Ok top 2%ers - explain this to me

[gellar]

How would paying a percentage of income tax equal to the amount of income that they make be considered punitive?  I don't consider the number of people in the data set to be a variable that needs to be in the equation.  If the top 38% of income was earned by the top 1%, top 20%, or top 50% of the population, as a group, they should be fine with paying 38% of the income tax.

Ah right, got it.  Yeah I'm not arguing the validity/fairness of that figure, I'm merely stating it's a big chunk of money that we can't realistically do without.

[pr0ner]

These numbers might as well exist in a vacuum without another piece of information.  What percentage of the income do they earn?  If they earn 50% of the income, then I'd say paying 38% of the income tax is too damned low.  If they earned 25% of total income, then I might be persuaded that they are paying more than their fair share.  But just throwing out a number as to how much of the burden they pay is a meaningless number by itself.

What, your info-terrier instincts aren't good enough to answer your own question?

As of 2008, the top 1% earned 20% of adjusted gross income, and paid 38.02% of the income taxes.

In comparison, the bottom 50% earned 12.75% of adjusted gross income, and paid 2.70% of the income taxes.

[pr0ner]

Second, the 1% are paying 38% of all tax revenue. These are numbers straight from the IRS.

And own just about that exact amount of the wealth in a country that is supposed to have a progressive tax structure.

Wealth is moot when discussing income taxes.

[Ironrod]

Payroll taxes – Wage earners will have extra money in their paychecks with the lowering of the payroll tax from 6.2% to 4.2%. Someone earning $50,000 a year would pay $1,000 less in Social Security contributions next year. Someone earning $100,000 would pay $2,000 less. The payroll tax rate would go back up to 6.2% in 2012.

Why do I have this odd feeling that FICA withholding will not, in fact, go back to 6.2%? We have a history of not letting the sun set on tax cuts. While the deficit commission proposes cutting future SS benefits and raising the retirement age and the income subject to tax, is this really the right place to find "temporary" tax relief?

[gellar]

Payroll taxes – Wage earners will have extra money in their paychecks with the lowering of the payroll tax from 6.2% to 4.2%. Someone earning $50,000 a year would pay $1,000 less in Social Security contributions next year. Someone earning $100,000 would pay $2,000 less. The payroll tax rate would go back up to 6.2% in 2012.

Why do I have this odd feeling that FICA withholding will not, in fact, go back to 6.2%? We have a history of not letting the sun set on tax cuts. While the deficit commission proposes cutting future SS benefits and raising the retirement age and the income subject to tax, is this really the right place to find "temporary" tax relief?

Absolutely.  No one cares about old people.

[pr0ner]

Payroll taxes – Wage earners will have extra money in their paychecks with the lowering of the payroll tax from 6.2% to 4.2%. Someone earning $50,000 a year would pay $1,000 less in Social Security contributions next year. Someone earning $100,000 would pay $2,000 less. The payroll tax rate would go back up to 6.2% in 2012.

Why do I have this odd feeling that FICA withholding will not, in fact, go back to 6.2%? We have a history of not letting the sun set on tax cuts. While the deficit commission proposes cutting future SS benefits and raising the retirement age and the income subject to tax, is this really the right place to find "temporary" tax relief?

Absolutely.  No one cares about old people.

It's ironic that the payroll tax cut was a Democrat idea.

[Moliere]

Who got the better deal?

[Isgrimnur]

These numbers might as well exist in a vacuum without another piece of information.  What percentage of the income do they earn?  If they earn 50% of the income, then I'd say paying 38% of the income tax is too damned low.  If they earned 25% of total income, then I might be persuaded that they are paying more than their fair share.  But just throwing out a number as to how much of the burden they pay is a meaningless number by itself.

What, your info-terrier instincts aren't good enough to answer your own question?

As of 2008, the top 1% earned 20% of adjusted gross income, and paid 38.02% of the income taxes.

In comparison, the bottom 50% earned 12.75% of adjusted gross income, and paid 2.70% of the income taxes.

Not every question piques my interest enough to run it down, nor do I always have enough time to do the research at the time that the question arises.  But thanks for the shout out.  

AGI is after a number of deductions.  Thanks for running it down, Pr0ner.  I believe that I've been sufficiently persuaded that keeping the tax cuts for the top brackets is an equitable solution.  Obviously there's ground not covered by those below the poverty level, those getting the EITC, etc, and the top brackets are doing that.  Tack on sales/income taxes approaching 8% in some states, property taxes, etc., and I'm sure some people are approaching 50% in total tax loads.  

I'm past caring about whether or not the top brackets got the cuts along with the rest of us.  That being said, I think that now is not the time to cut spending with a hatchet, as much as it does need to be done overall.  I'm just afraid that no one is willing to make the hard decisions to get us back to square when the salad days of economic growth come back around and move the rates back up.

[Blackadar]

Second, the 1% are paying 38% of all tax revenue. These are numbers straight from the IRS.

And own just about that exact amount of the wealth in a country that is supposed to have a progressive tax structure.

Wealth is moot when discussing income taxes.

It's absolutely not. 

[pr0ner]

Second, the 1% are paying 38% of all tax revenue. These are numbers straight from the IRS.

And own just about that exact amount of the wealth in a country that is supposed to have a progressive tax structure.

Wealth is moot when discussing income taxes.

It's absolutely not. 

Income != wealth.  Therefore, wealth is moot in a discussion of income taxes.

[Purge]

Second, the 1% are paying 38% of all tax revenue. These are numbers straight from the IRS.

And own just about that exact amount of the wealth in a country that is supposed to have a progressive tax structure.

Wealth is moot when discussing income taxes.

It's absolutely not. 

Income != wealth.  Therefore, wealth is moot in a discussion of income taxes.

Your statement begs the question. No one was saying that wealth was the same as income. But to say wealth does not impact income is insane.

The low end of the income spectrum is likely not wealthy enough to make money off their existing money (in any reasonable means), therefore wealth can contribute to income, because one generates income either through investment/capital gains, or through labour.

I'm in the labour camp.

[pr0ner]

Wealth is still moot when talking about income taxes.  I know wealth generates income.  However, the wealth is not taxed, income is.  And, on the flip side of the coin, simply having a large income doesn't guarantee someone wealth if that income is pissed away by poor decision making.

[Purge]

Income generated by wealth (at least in Canada) is taxed differently than income generated by labour, therefore it still is relevant.

A multi-millionaire could not work one day for his company, yet still gain income from capital gains. He/she could then work a minimum wage job and get tax breaks etc due to lower "income" if you ignore wealth.

That would be a loophole (and here it has been closed, although I am aware of people having used it in the past 15years - and eventually getting caught).

[gellar]

Income generated by wealth (at least in Canada) is taxed differently than income generated by labour, therefore it still is relevant.

A multi-millionaire could not work one day for his company, yet still gain income from capital gains. He/she could then work a minimum wage job and get tax breaks etc due to lower "income" if you ignore wealth.

That would be a loophole (and here it has been closed, although I am aware of people having used it in the past 15years - and eventually getting caught).

I think the theory here is similar to that of Inheritance Tax - if you are gaining Income off of Wealth, then in theory the original income that led to wealth was already taxed income at some point in time.

Of course now we differentiate between Short Term Capital Gains (taxed as regular income) and Long Term Capital Gains (taxed at a lower rate), except in the People's Republic of California, where it is taxed at the same frikkin rate.

[Mr. Fed]

The problem with the "bigger piece of the pie" image is that it acts as if wealth is something the government creates and then parcels out.  Saying "the tax bill gives rich people too big a slice of the pie" is bogus.  A more honest way to say it would be "the tax bill doesn't confiscate from rich people as much of the pie that they baked as I think it should."

Also, the estate tax issue annoys me.  It wouldn't hit me, or my law partners, or my father, or my in-laws, the estate tax reverted to pre-cut levels.  It would, however, hit my 93-year-old grandmother (who is hanging on just fine, thank you) if she were to pass.  That's because my grandfather worked his ass off all his life, spent modestly, and invested wisely.  HE was taxed throughout his life.  What's to admire about the government taxing their income all their life, then confiscating a big-ass chunk out of their life savings when they die, rather than letting them leave it to kids and grandkids as they like?  

[gellar]

The problem with the "bigger piece of the pie" image is that it acts as if wealth is something the government creates and then parcels out.  Saying "the tax bill gives rich people too big a slice of the pie" is bogus.  A more honest way to say it would be "the tax bill doesn't confiscate from rich people as much of the pie that they baked as I think it should."

Well said.  I also take objection to the notion that making more money is a byproduct of luck or social circumstance.  While where you start in life is certainly not something you can control, very rarely is someone wealthy or even close to wealthy through no skill or work on their own.  We are still paid in this society based on our overall value (for the most part, there are exceptions) and a higher paying position comes with responsibility, pressure, and added requirements.  It's not something you just stumble onto and maintain with no cost, reality TV stars aside.

[Mr. Fed]

The problem with the "bigger piece of the pie" image is that it acts as if wealth is something the government creates and then parcels out.  Saying "the tax bill gives rich people too big a slice of the pie" is bogus.  A more honest way to say it would be "the tax bill doesn't confiscate from rich people as much of the pie that they baked as I think it should."

Well said.  I also take objection to the notion that making more money is a byproduct of luck or social circumstance.  While where you start in life is certainly not something you can control, very rarely is someone wealthy or even close to wealthy through no skill or work on their own.  We are still paid in this society based on our overall value (for the most part, there are exceptions) and a higher paying position comes with responsibility, pressure, and added requirements.  It's not something you just stumble onto and maintain with no cost, reality TV stars aside.

There's no question that elements of our government are biased towards the rich.  Take, for instance, ludicrous agricultural subsidies that mostly favor rich companies.  Or corporate tax loopholes for favored industries and individuals.  We should cut that shit out.

But I abhor the sentiment that the default state of wealth is that it belongs to The People or The Government, and everyone must justify how they "deserve" each penny they keep.

[Autistic Angel]

Also, the estate tax issue annoys me.  It wouldn't hit me, or my law partners, or my father, or my in-laws, the estate tax reverted to pre-cut levels.  It would, however, hit my 93-year-old grandmother (who is hanging on just fine, thank you) if she were to pass.  That's because my grandfather worked his ass off all his life, spent modestly, and invested wisely.  HE was taxed throughout his life.  What's to admire about the government taxing their income all their life, then confiscating a big-ass chunk out of their life savings when they die, rather than letting them leave it to kids and grandkids as they like?  

I don't understand this concept of "double taxation."  Money and property are almost always taxed when switching hands.  If you earn a paycheck, use the money to buy a car, pay a dude to help refurbish it, resell it for a profit, double your money at a casino, and then give the winnings to one random waitress as a tip, there's a tax levied during each transfer.

Why, if you instead leave that same money to that same waitress in your will, would that transfer not be taxed?  The government is not taxing you for dying, it's taxing her for a percentage of her income, just as if she'd acquired it through manual labor, savvy investing, shrewd trading, or a lucky streak at the slots.

-Autistic Angel

[Isgrimnur]

As a lawyer who knows other lawyers, why hasn't some of this wealth been put into trust funds early to avoid being taxed on that eventuality?

[Ironrod]

Dammit, now I want pie.

[pr0ner]

Also, the estate tax issue annoys me.  It wouldn't hit me, or my law partners, or my father, or my in-laws, the estate tax reverted to pre-cut levels.  It would, however, hit my 93-year-old grandmother (who is hanging on just fine, thank you) if she were to pass.  That's because my grandfather worked his ass off all his life, spent modestly, and invested wisely.  HE was taxed throughout his life.  What's to admire about the government taxing their income all their life, then confiscating a big-ass chunk out of their life savings when they die, rather than letting them leave it to kids and grandkids as they like?  

I don't understand this concept of "double taxation."  Money and property are almost always taxed when switching hands.  If you earn a paycheck, use the money to buy a car, pay a dude to help refurbish it, resell it for a profit, double your money at a casino, and then give the winnings to one random waitress as a tip, there's a tax levied during each transfer.

Why, if you instead leave that same money to that same waitress in your will, would that transfer not be taxed?  The government is not taxing you for dying, it's taxing her for a percentage of her income, just as if she'd acquired it through manual labor, savvy investing, shrewd trading, or a lucky streak at the slots.

-Autistic Angel

Your waitress inheritance analogy is awful, especially since there's no correlation between the actions involved in all of your other examples and in her inheriting someone's estate.

[Autistic Angel]

Also, the estate tax issue annoys me.  It wouldn't hit me, or my law partners, or my father, or my in-laws, the estate tax reverted to pre-cut levels.  It would, however, hit my 93-year-old grandmother (who is hanging on just fine, thank you) if she were to pass.  That's because my grandfather worked his ass off all his life, spent modestly, and invested wisely.  HE was taxed throughout his life.  What's to admire about the government taxing their income all their life, then confiscating a big-ass chunk out of their life savings when they die, rather than letting them leave it to kids and grandkids as they like?  

I don't understand this concept of "double taxation."  Money and property are almost always taxed when switching hands.  If you earn a paycheck, use the money to buy a car, pay a dude to help refurbish it, resell it for a profit, double your money at a casino, and then give the winnings to one random waitress as a tip, there's a tax levied during each transfer.

Why, if you instead leave that same money to that same waitress in your will, would that transfer not be taxed?  The government is not taxing you for dying, it's taxing her for a percentage of her income, just as if she'd acquired it through manual labor, savvy investing, shrewd trading, or a lucky streak at the slots.

-Autistic Angel

Your waitress inheritance analogy is awful, especially since there's no correlation between the actions involved in all of your other examples and in her inheriting someone's estate.

I am not making an analogy.  I'm using examples to point out that the majority of financial transactions are subject to taxes.  The correlation is that money is taxed almost anytime it changes hands, whether it is earned, won, gifted, or deeded.  If that hasn't been clear, I'll try to make it more explicit.

If your great-aunt Hortence hired you, pr0ner, or bought you a house, or transferred her own house into your name, or lost her house to you on a wager, or just plain wanted to give you a gigantic Dark Knight-style pyramid of cash to slide around on, you would legally owe taxes on that income.  It does not matter that she has already paid taxes on their value.  Why, then, if she dies, should you not pay taxes on your proceeds from her will?

-Autistic Angel

[SkyLander]

With Burnie Sanders going on his awesome filibuster right, seriously I suggest everyone watch this, he is basically going all out.

http://www.c-span.org/Watch/C-SPAN2.aspx If it's still going on c-span.


And I'll just leave this, right here:

[Geezer]

This chart is relatively meaningless unless contrasted against the remaining tax burden each income level will retain.

With Burnie Sanders going on his awesome filibuster right, seriously I suggest everyone watch this, he is basically going all out.

http://www.c-span.org/Watch/C-SPAN2.aspx If it's still going on c-span.


And I'll just leave this, right here:

[raydude]

With Burnie Sanders going on his awesome filibuster right, seriously I suggest everyone watch this, he is basically going all out.

http://www.c-span.org/Watch/C-SPAN2.aspx If it's still going on c-span.


And I'll just leave this, right here:

I don't quite understand the chart. Is it saying that there is a Republican tax plan that is separate from the brokered Obama-GOP plan? I thought the Obama-GOP plan WAS the Republican plan? Is the GOP not the Republicans? Or are these separate Republicans that refused to go along with the Obama-GOP plan? How come I never heard of this alternative Republican plan before?

[Scuzz]

Btw, does it sound fair that the top 1% income earners pay 38% of all income taxes?

Absolutely not. It shows that they clearly earn way too much.

I'm serious.

socialist is more like it........................

The government needs to learn to make to with what it has.....and now (economic downturn) is not the time to be raising taxes on anybody...