Myth – The Rich Don’t Pay Their Fair Share
Perhaps one of the most common myths (or lies, depending on how you look at at it), is the idea the “rich don’t pay their fair share”. But is this true? Various groups drag out “studies” to prove their point, but are they correct? Instead of using biased “studies” (from any group), why not simply go to the source? The Federal Government published a CBO Paper in August 2004 titled Effective Federal Tax Rates Under Current Law, 2001-2014. On Table 2 (page 18 of the PDF) “Effective Federal Tax Rates” under “Share of Total Federal Tax Liabilities” heading shows some interesting results.
Taxes paid by highest incomes
- The top 1% pay 22.7% of taxes.
- The top 10% pay 50% of taxes.
- The top 20% pay 65.3% of taxes.
- The top 40% pay 84.3% of taxes.
Taxes paid by lowest incomes
- The bottom 20% pay 1.1% of taxes.
- The bottom 40% pay 6.1% of taxes.
The bottom 40% pay about 6% of taxes, while the top 40% pay about 85% of taxes — or about 14 times more than their counterparts in the lower brackets. But in light of the constant droning “the rich don’t pay their fair share”, how many expected the distribution reported in the CBO paper? Be honest.
Progressive taxation is not inherently wrong, but taken too far it’s socialist income redistribution, which is legalized theft. Asking one minority group to shoulder the burden almost exclusively is discrimination and unethical. Those blessed financially have an obligation to help others, but when the top 40% pay almost all the taxes, isn’t that enough?
Charity is a foundational principle, and those blessed financially should help those less fortunate. Everyone should pick a favorite charity and contribute to it regularly. Note: if you do plan on beginning charitable donations, be vary careful, some “charities” use the majority of funds (well over half) for administration. Do some research about your chosen organization and be sure your donations are being used for what you intended. As a very general rule, if administration and fundrasing are more that 10-15%, we’d question that organization carefully and thoroughly before sending money.
Do the rich pay enough in taxes?
Everyone has a stake in needs and functions of government, so everyone should pay. Once you’ve removed huge sections of people from paying anything, what incentive do they have to demand controlled spending? None. After that, they’ll always vote for the candidate who gives them the most handouts — after all, they’re not paying for it. Consider the following comment about democracy:
It can only exist until the voters discover that they can vote themselves largess of the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. (This quote has been attributed to both Sir Alex Fraser Tytler and Alexis de Tocqueville.)
So for those who believe the rich don’t pay their “fair share”, how much is enough? If you designed the tax system, who would pay what? With the top 40% shouldering 85% of the burden, how much more would you ask them to pay? And how many in the lower brackets would you exempt? Or do those claiming the rich don’t pay enough really want socialist income redistribution? We’d really like to know.
UPDATE: July 12, 2012
This article has been getting many hits lately as the campaign heats up. When Obama and others talk about paying a “fair share”, they leave that undefined. A new CBO report “found the bottom 20 percent of American earners paid just three-tenths of a percent of the total tax burden, while the richest 20 percent paid 67.9 percent of taxes.”
Thus, since the original report came out, the system has been getting more progressive, with the “rich” paying more.
So for all the people screaming “the rich don’t pay their fair share” — considering they already pay far more than other groups, how much more should the upper income levels pay to be “fair” in your view? And is it acceptable for about half to pay no federal income tax?
antifolkhero said
This is an interesting article. Family members of mine are in higher tax brackets, pay much more in taxes and yet still vote democratic. Having recently applied to law schools, I was appalled to find special treatment, from acceptances despite poor grades to full-ride scholarships, given to people simply because of their ethnic background. Does being from a non-white race make you automatically poor and opressed? I beg to differ. Multiculturalism has become a shield for everyone except caucasian people, who are always the bad guys.
freeurmind said
@antifolk: If you ever decide to have children or raise children , maybe you will have a perfect plan to pay for each & every one their tuition, but their are some kids who are the first in their generational family tree to attend college, now thats not your fault and its not tax payers fault, but I’d rather my tax $ help provide an opportunity for those kids to break the cycle than saying to hell with them , let them figure it out for themselves, because then what happens its in the govt. hands for the next generation of govt. assistence dependents. I just paid my kid’s for semester tuition for college and let me tell you, I would’ve gladly accecpted a hand Up , and my wife & I work, so imagine a family with no job income. Think on it brother
bedowd said
freeurmind-
I believe your brain is so free that it no longer exists in your head. Just because one child is the first in their family to go to college does not mean that they are deserving to go on the tax payer’s dime. I’d rather my tax dollars go to a student who’s past academic record indicates a good investment- meaning the student will make good grades, graduate, and be a productive member of society. Put another way- lets say we have two high school students and lets leave gender and race out of the equation. One student makes good grades, mostly B’s but has a few A’s. Both parents have college degrees. The other student makes C’s and a couple of D’s, neither parent nor any family member has ever gone to college.
By this account- which student appears to want to go to college the most? The kid making B’s and A’s, or the student making C’s and D’s? Which student (if you were asked to fund his/her education personally) represents the greatest risk of flunking out?
A students grades should be the only factor!
American Dreamling said
Freeurmind,
If you are interested in spending your tax money on tuition for under privileged children, you should consider a donation to a scholarship fund. Do you want or need a “hand up”? If you merely want it you would be taking it away from someone that needs it. Would you rather not pay the tax money that goes to to college grants, so you can spend it on your child’s tuition? Remember what one person receives without working for, another person must work for without receiving.
tony said
I worked 40 yearsof my life with some OT and could not afford to send my kids to college and they could not get fully funded assistance because I was white and made too much money. But not enough to send them to school. So my kids worked as hard as they could to go to school. Are you telling me that my hard earned taxes should go help some other nonworking parents kids so they can go to school?.
Sylvin said
Actually, tax payers should not have to pay for anyone to go to college. If you want your money to go to pay for someone’s college education then donate it yourself. Stop stealing everyone else’s money just because YOU want to help people with OTHER PEOPLE’s money. It’s people who advocate tax payers be forced to fund things that will finally bankrupt this country, who are always looking to control other people’s money and give it to their own special interest of choice.
Marvin McConoughey said
It is difficult to know how much tax burden is truly borne by the rich. Consider, for example, if a firm wishes to obtain a new CEO. If the potential CEO demands a half-million a year income after taxes, the firm then does a simple math calculation and provides the salary that will provide the desired after tax income. If tax rates rise, so does salary. Someone is paying the taxes but it might well be the customers, other workers, or even internal programs such as research and development. The taxes get shifted in a way that may not be definable. Yet, on paper the CEO pays the income taxes. That is true in terms of the paper trail but the real economic reality goes undocumented. I use the word “rich” loosely. In the context of average global population income per person, most Americans are rich.
Dan Heberer said
No, isn’t difficult at all to realize the tax burden that the rich bear. They pay the same 35% as everybody else in that federal bracket.
Sue said
35%? Is that what the wealthy pay? Then why did Mitt Romney say that he paid his fair share of taxes? He stated that he paid a whopping 13% on his income. I pay 28% to the federal government on my $64,000 yearly income. How is that equitable?
Bah Rock Oobahma said
Sue… the average American pays around 12% taxes. Don’t hear that on the news though do you? Either you need a new accountant, or some deductions honey.
Bob said
The reason Romney was able to pay such a low tax amount was because the majority of his income his derived from capitol gains on investments and other revenues of that nature. I believe the capitol gains tax is 15% or so, however, Obama believes that if you make over a million a year you should pay 35% regardless of how it’s earned. Known as the buffet rule, the idea came from a billionaire democrat investor who’s secretary paid proportionately more taxes than he did.
Robert said
You forget payroll taxes, that everybody who works pays regardless of income level, with the cap at $105000ish. So somebody who’s a CEO and is paid $2 Cagillion will only pay $6000 ish in pay roll taxes. Therefore, Sue is absolutely in the ball park when she says she pays 28% taxes, income tax, plus pay roll tax. That’s what people forget about; even those who pay no income tax will still pay 4.2% for FICA, 1.45% Medicare, .6% F.U.T.A..
cold logic said
It’s a bit misleading to use “the top 40%” to mean “the rich”. The top 40% are households that filed $26k or more.
Richard said
Hu? According to the 2007 census the percentage of house hold income 26k or more is about 75% of all households. The line for about 40% is 50k.
http://www.census.gov/compendia/statab/cats/income_expenditures_poverty_wealth/household_income.html
Susan said
Yes and people making 50,000 are so rich. Which means that the middle class actually is burdened with the biggest tax share. Which makes this entire post suspect.
Einstein said
In 2004, the top 1% of Americans are less than 3 million Americans based off of the census of over 293 million Americans. That means less than 3 million Americans shouldered 22.7% of total federal taxes. Just as a comparison, New York City has over 8 million residents. Now 40% of Americans in 2004 come up to 117 million, covering 84.3%. That sounds bigger; however, if you remove the top 1% from those numbers, you have from the top 2% – 40% only paying 61.6% by 114 million Americans. So the bottom line is that the top 1% is paying 22.7%, and the top 2% – 40% are paying 61.6%. However, that also means that 3 million Americans are shouldering 22.7%, while 114 million Americans are shouldering 61.6%. Don’t you just hate math?
Namey Name said
I don’t think the report was talking about the top n percent of Americans, I think it’s talking about the top n percent of taxpayers so I think you may have to rethink your numbers. Math isn’t so bad.
Barry said
You left some important information out of your equation.
1- the top 20% of Americans control 84% of the wealth. You can’t get blood from a turnip.
2- The corporate leaders – The top 1% caused the financial crisis
3- There are less federal workers today than there were in 1988
4- If we don’t tax the rich, social welfare programs like Medicare and Social Security will be cut even more than they will be if we don’t tax more.
5- Fox news is beggining to report the truth – They have begun to talk about the transfer of wealth from one generation to the next.
They have begun to talk about working people paying for those who stay at home and do nothing (retirees). Many think Fox is talking about welfare recipients, but aren’t they really begining to say retired Social Securiy medicare recipients? I agree with Fox on this matter. I don’t want to pay the benefits to some old fart whos generation failed for 30 years to adequately tax the rich. Now there’s no money to pay for their benefits. What a bunch of do nothing slackers with heir hands in my pockets.
6- corporations have been earning record profits for the past three years. Helping them isn’t going to help the middle class.
lol, ok, I don’t really hate the old poor people who rely on social programs. i just wish theat they wold stop fighting the ounger generations efforts to tax he rich in order to pay for the benefits given to the elderly. that or take a 50% cut to your benefits.
Constitutional Conservative said
#1 — Wealth is not the same as income. We’re talking income taxes, not wealth. You can have lots of the first, and not as much of the second. Or are you changing the discussion to wealth redistribution, not taxes?
#2 — The fiscal crisis goes back *long* before that. In reality, it starts with the Clinton administration and continues from there. As politicians do, each Congress and President made it worse. But the real fiscal crisis is coming — with $1.5 Trillion deficits, the poop is about to hit the fan.
#3 — Even if true, so what? How is that relevant to income taxes?
#4 — Medicare and Social Security are in *huge* trouble. SS is already bankrupt, and Medicare promised what it can’t deliver.
#5 — What happened is previous presidents and Congress promised what they *knew* they couldn’t do. Starting with guns ‘n butter, and so on. Deficit spending (aka “stimulus”) is really spending today what would be spent tomorrow. Sooner or later the deficit must be paid back. Medicare/SS worked the same way, gladly (hoping) to pay tomorrow for a hamburger today.
“I don’t want to pay the benefits to some old fart whos generation failed for 30 years to adequately tax the rich”. Of course, if the government actually spent within its income, the problem wouldn’t exist. $1.5 Trillion deficits aren’t sustainable, even for a short period.
The Affordable Care Act only made this problem worse. It’s strange how youth voters love Obama, but don’t really know how much he’s shafted them. Starting next year when taxes kick in, and when they’re forced to buy huge insurance policies they don’t need, they’ll figure it out. But Obama hopes that will be well into his second term, when they’ve fallen for hopey-changey again.
Bah Rock Oobahma said
@ Constitutional Conservative… Amen!! Well spoken rebuttal! I don’t understand why the youth like Obama either, other than they are indoctrinated in college into the liberal mindset perhaps? I can’t understand why someone would vote for someone because he is for gay rights (which I too am for btw), yet none of that matters with an unsustainable debt and deficit! It sickens me!
tony said
I think the youth like Obama because they are inexperienced, easily swayed with grand ideas, buck the system as the young do, and really ill informed/ not informed about his policies. But hey, the young know everthing right? I think Obama hopes his taxes don`t really kick in until he is out of office so he can blame it on the other guy-you know like George Bush.
Robert said
Medicare and Social Security are not in huge trouble they are actually one of the few parts of the Federal Budget that stays funded and is supported by direct taxes in the form of payroll tax. Which is capped at over $100,000 so if you make $2M from your job you only pay $6,000. See those who work have their payrolls deducted automatically by the Federal Government. No if, and, or buts. Now somebody who makes their money from investment, capital gains, ect. does not have to pay taxes on their money till the end of the year, were they can use itemized that bring their income to a lot lower level. The best part is that you can wrap any gains you might have to pay taxes on and put them in a nice tax free retirement fund, hedge fund, ect. Then you can take out a tax-free loan with your retirement fund manager, at a small interest rate on your retirement fund. You see the brilliance there nobody pays taxes on that money. You don’t report it as income but you still can use it and reinvest it, ect.
Constitutional Conservative said
That’s the problem – when politicians say “the rich”, who are they referring to? I’ve seen them call the “rich” as low as people making $30,000/year. Generally, I’d put the category somewhere in the $150,0000-$250,000 range, but that’s debatable. But of course it also depends on where you live. $100k in New York is certainly different from $100k in Idaho.
The point is by any reasonable scale, the rich pay the vast majority of taxes. In this context, the top 10-20% are “rich” and pay half to two-thirds the taxes.
greg said
the top 1% of Americans have almost 25% of the wealth, the top 25% hold almost 85% of the wealth.
All of these statistics are incredibly vital to establishing how much a certain denomination should be paying in taxes.
I honestly find it hard to believe that you didn’t include these by chance, this whole article is clearly biased toward the rich.
If you hold 50% of the wealth, you should be paying damn near 50% of the taxes, please explain to me how this is unfair socialist and class warfare. yes i believe that people making about 20,000 a year need some tax breaks, and if you think that makes them want to continue earning that wage your a fool. Everybody wants more, everyone would like to have more money even, the average man wouldn’t care about paying taxes if he had plenty to take home, and could see some credibility from the government and consequences for those who lie and willingly deceive the public for personal gain.
People like you simply ignore any fact that doesn’t support your view, what you fail to realize is that having a strong middle class creates more wealth for everyone, and highly uneven distribution of wealth leads to collapse. eg. the last time we had the top 1% at almost 25% of the wealth 1928, what happened next?
Constitutional Conservative said
> the top 1% of Americans have almost 25% of the wealth, the top 25% hold almost 85% of the wealth. All of these statistics are incredibly vital to establishing how much a certain denomination should be paying in taxes.
Wealth is not the same as income. While correlated, they’re not even close to being the same. Bill Gates could not receive another penny in income ever, and still be wealthy. Others make millions, but don’t have good financial sense and end up with no wealth (assets).
> this whole article is clearly biased toward the rich.
It presents facts on who pays the taxes. You may not like them, but that’s your opinion, not fact. Whenever people scream “soak the rich” they might not know the rich *already* pay most of the income tax.
If you were King, how much more would you have them pay? What’s your specific plan?
> having a strong middle class creates more wealth for everyone, and highly uneven distribution of wealth leads to collapse.
Most people want a strong middle class, but socialism/communism *destroys* it, leaving only the elites and the serfs. You’ll notice most of the taxes end up on the middle class, which suffers under socialism.
Look at the national government healthcare plan (aka “Obamacare”), a government-run model — the law has taxes on the sick and middle class, making the problem you wish to solve (strong middle class) *worse*, not better.
If you want a strong middle class, socialism isn’t the way to get it.
> the last time we had the top 1% at almost 25% of the wealth 1928, what happened next?
That’s a logical fallacy called affirming the consequent, or Post hoc ergo propter hoc. The sun came up the day after the crash… by your logic the sun caused the crash! Obviously that’s wrong, just as your logic is.
It’s a common mistake, just because “B” followed “A” does *not* mean it caused it. You’ll need to do better and *prove* your assumption.
Joe said
Great. Now where are the numbers about income distribution? How much of the country’s wealth do these 1 percenter greedheads own? I call them greedheads because that’s what they are. They spend all day thinking about money, as opposed to your average school teacher or social worker.
ARod said
Your comments sound like sour grapes, maybe I am mistaken.
Is there something wrong with being rewarded by hard work? Did they take the money away from you by illegal or immoral means? If they found fortune by outworking their peers then they deserve every single penny. Why would the government take it away in a disproportionate fashion?
Voodoo said
how the hell do you know what they do all day? So all people who are rich are “Greedheads”? Thats like saying all poor people are Lazy. Its nice to know you can read minds, maybe you can become a “greedhead” with all that knowlage.
Mario said
“greedheads…as opposed to your average school teacher”
Have you heard of TEACHERS UNIONS whose GREED is killing our childens’ chance of a good education?
Lytchcov Zammana said
You should know that our teacher’s “union” (it’s really an “association” with no right to strike) spends WAY too much of my dues for projects and causes that do not benefit me in any direct way. What other union is more concerned with the product than with legitimate concerns of the dues-payers than the teachers’ “unions?” None.
I join the PTSA to help student causes. I donate my time and money to help students. I pay my union dues to advance my pay and working conditions. Period. If you want my union to benefit you or the public, then YOU pay the freakin’ dues for me!
If you work for a small business, you can walk in and negotiate with the person holding the purse strings and get yourself a better deal, but if you work for a mega-operation, no way will you ever gain an audience with the mucky-mucks who actually have the final say. That’s what unions are for: they gain us access to the people who can actually say, “OK, you got the raise” not some low-level bureaucrat who says, “Gee, I’d LIKE to help you but my hands are tied…”
So quit mutterin’ under your breath about evil “teachers’s unions” and shut up.
OH, and by the way, my pension is part of the reason I took the lowest paying of all professional fields, devoted 20 years of my life to it, and have done a damn good job. It was part of the deal why I signed on. Honor it, don’t try and weasel out of what was agreed on. And, you should know that even though I am fully vested in Social Security (having paid both the employee portion AND the employer portion – being self-employed for over 15 years) in California I won’t get one red cent of Social Security. I should’a taken the baby-sitting job of watching 35 of your bratty kids at 5 bucks each an hour; I’d be further ahead.
Mark Bell said
To be fully vested in Social Security takes 30 years. Ten years gets you in the system. Full vesting is what’s needed to avoid the double-dip penalty mentioned, which teachers and other public pensioners have run into. Your SS payments will rise as you get above 15 years, and the closer you get to 30 the less the double dip penalty will be.
tony said
Joe you sound like you are jealous of some one who has done well for themselves in their life (money wise). This is the land of opp.. Try another profession if yoy are not happy with what you earn. Why should some one else have to pay for you. What ever the rich pay I am sure it will not be enough. Obama has succeeded in one thing, he has caused a great divide and also some hate between the so call” rich” and poor. He has made it a crime to succeed. He won a lot of votes using this as a toll. There are far more poor and middle class than rich. That is and evil way to get relected. What a way to destory the country from within. As I read these post, I see hate and anger in my fellow americans and I can help but think that one man has really brought these feelings to the fore front and he was just elected president.
Constitutional Conservative said
It’s amazing you know the motivation of everyone and what they think about. Don’t you think you’re jumping to conclusions here – just a bit?
But to your question, let’s suppose the 1 percent of the top taxpayers have about 60% of the money (just a guess). Are you saying they shouldn’t have it? Are you for income redistribution? Or that hard work should not be rewarded? If they don’t pay enough right now, how much more would you have them pay?
Let’s be specific – what would YOU do? Most people are shocked when they learn the rich pay most of the taxes (as they never hear the truth about who pays the most), so if you think it’s not enough, how much should be paid and by whom?
Wavy3202 said
I understand that the rich pay a lot in taxes, but it clearly has not been enough to stop our country from going toooo far in debt to stop financial crisis. Please don’t blame government spending on the problem either. We the people elect those to be in office and make those decisions for us. It has been a combination of both republican and democrats in office that has lead to spending more than we take in. This problem needs to be fixed by the PEOPLE by electing those that don’t spend more money than they can accurately pay back in a reasonably amount of time. However, government is twisted in such a way that it is almost impossible to get elected to office without making unreasonable promises to the voters that cost more and more money. This is our political system and it will make all of us bankrupt!
bedowd said
“Please don’t blame government spending on the problem either. ”
Why shouldn’t I be allowed to blame government spending? That is, in fact, the problem not because the rich are not being taxed enough! They are taxed too much. Can we just look at it logically? If taxes are suppose to be for certain government programs in which everyone benefits shouldn’t everyone pay? 40-45% of people pay nothing at all. Some might argue that the rich benefit greater than the poor. How so? I mean, if the country would just get off this socialistic economic policy and return to a time when we had smaller government then every American would benefit equally from government programs. The only programs that would be required are immediate assistance programs such as police and fire department on the local level and a robust military on the Federal level. Let the sates charge a small tax to fund themselves. We do not need all these stupid protection programs like the EPA, Fish and Wildlife etc, etc. Just civil defense- period. Let people take care of their own- like it use to be. Grandma can’t take care of herself anymore? Let the children take care of her. You have a family member in need- help them out. Stop being so stingy! You have a family member who lives on the street because they don’t want to work? Let the family do something. Either show some tough-love, or you be the one to give them a hand out. But- I guarantee you this. You get back to a point where the government is smaller, has less control, and is not in every minute detail of our personal lives you will see a lot fewer people living on the streets. People will realize that THEY have to lift themselves up and out of the mess they are in. They will have GREATER opportunity to provide for themselves and keep more of what they bring in. Hope and opportunity go hand-in-hand with quality of life.. If you have the opportunity to better yourself- there is always hope. If you have hope, you are motivated to better yourself.
Einstein said
It’s not the job of the rich to stop our country from going further into debt, it is the citizens responsibility to vote out the people who are spending our country into debt. There is no way the rich alone can rescue our country from the spending of our current administration by paying taxes. Your grandchildren and beyond will be paying his debt.
Barry said
I want to build a factory upstream of Bedowd, pollute his air and water with carcenogens, earning millions for myself and leaving him to clean up the mess. He also thinks it would be ok for me to hunt wildlife year round and overfish to the point of extinction. Sorry, he’s just getting under my skin with his rediculous statements that make no sense at all. He’s probably also receiving social security, medicare or some othet social welfare benefits.
Colorado said
Barry- your reaction is understandable, he’s obviously a “Ron Paul type”, which = insane.
tony said
Wavy you no sense.
Little Sue said
As a member of the working class, I’d like offer all billionaires the opportunity to exchange jobs and bank accounts if they feel they are unfairly taxed and missing out on the free ride that the rest of us enjoy. I can’t promise you will qualify for the earned income tax credit; nonetheless, you can experience the warm feeling I get after making others rich through the work I do and the bills I pay. After the switchover, I can cover your share of the Federal Government’s expenses just like you currently do for me. Your assets will then be protected by the US government through military power, occasional bailouts, and countless other avenues for free. Well, maybe not your assets. I don’t really have any. But your way of life will be protected. Guest workers will probably keep your wages in check so don’t worry about jumpin’ into a higher tax bracket. Inflation is really nothing to worry about either; dollar stores can be found on every corner these days. So, hey, I recognize my freeloader status and I am ready to become a more responsible tax-paying citizen. I’ll assume the burden that comes with being filthy rich; you know, paying for this great country and everything. I wouldn’t expect you to do that. Ya can’t get blood out of a turnip. I mean, like, I can’t control sales taxes or real-estate taxes or gas taxes or tollbooth fees or whatever; nonetheless, I’ll go the extra mile and promise not to make you pay for political influence.
Voodoo said
Man, why don’t you paint with a bigger brush? Everyone who has money and earn it are all “Little Satans” bad people who don’t “Work” for their money and ride the backs of the poor. NOT ALL are like that, just as NOT ALL poor are lazy and take the system for granted. I am no where near rich in money but that God I have paid off my mortgage last December and have no bills except normal monthly gas, food, electricity etc. I am happy where I am but if I had the chance to become a millionaire or billionaire I would take it and not feel sad about it one bit.
Susan said
Your chances of becoming a millionaire of billionaire? Well what are the odds on the lottery? You have a better chance of getting struck by lightening, “twice.” But good luck with that. And you’re right, not all rich people are “little satans”. Some of them are actually true patriots who thinks that the tax cuts for the rich are irresponsible fiscal policy. They don’t need to be defended. But I’m sure the other people you defend, the ones who want all the wealth and power they can accumulate and they don’t care whose expense it comes at, not even their country, I’m sure they appreciate you defending them. In fact, many of them count on it.
Mr. Khan said
If I win the Championship, why would I trade my trophy for your participation certificate? What the U.S. needs is reduced regulation and more opportunity for entrepreneurs to start businesses, innovate and compete. You’ll still have those who whine and envy. They will always be with us. But we can stop the shrinking of the middle class and return to general prosperity and a growing economy.
Josh said
What they conveniently leave out is what percentage of the wealth each bracket controls. The top 10% control 69.8% of the wealth in the country. According to this article’s numbers, they pay 72.7% of the taxes.
Gary said
It blows me away to hear all the moaning and growning about how much money the “Rich” have. Do the rich create jobs? Do the rich pay their fair share of taxes? Do the rich give money to charities? Im no where near the “rich” status, but I would like to ask all the belly-achers how many jobs did they create. By them creating jobs, did they put food on someone elses table? How much money did you give to charitable organizations. Stop whining and go to work and change your plite in life if your not happy.
Susan said
Well considering we haven’t added hardly any jobs to the economy since Bush gave the rich tax cuts, I can only assume that they don’t “create jobs” either. In fact, you should really do some research on this. The rich have found a way to make money without creating jobs. They are so smug about it that people like the Koch Brothers are trying to break the unions, the unions that up until recently the wealthy put up with because they knew that more stable jobs and wages allowed the middle class to have purchasing power to buy their products. The rich aren’t manufactuers anymore. They are creators of wealth out of thin air, manipulators and criminals. Not all rich are crooks and bad. But many of the people you defend didn’t even earn their money, they inherited it from Daddy. I can’t understand why people defend the rich. I hate to tell you but the policies implemented in this country have killed the American Dream. Statistics show that you will probably never do any better than you did at 30. In spite of what Rush Limbaugh feeds you.
bedowd said
And that is the real problem in this country isn’t it. We have become an economy of providing services, not providing products. Furthermore- more people COULD move up the tax bracket if the government wasn’t hell bent on controlling everything and making a profit for themselves where none is deserved. I have many, many, good ideas for products. Products that would be very beneficial to people and create jobs too. But- I can’t move on these ideas because of all the restrictions in place. I can’t move because of all the complications fostered by government bureaucracy. I am telling you- if all the regulations we have now were put in place 75 – 100 years ago we would not have half the products we enjoy today, nor the wealth. .
lisa laati said
You are the one that is not publishing the facts. It doesn’t matter what percentage of taxes one pays. What does matter is the percentage of one’s income one pays. In other words…why should I pay 28% to taxes of my check when millionairs and billionairs pay 15%. If I pay 28% then they should pay 28%. That is what is fair. Anyone who negates the logic of that and refuses to acknowlege the truth of that statement is just not wanting to accept the truth. It’s THAT simple.
Susan said
Exactly! Warren Buffet has said that his secretary pays more as a percentage of her income to taxes than he does. When Ben Stein asked him about Class Warfare, he said, there’s a war on alright, and my side is winning.
No all millionaires are so greedy that they put their wealth and power in front of the nation’s interest.
Joshua said
You need to understand how this works: The primary source for Warren Buffet’s income is through dividends paid out on stock he owns in Berkshire Hathaway (BERKA and BERKB) — these gains are known as Capital Gains, which has a maximum taxable bracket of 15%. A CEO that makes a muti-million dollar salary falls under the standard tax bracket system and will pay 37%. There are many people that have a standard source of income that falls under the standard tax bracket, as well as investments that fall under Capital Gains tax regulations.
I feel that people use Warren Buffet as a generalized example for wealthy America, which is irresponsible. Any kind of over generalization based on the actions of a single person is irresponsible.
Lawrence said
Joshua, you need to know how you can defer your income when you make more. Because I was able to hire fantastic accountants they gave me great advice on how to depreciate assets and the like I never knew I could. These are items that are just not available to other people. In the end despite making some more than mid 6 figures, I only ended up paying 6-7% income and state taxes. I almost paid as much in property taxes which I also wrote off.
My accountant promised me that the tax department would never come after me and we never had so much as an inquiry. On the other hand I had friends making about a sixth of our income and they actually paid more in taxes than we did. If this is occurring, who do you think is paying for the debt and the like? It’s not me because I got the tax breaks and actually pay less than people making 1/6th my income who cannot take these deductions. Who do you think wrote the tax code to allow me take these deductions?
If my wonderful accountant can save me all of that money, how much do you think multi-millionaires and billionaires can write down their incomes? Buffett is not paying 15% (he acknowledges this), he’s paying about 2-5% if that. It would actually take about 10,000-20,000 people to pay his fair share if they had incomes of $50,000. In actuality, he’s actually paying the same income tax as 3000 people earning $50,000 a year. If he’s not paying his fair share, who do you think is paying it? If it’s not the wealthy and not the poor, it only leaves one group left.
Einstein said
So you are in favor of the Fair Tax program?
Dan Heberer said
The rich pay 35% on income from salary, and the 15% rate comes from investments(capital gain). Get the facts straight! This is the why the “Warren Buffet’s secretary” scenario is irresponsible. The people who use that example, including our president, don’t seem to understand the tax system that they’re complaining about.
akaka said
Josh and Lisa, it is not like things like facts are important on a blog called “constitutionalconservative”
Einstein said
Actually, the facts are public information, readily available on the IRS’s Web site as well as the Census’ Web site. Class envy and other emotional liberal rants are what cannot be proven as fact!
Constitutional Conservative said
So by your account (assuming it’s possible to determine who controls the “wealth”), the rich overpay proportionally to their wealth. In other words, the system is *too* progressive and the rich should pay less. Somehow that’s not what you were trying to prove, me thinks.
It’s the CBO report on who pays the income tax – is it incorrect? If their report has errors, please let us know. Otherwise, it’s fact from the people who would know.
The tax rate on millionaires and billionaires is over 28% — 35%.
If you’re complaining about deductions, exemptions and such, would you support a flat-tax where *everyone* pays, say 10%? No deductions, no welfare disguised as tax credits. Everyone has a stake in government, everyone pays for it.
A flat-tax with no deductions; something with perhaps two or three brackets – *everyone* pays at least 5%, then a middle bracket of 10%-13%, and a top bracket of 17-19%. No deductions, no credits. Everyone pays.
Would that be fairer in your view?
Please study the government’s CBO report and cite factual errors. The facts are what they are — the top 40% pay almost all federal taxes (in spite of the constant drumming “the rich don’t pay their fair share”). Are you claiming the CBO report is in error? If so, please provide your sources with proof. You know, facts.
Or is it your opinion the top 40% should pay *more* in taxes? Or the top 10% should pay all the tax, and everyone else pay none? Since the rich already pay almost all the income tax (a fact from the CBO report), what changes would you make to the system?
Read the CBO report – it’s quite detailed and filled with information.
It’s interesting all these comments don’t dispute the basic premise – the rich already pay the majority of income tax; none of these comments offer any proof the government report is inaccurate (perhaps because the reality of the rich paying the most conflicts with their ideology).
If the report is in error, please let us know. Otherwise, the report is quite clear the rich pay most of the income taxes. That may not be a popular fact for some, but absent proof of errors in the report simply complaining or saying it isn’t so doesn’t advance the discussion much.
The question is simple — since the rich pay most of the income tax already, when cries of “soak the rich” are heard, what changes would you make in the system? The top 40% pay most of the tax already (while the bottom pays virtually nothing), how much more would you have them pay? 95%, 98%, 100%? And on the flip side, would you exempt others from paying anything? If everyone has a stake in government, shouldn’t all pay for it?
That’s the question. If you’re not going to offer evidence the report is wrong, at least be constructive and discuss what changes *you* would make instead of complaining you don’t like the facts (or they’re wrong).
For future commenters, you’re not advancing the discussion much by complaining you don’t like the facts of the report without offering any evidence to support the claim the report is factually wrong. So here’s some ideas which *would* advance the discussion:
* Since the rich pay almost all the tax, they should still pay *more*. That’s fair.
* Tax rates should be cut to create more incentive for business.
* It’s a good time to raise/cut taxes because …
* It’s a bad time to raise/cut taxes because …
* Income redistribution is a fair method to spread the wealth around.
* The tax rates should be increased, to pay for more programs. The rich pay almost all the tax, but they can pay more $$$.
* The poor should pay more/less percentage and/or $$$.
* The rich should pay more/less percentage and/or $$$.
* It’s not the tax rates, it’s tax loopholes – eliminate deductions.
* A flat tax is the best tax-reform.
* A national sales tax is fair.
* It’s fair for everyone to pay as everyone to has a stake in government.
* It’s fair for some to pay nothing, and others to pay for everything, as they have more.
And so on. Lots to talk about. What are your ideas? How should taxation be handled? But please, unless you can prove errors in the report, it should be a settled issue – according to the government who collects it, the rich pay the vast majority of income tax.
Gary said
Josh and Lisa dont get it becaue they dont want to get it. They are showing why they will never be in the top 10%. Take away the rich (top 10%) and see where we all are. I dont think anyone with half a brain would want that to happen.
Jim Davis said
“Please study the government’s CBO report and cite factual errors.”
Here, you tip your hand. The criticism is not that the report is inaccurate or false. The criticism, and accusation, is that you’re not being honest. You are only telling half the story. You completely ignore percentage of total income and when called on it revert to “is the report inaccurate?”.
What you do is akin to- There are 10 people in a room. They are offered 20 pie slices and told that they have to pay $1 per slice. Tom eats 1 slice, pays $1. Bob eats 9 slices, pays $9. It’s an outrage that Bob paid almost half of the total cost of the pie all by himself while Tom only paid 10% of the total cost.
Only in your case you fail to mention that Bob ate 9 slices and is thus charged accordingly. Instead, you only cite how much of the total pie bill that each party paid. “Oh my gosh! Look at this outrageous disproportion !! Poor Bob pays HALF the total cost!! This is SO unfair!”.
Bottom line: the top earners pay a HUGE portion of the total tax bill because they take in a HUGE portion of the total income.
You dance around this fact, and thus, your entire argument is dishonest. ( or at least severely handicapped by your failure to tell the complete story )
Constitutional Conservative said
That’s because it’s irrelevant to the fact of who pays the most taxes. You’re talking policy about who should pay (which is debatable), verses referring to facts (irrefutable).
OK, so the person who ate (used) the most, paid the most.
And that’s a *totally* different application. If we’re going to tax based on who *uses* the most (like your pie analogy), we’d increase taxes on the lower 50% of income earners — you’re analogy is closer to a flat tax where everyone pays the same percentage of their income in taxes.
Somehow I don’t think that’s what you wanted to imply, but you did.
Of course, then you attempt to apply your analogy to a totally different situation, which is completely misleading.
10 people in a room and all get a piece of pie which costs $10 total. 3 of the people pay $4 each, 2 of the people pay $1 each, 3 eat free, and 2 get a $2 “refund” with their pie. That’s how the income tax system *really* works.
It’s a simple fact, easily verifiable by anyone. Sorry you don’t like it.
But to the real question (since the facts are irrefutable): how much *more* would you have some pay, and how much more refunds (welfare) would you have others receive? Stop the accusations and get to specifics. What would *you* do? What would be “fair” in your eyes?
Perhaps you missed this:
What’s your idea?
Pobre Cita said
The fact that there are extremely wealthy people with multiple mansions, yachts, and cars while there are people struggling to make a house payment is a bit disgusting. Not all of their wealth is hard-earnd. Some are singers or actors who made a lucky break and get to spend their lives playing around on stage, some are just born into it, like Trump’s kids. I don’t see why we can’t all just pay a fixed percentage of our income; that way everyone would feel an equal pinch.
Amen to what Little Sue said.
ARod said
You argument has truth but it is also a double edge sword. Assuming your logic we could then say that those struggling are just plain out lazy. We can’t say that all rich did not do it by hard work just as we can’t say that all struggling did not do it because of laziness.
Thunar said
Hold on – the top 10% own 90% of the wealth, so they should be paying 90% of the taxes, even if we had flat taxes.
The bottom 50% own less than 3% of the wealth, so they should be paying 3% of the taxes.
There are plenty of taxes besides the income tax.
Anyway the real losers in our current tax system are skilled professionals, those making say between $140 and half a million per year.
Here’s a real interesting question – why should labor be taxed at all? When I work for an hour, I am really producing say $50 worth of wealth but only making $40 in compensation. Also I have lost an hour of my life, that I can never buy back. Labor is really an even exchange.
So it’s mystifying – If my money works instead of me, I only pay taxes on profits; if I am directly involved in productive work – whether that’s writing computer software or picking up garbage or picking plums – I’m taxed on my entire revenue. A company that makes $1M in revenue and of that $100k is profit, is only taxed on the profit. But a skilled Surgeon who makes $200k but spends $80k on transport, food, house, clothes, continuing education, etc. pays taxes on the whole $200k – not $120k.
Constitutional Conservative said
You’ve confused wealth (actually, net worth) with income.
If you’re really talking about taxes on net worth (like the death tax), how much should it be? Should Bill Gates pay 90% of his net worth every year? Of course, a person’s net worth has already been taxed (by income tax, capital gains tax, etc), so that’s double taxation, if you’re for that.
By your plan, if someone makes $3 million per year, but spends it all (leaving no net worth), zero tax liability! That’s probably not what you had in mind.
Perhaps the best way to be fair is a sales tax, and repeal all income, death, capital gains and other taxes. Then you’re only taxed when you spend money, not invest or save. Exempt food and medicine and you’ve got a fair system where everyone pays (but that assumes Congress would never impose other taxes again, and we know how trustworthy they are, so it’s a DOA idea).
The rest of your comment is equally wrong. A surgeon is a business just like any other, and deducts expenses, so if he makes $200k, he’ll deduct eduction, travel, and other legally deductible expenses (just like any other business) before paying taxes on what’s left. If the surgeon works for a hospital or other business instead of himself, his employer will pay required travel, education and other expenses. In neither situation will the surgeon pay taxes on his expenses.
And you’re also forgetting if you invest (make money work instead of you), you’ve already paid some sort of tax on it (income, capital gains, inheritance, etc), so unless you’re advocating taxing the same money multiple times, in makes sense to only tax the increase, since the initial investment has already been taxed.
Marvinlee said
If we accept that some rich people have earned great income, and that some have not, then perhaps we could accept that some poor people are poor through no fault of their own and that some are poor for self-inflicted reasons. A moral element of rightness enters here. It is right for a society to motivate people to create, to innovate, to invent, to take business risks. The reason is not altruism but societal self-interest. It is questionable to relieve the self-inflicted poor of all their poverty because to do so is to also weaken the incentive to self-manage one’s own life.
ARod said
I whole heartedly agree.
ddf said
Couldn’t agree more.
Voodoo said
Well said. Kudo’s.
Voodoo said
I think a flat tax would be the way to do it IMHO. But even with a flat tax others would “still” complain the rich are not paying their fair share. No matter what is done their will always be dissenters.
Who are these rich people Democrats are soaking? | Holeinthehull said
[...] and his Democrat flunkies belief that soaking the rich is the answer to funding their new entitlements is a ridiculous notion at best. Who are you [...]
Al said
Thank you. The first article in google (http://www.zompist.com/richtax.htm) is this inane “defense” of how the rich are getting a disproportionate share of benefits from government. Each argument is utter nonsense – for one they believe that because you’re rich, you should pay more in defense spending because you have more to lose from hostile countries. (huh???)
The defenders of socialism are ALWAYS poor and always stand to gain the most from redistribution. When I was a child and my parents were poor, I did not wish to bring the rich down to my level but to join them. And now that I have, I have no respect for those who wish to bring down the wealthy.
jelbert said
Since the recent Supreme Court ruling to allow corporations to contribute unlimited amounts to political campaigns from their profits, your defense of the “Myth – The Rich Don’t Pay Their Full Share of Taxes” is ridiculous. That corporate profits, like individual citizens income, should be taxed at the highest tax bracket to which the amount falls. The loopholes (e.g. taxed according to where (country) the corporation is domiciled) should be repealed as would apply to such corporations in that such loophole cannot be claimed by the individual citizen. A corporation’s income is its profits and IMO should be taxed as income regardless of where corporations is domiciled. If domiciled in anther country, then taxes on profit at state and federal levels for that corporation should apply to that portion of profits made in each and any state or territory of the United states at the applicable tax rate of the reported tax year in appreciation and support for those who purchase or contract for the services or goods the corporation markets. This, IMHO, would be fairer without putting poor against rich – just each pays his fair share. It is not an issue of redistribution of income. This additional revenue from what should be “Good Corporate Citizens” surely would go long ways to reduce the deficit and to fund costs of wars (included in budgets) that are generally waged under the guise of protection of the free markets mostly for the direct benefit of corporations than for the people (rich and poor) who pay the majority of taxes (state and federal). Get serious!
Marc said
Jelbert, Corporations do pay taxes for each entity where the profit is derived. I work for a corporation that is headquartered in Europe. They pay US federal income taxes for their US business operations.. and state income taxes for each state they do business in except the states with no income taxes. The reason why you have companies such a Haliburton placing their headquarters overseas is for competative reasons. It is not to avoid taxes for business activities based in the US. Haliburton still has to pay all the income taxes for business activities in the US.
Another thing… Corporations are owned by stock holders who are people just like you and me. These stockholders are made up of people with 401k’s, pensions and individual stock investors. The corporation gets taxed, then the proceeds of the profit gets distributed to the stockholders. Then the stock holders are taxed again. Something doesn’t seem fair about that.
All this complaining about corporations needs to stop. If the average person understood how much corporations actually paid in taxes, fees, and fines, no one would be complaining that corporations don’t pay their fair share. I used to think the same thing until I started to work in an accounting department of a large corporation..
Constitutional Conservative said
Wow. That’s one of the best non-sequiturs I’ve ever seen.
Making some groups pay more, while giving a free ride to others is the very *definition* of income redistribution. You may be for or against that idea, but let’s not call an apple a piano.
Where do you suppose those evil corporations receive their money from? Perhaps by products/services sold to the public. If their costs increase, so do prices. In the end, the private citizen pays whether it’s a corporate tax, or an individual one.
CWB said
Your article really doesn’t say much of anything. Why?
The reason why the rich pay most of the taxes is obvious. They make most of the income. If the income and wealth were more evenly distributed, the share of taxes would be more evenly distributed as well.
It’s almost funny how an article meant to pursuade the less informed on how unevenly the tax burden is distributed actually confirms how unevenly the income and wealth is distributed.
I love it.
Steven said
Wealth is NOT distributed, it is earned. Wealth is a by product of taking time out of the day to DO something. It is NOT distributed you stupid fucking idiot. The degree of wealth is uneven because a lot of people sit on their ass and collect money from rich peoples taxes. No such thing as fair in reality, you get back what you put out. No effort = no money. Great effort= great wealth. You smug fucking idiot.
reality said
No you are the idiot…..there are so many variables that go into becoming wealthy where effort is but one of many. For starters, on the most basic level you have to put efforts into the kind of work that can produce wealth. I am pretty sure the landscaper is working hard all day and making a ‘great effort’.
Jim Davis said
“The first article in google (http://www.zompist.com/richtax.htm) is this inane “defense” of how the rich are getting a disproportionate share of benefits from government. Each argument is utter nonsense”
Actually, it’s a valid argument, but not for the reasons the linked article cited.
Here’s how-
A low income person is unlikely to own a business that puts a demand on infrastructure and public services. The creation and accumulation of wealth consumes services. ( I’d even argue that financial success, in and of itself, consumes tax dollars ).
Dan makes $17K a year. He owns no business. He has no business office or warehouse that requires police and fire protection. He has no fleet of trucks that put wear and tear on the public roads and bridges. He does not require that water lines be installed by the county in order to provide his processing plant with water. Tom has been very successful and owns a small company. Good for Tom. But Tom requires all sorts of services that Dan does not. Yes, Tom’s company pays taxes that Dan does not. But Tom the individual, who’s wealth was derived via the company, does not pay those company / corporate taxes.
When the state constructs a new bridge costing millions to the taxpayer, the taxpayers benefit from that new bridge disproportionately. Generally speaking, the more income you earn the more that new bridge is a benefit. Again, back to our non-owner of a business and the owner of a business.- new bridge where there was none before saves Tom’s company lot’s of money. His fleet of delivery trucks no longer half to drive as far, delivery time and fuel costs are cut in half. The low income person, if they even own a car, benefits little beyond some personal savings for the few times they need to cross the river. Meanwhile, the government outlay, the new bridge, greatly increases Tom’s personal income.
It’s a loose science, granted. But generally speaking- the more you make in income the more you benefit from taxpayer-funded services.
Constitutional Conservative said
The company pays taxes. But the company doesn’t use welfare, health insurance, social security, medicare, or …. In short, Dan uses a lot of services Tom (and his business) does not.
Your story doesn’t work.
That’s a crazy argument. You benefit if you travel over the bridge using *any* method. The bridge doesn’t know how much money you make (unless you think it does). If you bike, walk, take a bus, drive, you benefit. It’s not an income issue, it’s simply who desires to use it.
Both a person making $50,000/year and the person who makes $0 benefit from defense, infrastructure, and so on. Yet the person making $0 gets free stuff and “refunds” from “taxes” the person who pays doesn’t receive. As you noted, it’s an inexact science, but your extreme view certainly isn’t reality as *everyone* benefits — even those paying $0 taxes and getting “refunds” from the system.
You’re attempting to stretch things quite a bit — back to the issue: how much more would you have the top earners pay to give the people in the bottom more handouts? Stop the silly stories and get to the concrete issue. What’s your idea?
Susan said
“Everyone has a stake in needs and functions of government, so everyone should pay. Once you’ve removed huge sections of people from paying anything, what incentive do they have to demand controlled spending? None. After that, they’ll always vote for the candidate who gives them the most handouts — after all, they’re not paying for it.”
Oh my!!! This is a doozy. As if what the poor and working class demands have ANYTHING to do with what the government does. I’m sure the working class and poor can DEMAND things until they are blue in the face, but let me ask you something, when was the last time the poor or working class got a say in what the government does? LOL. That is rich. And they can vote until they are blue in the face too, but that still got them 8 years of Bush.
Jake Asshford said
I for one enjoyed this article. But sadly, rather than learn much about our tax system, I learned more about the sheer number of ignorant people there are out there when it comes to how Corporations and Income tax works. Seems that those with the most opinions are the same ones who have NO FREAKING CLUE how our systems work. Nor do they seem to understand the difference between Corporate taxes (yes a corporation is a separate legal entity that pays its own taxes), and Personal Income Tax. I wont even get into things like LLCs and Sub-Chapter S corporations where the income is passed through to the personal income tax of the business owners. That would just confuse people even more, since they already have no clue about what a progressive tax system is and how things work.
Sorry not trying to detract from your article and I wish I could offer more constructive comments at the moment, but I am amazed at the ignorance of most of the people commenting here…although I shouldn’t be since most Americans are pretty ignorant when it comes to these things (and that’s not an insult, it simply means that people don’t do their homework or study up on basic things, but like to shoot off their mouth as if they have all the answers when they don’t even know what they’re talking about).
Namey Name said
Amen Jake! What a waste of time these people spend shooting their mouths off and not knowing what the hell they’re talking about. Is a good reason that explains why THEY have not achieved the wealth they desire.
Jake Asshford said
The pie analogy cracked me up.
In reality, it’s more like this…
I spend lots of time researching a good pie recipe and then hand select the quality ingredients I plan to use in making the pie. Perhaps I don’t have all the resources I need to make the pie, so I have to convince someone to lend me some sugar or flour. Once I am able to come up with all the ingredients I need to make the pie, I bust my butt in the hot kitchen all day making the pie.
Then when I take the yummy, fresh, warm pie out of the oven, someone from City Hall comes over and says “Hey, that’s a nice looking pie you have there. I see you’ve sliced it into 10 pieces. I’ll have to take 3 or maybe 4 slices because we’re having a function down at the City Hall and well, we want some dessert. And if you don’t give me the slices, I will make life really miserable for you. I will not only take the slices, but I will put a lien on your oven and require you to give me one more slice for each slice you didn’t give me! Have a nice day!”
And so now I have some choices to make. Do I give up the slices and then say “screw this” and forget about making pies in the future. Maybe I make smaller pies in future. Maybe I set out to make so much pie that even when some slices are taken away, I still have way more than enough pie to feed my family and friends. If I do that, however, maybe those without pie will start pointing the finger at me “Hey! look at him…he has all the pie! let’s get him! Let’s get City Hall to make an ordinance that he has to give us some of that pie too! That filthy pie horder!”
Gee, all I wanted to do was make some nice pie for myself, my family and my friends. I was even willing to do all the work by slaving away in the hot kitchen and baking it from scratch. I didn’t steal any ingredients, I did borrow some flour from a neighbor on the agreement that they would get the flour I used back, along with a fresh slice of the pie.
I even thought about opening a pie shop so that other people could enjoy my pies and perhaps I could employ some people and do some good in the community. But then I saw how much it would cost with all the zoning permits, city ordinances, outrageous restrictions due to a special species of gnat that lives in the area which has special government protections which give it more civil rights than I have. Oh and if I show the gnat away from my pie and accidentally kill it, then I’m going to jail for a long long time.
Besides, even if I overcame all of these things and managed to cohabitate with the gnats without accidentally killing even 1 gnat, I might become very successful. Then people might notice and out of jealousy they might start rumors and start to accuse me of being successful through some dishonest means. I’d be the filthy rich person who should have to PAY because he is so successful. After all why should someone be allowed to enjoy the success they’ve worked so hard to achieve? That’s not the “American way”.
Scott said
Brilliant. Couldn’t agree more.
Pieter said
My English is actually too bad for a blog like this. But it is too tempting for me to try and pinpoint the misleading tenor of Constitutional Conservatism’s ‘Return to Sanity’. It is about time that the book of our great Dutch Professor Hans Achterhuis ‘Utopia of the Free Market’, that exposes Atlas Shrugged as a harmful fairytale, is translated.
Please stay with me, it is not very difficult.
Nobody can become a billionaire by working with his hands, not even with a high salary (though this might be a good start). Revenues from corporate profits and speculation are not very notable but have huge consequences; even more the yields from derivates and currency speculations. The financial economy is nowadays at least 30 times as big as the productive economy though it doesn’t produce anything. It re-distributes money, mainly from the poor to the rich and does this extremely effective.
The main culprit in the whole money game is interest. Only ten percent of the population (a ‘conservative’ figure) receives more interest than it pays and the superrich get the major part of that big chunk. All the big banks have very important branches on the Cayman Islands and other ‘free money-havens’ to protect these profits from taxes.
So why is the debate about who is paying the most taxes and ‘who should pay more’ irrelevant?
By revenues from interest and derivates which the government is paying on bonds and loans the very rich receive more tax money than they are paying. That is why they will have to do their utmost to get poor. As a matter of fact, governments as a whole are their best clients..
At least ONE FIFTH of all paid taxes are disappearing to the suppliers of government, county- and city loans. Each step in the production and distribution of goods is charged with interest. By purchasing infrastructure, food, electronics, cars, machines and services from the industry a great deal of tax money ends up in the pockets of the superrich. After subtracting payment of interest- and speculation profits provided by the government the taxes are paid not by the superrich but for a little part by the rich and the most by the middle class and the poor.
A substantial part of our income we spend in the shops. The goods that we buy there are transported and offered for sale. This process needs sweat, time and raw materials (nowadays charged with ‘futures’) but money, machines and buildings as well. And the necessary money for those facilities is supplied only by paying lots of interest, for which businesses have to charge their clients. On average this makes up more than 30% of the retail price. So large amounts of money are paid by consumers directly to the rich which is a kind of tax we are not even aware of…… in addition we pay lots and lots of money for our credit cards and mortgages and for the bailouts caused by the bubble blowing superrich banksters, and for their bonuses!
Yes, we are definitely ignorant.
Namey Name said
The financial institutions that loan money are publicly held entities for the most part, and that means that EVERYONE has the opportunity to be a shareholder and share in their profits.
Pythoncharly said
This post is just another conservative propaganda piece, after all the loopholes, write offs, off shores, and subsidies, most of the wealthy and the corporate pay nothing, get real.
Constitutional Conservative said
If the wealthy pay nothing, how does the top 10% pay 50% of income taxes?
In other words, you’re quite wrong. It’s not rates, its total $$$ — and the “rich” pay most of income taxes. Please research the Federal data (it’s printed in the 1040 instructions) to easily verify it for yourself.
Why Not Tax The Rich and End This Elf-Ear Nonsense? | Bruno's Child said
[...] 2) The earners in the top income brackets are already taxed. The top 40% of income earners pay more than anyone else does in taxes. The top 20% pay 65.3% and the top 10% pay 50% and the top 1% pay [...]
Why did Tax Revenue INCREASE........AFTER the Bush Tax Cuts? said
[...] [...]
richard venson said
the rich don’t pay 50% of our taxes because they don’t pay payroll tax ,social security tax when they make over 106,800 dollars per year. Payroll tax is the major tax that the middle class pay thru their pay checks which is earned income the rich receive unearned income and the taxes are much lower than for the middle class. So your 50% supposedly paid by the rich does not exist its a play on words warren buffett says it clearly and hes no dummy he pays less taxes than is recepionist. wakeup america your being had
Constitutional Conservative said
Payroll taxes (social security) fund retirement for all citizens. Is it a tax (which makes it a welfare program), or is it an investment like other retirement?
It’s supposed to be a retirement program, like a government-required 401k. What you pay into gets invested and you then receive a retirement based on how much you pay in.
If you want to turn it into a welfare program, where what you pay into the system has no affect on what you get out of it, that’s a totally different matter.
fred jackson said
every year for the next 10 years because you crazy tea party republicans refuse to let the bush tax cuts expire this government is losing 300 billion plus dollars which would help to bring this economy back in to good health. you crazy tea party republicans would rather make the middle class and the poor take the hit for the loss of revenue for giving the rich and even greater 10% tax break totally unheard of. You know if the original tea party people knew of what your trying to do they would be ocmpletely against you for your stupidity. Your nothing but a pawn for the greed rich like the Koch brothers of coke fame
Constitutional Conservative said
That reveals the difference in philosophy. Liberals believe what you earn really is the government’s, and allowing someone to keep what they have “costs” the government.
Secondly (assuming your facts are right), $300 billion is only 20% of Obama’s deficit, so by your own admission it’s a SPENDING problem, not a REVENUE problem.
Thanks for proving the point.
Even if you take 100% of ALL income over $100,000 (hardly “rich”), you STILL fail to cover Obama’s deficit (according to the WSJ analysis).
It’s reckless and wild spending causing the problem.
Namey Name said
The middle class benefits well from the Bush tax cuts. That’s why Obama has left them in place
In The Real World said
Here is the easiest way to look at the situation. While many complain that the rich pay enough the fact is even they don’t believe that. Here is a simple tool that will let you see who pays and who should be paying. Write the numbers 1-10 on a piece of paper. Now directly underneath write the same numbers in inverted order. Now assume that number 1 on the top line makes $1.00 and break it down in tenths to $0.10, for number 10 on the top line. If you assume that the highest income earners make only 10 x’s what the lowest income earners make then the higher contribution by the top is almost warrented. We know however that this is not the case and that blows the numbers mentioned above. Bottom line-The rich must pay more.
Kevin said
I’m not sure anybody has any idea what you are talking about (thus no prior responses). Could you be a bit clearer as to what you are getting at
erb said
The issue is this: The wealthy (and I mean those with over 10 million) make most of their money on capital gains – you know, investments. They pay 15% on that income. That’s far less then people who work an hourly wage. In other examples, such as social security tax, the rich stop contributing after 106K. Hence, the rich pay, proportionally, less then they should.
Felicia said
Thank you Erb. Everyone tries to get technical and confuse the issue. The capital gains really makes me mad. Income is income.
HK said
Most of you are not looking at the real current numbers
For 2008: Source http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96679,00.html
document 08in05tr.xls
says top 1% income taxpayers pay 38.02% of all income taxes paid, an effective rate of 23.27% based on their reported Adjusted Gross Income. 797% higher than the 2.594% effective rate payed by me and rest of bottom 50% income tax payers. The top 50% taxpayers pay 97.30% of all income taxes paid. President Obama says rich don’t pay fair share.
What will the 797% higher increase to and the 97.30% of all income taxes paid grow to when the President Obama calls the rich’s taxes paid FAIR?
I am in the bottom group that would maybe benefit, and I still do not see anything unfair when rich now pay 797% higher effective tax rate and 97.30% of the total income taxes that are paid.
2008 Adjusted Gross Income (AGI) Avg effective
Percentage Share actual Tax
Percentage AGI of reported AGI Percentage of Total rate paid
Sector Income AGI Share % Income Tax Paid %
Top 50% $ 33,048 or more income 87.25% 97.30% 13.65%
Bottom 50% <$ 33,048 income 12.75 2.70 2.594%
Top 25% $ 67,280 or more 67.38 86.34 15.68
Bottom 75% <$ 67,280 income 32.62 13.66
Top 10% $113,799 or more 45.77 69.94 18.71
Bottom 90% <$113,799 income 54.23 30.06
Top 5% $159,619 or more 34.73 58.72 20.70
Bottom 95% <$159,619 income 66.27 41.28
Top 1% $380,354 or more 20.00 38.02 23.27
Bottom 99% <$380,354 or less 80.00 61.98
SlugHatchet said
so you are saying you make less then 33,000 a year. You are also saying that the top 10% are rich, and they are not. so you are really not saying anything are you? did you even look at the stats that you posted?
HK said
Sorry this site took all the spaces and spacing tabs out of the bottom table! I don’t how to get the table in!
May help you to know what the Title is and 1st column, 2nd column, 3rd column, 4th column, 5th column are:
Title 2008 Adjusted Gross Income (AGI)
1st column, Percentage Sector
2nd column, AGI Income
3rd column, Percentage Share of reported AGI AGI Share %
4th column, Percentage of Total Income Tax Paid
5th column, Avg effective actual Tax rate paid %
Dan Street said
Whatever happened to the protection of individual liberty and individual property rights in America? Why does government get to determine what is too much wealth, and then confiscate & redistribute it as it deems necessary. When did it become evil in America to work hard, prosper, and accumulate wealth? Wealth accumulation is not a zero sum game. The fact that your neighbor becomes wealthy does not preempt you from becoming wealthy. The biggest corporations in America are still owned by individual citizens. When the government bashes corporations, it is really bashing the American citizens who own the corporations. The fact of the matter is, as has been clearly articulated on the site, the wealthy pay their fair share of taxes as a proportion of their income, and then some. The data published by the IRS itself bears this out. So why do any of us spend any time at all bashing the wealthy? The answer: envy. Envy is such a detrimental sin that it is listed in the Bible as one of the Ten Commandments: Thou Shalt not Covet.
Bill said
So your telling me that the rich don’t have the advantage of tax loopholes that the middle and the poor classes don’t?
Dan Street said
Looks like to me if 40% of the poulation pays only 6% of the burden, it is that group who is getting plenty of tax advantages. I’m not saying this is unfair. Saying the rich aren’t paying theirr fair share just is not supported by the raw data. So, I’m wondering why this is said. I just can’t figiure it out.
jfxcoll said
The top 10% make 80% of the money! so the should pay 80% of the taxes. you state the pay 50% but that not correct its more like 30%
Anonymous said
I don’t know where the “top 10% make 80%” comes from, but your idea the top 10% only pays 30% is quite wrong. It’s NOT an opinion, it comes direct from the CBO. Where does your guess about 30% come from?
Joseph Pasulka said
The Poor Should Pay Their Fair Share
Taxes are the price we pay for government services.
I cannot be certain, but it is reasonable to assume that poor folks require greater government services and assistance than do the wealthy. Thus, in principle, the poor should pay more.
However, since the wealthy do have greater resources, perhaps we can ask them to pay as much as the poor.
It is unarguable, though, that I have no claim on the wealth of others. While all men should enjoy the same legal rights and responsibilities, they will never have equal talent, opportunity, or success!
To the extent that one’s wealth is illegally acquired, prosecution is a remedy.
But another man’s honest accumulation of wealth takes nothing from me and owes nothing to me.
Joseph Pasulka
AbsolutelyRight said
Exactly right Joseph. If anything, the originally posted data and the arguments and non-arguments made on these posts clearly point to the conclusion that the tax system is indeed unfair. The POOR don’t pay their fair share. The rich are getting soaked. Everyone needs to pay something and have skin in the game. Even the spoiled smelly lazy entitled hippies protesting on wall street need to stop crying and grow up. Get whatever paying job they can and start to pay back amounts on their loans however small. But first, they need clean up after themselves and really take a good shower.
The fairest system is an entirely flat rate income tax for all, with deductions only for charitable contributions. And since we are proudly a capitalist American country, we need to have a separate falt tax rate, the lowest possible internationally competitive corporate income tax rate to keep production and private sector jobs in the US.
I am against Herman Cain 999 plan – we need no precedent for federal sales tax or other federal taxes as that only encourages the left wing political scoundrels to raise those rates later.
Also, politicians then need to be held truly criminally liable with jail time, if they intentionally break the law and not pass a budget in both houses each year, which forces them to only spend that which is in an official budget – just like some dishonest CFO in a company who breaks financial and accounting laws.
Joseph Pasulka said
I guess that these objectors would subscribe to the proposition that:
Burglary should be against the law, unless the victim is very wealthy and can easily afford to be burglarized.
SlugHatchet said
The top 10 are middle class people so this whole article is just plain false. and the bottom 40 are your target employees, fast-food ect.
and the bottom 10% well they are unemployed, so how the fuck can they pay taxes. this whole article is a sham, and needs to put the whole facted out there, not just a bais portion, so these idiots that agree might take a second look.
P.S. Shit the top 5% is middle fucking class, WTF is this article even about?
bptr said
This article was written buy a complete MORON. TOP 40% ??? Are you joking??? First of all. “top 40%” is NOT TOP!!! That is the MIDDLE-CLASS! The middle-class pay the bulk of taxes. Arguing that the rich pay far more than the poor is completely stupid also. Obviously the poor don’t pay much taxes – HELLO???? THEY DON’T HAVE MONEY – DUH
The argument is the rich versus the working-class. The top 1% pay little tax dues to loopholes and lower Capital Gains taxes. Many corporations such as GE pay zero taxes. Enron got RETROACTIVE tax credits even though they paid no taxes!! The rich also got a “temporary” tax cut from Bush.
“Once you’ve removed huge sections of people from paying anything, what incentive do they have to demand controlled spending? None. After that, they’ll always vote for the candidate who gives them the most handouts — after all, they’re not paying for it. ”
THIS DESCRIBES THE RICH!!!!
Anon said
You didn’t read much, did you? The “1%” pay almost 1/4 of all income tax, and the top 10% page about HALF of all income tax, while the lower 90% pays the other half. The income tax is ALREADY quite progressive. How much MORE would you have the top 10% pay of all income tax? 70%? 80%? 90% Do you think the lower 50% should pay anything, or should they get a free ride paid for by others?
Name-calling doesn’t help much. How much MORE progressive would you make it? What is your idea?
bptr said
Written by another deluded Republican moron.
Sharan DePalma said
I have thoroughly enjoyed reading this post and all the comments following. Clearly, those writing here represent a very small demographic and certainly have a level of intelligence I greatly admire. The moderator clearly asks over and over again, “what’s your idea?” I do not have the eloquence to write something powerful; only my thoughts. I do remember (a very long time ago) taking economics 101 and learning one simple rule, “you cannot tax a country into prosperity”. The progressive tax system is weary and needs an overhaul. Just as I don’t begrudge anyone their paycheck whatever it may be, I also don’t want to see a child go hungry or cold. Balance is the key, and everyone, no matter what the income level, should pay something.
Tom said
This is an intellectually dishonest piece. This looks solely at Federal Income Tax without adding all the other taxes and fees people pay to the government in order to live. How about you add in average state taxes (sales, property, income contributions), registrations and licenses, FICA, medicare, and other miscellaneous ones.
Then run the analysis of % of taxes per income. It’s not correct to look at “who’s paying the bill” particularly when there is a deficit. It’s about “who can afford the bill”.
So, write an little bit more intellectually honest piece and get back to me. I’d love to see the analysis.
HK Hanson said
Even if it is analized in what you see as the unfair method of income tax alone, the follow mathmatic facts come out:
2008 government Income Tax records
AGI = Adjusted Gross Income (reported on tax forms)
Individuals Incomes $380,354 & up; AGI group Top1% Income Taxpayers; %of All Reported AGI 20%; %of All Income Taxes Paid 38.1%; Actual Over All Tax Rate Paid 23.27%
Individuals Incomes Under$33,048; AGIgroupBottom50%incomeTaxpayers; Percent of All Reported AGI 12.75%; Percent of All Income Tax Paid 2.70%; Actual Over All Tax Rate Paid 2.594% Top1% pays tax rate 797% higher than Bottom50%. You must multiply 2.70% by almost 9 to arrive at Top1% 23.27% tax rate. I’m in the bottom50% but have the degree in math so I ask is paying 8.969 times more income tax enough to be what you concider fair?
Or are you with Obama and his 30% that’s 1,011% higher than the Bottom50% (multiply 2.7% by 11.11) and/or his 35% that’s 1,196% higher than the Bottom50% (multiply 2.7% by 12.96).
I’m in the bottom 50% and do not see anything fair about insisting on 11 or 13 times more taxes from the rich incomes $380,354 & up than us bottom 50%s pay for an overall combined group tax rate which is our 2.7% and is already really low when compared to the Top1% groups 23.27%.
Add in 7% payroll and 10% state is only 19.7% but rich pay state so their 23.27 becomes 33.27%. And us bottom 50% are under 20%. Make fairness arguement very difficult unless you ignor the facts and lie President Obama.
Source: http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96679,00.html
See: 08in05tr.xls click first ’1986-2008′ for document
MATH:
Top 1% tax paid / AGI reported
$392,149/$1,685,472 =0.23266 or 23.27%
Bottom 50%, tax paid/ AGI $27,873/$1,074,514=0.02594 or 2.594%
23.266420326 / 2.59400904 = 8.969290 since 1.00 (100%) gives the same number, so 8.969290 – 1 = 7.969290 that is 797% higher
Top50to25% Group AGI reported 7,352,111-5,678,179 = 1,673,932
or 22.77% of all reported AGI 1,673,932 / 7,352,111=0.22768
Tax paid 1,003,639 – 890,614=113,025
or 11.26% of all tax paid 113,025 / 1,003,639 = 0.11261
Tax paid / AGI reported 113,025 / 1,673,932= 6.75% effective tax rate payed
diogenes said
Tom’s right… This is an INTELLECTUALLY DISHONEST PIECE… 1% may pay 22.7% of all personal income tax and almost 40% may pay 6.7% of the income tax this is so misleading. Personal income tax as a percentage of total govt revenue (by total I mean Federal, state & local) is only 29.94% of Total Govt Revenue. Corporate income tax is 5.09% of total govt revenue. Total Income tax is 35.03% of total govt revenue. The top 2% pay a tiny fraction of payroll taxes and a very small minority of other Ad Valorem taxes like Excise Tax or property tax. If they told you the whole story you would see America has a very progressive and fair tax table which actually works in favor of the rich or the plutocracy far more than the welfare mom with the pink Cadillac and 20 kids by 19 men. I took these numbers from the congressional budget office and did the math myself these numbers are from fiscal 2010.
The max amt that can be taxed for FICA is $106,800 why are the rich not paying FICA on the rest of their income?
Do you really think millionaires like Mitt Romney are paying any FICA on the money he gets from his “Blind” trust?
Do you really think the 1% of people that are probably so rich that they don’t have earned income like Mitt Romney are pay more FICA than the the bottom 99% or even the bottom 80% when its a flat tax that clearly benefits people making over 106,800 / yr and the more you make over that the more advantageous its is.
Can you tell me that this is also intellectually dishonest?
Be honest do 50% of us poor people not pay excise tax on gas, alcohol, telecom & tobacco? Do the rich really buy more of that than the poor?
Do poor people really not pay sales tax on the food they eat? does the rich 1, 5 or 10% really buy more food and pay more sales tax that than the rest of America?
the Koch brothers Anton Schutz and other owners of fascist plutocracy party have it better now than they’ve had it in their lifetime…
Constitutional Conservative said
Just because you don’t *like* it doesn’t make it wrong. The numbers come right from CBO. If you think they’re dishonest, tell them – maybe they made a mistake?
Tom’s wrong – FICA/medicare are (supposed) to be self-sustaining insurance/retirement programs, not general taxes. Tom’s also wrong in adding state taxes in a discussion about FEDERAL taxes.
Is SSI a tax/welfare system or a retirement system? Liberals *love* to switch definitions. When it’s a budget, SSI isn’t part of it as it’s a lockbox of personal retirement. Now you’re claiming it’s a tax.
Which is it? A tax which doesn’t cover expenditures and contributes to the debt, or a personal retirement program?
As the data shows, it’s *extremely* progressive.
In short, sorry you and Tom don’t like the facts about who pays income tax, and who doesn’t.
Leah said
The top 1% own 43% of America’s wealth, the next 19% own 50% of America’s wealth and the other 80% own SEVEN PERCENT of America’s wealth. I think you may have forgotten to mention that in your little article.
Constitutional Conservative said
Didn’t forget to mention it, because it has nothing to do with who pays how much Federal income tax.
The facts are simple: the “rich” already pay most income tax, while the bottom half pays zero. How much *more* progressive do you want it to be? Would you like 3/4 of the country to pay nothing? When the president said people must pay their fair share, does that not include half the country?
Why Not Tax The Rich and End This Elf-Ear Nonsense? said
[...] 2) The earners in the top income brackets are already taxed. The top 40% of income earners pay more than anyone else does in taxes. The top 20% pay 65.3% and the top 10% pay 50% and the top 1% pay [...]
stooge of the liberal elites said
If the rich are paying disproportionate to their income, it’s because, duh, the overwhelming portion of income among middle class and lower households is consumed by life necessities, while most income above $100K is discretionary (yes, I know living standards vary by region and that in some places $100K ‘pays the bills’…but anyone saying that $250K isn’t well-off is spending too much time among the very rich and has acquired so many unnecessary expenses that they can no longer tell the difference between a luxury and a necessity. I say this as someone who lives in an affluent town on about $125K income and has lived in NYC for 10+ yrs). Also, pointing out the ratio of taxes paid by the rich vs. poor/middle class ignores the fact that CEO pay (and executive pay in general) has sky rocketed in the past 2-3 decades, going from about 42:1 to 380:1, while wages among the middle class have more or less flat-lined.
For someone w/ millions of dollars to complain about taxes is obscene. They were higher under Reagan, and the fact remains that the rich have never owned more of this country than they do now. How many cars/houses/watches/etc do you need? And don’t give me some BS about “I took the risks, so I earned it”…bullocks. The overwhelming majority of rich in this country are not entrepreneurs, but corporate executives who are mere stewards of their companies and who got to the top of the corporate ladder by dint of connections and an educational track that was greased by similarly affluent parents. Meanwhile, the middle class and lower struggle to achieve anything beyond flat-line progress without the advantages of connections and a superior support system. Research has show that America is now one of the least class mobile societies among industrialized nations, and we’re starting to resemble more so third-world countries in terms of wealth polarization. The tragic thing is that the upper class (like those of you on this site) are too blind to see how the culture and national dialog suffer because of the increasing disconnect between rich and poor, and the middle-class and poor are too stupid to see through the myth of ‘this could be you!’
Those of you insisting that the rich are paying enough taxes are either totally disingenuous or without a clue…no clue that lower income households have no more money to pay taxes after food, shelter, etc…and no clue that there is inequality of opportunity in this country. From birth, the rich enjoy superior schools and an overall community learning environment and extensive social networks to help them climb the ladder of success. To deny these facts is either gross ignorance or malicious intent to protect what you’ve got. So which is it?
Namey Name said
It’s neither, you are just an angry liberal. I lived the very life you described when I was a child, and I worked hard to make a better life for myself. I will teach my kids to do the same. What are you going to do, piss and moan about what schools you never went to? Pathetic. I’m ashamed that you are a fellow American.
John G said
This article makes some good points, but the tax info is way out of date. As pointed out in the book, “The Rich Don’t Pay Tax! …Or Do They?”, the latest IRS collections data shows that the top 1% now pay 36.73% of all personal income tax that is actually “collected,” while earning only 16.93% of the income. That’s 2.2 times their share, based on income. Those are FACTS. It’s money in the US Treasury and more than a third of it came from just the top 1% of taxpayers. But a funny thing happened on the way to mail their tax forms. Many of the rich left. Zogby reports that more than 3 million Americans relocate outside the USA every year. The question that this raises is, “How many of those expats are wealthy?” We can’t afford to drive off a third of our most prolific taxpayers.
Constitutional Conservative said
The article was written way back in 2007, the data was the most current at the time. What’s interesting is this article only got a few hits per day for years, then starting last year is getting 50x or more hits.
It seems many people in the OWS crowd don’t really know the rich *already* pay most of the tax. As Margaret Thatcher said, socialism eventually runs out of other people’s money — and we’re rapidly approaching that as half the country doesn’t pay any federal income tax at all, yet wants all the free goodies (as long as they’re paid for by somebody else).
If you have a link to the IRS data, I’d love to have it.
The Rich Don’t Pay Their Fair Share? A Look at the Facts, Not Fantasy « DYNAMO_politics said
[...] The top 40%of income earners pay 84.3% of income taxes (h/t to our source here) [...]
Sharmarke said
Your post is disingenuous. Effective tax rates for top earners were over 50% between 1950 and 1980, and the economy grew like a rocket launcher zooming through the sky. Today effective tax rates across the board are 22% or less for the richest Americans. Total taxes as a share of income for the top 1% are about 33%, as this figure takes into account all federal taxes. You should apologize to your viewers for this defamatory, misleading garbage.
Constitutional Conservative said
Let’s get beyond attacks providing no solutions. The top 10% pay half the federal income tax – how would you change that? Who do you think should pay what? What should the rates be? Should everyone pay something, or should one group pay for everyone?
What would *YOU* propose to change the federal income tax?
If you feel the data is wrong or misleading, perhaps you should contact the CBO and tell them their report is wrong. I’m sure they would like to issue a correction for any errors.
I’d also like to issue corrections for any errors. Can you explain where any errors are so they can be corrected? Keep in mind the CBO report is from 2004, and this article was originally from 2007 or so; I haven’t yet seen any newer data. If you have newer data, that would be helpful to the discussion as well.
Namey Name said
hahaha, they don’t want to see newer data because it will buttress your argument even more. LOL!
TheHeadofAtlas said
Income taxes account for only around 40% of total federal taxes on income. They do not include payroll or sales taxes, let alone excise taxes and others.
Your CBO data is fully accurate; my point is that you are using the right data to come to the wrong conclusions: the rich are paying their fair share. A lot of people cite fully authentic data; the challenge is to provide the right explanations and the proper context.
Constitutional Conservative said
Payroll (social security) was *supposed* to be a retirement account. You get back what you pay in. It’s not supposed to be a tax in the traditional sense in that it’s not used for general government.
Federal sales tax? Haven’t heard of that one yet. Gas tax, and others, yes, but no federal sales tax.
When this data comes up (the rich already pay most of federal income tax, while half pay almost nothing), it’s become popular to change the subject.
First, the scream – tax the rich! And then when it’s discovered they’re *already* paying most federal income tax, the screed changes. Yeah, but, what about…
As I’ve asked many times in this thread, what would *you* do? What would be “fair” tax rates in your opinion? I hear lots of liberals shouting “tax the rich!”.
What do you think would be fair? How much more should the rich pay (if anything), and how much less (than zero?) would the lower pay? And of course, we need to define rich.
I’d really like to hear an idea, as if you’ve read the comments over the years on this thread, nobody who doesn’t like the CBO facts ever offers their idea, just complaints.
If you could do anything to the federal income tax, what do you think would be fair?
TheHeadofAtlas said
My mistake with the sales tax, it is NOT federal.
“When this data comes up (the rich already pay most of federal income tax, while half pay almost nothing), it’s become popular to change the subject.”
The top 1% of American income-earners have nearly a fifth of total income. The richest 20% of households make over 14x, at least, as much as households living below the poverty line. They have so much money they don’t know what to do with it.
A better metric for judging tax fairness and its progressiveness is tax rates. The richest Americans, again, pay about 22% or less effectively out of federal taxes. They paid over 50% in the thirty years after the 2nd World War.
I would think that returning to those rates for those folks would be fair.
Constitutional Conservative said
Okay, that’s not too bad. Let’s define rich and see if we’re talking about the same group. I’d change the rates to something like this (all are for single, married would be double).
over $350,000 37%
over $500,000 38.5%
over $1,000,000 40%
over $1,500,000 42%
… but that would make little change to the deficit/debt, as the real problem isn’t revenue, it’s spending – the government is spending our kids (and their kids) earnings.
One problem is when politicians talk of “the rich”, it usually means the middle class, so we’ve got to be careful. I don’t think those brackets too many would consider middle class, but that’s open for debate.
If both parties could agree on something like that, we’d put this discussion behind us and move on to the massive spending problem, which *NOBODY* in Washington is dealing with. Even the Democrat-hated Ryan plan never gets to a balanced budget. That’s absurd. We should move to a balanced budget in a medium time frame – 5-10 years.
As a matter of fairness, I don’t like to see total income tax over 50% – I think if government takes over half what someone makes that’s not good – certainly you should be entitled to *half* what you work for? Most state income taxes top out around 10% (and we’re ignoring any local/county/city income taxes), so we’ll be right about 50%, depending on where you live.
Of course, I think a flat-tax would be a better idea completely. Get rid of all the paperwork. No deductions, no exemptions, nothing. Just a flat tax. Everyone earns, everyone pays. Make more, pay more.
Of course, that’s never going to happen.
John said
Instead of “fair share”, lets talk about “fair pain”. Earning $50k/yr with $10k taxes leavess $40k to live on. A $1,000/month mortgage (say on a $250k home)leaves $28k for evrything else. Earning $1M/yr and paying $300k in taxes (assuming I’m not a hedge fund manager only being taxed at 15% on my capital gains income!), I have $700k to live on. Now, to keep up with my wealthy friends, I want a $5M home, wih a morgage of $20k/mo. leaving a mere $460k/yr for everything else. My heart bleeds.
Constitutional Conservative said
Does everyone have a responsibility to pay for roads, defense, etc? Or should only half the country pay? Should we be able to take what someone else earned simply because we define that as “fair”?
How about a flat tax of 15% or so, exempting income below poverty level. No deductions. No EIC. No corporate subsidies (Solyndra didn’t work out very well). Everyone earns, everyone pays. Those who make more, pay more.
Would that be fair to you? Or is it more about taking what someone else has?
Quora said
Why would measures such as universal healthcare, that have been successfully implemented in other western countries, “not scale” to the US?…
There are many factors that I consider when I say that things don’t scale. I think about many of the variables that make the United States a different argument than any other country. 1) The population difference is very important. The difficulty to m…
A. Real American said
If you’re too chicken to admit to the fact that the rich don’t pay the bulk of taxes then don’t post they do as apose to deleting comments that state the facts instead of your fuhrer’s propaganda.
Constitutional Conservative said
You might want to take a look at the actual CBO report. http://www.cbo.gov/publication/15919
If you believe the government’s CBO data is incorrect, do you have analysis to support your position? Name calling doesn’t accomplish much or contribute to the discussion, and without citing where you got your data, nobody can check it, so it doesn’t add to the discussion either.
Be polite, and cite your sources so everyone can look them for themselves — commenters should read the comment policy if they have any questions about what is acceptable.
tiger said
the rich pay a lot if you go by numbers! but 25% of my check go to the gov. and i’m probably not getting SS because the ones getting SS in the whitehouse that are older then 65, want to change that age so high that nobody gets it. but them if you go by what they pay now by percentage it at 10 percent for them how long is it going to last?
Jason said
Love the article and the comments. “Tax the rich more” is so easy to say and buy into for the average citizen that struggles to get ahead. My wife and I have recently become a “1% er” as the media has dubbed it. We didn’t inherit anything and we didn’t have any help from others. We worked long, hard hours and made many sacrifices and built two businesses. It took 16 years. I regret, now, not having kids but quite frankly, we couldn’t have accomplished what we did if we had kids. The sacrifices, the stress, the work, and the risks are real. I think that people looking from the outside in just think that the 1%ers got lucky or they inherited it. I would guess that very few of them fall into this category. And, it is not like you suddenly made it and everything is easy from this point forward. In fact, I had way more fun and much more freedom 16 years ago. Often times I would really like to go back to my simple life.
Sixteen years ago and for the first decade of building our businesses, we never even thought about taxes. They weren’t a burden for us as they really didn’t amount to anything. It wasn’t until now that suddenly my biggest worry is hoping that a client pays in time so that I can make the next 6 figure estimated quarterly tax payment. There have been many times where I have had to borrow against my house to make these payments. Being a “1% er” for me is far from lavish vacations, the yachts, and the servants that the media and Obama administration portrays it to be. We don’t have any wealth, we have a relatively low net worth, yet we now have a high income.
Last year, we paid a marginal tax of 32% in federal income tax. It is not a possibility for us to pay a higher percentage in federal tax unless I want to go into more debt or unless I lay people off. Both of these scenarios would result in less net income which would likely translate into less actual tax collected even at a 40% rate. Our income is just above 1 million.
I believe Obama’s plan is the raise the rates on income of $250K plus. I would have to believe that most of these folks would be in a similar situation as we are and simply could not continue their operation at the same level with this added burden. I find it laughable that they keep referring to this as a millionaire and billionaire tax when they are proposing it take affect at $250K.
I, like others have pointed out, believe that we have a major spending problem and not a tax revenue problem. It will not be easy or popular to cut government programs and services but I truly believe that this is the only answer. I also believe that it will have to be very significant cuts.
chicagojoe said
I lot of this is still confusing to me. So if you make millions of dollars a year and you pay 15% itax rate sure thats going to come out as a larger number then say 38% on an income of someone making say 30K a year. So I guess the question should be is it fair that someone that makes a lot less hazs to give up more of their income to taxes then someone who makes millions. It seems to me that the person making arounf 30K a year should be the one paying on 15% while the person making millions should pay the 38% Maybe I am just arguing for a flat tax rate
Dan Heberer said
Excuse me, but you unfortunately have it completely back wards. Take a look at the Federal tax bracket and you will see that the INCOME tax rate for someone making between $8,700-$35,500 is 15%, while the INCOME tax rate for people making $388,350 and above is 35%. The person making millions a year is paying 35% federal INCOME tax. The 15% tax rate that you are referring to is the CAPITAL GAINS TAX. It is the percentage that people are taxed on for their investments, dividends, etc. It is lower than the INCOME tax rate because it gives people an incentive to take the money thay have earned and invest it into the economy. The idea that the rich are only paying 15% income tax is a HUGE misstatement, but it’s very easy to confuse people with that statement, especially if the people hearing it are ignorant of the country’s tax code. President Obama has been misinforming people on this subject for years, and so is Warren Buffet, with the intention of making it sound like the rich aren’t paying their fair share. The 15% capital gains tax is available to every American who chooses to invest in the economy, regardless of what their income is. Some people, like Mitt Romney, make almost all of their income from investing rather than from a company’s payroll, therefore he pays about 15% in taxes because he no longer has a traditional income When he was working for Bain Capital, you’d better believe that he was in the highest income tax bracket. He’s made enough money in his life to where he doesn’t need a day job, and relies on investments to sustain him and his family. It’s a great situation to be in, one that I hope to be able to take advantage of one day. It’s not a loophole, but an incentive for people to invest in the economy. Anybody who can sustain themselves from investment income rather than being on a company’s payroll is going to benefit fro the capital gains tax rate of 15%, but the vast majority of people are making salary/earnings, and are therefore subject to the federal income tax rate, which is progressively higher, the richer you are. I hope this clears things up a bit for you.
The Economy For Dummies: Obama’s Plan To Destroy The Middle Class « politisportsblog said
[...] http://constitutionalconservative.wordpress.com/myth-the-rich-dont-pay-their-fair-share/ [...]
Fairness is in the eye of the beholder. « Red For A Reason said
[...] that the wealthy – which now appears to include the gainfully employed – don’t pay their fair share of taxes is a myth, [...]
Tim said
The Rich may pay more of the total taxes collected but they also have more of the money a lot more of the money. Being rich is not a human right neither is tax loopholes. So wealthy people should pay the same as everybody else and don’t give me that oh but if the rich pay more taxes they won’t be to able create jobs. Rich people are not in anyway job creators. Only demand creates jobs and for that matter rich people. What ever product or service you provide will not sell if no one can afford it. Not to mention that without the worker you employ you don’t make big money unless you think Steve Jobs built ever iPad, iPhone, and Mac computer all by himself.
Kevin said
Have you read anything on this site at all? Its fair to debate whether or not the truly wealthy should pay somewhat more than they do, but the entire point of this website is that the ALREADY pay more, whereas for some strange reason you claim “wealthy people should pay the same as everyone else…” Um, huh? So you want them to pay less than they already do so that they can pay the same as “everyone else?”
“Whatever product or service you provide will not sell if no one can afford it.”
No shit, and how do you think businesses perform that price their product beyond the market’s willingness to pay? No sensible person thinks Jobs built Apple by himself. He also didn’t reap 100% of the profits. What are you getting at? What does this have to do with this website?
Rich people aren’t job creators? Who do you think creates meaningful jobs, the poor? The lazy? The stupid? Redundant government programs lacking in any accountability?
As someone who “only” makes about $33k a year in the public sector where the pressure to perform is virtually non-existent, I just can’t help but roar at all of the people around me constantly condemning people who have achieved in life. As the moderator keeps pointing out, they already pay more, how much more do YOU think is fair? I’ve just always enjoyed liberals constantly criticizing conservatives for their more faith-based policies (rightfully so), while ignoring their own (egalitarianism, tax policy, environmentalism…got any bright ideas about what to do there? DID YOU KNOW THAT POLLUTION IS BAD!!! Ok, what do you propose? Or how about, gosh, black people still can’t seem to do well in school….must be racism right? I mean, what else could it possibly be since I’m going to ignore all empirical data as it doesn’t fit with my pre-determined beliefs….get a clue!)
Planman said
What a bunch of thumb-sucking whining people. It is like a written version of “The housewives of xxx”. Get those fingers back to income producing activities and consider how the rest of the world sees Americans or run for office. We can’t even compete with recent legal immigrants. You know what they say about pointing fingers. More are poiinting at you that at the one (or thing) you are blaming for the problem.
Dan Heberer said
You’re overlooking a very important detail. Romney, unlike the majority of the American workforce, makes all his money through investment income. Investment income is taxed at the capital gains rate of 15%. The entrepreneurial risk of the investing is what merits the lower rate. If Bain Capital paid him an annual salary, then of course he would pay at the 35% rate.
Sue said
Thank you Dan for the info. Do you remember the year that the capital gains tax was changed from 30% to 15%. Was it 1985?
Dan Heberer said
I don’t know about any changes in the past. However I do know that Obama wants it raised to 20%.
Sue said
Then let me enlighten you. The capital gains tax in 1972 was 35% and has progressively been reduced. In 1980, Reagan reduced rates on capital gains to 20%. Then in 1988, G. H. W. Bush raised the tax to 28% which continued until 1996 when Clinton reduced capital gains tax to 20% while balancing the budget and leaving office with a tax surplus. George W. Bush reduced capital gains taxes to 15%, valiantly defended this country with the “longest war”. (sarcasm, in case you don’t recognize it.) I remember that I received $300 in the mail from Uncle George while he gave the wealthy trillion dollar tax cuts. God forbid the wealthy should be asked to pay 20% on capital gains! While I continue to struggle at age 64 working those 2 more years so that I can get a larger piece of the social security pie which I have been promised by this country and gladly paid as a patriot. While I am told by Republicans that social security and medicare are an “entitlement”? I have worked hard since I was 17 years old and always felt safe that I could retire with the home I own. Now, I am faced with the promise of medicare vouchers by Mr. Romney and social security jeopardized so that the wealthy won’t have their taxes increased? No thank you, Dan.
Sue said
You can go to History of Capital Gains taxes on Wikipedia for an in-depth, non-partisan view of tax structures.
Pat said
Hey Sue, Romney paid his captial gains tax after paying tax on the earned income which was then invested and produced capital gains. My advice to you is get a good job, invest every penny you can in equities with dividends and you too may someday live off the captial gains and pay Mr. Romney’s rate. It is available to all of us. You just have to find a gig that pays as much as possible like being CEO of apple or writing Harry Potter books.
Sue said
Sure.
Dan Heberer said
I can totally understand how Romney’s tax rate seems unfair to somebody who either doesn’t understand why capital gains get a low rate, or don’t think people with a high net worth deserve low taxes. However, take a moment to think about the fact that fund managers(like Romney) have a choice between taking their management fees as regular income paid out in cash(guaranteed, but taxed at the federal rate) or reinvesting that money in the company’s funds/economy wherein the returns aren’t guaranteed, therefore thes rate. If you’re a smart investor, then you too can invest your income in the economy, and pay the capital gains rate on the returns. It’s about rewarding the risk takers, and giving them an inetive to grow our economy. I hope that someday I am successful enough to earn all my income through investments, so I can enjoy the capital gains rate. But if people want to raise the capital gains rate on investment income, than what the hell would motivate me to put my money into the market?
Sue said
So, obviously money means a lot to you. I think it’s called greed. You are quibbling about a stinkin 5%. I don’t have the need for a lot of money. I am blessed with a good life at $62,00 a year and am happy to pay 28% of my income to the USA. I have never been one to complain about paying taxes because I believed that after being in the workforce for 47 years that I would be able to retire and live life volunteering and enjoying time with the grandkids. I truly have no aspirations to join the billionaire club. And, I’m certainly not as smart as you, nor probably as young as you. I am 64 years old and hope to work until 66 when I can receive social security, medicare, and the proceeds from my annuities. Good luck to you, Dan. When you are “successful” I hope that you will toss a crumb to the poor on the streets. I’m still voting for President Obama and I hope he raises Capital Gains taxes to 28%. So there.
Jason said
Sue, you make triple my income. To me, YOU, are rich. I wonder what all these “middle class” Americans would say if they were asked/ told they had to pay more so it was fairer for me? Perhaps you should only make $45k a year so I can make $37k a year. I’m also sure there are people living in the streets who would love to have a piece of my $20k a year. Perhaps I should give them $8k of my income. I made a lot of mistakes in my life to get me where I am. My credit is crap. I have no savings. I live check to check. That being said, it’s not your fault. It is my fault. I am not entitled to any of your money because I didn’t do the work you did to get it. I made mistakes that you didn’t, but I guarantee I will get myself right. Everytime I hear about helping the poor, I feel insulted. I don’t want your sympathy, your handouts, your help, or your “crumbs”. I wasn’t smart, but that doesn’t mean I’m stupid or incapable.
sue said
Since your reading comprehension is compromised by your anger, let me spell it out for you. I am a single female earning over $62,000/yr as an RN, BSN. I sold my home which I paid $150,000 for in 1997 for $362,000 in 2004 and downsized to a condo for which I paid $230,000 (cash). Due to the real estate crash, it’s only worth a mere $160,000. I have no mortgage and have invested my savings wisely (IRAs, CDs and annuities) which will provide me with $500/mo until I die. I expect to receive only about $1,600/mo from social security, since I did not receive an income while taking care of my Mom who had Alzheimers for 2 years. We lived on her income from investments before I had to put her in a nursing home so that I could go back to work. She was a private pay during her nursing home stay.
You and I are more alike financially than you would care to admit and I, like you, have never been dependent on the government for anything. Read my blog of 9/8 regarding the history of Capital Gains taxes. G.W. Bush lowered the tax from 20% to 10% in 2001 and that 10% has remained in effect for 11 years. Along with 1.7 trillion in tax cuts for the wealthy, our government has lost a ton of money in revenue.
Don’t kid yourself, Jealousy, at $72,000 annual income you don’t come close to being wealthy (nor do I). Raising capital gains tax will not even affect you. Investment tip: invest in tax-free annuities and start a Roth IRA. It’s simple math: increased revenue = decreased deficit.
I’m preparing to retire in 2 years. I only pray that you come into my hospital on my last week of work so that I can take care of you. I’ll recognize you by your hypertension, small head circumference, big beer belly and ED. Foley STAT! LOL
jealousy will get you nowhere said
@Sue In 1980, when Ronald Reagan was elected, the GDP was $2.79 trillion, and the debt was 32.6% of GDP. In the last full year of Ronald Regan’s tenure in 1988, GDP was $5.1 trillion, and the debt was 51% of GDP.(FACT LOOK IT UP)
So notice that the GDP increased by a massive 82% over just 8 years under Reagan. That is a huge leap. Under Obama between 2008 and 2010, it increased by a pathetic 3%.(ANOTHER FACT LOOK IT UP)
Reagan did cut taxes on “the rich” from 70% to 28%, a drop of 42%. By liberal accounting, that should have caused revenues to the government to fall by 42%. But revenues to the federal treasury went from $517 billion in 1980 to $991 billion in 1989, increasing by a massive 91%(FACT LOOK IT UP). So indeed, tax cuts on the wealthy did what they always do – they produced economic growth. In 1921, cuts in the top rate from 63% to 25% produced The Roaring 1920s. Keep living in fantasy land sue.
sue said
I’m impressed! Did you look at my research? Where did you find your information? How can we increase government revenues to support education, social security, medicaid and medicare. I would like to see my son-in-law, who makes over six figures, and supports my daughter and 3 children under 12 have the same future as I have enjoyed. They have saved a lot of money, but live in a tiny house in MI and all 3 kids attend a catholic school and will probably all go to college. Banks no longer pay the same interest rates on CDs (over 12% as I remember in 1984). Money markets pay less than .25% and mutual funds are a crap shoot at best, although it’s kickin’ butt right now. But who’s to know how long that will last? In response to tax cuts for the wealthy which already occurred 12 years ago. How’s that working? The economy has been in the crapper for awhile now. Corporations outsource jobs for cheap labor to other countries. How is that creating jobs? America ranks #37 in the world for health care availability. We have the best health care system, but even with health “insurance” which is a joke, we are all but one catastrophic event away from bankruptcy. Only the uber rich can afford actual health care. A 27 year old CNA with whom I work just received a diagnosis of Sarcoidosis, a debilitating tumor forming disease which is terminal. She was working her way through school to be a dental hygienist and needs to apply for medicaid because her “health insurance” won’t pay. Might I add that when my Dad owned a travel agency he employed 12 people. I was responsible for payroll and health insurance premiums to BC/BS which then paid 100%. My BC/BS at my present job has a $3,000 deductible. I had a cardiac event last year and paid that $3,000 out of pocket (turned out to be stress). A cardiac cath revealed that I have a healthy heart but an extremely stressful job because of medicaid and medicare cuts staffing:patient ratio is 1:12. Maybe I am living in a fantasy world that a mere increase of 5% to capital gains would help our failing economy. But, I am worried to death. I am also sick of the whining wealthy. What do you do Mr. Jealousy? Are you employed by a billionaire?
jealousy will get you nowhere said
@sue You obviously care about america and your family and i respect you for that. If i came across rude with some of my previous comments i am sorry for doing so because like you i want what’s best for your family and mine. All i can tell you is that raising taxes on anyone is not going to help either our our families. The best way to solve our problems is to get our economy moving again and the best way to do that is to put money back in every americans pocket and tax cuts will do that. As for as republicans or democrats i can honestly say BOTH parties have sold us out and i’m not going to try to convince you that Romney or Obama is the absolute answer because both of them live in a different world then you or i could ever afford. Your correct in saying that my 72,000 and your 65,000 are in the same world because they are. It all comes down to who do you want to get screwed by and in my honest opinion Romney is the lesser of the two evils. I could talk forever about americas problems including healthcare but i don’t want to bore you to death. As far as investing goes i’m going to give you the best investing advice you could ever get so please listen carefully. Google” Harry Browne permanent portfolio” it’s what i’ve been using for many many years and almost guarantees a 8% to 10% a yearly return on your money. Your put your money in four different asset classes
1. 25% stocks.
2. 25%long term treasury bonds(20+year)
3. 25%Cash(sub Short term treasury bonds 1-3 year)
4. 25% gold.
The best way to implement this strategy is using four simple etf’s
1.Stocks=VTI
2.long term bonds=TLT
3.Short term bonds=SHY
4.Gold=GLD
This strategy sue have averaged around 10% a year for the last 40+ years since we came off the gold standard in 1971 and has had only 2 down years in it’s history. You can use it it a roth ira like i do to avoid taxes when you retire or a taxable account if you choose. When the market crashed in 2008 and your average investor lost between 30% to 40% of his portfolio this sucker made me 2% that year i did not lose a dime of my money with this strategy. Again go on google and you will see tons of articles and forums on this portfolio and as far as i’m concerned Harry Browne it’s inventor was a genius. Enjoy sue.
Bah Rock Oobahma said
@ Constitutional Conservative … I want to party with you! Or go voting with you so we can get the socialist off his throne! Your replies are spot on, you are witty, and your arguments are very well stated!
Keenan said
I am a Financial Analyst and wanted to just clear up something here: The bulk (90+%) of income received by the wealthiest individuals does not come from a weekly or bi-weekly check like the middle-class. It comes in the form of dividends and capital gains from investments. In essence, the Federal tax code does not apply to most of the wealthy. What does apply is the capital gains tax. If it is changed to 0% as the Republicans are proposing, the effective tax rate of the wealthy will be 0%. This would lose trillions of dollars in revenue, which would need to made up for by pulling programs from the poor and middle class. Unfortunately, it will not stimulate the market as is being proposed. Wealthy people are already heavily vested in the market because it is one of their ways to pay the least taxes (15%) along with a few other loopholes. Job creation from the wealthy would not likely increase much because gains from business would be taxed at the effective tax rate, while market investments would be 0%. So, any excess income would most likely be reinvested into the market and not creating new business (especially with a struggling middle-class who buys most American goods) Some people may say “Investing in the market is investing in business.” This is somewhat true, but will all the extra income for the wealthy go strictly to American businesses? The answer is no. The conclusion: 0% capital gains tax means 0% tax on the wealthy, which leads to less programs for the struggling, less money in the purses of those who help American businesses thrive (middle class). American businesses will be hurt and some will go under because of less middle class consumerism. This will cause stock prices in American stock to drop, the wealthy will invest in foreign companies because their prices will rise (due to cheaper merchandise and labor). This coupled with the proposed repealing of the home mortgage interest deduction will cripple the middle-class purchasing power, make the gap wider between the wealthy and middle-class, and empower foreign countries through company profits- some of which may not be allies of America. This is exactly what happened a few years ago. Take a look at Dubai- thanks to loose regulations on housing and market practices, and the notion that giving the wealthy more federal money will help America…they’ve built the most beautiful hotels with your retirement savings. Too bad only the wealthy Americans have enough money to ever stay in one of them.
Dan Heberer said
Romney’s position is to eliminate the capital gains tax ONLY for people making $200,000 or less annually, NOT for the wealthy. That’s a very important detail that I didn’t see in your comment. Do you think that’s a fair idea?
sue said
Romney actually has a position?
Ada said
Genuinely no matter if someone doesn’t know after that its up to other users that they will help, so here it occurs.
Ada
CriticalThinkingOhioan said
the original post is basically meaningless because it says nothing about what % of total income is represented by the various top slices of the population discussed. when casual readers see “the top 1% pays 40% of the taxes” they just see 1 -> 40 and they think gee, those ppl are getting soaked. but what if the top 1% earned 60% of the income that year? if that was true, then 40% of tax revenue would be way too low to be fair. i have no idea what the actual % is, i didn’t look it up. but more importantly, neither did the author.
CriticalThinkingOhioan said
oh and btw, you can’t just google up “what percentage of income goes to the top X %”. the information IS out there, but you can’t rely on the word “income” in your searches because, as warren buffet famously explained, the very wealthy often get their compensation in ways that are not classified as “income” by the IRS in the way that normal people’s incomes are. even tho that’s exactly what it is.
Hal Swanson said
Clearly the wealthy pay more than their fair share. What should Americans pay for? Those things they use and in proportion to how much they use them. For example, do the rich use public highways more than the poor? No. Speaking of National Defense, does it cost more to protect the rich than the poor? No. So why should the rich pay more for these things? Everyone should pay an equal amount for public services, unless they use them more than the average person. The fact the rich make more money is irrelevant. It’s how much we use things provided by the government that should determine how much taxes we should pay to pay for such services.
ab said
What? Walmart (and other large corporations) aren’t constantly using their big ass trucks all over the country? Those same corporations don’t use any land or contribute to any pollution? I don’t think its unfair to ask that since they do control so much that they can make sure the fucking roads (that they use as well as the poor) are in decent condition. National defense? They’re the defense contractors! If the poor could afford to pay any more they would.
Obama’s Plan to Tax the Rich would run Govt for 8 Days | Politisite said
[...] via Myth – The Rich Don’t Pay Their Fair Share [...]
Dan Heberer said
It is a brilliant way for people to keep more of their hard earned money out of the government’s pocket. I hope more people begin to understand these principles, so that it inspires them to earn more money, and learn how to keep most of it!
Suck It said
what about the people making millions of dollars every year but pay the capital gains tax rate of 15%? Is that paying a fair share when someone making 50k a year pays more than that?….No, didn’t think so.
Kevin said
15% of millions = a lot more than 28ish% of 50k. What do you consider fair? is the question that keeps getting asked and for whatever reason ignored. Any idea why someone might be in a position to make millions of dollars a year through investments? Even if you disagree with why they have the money in the first place, they don’t “make” the money until they sell “x” number of shares (bought with income they’ve already paid tax on) in the investment in question and then they pay the capital gains tax (15%) on their earnings (the same rate you’ll pay as you dip into your retirement account one day).
Dan Heberer said
That’s a misconception. The millionaires you speak of pay the capital gains rate only on their investment income. Their regular income is taxed at 35%, the highest possible rate. Everyone has an opportunity to take advantage of the capital gains rate of 15%, but you have to invest your money to do it.
Logan said
No I think you miss understand them. There is no misconception. Obviously “capital gains” tax rate is for investment income. “Capital gains” is basically a fancier way of saying capital gains. There are many super rich people who earn most if not all of their income through capital gains. They don’t have a salaried position. These people will pay only 15% on all of their income because it is all capital gains. With deductions thrown into the mix some even end up paying less than 15% like Mitt Romney. Hes been paying 13%-14% the last couple years and makes about 20 million dollars a year. Thats what people are complaining about. Its the rich people that pay a lower tax rate than the middle class not the ones that pay the highest level possible.
Kevin said
13% of 20 million USD is still 2.6 million USD, i.e. more taxes than you’ll likely pay in your lifetime.
Dan Heberer said
What solution do you propose? Should we raise the capital gains tax? If so, by how much?
Should we not allow people to make all their money from investments?
There will always be people who are very smart and good at making money. The more we try to punish them financially, the closer we get to discouraging capitalism, and encouraging socialism.
Logan said
Well i think that if you are the average person who collects capital gains mostly from your retirement or maybe a small investment on the side 15% is fine. But the people who are earning several hundred thousand or more a year from capital gains should be taxed on capital gains as income. So the rate would depend on what bracket you are in. Most likely 35% if you are earning that much just from capital gains. I’m not one of those crazy liberals that thinks the rich should be taxed 70% or something. Thats ridiculous.
As i stated they should be taxed fairly not ridiculously. I do not promote full socialism. The perfect economy is a mixed economy. Part capitalism and part socialism but American is a little bit too capitalist for my taste.
Dan Heberer said
The great thing about the American stock market is that you can make your hard-earned money grow quickly, and exponentially. It’s good for the investor, good for the companies that are selling stock, and good for the overall economy. It’s one of the reasons that, despite all of our government’s financial problems, we are still the largest economy in the world(with China getting closer everyday). If the government raised the capital gains tax to ordinary income tax levels, then why would anyone bother risking their hard-earned money in the stock market??? I know I wouldn’t. I would put my money in the bank where it will hardly grow, but at least it will be safe. The lower capital gains rate is designed to encourage investors to risk their money in the markets, in order to stimulate growth. Raising the rate will kill growth!
And for what? To make the average people feel better about the tax rates of the super rich? They will always be rich, and will always find loopholes to keep most of their money. The truth is, people making 200M per year from investments, while only paying 15% or so in taxes, still pay the government between 20M-30M per year! More than most people pay in 10 lifetimes. I’d say they’re paying their share.
Logan said
No, at the 15% they aren’t paying their full share because they use more resources. They may be one person but the amount of money they spend and resources they use equate to hundreds or possibly thousands of average people. If that 200m was split up between a few thousand people(salaried income), they would all be paying 30-35% and the government would earn more revenue than having one person who owns it all and pays 15%. I understand that there needs to be an incentive to invest but there is a point where its too much. These rich people arent going to stop investing if the tax rate is raised. They will still make a ton of money.
Many of these super rich people will take the money they earn and put it in bank accounts anyways and horde the money which wont stimulate the economy. Some even use offshore banking which is even worse.
Dan Heberer said
You make some interesting comments. “the amount of money they spend and resources they use equate to hundreds or possibly thousands of average people.” Do you have a source you’d like to cite for that fact? Or did you just pull that statement out of thin air? It sounds more like an assumption than a fact. Are you suggesting that our tax rates should be in proportion to the amount of resources people use? Then by that logic, the poor people on welfare should pay the most in taxes since they’re using the most government resources. Sounds a bit ridiculous.
If the capital gains tax rate is raised from 15%, do you really think our market is going to have the same amount of money invested in it? Of course not, it’s simple economics. If the rates are raised, investors are more likely to pull their money from our markets and invest in a market that’s more investor friendly(China, India, Japan, Europe, anywhere but America.) Not a pretty picture for our economy’s future. Maybe instead of raising taxes to increase revenue, the government can find more creative ways to get on track financially. I’m from Chicago, and the politicians raise our taxes every single year in one way or another, but the state falls deeper and deeper into trouble because they just find a way to overspend the extra revenue. People shouldn’t be punished for being wealthy just because our government is irresponsible. That goes completely against the principles that make this country great.
sue said
Give it up, Dan. You have been erroneously belaboring the same old Reaganomic argument for over a year now. Read #97. He makes sense. Reaganomics did not work then and works even less now. Open your eyes and take a look around
Logan said
No I do not have a source for my statement but I think it is a pretty fair assumption considering the private jets, yachts, mansions, exotic cars, etc. that many of these extremely wealthy people buy. I wasn’t just referring to government resources either, I meant any resources in general. Obviously it wouldn’t make any sense for the people using the most government aid to pay the highest taxes.
However I do agree with you on the negligence of our government, they definitely do not manage money properly and if they did manage money properly there might be no need for extra revenue in the first place.
And like I said I have no problem with the capital gains tax. I just don’t think it’s fair when people that make most of their money from capital gains and make millions of dollars from it pay a lower tax rate than a middle class citizen. I don’t know exactly how the law could be changed to prevent this but our government needs to either start raising more revenue or stop spending so much money or our debt ceiling is going to continue to rise.
Kevin said
Ding ding ding…so you don’t know how changing the tax rates would help anything, but you do see that the issue of debt is out of control? Raising marginal rates would put a small dent in the problem, just as raising capital gains rates would raise more cash for the government (at the large expense of discourage investment), but despite your own arguments you’ll now have to abandon you well-intentioned emotional calls for fairness and recognize the obvious…we have a big time spending problem.
The Smallest President « Seano.org said
[...] their fair share.” But as we all know (or should), people at or above these income levels are already paying more, both in percentage and total dollars collected, than Americans of low incomes. Further, the [...]
Brian said
Why can’t people see that the investment the rich invested in already pay a good amount of tax already (Corporate income tax). It calls double taxation. If you combine the rich’s tax rate on investment with the corporate rate, they pay almost 50% of taxes on on the profit.
Inna said
Thank you. Most just don’t care what others pay. They just care how they can avoid paying themselves.
Dan said
The “Income is income” statement is so ignorant. The reason people are rewarded with a lower tax rate on investments is because they are putting their money at risk by entering it into the markets. If people stopped investing in the stock market, what do you think would happen to our economy? People need a reason to take an investment risk, and the capital gains tax provides one.
Anon said
Do you even believe that?!?! You have NO idea how this country was created. Taxes did not exist for the working class 100 years ago.
Adamant stupidity claiming to understand, yet not explaining a damn thing. Learn some history. Assuming everything claiming to think you already know, when never knowing a thing about it.
Anon said
There is a HUGE wealth gap from the top 2% to the 3% and this information is misinformed and ignorant. The entire working class of America receives around 3% of the wealth, while ONE RICH family receives MORE THAN 30% OF AMERICAS WEALTH! Corporations like GE DIDN’T PAY ANY TAXES ON OVER $100 BILLION! That’s more tax than the working class creates. Centralized banking is the problem, which is why our forefathers who created this country had WAR on centralized banking. This country went to shit.
Anon said
The elite rich are the ones getting the “handouts” not poor people. Austerity creates the poor remember… Jesus fuck people are fucking retarded.
Charles Henry said
if the top 10% has 90+
% of the income; why are they only paying 50% of the taxes?
Bag Man said
two reasons why this debate is utterly tired and unproductive:
1) it’s mathematically meaningless to discuss the fairness of the % of total revenue contributed by a particular segment without also providing the % of total income earned by that segment.
2) while federal income tax is significantly progressive, state and local taxes are significantly regressive. that is, the more you make, the less you tend to pay in state and local taxes. when all three levels of taxes are added together, the total tax burden for the top-earning 2/5 of non-elderly taxpayers varies by less than 2%. and the middle quintile is only 5% lower than that.
http://www.washingtonpost.com/blogs/wonkblog/wp/2012/09/19/heres-why-the-47-percent-argument-is-an-abuse-of-tax-data/
when you look at the big picture of total taxes paid as percentage of household income, what you see is signifcant progressiveness between poor and middleclass, only modest progressiveness between middle- and upper-middle, and then basically flat after that.
once you get tired of these tedious little slapfights over the definition of “fair”, then you can begin to turn your head around and look at some more important matters of tax policy, the the TRILLIONS in lost revenue to fed and states that corporations are keeping in their pockets because we let them simply get a PO Box in the Caymen Islands, say all their economic activity which is clearly happening in the US is overseas activity, then grant them an indefinite deferment on paying taxes on it. state and fed govts could probably use a couple trillion bucks these days. but instead people like the OPer above think it’s more productive to bitch and crab about hows come schizophrenic bag ladies wandering around downtown don’t pay their fair share.
sue said
Well said. Thank you!
jay said
Do the rich pay their fair share, well if they pay 14 times more that means they make 14 times more, thats why they are rich. think about this i will keep it simple if i make 50,000 a year at 6% thats 3,000 a year taxes. (i know it doesn’t work like this but to illustrate) ok 14x that is 700,000 a year at 6% is 42,000. you tell me which is harder, or better yet fair. all in all there needs to be a better way, everything should be cut a little, every ones taxes should go up a little. we all live here we all should pitch in to keep this from causing detrimental problems.
sue said
Good illustration, Jay. Glad to see more people on this site thinking more logically than the introductory statement which alludes to the old Reaganomics… the old trickle down system which did not work then and does not, obviously work now!
Inna said
I happened to reed this article because I am writing research paper about corporate tax vs. public tax. I was born in another country and have to tell you that american corporations paying at list something to the government. In contrast Eastern Europenian countries begging corporations to give then at list something, small-small bit of what they should pay. It is not going to happen though because they owned by government representatives.
Now about personal taxes. So it is about 20 (roughly)% of Americans considered poor and receive dissent tax returns. That is fine. Conversely, why is it called tax return if they are getting much more then they are paid????????????? I just not getting that!!!!!! They most likely have monthly check and then bonus in the end of the year for been poor!!!! Not bad at all. Should we all quit jobs and go apply for “fair” money? And this is going on here not only in tax department. It is everywhere!
It is just an example: in my country students have grands ONLY if they have grade 3,5 and above (if we transfer grades from my system into American). Does not matter who your parents are and how much money they have. You are smart so we government pay for you because it worth it in the long run and because that child deserves it. Consequently, kids study hard cos they must earn it every semester.
Back to numbers. If 20% not just do not pay, they getting much more and 1%(corporations) blamed for paying not enough, everyone should see how understanding of “fair” mestup in here.
Is there are anybody who paid taxes for their neighbor just because he did not work as hard as you did? Is there anyone who is willing to donate few thousandth dollars to the kid, that is going to university(he/she does not need to make good grades so it is D-student) and selling drugs to you own kids(that is all that child had learnt to do on the street and only one job that pays back without need to pay taxes so he/she is not going to lose grands). Would anyone honestly say that there are no opportunities here and people forced to struggle?
I came to this country with 150 dollars in my pocket and under average knowledge of English. Four years down the road I have everything I need to live a good life. And do not tell me that is because US help immigrants. Lie!!!!!! I had not got a penny from US government. On the contrary I paid many thousands of dollars for all fees and paper work. I worked 3 jobs to bet back on my feet without time for sleep, hour dinner, fun or even myself. 3 normal average jobs that Americans don’t like to do. I did it because job is a job and it pays your bills. I proved that poor people here because they choose to be poor. Homeless choose to be on the street ( and don’t tell me about Katrina and rest. I see New Orleans and see what kind of people still behind. It was hard … but human recover. Or not, if it is been chosen).
I think that tax system here is been abused. And it is not been done by corporations. It been done by public (so called poor public). Most should say thanks corporations and prey on them because if they gone will be no job, no well fear, not products, no nearly comfortable life as everyone use to. You will have to drive 30 miles to by products( Walmart will not come to you any more), you will have to drive bicycle because ( Ford will retire and Chevron will find another place to do business), you will have wash by hand (GE will be gone with the rest) and so on. If every one like this picture then lets abuse corporations with taxes and let them fall or move. We depended on the big companies much more then we think so.
ab said
Ok first of all your English is still very poor. Secondly, the corporations you speak of combined the bullshit politics of the past few decades have caused the US to become dependent on them. So while they continue to get richer the poor get poorer but its at everyones detriment (i guess unless you’re already rich then why would you care?) Don’t even get me started on Walmart -_-
Inna said
Excuse me for my English.
Poor will be poor anything you do for them. Business owners loose or fail very often and they get up and continue going forward in the most of the cases. All do mistakes but not all learn of it. The main difference between rich and poor is SET OF MIND. It is not the money and it is not the system as you saying. Poor people always will blame rich for having more then they have because they need to excuse themselves for not doing anything valuable with their own lives. If you think HOW, you will be rich if you are not now. If you think BECAUSE, you will be poor because you look for excuses. You paid 3 dollars more in taxes this year then someone else then find a way how to make this 3 government dollars to work for you. Look for pros and not for cons.
Look forward but don’t forget the history. Many of now days corporate giants started from nothing 50-100 years ago. (You name it) The problem is that only few people want to dedicate their lives to building a big Corporations. They want Now and Many! It does not work like that! To get up you need to work hard and dedicate yourself to what you do.
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shh said
This is how you lie with statistics. By concentrating on the amount paid by the rich instead of how much they pay as a percentage of their income tight ring commentators make it seen that the one percent pay their fair share. But, the super rich have more than all the rest of us combined and yet people like Romney pay only fourteen percent of their income in taxes. How is that remotely fair. We ask fast food workers to pay a greater percentage of their salary in taxes why do people like Romney who benefit from this system get off so lightly.
JOHN said
ALL THIS IS BULL$HIT AND WE PORE KNOW IT THE RICCH DO NOT PAY THEIR SHARE OF I KNOW A FEW RICH PEOPLE WHO ARE VERY RICH PEOPLE THAT GO TO THERE LAWYERS AND HARDLY PAY ANYTHING TAXES AT ALL AND THEY BRAE TO ME HOW THEY FIND LOOP HOLES. SOME OF THE POORER RICH PEOPLE GRIPE TO ME AND SAY YHET HAD TO PAY $100,00.00 IN TAXES TWO WEEKS LATER SHE TELLS ME HER LAWYER GOT IT CUT DOWN TO $6 THOUS]SO THE GOVERMENT CAN LIE ALL THEY WANT BUT THEY PROTECT THE RICH. CAN WE POOR PEOPLE DO ANYTHING TO STOP THIS CRAP AND MAKE THE RICH PAY THERE FAIR SHARE. NO BECAUSE OUR VOTE HASENT COUNTED SINCE 1964. THE ONLY WAY TO STOP THE INJUSTIS IS ALL OF AMERICA JUST STOP DONT WORK , SHOP WE DO LIKE THE BABYS IN THE GOVERMENT WHEN THEY WHINE. THET SROP OR GO HIDE, WE AS AMIRICANS ARE STUPID ……I DONT CONSITER MY SELF AS PART OF THIS LIEING COUNTY I AM TAKING UP SPACE AND PAYING OF A RICH PERSONS TAXES. WE ARE LOW DOWN NASTY COUNTRY AND WE ARE WONDERING WHY ALL THE KILLINGS AND BLOWING PEOPLE UP. QE NEED TO INVEST IN THE USA. TAX THE RICH WHY DO PEOPLE NEED BILLIONS AND ERILLIOS. THEY CAN ONLY BUT SO MUCH $HIT BEFORE THEY DIE; TAX THEM OR IN 5 YEARS AMERICA WILL BE NO MORE WE WILL BE LIKE RUSSA ….. A BROKE COUNTRY SO TAX THE RICH
Regular Guy said
I’m just a regular guy, I own a small business, I drive a ten year old car, I take one vacation a year, I work seven days a week and about 70 hours a week to pay the bills. Why is it I have to give 33% + of my income to the Government? I’d prefer to be taxed on a 40 hour work week which is already more than the average person works. Work more = pay more is bullsh*t. Get your hand out of my pocket.