I'm questioning a RW friends claims about US tax structure. Does anyone have any data

[Lorien]

on the subject? I recall that Warren Buffet said that he pays 17% in income taxes while his secretary pays 26%, which doesn't jive with my friends claims:

"The latest data shows the wealthiest 1% of Americans earn 19% of the US income but pay 37% of income taxes and the top 10% pay 68% of all income taxes whereas the bottom 50% earn 13% of the income but pay only 3% of taxes."

[jody]

1. Valid data at the link below.

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

[Bill McBlueState]

2. where's the inconsistency?

:shrug:

[daylan b]

3. Capital Gains Tax

Is what creates the confusion. So much of Warren Buffet's income is capital gains (15%) that it would be surprising if his tax rate were ever far off from that number.

His secretary (who earns well into the six-figures to pay that in income tax) likely has a salary that is almost all taxed as income tax.

[rfranklin]

4. That's only income taxes...they never count payroll taxes...

Even so, if we want to tax the rich and we can get it through Congress, tough shit. If they don't like it they can go elsewhere.

[Mugweed]

5. The numbers can get misleading.

If you take a man who earns $250,000 and he pays 15% tax, and then take a man who makes $25,000 and he pays 15% tax, you can say that the first man paid 90% of the total taxes taken from the two while the second man only paid 10% of the total taxes. They each paid their fair share of taxes, the first guy just earned more money. This is the way rich people pretend that they pay too much in taxes.

[daylan b]

13. Misleading numbers

$250k pays 27% - $67,500

$25k pays 13.33% - $3,333

Rich dude pays 95% of the total taxes between the two.

[Mugweed]

17. Thank you for the correction.

I have always through that a flat tax was the only correct structure that nobody would have any valid reasons to complain about.

[NYC_SKP]

19. Rich dude has 90% of that income, pays 95% of the taxes for the sum of both incomes. Big Deal.

Not nearly enough, IMHO.

Poor dude is only left with $21,667.

Rich dude keeps $182,500.

By your math.

[daylan b]

20. You can spin it however you want.

You can also say rich dude earns 10x as much and pays 20x as much in taxes. Another spin is poor dude gets $8.21 in money and government services for every dollar he pays in taxes and rich dude gets $0.41. Yet another spin is rich dude pays more than twice as much in taxes as poor dude earns.

What tax rates do you feel would be adequate for those two examples?

In my opinion, the current system which already puts the bulk of the responsiblity on a very small portion of earners is already taxing the rich heavily. What I would do to fix it is get rid of the capital gains tax rate which allows the rich to avoid that system.

[Statistical]

27. Your numbers only look at INCOME TAX.

You are forgetting sales tax, payroll taxes (FICA), excise taxes.

Pretending that rich paying majority of income taxes = rich paying majority of all taxes (total tax burden) is dishonest.

[daylan b]

28. Are you ignoring the context of my post on purpose?

Because it would be pretty hard to say what you did if you read the entire conversation.

Heck, when you take the fact that I was arguing for the elimination of the alternative tax rate for capital gains I wonder if you even read what you were replying to.

[Statistical]

30. Your words: "Rich dude pays 95% of the total taxes between the two."

That is 100% false. The "rich dude" (or rich in general) only pay 95% of taxes if you look ONLY at income taxes.

It is often trouted out by freepers because it is a great soundbite. The only metric that matters is TOTAL taxes.

[daylan b]

31. Again, did you take that out of context intentionally?

Because it wasn't a new post. It's pretty simple to see what I was replying to.

BTW, the $8:1 vs $.4:1 ratio does include everything...

http://www.taxfoundation.org/files/wp1.pdf

[daylan b]

32. You know what, even if you take your premise at face value...

Once you include all federal, state, and local taxes, the disparity between the percentage of what the poor (less) vs rich (more) pay is even more than the income tax example I used.

So I'm not even sure what your point was to begin with.

[Statistical]

33. Of course you don't because you are on the wrong board ...

Here you go:
http://www.freerepublic.com

[daylan b]

34. Ad hominem

For the win.

I challenge you to show me one single argument I've made that would qualify as "freeper".

[daylan b]

35. Why don't you head on over there and propose eliminating capital gains

and tax them as regular income and see how fast you get your ass kicked out of there.

Do you even have a clue what you are talking about?

[Dogtown]

38. You missed your turn,

but take the next 2 lefts and you'll be right back where you belong.

[daylan b]

39. Grow up.

Some of you people have no desire to look at actual issues and would rather play in the mud.

Eliminating capital gains rates and taxing it as regular income would completely flip flop the OPs stats and Buffett would be paying the top tax rate on all income. Buy hey, it doesn't take as much intelligence to post a snarky comment, so just stick with that.

[Dogtown]

40. Fuck off.

Snark is all you deserve.

[daylan b]

41. lol, for what?

I challenge to find anything at all that I have said that is false or deserves that vitriol you have posted.

My only opinion has been that the capital gains should be eliminated and that income taxed as regular income. Something that would get a person called a 'flaming librul' on the board ignorant fucks like you think I should be visiting.

You see no shades of gray.

[rfranklin]

6. These figures would also reverse if people received a fair wage...

There has been no increase in wages since Reagan.

The Great Productivity Swindle
Management is always quick to say in contract negotiations, 'give us more productivity and we can afford to give you a bigger raise'. But this has been a false promise from 1979 to 2000, and an even bigger lie under George Bush II.

With 1992 as base year, productivity was at 82.2 in 1979. It grew to 94.2 by 1989 and 116.6 by the year 2000. In the past year, moreover, it has exploded, putting it over 120. That's a nearly 40% increase since Ronald Reagan took office nearly 25 years ago!

The 100 million American workers without college degrees, whose real take home pay today is less than it was 25 years ago, certainly can't be said to have shared in that 40% productivity gain. And the other 20 million or so with college degrees whose pay rose modestly at best certainly shared in very little of that nearly 40% productivity gain.

So who got all the money?

CEOs & Executive Compensation
Considering just the period from 1989 to the present yields an obscene result. The median executive salary (cash pay and bonuses) of American CEOs rose by 79% from 1989 to 2000�and has continued to accelerate right through the current Bush II recession! And that's only the median. The average CEO cash and direct compensation growth is even higher than 79%.

But wait! That's only CEO wage or 'cash' compensation. How about management incentives, stock options exercised, the value of new stock grants, special supplemental pensions, etc. etc. The growth of this 'direct compensation' of CEOs from 1989 to 2000 was no less than 342%!. 212% of that growth occurred in the 'boom years' of the late 1990s.

Put in real money terms, the median pay for an American CEO was $2,436,000 in 1989 and $10,775,000 by 2000.

http://www.kyklosproductions.com/articles/wages.html

[daylan b]

14. Wages have nothing to do with Buffett

The vast vast majority of his income is capital gains, not salary.

[rfranklin]

29. My point is that the average Joe would pay more income tax...

if they were paid more salary.

[harun]

7. Ask them why they want a tax break for the top 1% when the top 1% isn't

even asking for a tax break?

[ohtransplant]

8. Ask your friend...

if the top 1% would agree to give up some of their income in return for a lower tax rate.

[Statistical]

9. INCOME TAX vs. TOTAL TAXATION. Rich DO pay majority of income tax but income tax is not ALL tax.

The rich DO pay majority of income tax (and they love to brag about that). However what is more important is TOTAL TAXATION.

Payroll taxes for example are 8% with no deductions and only on first $108K in income.

Sales taxes are usually in the 5% range depending on state. Not only do rich and poor pay exact the same rate. Taxable goods make up larger portion of poor expenses thus as percentage of their income they pay more in sales tax.

State Income taxes also tend to be rather regressive. In VA for example the top bracket begins at $17K. So someone making 17,000 a year or 17,000,000 a year will pay same tax rate.

Another regressive tax is gasoline (and cigs, alcohol, ammo, firearms, etc). Rich and poor tend to spend about the same amount on gas (and thus gas tax) however fuel makes up a major portion of the poor budget (and negiglbe portion of rich's budget).

Rich DO pay majority of INCOME tax however total tax burden is much heavier on the poor due to regressive taxes.

Tell your friend repeal every single tax EXCEPT income tax and then we can talk. Till then looking at income tax only has no value.

[daylan b]

15. CAPITAL FREAKIN GAINS

Tax capital gains as income and the disparity the friend is talking about no longer exists.

[Captain Hilts]

10. Go to www.ctj.org they'll have everything you need. nt

[LiberalFighter]

11. I wonder how much income his secretary earns?

A person paying 27% of taxable income would have to earn a minimum of $373,649.

[Statistical]

16. Nope. He was talking about TOTAL tax burden.

Sales Tax
State Income Tax
Federal Income Tax
Real Estate Tax
Excise Tax (gas, alcohol, tobacco, ammo, etc)
Payroll (FICA) Tax
etc

Income tax is only a small percentage of total tax burden.

[Captain Hilts]

12. CTJ: Tea Party Myths About Taxes

http://ctj.org/taxjusticedigest/archive/2010/03/the_tea_party_and_misconceptio.php

[4lbs]

18. Ask your RW friend, who probably worships at the shrine of Reagan, if he'd be willing to go back to

the tax structure as it was under Ronnie Raygun in the 1980s.

RW/Conservatives/Teabaggers should since they hold Raygun in high esteem.

I doubt they would realize that they paid much higher marginal tax rates in the 1980s than they do now, yet there was no complaining from the Conservatives in the 1980s about how Raygun was killing them with too many taxes.

For most of the 1980s, the marginal tax rate was 50% for income above $170,000.

Currently, the marginal rate is 35% for income above $311,000.

All Obama wants to do is set it back to the way it was in 2002, which was 38.6% for income above $307,000. That will be done by simply letting the "Bush Tax Cuts" for the wealthy expire in 2011.

The "Bush Tax Cuts" for the wealthy, in 2003 was the 3.6% marginal cut and slight raising of the income level to which it applied.

However, I feel we should go back to the 50% marginal rate for income above $170,000. After all, that's the way it was under Raygun, and EVERY Conservative loves him, right?

[jdlh8894]

21. Got some

links or stats to back up those figures?

[4lbs]

22. Here you go.

The marginal tax rates and income levels for every year from 1913 to 2003.


http://www.truthandpolitics.org/top-rates.php

[daylan b]

23. And you don't see the folly?

...in arguing a Reaganite should be okay with the 50% rate even though Reagan spent most of his tenure trying to get it lowered?

[Union Yes]

24. the top 10% own 90% of all wealth and only pay 68% of all taxes? They should be paying 90%.

[Statistical]

26. Only if your standard for taxation is based on wealth.

16th amendment would prohibit that.

We tax income at the federal level.

Some taxes do tax wealth (or at least a subset of it). Real Estate taxes at state level are one example.

As far as federal revenue that isn't Constitutional.

[Lorien]

25. Thanks for all the great info! He's got quite a bit to think about now

he hadn't factored in capitol gains at all, nor did he think about the property gap:

The gap between the rich and poor in the United States grew at the same pace as the economic growth. Statistics show that the richest 1 percent of the US citizens own 40 percent of the total property of the country, while 80 percent of US citizens own just 16 percent.

Since the 1990s, 40 percent of the increased wealth went into the pockets of the rich minority, while only 1 percent went to the poor majority.

From 1977 to 1999, the after-tax income of the richest 20 percent of American families increased by 43 percent, while that of the poorest 20 percent decreased 9 percent, allowing for inflation. The actual income of those living on the lowest salaries was even less than 30 years ago.

http://academic.udayton.edu/race/06hrights/georegions/northamerica/china03.htm

[Spike89]

36. High earners also use the most services

The owners of a factory benefit directly from the paved roads and subsidized rail access needed to bring workers, customers, and raw materials in and send products out. They also employ the trucks that tear up those roads that are actually paid for in most places mostly from gasoline taxes that the owners pay pehaps less of than their factory janitors. The local fire department needs expensive hook-and-ladder pumpers not to put out the fires in the modest single or double story homes of the workers, that equipment is for the skyscrapers and large factories. Oh, they also tend to use much more water and electricity and although they do pay for those utilities (usually at a highly discounted rate) they rarely have to pay their share of the cost for the infrastructure--that is spread around the entire community. I gladly pay for educating children, but as much as I appreciate the benefits, those making more money tend to benefit even more from having a pre-trained workforce available.

Police protect property...well obviously the $250,000 a year person benefits more than the $25,000 person. It goes on and on. Wealth in this country is dependent on and consumes more of the resources than those in poverty. Almost anyone "making their fortune" in America is doing so by using/exploiting the common infrastructure.

[beardown]

37. Exactly. Cadillac versus Neon.

You've got the top earners standing at the top of a 50 foot ladder where the pickings are plentiful telling the poor jerk on the bottom rung of the ladder where all he can reach is the rotting fallen fruit that we all have to chip in our fair share of the ladder because we are all standing on it. If the ladder fails, the guy on the bottom rung can step away. The guy at the top falls 50 feet.

Rich folks get services that many working class people don't get. They get legislation written for them. They have more to lose if the system fails. And most importantly, the rich rarely pay the blood tax of limbs and lives when the armed forces have to go into harm's way to protect the nation, regardless of how real the threat may be.