How Much Money Do The Top Income Earners Make?
Americans are rich by world standards. With an average per capita income of ~$48,000, America ranks in the Top 10 in the world. The other nine include Qatar ($88,300), Luxembourg ($80,000), Singapore ($57,230), Norway ($52,230), Brunei ($47,500), Hong Kong ($45,000), Switzerland ($41,800), Netherlands ($40,800), Australia ($39,632), and Austria ($39,100). The data comes from the IMF (2011), and the World Bank and CIA World Factbook collect and corroborate similar data.
If at birth, you had the mental capacity to choose where you’d like to live for most of your life, one of these 10 countries should probably be on your list thanks to proper infrastructure which allows for opportunity. Even if you end up being the most mediocre producer, you are still miles ahead of much of the world. Too bad many of us can’t pick where we want to grow up and earn a living. As such, it’s nice to understand how we compare against the rest of the world to give us some perspective.
If everybody earns $1 million a year, being a millionaire isn’t very special anymore. At the same time, if everybody earns under $20,000 a year, the income level for poverty must be redefined. Everything is relative. Let’s learn about each others’ incomes shall we?
WHAT THE TOP 1%, 5%, 10%, 25% and 50% MAKE IN AMERICA
Based on the Internal Revenue Service’s 2010 database below, here’s how much the top Americans make:
Top 1%: $380,354
Top 5%: $159,619
Top 10%: $113,799
Top 25%: $67,280
Top 50%: >$33,048
SUMMARY OF FEDERAL INDIVIDUAL INCOME TAX DATA, 2010
Based on a previous 1000+ survey study on Financial Samurai in 2011, about 80% of readers are in the Top 25% ($67,000+). Good to know that many of you are doing well. The table also tells us a number of things about equality or inequality, namely that the top 1% of tax payers pay 38% of all income taxes yet only have a 20% share of total AGI. Furthermore, the top 50% of tax payers pay practically all of the nation’s federal taxes (97.3%) while commanding 87.25% of total AGI. This table from the IRS is the source for the often politically bantered argument that 47% of American income earners pay zero federal income taxes.
If you do another little exercise and compare the top 25% of American income to the Top 10 per capita income countries in the world, you can once again see how lucky most of us are. If only we could get all American wage earns to pay some taxes, it would go a long way to help shoring up our budget. Congress constantly holds the nation hostage by bickering over whether to cut $10 billion here, $50 billion there. All we have to do is make those who earn above the poverty line who pay no federal income taxes pay just $43 a month and we’d raise $60 billion a year right there for example!
Let’s have everyone contribute to the welfare of our country. We are all in this together! For those who are just struggling to keep their heads above water, let’s lend them a helping hand.
WHO ARE THE 47% WHO PAY NO FEDERAL INCOME TAXES?
The Tax Policy Center’s Donald Marron said they fall into three main groups:
The working poor. The earned income tax credit and the child credit can help families making $50,000 or more pay no taxes or get money back. About 60% of those not paying income taxes do contribute to payroll taxes, meaning they must have some source of earned income.
The elderly. An increased standard deduction for those over 65, and an exemption on part of Social Security earnings, means that many older Americans pay no income taxes. Please remember though that the elderly have paid their dues through decades worth of federal taxation during their careers.
The low-income. A family of four claiming only the standard deduction and personal exemptions pays no federal income tax on its first $27,000 of income.
As you can see, being poor or elderly likely means you don’t pay net federal income taxes. We’re all going to grow old one day, so let’s give this group a pass. The elderly paid into the system, so let’s take care of them. I don’t think any of us would rather be poor so we can pay no federal taxes, so let’s give them a pass too. This leaves us with a low-income group that may have made some suboptimal decisions such as having children while not being able to support themselves. Children are estimated to cost anywhere from $100,000 to $500,000 from the ages of 1-18. Perhaps having multiple children on a low income is not ideal. But, how do you deny passion?
NO REASON TO EVER COMPLAIN
If you work in America, you can see from a top down and bottoms up perspective you’re doing fantastic. If you are in the bottom 50% of Americans who earn less than $33,048 a year, know that you can earn more if you want to. Half the battle is just moving to a vibrant location such as the San Francisco Bay Area where billions of dollars are flowing in due to technology innovation. It’s not like you have to brave the high seas to reach America. It’s not like you need to ride a horse for three months to get from New York to get to California. All you’ve got to do is hope on a bus or a plane to be where the action is!
I remember making $550 a month working at McDonald’s for $3.50/hour, 20 years ago. With wages 3X higher now, I’d be pulling in $$1,650 a month or $20,000 a year! Tack on another side hustle that pays $1,200 a month and I’m in the top 50%. So where are these side hustles you say? You can find a plethora of opportunities on sites like Craigslist.
If you are only working 40 hours a week or less and complaining why you can’t get ahead, you need to seriously re-evaluate your work ethic and expectations. Anybody can do it, you just can’t be delusional enough to think that you’ll be able to compete, when everybody in the world who wants to get ahead is working 60+ hours a week and getting paid much less to boot! Spend some time online understanding global wages from our biggest competitors in China and India. In order to maintain or incomes, we must constantly be updating our skills.
There are plenty of six figure jobs out there for the taking. You just need to have the desire, motivation, work ethic, and perseverance to get there. Did you know as of 12/2012, the San Francisco police chief makes $320,000 a year? Furthermore, when he retires, he’ll probably get a $200,000 a year pension for life! It’s not just doctors, lawyers, venture capitalists, bankers, movie stars and athletes who make healthy sums of money. There are six figure earners in practically every single industry, including the non-profit industry!
Back to my point where if everybody earns a million dollars a year, nobody is rich. Living in San Francisco, it certainly feels like most are in the top 5% of income earners ($159,619). I’m sure many who live and work in Manhattan, and potentially LA and Chicago feel the same way. The cost of living is expensive out here, and that’s predominantly driven by high wages. Combine two income earners with these amounts, and you can really start understanding why surpassing what the government deems as wealthy ($250,000) is so easy.
LET’S THANK THE RICH FOR ALWAYS PAYING MORE
As the economy continues to recover, it’s likely that the top 1% of income earners will likely pay an even higher percentage share of overall income taxes than their share of income justifies. If things were fair, the top 1% would only have to pay 20% of total income taxes since 20% is their share of total income. Alas, the rich pay almost double what they owe.
On the flip side, the bottom 50% who earn 12.75% of total earnings only pay 2.7% in total taxes. But, as we learned above most of the bottom 50% are elderly or poor. Just how protesters wrongly group together the top 1% who make over $380,000 with the ultra rich who make millions of dollars a year, zealots are also grouping together those earning ~$30,000 a year with the most destitute!
Inequality is wrong. If you are being terrorized by the IRS or protected by the nation’s military from nuclear war, you should pay taxes. If you get to drive on interstate highways, you should pay taxes. Discrimination is not OK, just because you aren’t being discriminated against. In other words, it’s not right to always go after a group of income earners who already pay the most federal income taxes already if you don’t pay any taxes, or aren’t willing to pay more taxes yourself!
If we can increase the breadth of tax collection by our spendthrift government, we will ensure that every citizen has a vested interest in moving our country forward. Trying to squeeze people even more when you’re paying little to no taxes very is a throwback to tyranny.
Let’s stop demonizing the top income earners. Instead, how about just being appreciative of those who pay the most taxes, donate the most to charity, and hire the most people? Always fight for equality. It will set us free!
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Photo: President Obama and His Dog, Public Domain.
Best,
Sam
When Kennedy lowered taxes, revenue went up. When Reagan lowered taxes, revenue skyrocketed. When Bush lowered taxes, the government had record revenues.
Why are some on here of the belief that if we do the opposite, we will get the same result.
Obama even admitted that revenue would shrink if taxes were raised. He said it was just fair.
Just to be clear. Obama is not “asking” the top 1% to pay more. He is proposing that the government take more money from them.
If you were told that any money you made over $200k would be taxed at 100%, would you go out and work your butt off to make 300k? or would you stop at 200k because there was no incentive to make more?
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CHUCKSTER Reply:
December 8th, 2012 at 7:56 pm
but nobody is taxed at 100% period. if im poor i pay in proportion to my income. if i am poor it is much harder for me to live well at the rate of inflation than if i was rich. the rich’s income increase faster that the poor’s income
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Zaphod42 Reply:
December 10th, 2012 at 7:25 am
The key word there is WHEN. Later they plummeted.
GHW Bush’s increase in taxes, for which he was wrongly excoriated by his right wing party, were responsible for the 1990′s surge. That and artificially low oil costs. Clinton’s reduction was ill considered and responsible for the recession in 2000/2001.
Enjoy
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Alecia Hawthorne Reply:
December 10th, 2012 at 1:24 pm
Bush did not artificially lower oil costs, we have oil in this country, We even have reserves for emergencies, such as Sandy, that have not been tapped into. We also have oil in North Dakota that is 20 times the oil that was discoversd at Spindletop and that is only ONE of TWENTY…the only problem is our President. He keeps making laws to make it harder to drill or frack for it. It takes a private citizen at LEAST a YEAR to get a permit to drill on their on land, THEN they have the EPA to fight. Government needs to get out of our business and let us help this country.
America is the only country in the history of man that was formed with a single idea in mind, to protect the citizens rights and the citizens pursuit of happiness. The governments purpose, the governments end, was the citizens…WAS the citizens, it is no longer the citizens. Now the citizens have become a MEANS of government…let me explain.President Obama has a dream of National healthcare, it may be a very compelling idea but his idea of healthcare is not MY dream, and yet, President Obama is usung the force of the Federal Government, the coercive power of the Federal Government to compel, not just me and you, but every single American to FUND his dream, This is NOT the purpose of the American Government.
stewart Reply:
December 18th, 2012 at 3:50 pm
Lower taxes and tax revenue goes up. History shows and proves itself. Liberal Democrats raise taxes during these prosperous times and blame others for the failures. Insecure people like to drag other people down. Bush gets hammered for 5% unemployment while Obama gets praised for unemployment dropping to 7.9%. History has shown what happens over and over. Too bad people (yes, they are people too) can’t understand that there is a bigger world than what their little eyes can see and comprehend!!!!
Dtrain Reply:
December 10th, 2012 at 6:02 pm
CHUCKSTER, it is only fair that ALL recipients receive equal reward for their contribution. As such, all contributors should pay equally. That is to say, EVERYONE should pay the same tax rate (e.g. 15% income tax for everyone regardless of income).
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J D Reply:
December 18th, 2012 at 3:28 pm
So what you’re saying is:
If there are 50 million households making $20k/year or less, they should be taxed at the same rate as the 15k or so households making $500k per year, despite the fact that the cost of living between the two is marginally higher?
I’m guessing for that to be viable, the 15k households must buy contribute considerably more to the GDP than the 50 million households in the $20k range, in order to economically equitable within the US. Now on top of it, the 50 million households that have less disposable income are spending less money, while the 15k with the most disposable income are saving more money. That seems like it will do well for the GDP.
AH Reply:
April 18th, 2013 at 1:22 pm
Effective tax rates and income tax rates are entirely different things. +/- 5%, everyone has been paying an equal share of their income in taxes for a few decades now.
You need to take into account more than just income taxes – we pay taxes all the time (sales tax, licenses, registration, etc.), and most taxes are regressive in nature and not progressive like federal/(some)state income taxes are. As a function of income, those small taxes hit people with lower incomes to a very high degree in terms of percentage, but hardly register with the more fortunate.
john Reply:
December 18th, 2012 at 8:31 pm
I am curious about this, If Reagan was a conservative and his tax lowering increased revenues so much then how and why did the national debt almost triple during his term?
He also did away with the personal interest deduction which effectively raised taxes on lower income people who cannot afford to pay cash for things like cars…I remember it killed me.
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mysticaltyger Reply:
March 30th, 2013 at 10:28 am
The debt went up in Reagan’s time because the government has a spending problem, pure and simple. The government is a perfect example of a high income couple who are always in debt no matter how much they make. There are a fair number of high income folks out there like that…and that’s what our government is like, too. Getting rid of deductions for consumer debt was a good thing, in my opinion…it discourages people from takine on excessive debt. Of course, the banks found a loophole because it didn’t include home equity loans. I think they should take away the deductibility of home equity loans as well…It will discourage people from using their homes as ATMs.
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ErikwithaK Reply:
March 25th, 2013 at 5:02 am
And what was the income gap between the executive and the employee in the early 60s and early 80s? Let’s go back to those numbers, too, shall we? See, the problem is, when you’re making $30,000 a year and have 20% taken in taxes, you live on $24,000 a year. When you make $300,000 a year and are taxed at 20%, you have to struggle through life on $240,000 per year. Now do you get it? The well off have been coddled for far too long and the playing field is very much tilted in their direction. And why wouldn’t it be, as they have the money, the power and make the rules. What do you expect from alleged patriotic Americans who had as the “top priority” to make Obama a one term president? Not the economy, not the wars in Iraq and Afghanistan, but a power grab. That tells you all you need to know.
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Financial Samurai Reply:
March 25th, 2013 at 6:21 am
You say this because you’ve made $300,000 before? I hope so, otherwise pontification isn’t credible.
Believe in equality, not discrimination.
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@Andrew
http://www.thenewamerican.com/reviews/correction-please/760
“Henry Morgenthau, who served as Roosevelt’s treasury secretary, admitted to a congressional committee in May 1939 (as quoted in the recent book New Deal or Raw Deal? by Burton Folsom, Jr.): “We are spending more money than we have ever spent before and it does not work…. We have never made good on our promises…. I say after eight years of this Administration we have just as much unemployment as when we started … and an enormous debt to boot.”"
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I noticed you didn’t figure in payroll like social security tax that is only paid on the first 100K. If you reallyh want fairness and equality in taxing you would also be pushing that everyone pay this on all their income.
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Financial Samurai Reply:
November 15th, 2012 at 8:58 pm
Only if social security benefits also increase commensurately.
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Interesting statistics. It is surprising to me how low the average income is in the US. With inflation on the rise, I do not know how people survive with those income rates.
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Quaker99 Reply:
November 21st, 2012 at 11:22 am
Be very careful when articles quote averages on anything. I believe the average in this article refers to what Americans earn. There are many Americans that earn nothing (retirees, unemployed, disability, etc although they do receive funds) so they drag the average down. I’m willing to bet that if they included only income of working families the average would increase significantly.
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It was my impression that the Samurai were known for their scrupulous honesty and strength of character. After reading this factually challenged and not-so-cleverly parsed pitch for the rich, I realize the context in which the author describes himself as a Samurai — protector of the treasure and land of the King, defender of the richest and most powerful.
Some of the comments here are even more ridiculous and untrue.
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Financial Samurai Reply:
November 23rd, 2012 at 4:19 pm
Comrade,
I am for Socialism for a brighter future. Maybe you misread this post about the the hope for equality. http://www.financialsamurai.com/2011/08/01/socialism-as-a-means-to-a-brighter-future/
Here’s another great article http://www.financialsamurai.com/2012/08/15/working-is-to-capitalism-as-retirement-is-to-socialism/
Sam
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Dtrain Reply:
December 10th, 2012 at 6:08 pm
Financial Samurai, you my friend, are an idiot. The world has repeatedly proven that socialism does not work, yet you keep pushing the button hoping for your treat. get off your ass and earn what you deserve. If you haven’t earned it, you don’t deserve it!
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Financial Samurai Reply:
December 10th, 2012 at 6:35 pm
If Socialism is so bad, why did America vote for bigger and bigger government over the next four years?
Is it not rational to kick back and live the good life if there is a huge safety net? We can take more risks and pursue are dreams as well. Are you saying Americans voted for the wrong candidate?
ErikwithaK Reply:
March 25th, 2013 at 6:06 am
That’s not true. Socialism is alive and doing well in a number of countries around the world. And in most of those countries the residents enjoy better health, longer lives, better education and an all around better standard of living. Is pure socialism the answer? Of course not, but neither is pure capitalism, because sooner or later, as we’re seeing here in the US, one segment gets all the money and power and we cease being a free market and become an oligopoly. And that shouldn’t be a surprise since we’re living in an oligarchy.
@Jimbo
You’re either joking, or been in a coma for 50 years (or you’re flat out lying). All of your statements are false. Sure, Reagan cut taxes in 1981, but then two months later raised them back up a by a third (because we NEEDED THE REVENUE). He raised taxes 13 times altogether.
Daddy Bush promised ‘No New Taxes’, and then found himself having to raise them (because we NEEDED THE REVENUE); if you were alive back then, you’d know how pissed off the Right was when he did that.
Clinton, on the other hand, RAISED taxes (because we NEEDED THE REVENUE) and it was this additional revenue that created the surplus of the ’90′s — which disappeared with W’s tax CUTS.
And the JFK tax cut? “Unlike contemporary GOP policy, Kennedy’s plan distributed tax cuts broadly across the wage spectrum. The bottom 85% of the population received 60% of the benefits of JFK’s tax cut. The top 2.4% received 17% of the tax cut, and the top 0.4% received just 6% of it. Top rate was still at 65%…Also at the time, the country had very little debt — because Eisenhower, thankfully, kept taxes high throughout the 1950s — almost no deficit.”
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real issues Reply:
November 27th, 2012 at 11:18 am
We “NEEDED THE REVENUE” because we spent more than we collected (for both sides to buy votes). Clinton raised taxes that, in part, caused the recession that W inherited (Clinton even said he “probably raised taxes too much,” pretty honest statement for a politician). The Clinton surpluses were achieved, in part, to the ending of the welfare system and cutting the military, reducing significant spending and forcing people back to private sector work and paying taxes.
Overspending was wrong when Republicans had White House, Congress and Senate for 2 years during Bush’s term. Overspending is still wrong when the Democrats control the WH, Congress and Senate for 2 years during Obama’s tenure. We just don’t hear about it from the Demedia. We threw away $1 trillion with nothing to show for it.
Reagan raised some taxes to compromise with Tip O’Neil and keep the government functional. “Daddy Bush” didn’t initially compromise with Congress and the government shut down. Of the 535 Congress members, 102 Senators and the 1 Republican president, guess who the Demedia blamed?
With the exception of your well supprted JFK tax cuts, I don’t know where you are getting your “facts” from. How can you attribute tax increases, without factoring spending, to the “surplus of the 90′s”?
Address issues, not party. There’s not enough tax revenue available to match our spending. We must cut spending by millions for every dollar of tax increase. We are very near the edge of the cliff. Stop pointing at the various drivers and let’s find the brake pedal and turn the steering wheel.
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hard worker Reply:
December 5th, 2012 at 1:33 pm
the problem is not income taken by the goverment but money spent by our goverment way out of balance
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Financial Samurai Reply:
December 5th, 2012 at 1:48 pm
Weird how the government tries to dictate how we should manage our finances while the government can’t even spend less than they earn and balance a budget isn’t it?! It’s RIDICULOUS!
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Paul Magill Smith Reply:
December 20th, 2012 at 7:26 pm
It’s a basic conflict between Friedman or Keynesian advocates, with a lot of erroneous ‘facts’, and poor understanding of economics, history, law, and/or ethics. Austerity measures only work effectively when done at the correct time. There are other ways, however. Take a look & do the math:
http://www.alternet.org/economy/8-tips-how-we-could-cut-deficit-slashing-social-security-benefits-wont-help#.UNMdnY_RPH4.facebook
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@PunkyAmerica
W’s tax cuts brought in more revenue than ever in the history of the US. Fighting two wars and reckless domestic spending did away with those surpluses not tax cuts. http://www.washingtontimes.com/news/2010/feb/3/bush-tax-cuts-boosted-federal-revenue/
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asking people below the poverty line to pay an additional $43/month in taxes (over payroll taxes) is just plain stupid. They will require a greater amount from social welfare programs to make up the difference, and any “savings” will be lost in the bureaucratic overhead for those programs. Oh but wait you probably think the social safety net is a waste of money. More sage advice: try to hit the soup line twice, you’ll have more energy for that great second job!
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Financial Samurai Reply:
November 28th, 2012 at 6:07 pm
Nobody said below the poverty line. Above the poverty line, yes let’s all chip in. Below, best of luck and keep all your money to survive!
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Richeroo Reply:
November 30th, 2012 at 2:22 pm
But you did, Samurai. The bottom 50% of earners obviously includes those below the poverty line, and you wrote: “All we have to do is make the bottom 50% who pay no taxes pay just $43 a month in taxes and we’d raise $60 billion a year right there!”
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Financial Samurai Reply:
November 30th, 2012 at 2:51 pm
Then I’m clarifying now.
I understand why people can’t or don’t want to pay taxes. As a new retiree, I plan to shelter as much income as possible. We must accept big government is here to stay and therefore we must do our best to protect our hard earned income and assets from wasteful government spending.
Nice to see the rich are not above ABUSING UNEMPLOYMENT by having no intention of getting a job after engineering their layoff when they’re ready to retire. And they complain about welfare queens.
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“Clinton, on the other hand, RAISED taxes (because we NEEDED THE REVENUE) and it was this additional revenue that created the surplus of the ’90′s”
Wrong.
Clinton’s “surplus” came from raiding money from many different money pools that government controls. He in essence took money from one pocket, put it in his other pocket and said “look at all this surplus money my policies created!”
in 2000, Clinton claimed a $230B surplus, but Clinton borrowed
$152.3B from Social Security
$30.9B from Civil Service Retirement Fund
$18.5B from Federal Supplementary Medical insurance Trust Fund
$15.0B from Federal Hospital Insurance Trust Fund
$9.0B from the Federal Unemployment Trust Fund
$8.2B from Military Retirement Fund
$3.8B from Transportation Trust Funds
$1.8B from Employee Life Insurance & Retirement fund
$7.0B from others
Total borrowed from off budget funds $246.5B, meaning that his $230B surplus is actually a $16.5B deficit.
($246.5B borrowed – $230B claimed surplus = $16.5B actual deficit).
If there is ever a true surplus, then the national debt will go down.
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The Clinton “surplus” was not an actual value that you can hang a hat on. When the budget is a deficit budget and you don’t spend all that you borrowed from the fed, then what you have is a time when you didn’t spend what was budgeted but spent more than you took in with taxes.
And as “Me” pointed out, Clinton raided other funds which most likely has quite a bit of bearing on the circumstances we found our selves in after January 2007 when the Democrats took over the House and Senate, creating the 2008 crash.
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Financial Samurai Reply:
December 4th, 2012 at 7:20 am
My question is, with big government here until 2016, isn’t it logical for people to save LESS given more people at the margin will expect the government to be their savior?
Here’s an article I wrote on 12/4/2012 entitled, “How Much Savings Should I Have Accumulated By Age” for everyone to read. I’ve got charts and everything!
It’s written to be applicable and helpful to 99% of the population.
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I used to work at McDonalds, 2 years ago (2009) and I made 7.25 and hour, which is minimum wage, at 40 hours a week I made $1160 BEFORE taxes. I was also in college full time at the time so Im so sorry that I didnt have the time to work 60+ hours a week. So Im not sure why you think working at McD’s would be so great now. As for getting this imaginary great 2nd job? Im sorry, what world do you live in? A second McD’s job? Where are these awesome jobs? I have a college degree and 2 good jobs, still make about $50K/year. As for moving to where the good jobs are…well I dont know if your aware, but moving costs money. Poor people are not typically the most mobile of people, for financial reasons. I would think all of this would be obvious if you had ever been poor, but it sounds like when you worked at mcd’s you probably either lived with your middle or upper class parents or they at least helped you out a good bit.
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Financial Samurai Reply:
December 4th, 2012 at 5:40 pm
I don’t call someone making $50K/year poor by any means. What country are you living in, Luxembourg?
Taking a Greyhound bus anywhere in America doesn’t cost more than several hundred bucks. Go where the jobs are, or don’t if you are happy with what you have. It took Americans 3 months to travel cross country hundreds of years ago. What’s several days?
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ErikwithaK Reply:
March 25th, 2013 at 5:12 am
When you’re living paycheck to paycheck “a few hundred bucks” may as well be a million. Plus, you need something for a damage deposit as well as rent, food and other living expenses until you find that dream job. Why don’t you just tell them to eat cake? You have no concept of what it’s like to be poor in America. And that’s the problem.
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Financial Samurai Reply:
March 25th, 2013 at 6:20 am
Do you? I grew up in third world countries for the first 14 years of my life. America is a cake walk compared to living in India for example. What’s your story?
New law: You only get to vote if you pay federal income taxes.
If you receive government subsidies, you give up your right to vote until you become a “productive” member of society.
I have to submit to Federally mandated background checks, physical exams, random drug and alcohol testing, and recurrent training with competence testing to earn my (private sector) paycheck. A fraction of my pay gets redistributed to people who abuse drugs , alcohol, wives, kids, and/or “the system.” It seems to me that if we pay people not to work, and don’t attach ANY strings to the benefit, we are not fixing the problem. I gotta jump through the hoops to receive my pay, how about drug/alcohol/background testing to receive benefits?
We have a moral problem. We feel no responsibility to spend within our means, no remorse in forcing others to pay for the overspending of others. Instead we demonize the 1-2-3-4% who contribute 30+% of the government’s income to redistribute; effectively buying votes. For the middle 50-96%, entitlement spending means there’ll be less money saved for retirement, forcing a number of them into the dependency class upon retirement. Take the savings requirement test and see what a difference an extra $100/month makes over a lifetime.
The current spending path is unsustainable financially. Keeping people dependent on government, empowers politicians, not the citizens. Remember the whole reason America was founded?
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Janna Reply:
December 30th, 2012 at 7:40 am
Yeah! Kick ‘em when they’re down!!! Are you elderly or disabled, or you can’t find a job because the rich CEOs are sending jobs overseas and then collecting millions in bonuses? Then screw you! You can’t vote either!! A lot of those people who are not paying federal taxes were productive and/or defending our country long before you were born. Sorry that you feel that you are being “demonized” (that must be so hard), but when Mitt Romney pays basically the same effective tax rate that I do, I don’t think the rich are being punished. We should be fixing the tax system to give businesses tax breaks for creating jobs in the U.S. and taxing them heavily for sending jobs overseas. I don’t care how much you make, if you are ACTUALLY a job creator, then you should get tax breaks. If you make millions from being a CEO of a large corporation (e.g a big bank), then you are not a job creator, and your paying a higher tax rate is not going to hurt the economy, in my view.
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real issues Reply:
February 16th, 2013 at 11:00 am
Janna
I’m confused; Rich CEO’s are bad for sending jobs overseas, then Romney’s bad for paying the tha same tax rate as you and I. Romney was a huge employer via multiple corporations that he turned around. Most companies stayed solvent and stayed in the US, some expanded into major corporations. Romney received compensation for this in the form of stock options (which ties CEO’s pay to company performance) and he is now a rich man who has paid every bit of his taxes due (contrary to Tim Geithner and Harry Reid). Romney’s current taxes are at a rate of most retired people living off of their savings (he’s gonna get slammed by taxes when he turns 70 and has to take RMDs).
Your quote, “if you are ACTUALLY a job creator, then you should get tax breaks.” So only liberal/democrat/socialist job creators should get tax cuts while religious, white, wealthy, straight, faithful family male like Romney should be “punished”? These are your own words?!.
You say, “screw me” and also that I think that I’m “being demonized.” Again, I’m confused; I would submit that YOU are being demonized. Your “news” sources are just filling you with hate (just read your own words!) for your fellow Americans. It worked in 1939 Germany too.
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Janna Reply:
February 20th, 2013 at 3:41 pm
@real issues: Yeah, I see that you are confused….. I didn’t say “Screw you” to you… I was paraphrasing your idea that only those who pay taxes should vote. YOU are saying “screw you” to those you would like to prevent from voting.
And I didn’t say that the rich SHOULD be punished… I am saying that they are NOT being punished, as you would think they are if you listen to Fox News… And where did I say that only liberal job creators should get tax breaks?????????
And I DON’T THINK you are being demonized…. YOU think that!!! (Just read your own words!)
So yeah, you summed it up pretty accurately when you said you’re confused. And I am in no way filled with hate for my fellow Americans. You may be projecting your own feelings.
You can argue these points all day long and you can twist statistics to suite your argument, but facts are facts, the government has had to create jobs before and it works. Our Taxes are at an all-time low. Our country needs our enter structure repaired, and that not only creates jobs and tax revenue it takes people off unemployment which cuts government spending. Plus those people can buy; you know the basic way to grow the economy. Big business needs a reason to create jobs here so they need tax incentives to do that, but they also need to be taxed heavy when they want to take jobs out of the country just because we have a higher standard of living and they have to pay the worker more, that’s how our economy works. One big problem with our debt is the wars we have been in and not paid for. I wonder how quick our Congress would have voted for the war in Iraq if they would have had to add a cross the board % war tax on everyone to pay for it, and better yet how long we would have stayed and how much enter structure would we have paid for. Sure we have to deal with entitlements, but come on we keep printing money and where is it going? Not to the middle class. The middle class wages are stagnant and the rich are sending their money overseas to make even more money. All the people on entitlements are putting it back in the economy. Agreed it’s still a drain but at least it’ staying in the US economy, but these law makers need to do their job and quit blaming each other. Charity starts at home so if you want to blow people live with the consequences, don’t spend my money overseas while we have people going hungry here. I didn’t ask them to go over there, and I didn’t give them poor intelligence about what was going on over there, and I darn well didn’t tell them to spend my money rebuilding their enter structure. These law makers have a good gig, give themselves raises, collect money from the lobbyist, and blame everyone else for the problems. WAKE UP AMERICA
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I just read all of the above comments and replies. I must be middle class, because of all the comments the “Middle Class” one makes most sense to me. Regardless of how one twists/interprets the issues, the bottom line is that it is getting harder to provide for a family’s basic needs in America. It used to be that a person working 60 hours a week at a regular job, even at minimum wage could provide basic housing for his family. I just read a report that many lower income families are now having to live in homeless shelters because there is not enough low-income housing; and I have a real estate friend who told me that most of the cities in our area will not allow builders to build low income or starter homes. I just read a report that shows that in the last 15 years the poorest 20% in our country have experienced a decline of income of over 11%, the middle 20% have experienced an increase of almost 2%, and at the same time the richest 5% have experienced an increase of over 10%. It appears that the rich are saying to the rest of the world that they will stay rich, regardless of what the rest of the world is experiencing, and that is their entitlement.
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Reading these posts is frustrating….
Some readers post on here where someone paid the same percentage as they did on their taxes and they were livid. I find that comical. Warren Buffet was said to pay the same percentage as his secretary but the difference is he paid 7 MILLION DOLLARS in taxes people. Paying the same PERCENTAGE doesn’t mean your paying the same amount. It only represented 17.4% of his income but it was certainly a lot more money than they were paying in. Why should those that make more pay a higher PERCENTAGE. For God’s sake the man paid in 7 million dollars. Maybe get rid of tax breaks. But socialism doesn’t work look around at all the other countries. Warren Buffet is paying his share and quite a few more peoples share. It’s big government spending. Did anyone pay attention that the pay raises that were approved by President Obama. I’m sorry I didn’t realize our Government officials were falling on hard times and needed pay raises at this time. If anything didn’t they need to cinch their belts in considering the massive debt every child born in America inherits. With the economy and unemployment and Government spending out of control it just goes to show how out of touch they are with the American people and who they are supposed to represent. It shouldn’t be me and you against each other it should be all of us demanding more and better from our government.
I think where ever a person is they look at how it affects them and looks no further with their argument and sometimes without realizing it they could quite possibly be arguing the same point. As a wife of a business owner it amazes me when people say ” Yeah we need health care…businesses should provide it. Well in our business if we provide it to everyone it would cost our business $750,000. per year. We can’t afford that. It’s shocking to us that we are just supposed to come up with that money. So what will happen is we will pay the penalty of about $350,000 (God willing) and it will mean people will lose their jobs and pay cuts. What will our employees gain NOTHING they will actually lose jobs and pay. The Government will collect allot of penalty money of small businesses but I don’t know how it’s going to help small businesses or our employees.
As far as the richer paying the same percentage as someone making a smaller amount like say Warren Buffet.
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Financial Samurai Reply:
January 12th, 2013 at 7:58 am
Tonya, thanks for sharing your thoughts. You will love this post then: http://www.financialsamurai.com/2009/10/09/were-idiots-please-tell-us-a-flat-tax-is-not-fair/
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My address is not to be passed on please.
I’m not smart enough to figure this out, but I was curious if that instead of a national & state income tax, we instead did away with state sales tax and just charged a 10% national sales tax on everything, except food and medicines. Can you somehow estimate what would be brought in and distributed to the states and feds? This tax would be paid by everyone, from kids buying an ice cream cone, to seniors buying a pair of stretch socks. How much would hit the treasury? We maybe even be able to eliminate some of the greed. And we could probably eliminate the IRS and all of those employees. More savings.
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I earn a decent salary and do not mind paying my taxes. I’m grateful for my opportunities but what I do have a problem is the manner in which our government wastes my money. It leads me to want to live elsewhere. There’s no insurance or security these days and that’s scary even if you make a lot of money.
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Waw, those are some really impressive figures. There are countries where they would work more than 10 years to earn how much others are doing in one week….
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Facts that the GOP and the wealthy don’t want us to Know. 1) The last time marginal tax rates on the wealthy where this low was right before the great depression and 2) the top 1% now earn over 23% of the total U.S. Income. The last time it was that high was again 1928 right before the great depression- It was less then 10% during the 50′s and sixties. — Scary stuff huh? They also had the predecessor to the TeaParty (financed by billionaire Koch Bro.) back then called the Liberty league (Financed by JP Morgan). Backed Right Wing Anti Tax Anti government Politicians. Published a Newsletter and said all the same things–blaming the poor and unemployed for the weak economy. They self destructed (got close to being Tried for Treason) and alleged to have made a deal to stay out of Jail to stop blocking FDR’s programs and disappeared until reincarnated as the Teaparty. FIX THE TAX CODE AND GET AMERICANS BACK TO WORK. pass it on. Check out the facts and Pass this on to everyone. Why don’t they take a look at the top .5%.
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Do you realize you just took Mitt Romney’s right vote away from him? When’s the last time Mitt had a job? And we can start taking away people’s right to vote right after we take away the right to keep and bear arms.
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The federal minimum wage was $4.25 in 1993. Why were you only making $3.50?
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Financial Samurai Reply:
March 25th, 2013 at 6:17 am
http://www.taxpolicycenter.org/taxfacts/content/PDF/state_min_wage.pdf
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The point with lowering tax raises results in increased revenue is not entirely true. A better estimate of the benefit of tax cuts/increases is to look at tax revenue compared to the GDP.
Look at this ratio over the last 30 years.
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