horrible greedy overlords that rich people are portrayed to be at least on this forum.

But could someone explain to me what is meant when they say the rich don't pay their fair share?

Fair share of what?

You must be a horrible rich greedy overlord.

Always complaining you pay too much.

Hopefully you will get uncomfortable enough to leave soon.

 

[BoomerD]

Is that capital gains?

Nope, just the US Income tax rates by year and income range.

 

[woolfe9999]

Those people (11-25% bracket) pay more because that group is so much larger. Individually they pay less, but when added together their huge numbers means, as a group, they pay more than the (smaller) 6-10% group.

Fern

You're right. I see that the OP data was based on percentage of total income tax revenue paid by each income bracket. However, my point remains that the OP data relates only to federal personal income tax. I doesn't cover capital gains. For that matter, it doesn't cover payroll taxes, state income tax, or sales taxes. Any honest assessment should be looking at all sources of taxation.

 

[Fern]

You're right. I see that the OP data was based on percentage of total income tax revenue paid by each income bracket. However, my point remains that the OP data relates only to federal personal income tax. I doesn't cover capital gains. For that matter, it doesn't cover payroll taxes, state income tax, or sales taxes. Any honest assessment should be looking at all sources of taxation.

How do you mean it doesn't cover capital gains?

Cap gains are taxed on our personal income tax return. The income tax on cap gains should be included in the numbers above (in OP).

And no, it wouldn't include payroll taxes, state income taxes or sales taxes (or r/e taxes for that matter). There are some pretty good reasons for excluding these taxes from federal income taxes, some include 'theory' (reason for excluding SS), others are the sheer impossibility of obtaining hard data (not estimates) like with sales tax, and getting the 45 or so states' income tax data together to fold in with the fed govt data is virtually impossible I would think (e.g., incompatible applications/formatting).

Fern

 

[Craig234]

Interesting analogy you have here. What I heard was: "I'll steal something from you, but then donate half of it to charity, so you'll have nothing to complain, right?"

Listen more carefully, and you'll hear the rich saying, 'give use far more of your wealth, and we'll pay the taxes on it (but fight for lower rates).

That's what's happened, as the statistics I listed summarize. The rich are paying a lot of taxes because they're *taking even more wealth*.

My statement was what the rich are doing.

 

[Craig234]

Looks like it's time for the L Curve again. Three minute video to watch:

http://video.google.com/videoplay?docid=5297476348213155147

Puts a bit of perspective on the 'fair share' question.

Not one response I read addressed the stats in my post.

 

[woolfe9999]

How do you mean it doesn't cover capital gains?

Cap gains are taxed on our personal income tax return. The income tax on cap gains should be included in the numbers above (in OP).

And no, it wouldn't include payroll taxes, state income taxes or sales taxes (or r/e taxes for that matter). There are some pretty good reasons for excluding these taxes from federal income taxes, some include 'theory' (reason for excluding SS), others are the sheer impossibility of obtaining hard data (not estimates) like with sales tax, and getting the 45 or so states' income tax data together to fold in with the fed govt data is virtually impossible I would think (e.g., incompatible applications/formatting).

Fern

Fine, but why even discuss what percentage of total tax revenue is paid by the top 1%? Shouldn't we be discussing what percentage of their total income is being paid out? Percentage of total tax revenue reflects income distribution. Suppose, in theory, that 99% of all Americans were below the poverty line and all the rest were millionaires and billionaires. Under any progressive taxation system, the top 1% would be paying at or near 100% of the total income tax revenues. As income distributions become more unequal over time, of course you will see the wealthy paying a higher percentage of total income taxes. But this doesn't support the right's position on taxation the way they think it does. It's actually a self-defeating argument.

Also, my point remains - if we are discussing whether the rich pay their "fair share," which is the broad issue raised by the OP, we can't really answer that question by looking at a subset of taxation, can we? Doesn't matter how difficult it is to obtain other information. You can't take advantage of that fact to try and draw conclusions from a limited information set. The most you can say is that until we obtain all the information, the "fair share" question raised by the OP can't be answered meaningfully.

 

[Argo]

Listen more carefully, and you'll hear the rich saying, 'give use far more of your wealth, and we'll pay the taxes on it (but fight for lower rates).

That's what's happened, as the statistics I listed summarize. The rich are paying a lot of taxes because they're *taking even more wealth*.

My statement was what the rich are doing.

Except the rich are not taking the wealth away by force...

 

[Fern]

Fine, but why even discuss what percentage of total tax revenue is paid by the top 1%?

Ummm. You guys were already talking about it. I just wondered what you meant when you said cap gains weren't included.

Shouldn't we be discussing what percentage of their total income is being paid out?

If you want to, sure.

IIRC, the IRS has that data available. Its' taken from actual tax returns.

Percentage of total tax revenue reflects income distribution.

Ummm.. yeah, pretty much, but it's a little more complicated than that. Since we don't have a flat tax (one single rate) the progressive rates are going to skew that. Then there's the lower LT cap gain & div rates that counter that. Etc.

Suppose, in theory, that 99% of all Americans were below the poverty line and all the rest were millionaires and billionaires. Under any progressive taxation system, the top 1% would be paying at or near 100% of the total income tax revenues. As income distributions become more unequal over time, of course you will see the wealthy paying a higher percentage of total income taxes. But this doesn't support the right's position on taxation the way they think it does. It's actually a self-defeating argument.

Not sure what position of the 'right' you're referring to.

Fern