Welcome top income earners!
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 (2015), 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 2010-2015 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
Based on a previous 1000+ survey study on Financial Samurai in Fall 2014, 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 California. All you’ve got to do is hop on a bus or a plane to be where the action is.
20 years ago, I remember making $550 a month working at McDonald’s for $3.65/hour. With wages 3X higher now, I’d be pulling in $1,650 a month or $20,000 a year! Heck, tack on driving for Uber for 20 hours a week part-time at $36/hour and you’ll make another $2,000 a month and be in the top 50% of income earners no problem. There’s an entire gig economy out there for freelancers to make extra money after work, or freelance full time. Why not take advantage?
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 our 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 the San Francisco police chief makes $320,000 a year? Furthermore, when he retires, he’ll 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. Even my friend who is a union electrician and is not allowed to work more than 35 hours a week makes $120,000 a year and gets a $5,000 a month pension when he retires at 55. Let’s not count the $30,000 a year he makes doing side jobs with all that free time. 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 not too difficult.
Thank The Rich For Always Paying More Taxes
As the economy continues to recover in 2016, 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, is baffling. Zealots are also grouping together those earning ~$30,000 a year with the most destitute!
Inequality is wrong. Whether you are being terrorized by the IRS or being 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 earners, who already pay the most federal income taxes, if you don’t pay any taxes or aren’t willing to pay more taxes yourself!
Be Your Own Boss If You Want To Be Rich
We are in the technology and internet age now. If you really want unlimited earnings potential, you might as well be your own boss someday. It costs so little now to just start your own website so you can brand yourself online, connect with like-minded people, find new job and consulting opportunities, and potentially make a healthy living online. Take a look at this income statement example of a friend with a simple personal finance blog.
The are many ways to make money online if you have a brand and the traffic
I started Financial Samurai in 2009 as a hobby to help make sense of the financial destruction. Two and a half years later I negotiated a severance because I was making roughly $80,000 a year from this hobby. Nowadays, I’m earning more than I was making as an Executive Director at a large financial firm while working 90% less and having 100% more fun!
You can start your WordPress site like this one with Bluehost for as little as $2.95 a month. Bluehost is optimized for WordPress and has great service and speed. Come up with a unique and memorable domain name, find a free website theme, connect your hosting and you’ll be up and running in 30 minutes. Everybody should start something on the side. The key is to adopt an abundance mentally and just try. The things you do now could change your life forever! Here’s my step-by-step guide on how to start your own website in less than 30 minutes.
Track Your Net Worth For Free
The other action item wealthy people do is track their net worth. You can only truly optimize your wealth if you know where all your money is going! Sign up for Personal Capital, the web’s #1 free wealth management tool to get a better handle on your finances. I’ve been using them since 2012 and have made much wiser financial decisions since. In addition to better money oversight, run your investments through their award-winning Investment Checkup tool to see exactly how much you are paying in fees. I was paying $1,700 a year in fees I had no idea I was paying.
After you link all your accounts, use their Retirement Planning calculator that pulls your real data to give you as pure an estimation of your financial future as possible using Monte Carlo simulation algorithms. Input various expense and income variables to see how you stand. Your goal should be to get to a 90% probability of achieving your goal. Try it out yourself for free. Your future is too important not to take it seriously. You don’t want to end up old and not have enough money because there is no rewind button!
Is your retirement on track? Check for free after linking your accounts
Updated for 2018 and beyond
Photo: President Obama and His Dog, Public Domain.
I continually feel very blessed to be living in the U.S. and to have the opportunities that I have available to me. My household is in the top 10%, but we live in a low cost of living area (central U.S.). Having this type of income in this location is the best of both worlds. At ages 26 and 25, me and my wife are living the life of our dreams. We have a great house that we love, we give a good amount of money away, we invest in more real estate, we save a huge chunk every month for retirement, and we also spend a good deal of money each month doing the things we love (golfing!).
We consider ourselves extremely blessed, to say the least. To be born at this point in time, in this location of the world is a bit like winning the lottery (with even bigger odds). We recognize the responsibility that goes along with this.
I wonder what the household income is for Top 10% as these figures are for individual income earners.
It is great that you feel so blessed!
Curious, what life were you born into? Were your parents middle class, upper, lower? How’d you pay for college? To be so young and so well off, chances are you were either extremely lucky or you had a head start.
It’s best to always attribute success and fortune to luck instead of hard work and ingenuity when people ask. Never let others know how much you’ve done to get to where you are.
How about you? What’s your story?
This was 7 years ago and hopefully your out of bankruptcy court by now. Why do mostly Americans say the dumbest things like say they are blessed to live in the US where you can achieve your goals or whatever. What countries are you comparing ‘Merica to. Syria? NK? Are people in Germany held back by the government so they can’t achieve goals. Or you can live in Red China who are so rich they loan us Billions every year, have bought up most of America. And in a couple years they will be the biggest super power in the world. Maybe then goals will be unobtainable do to our weak standing in the world and the rise of China who have already taken over the world as leaders and our silly anti science mentality and 2000 year old archaic beliefs in some Mumbo Jumbo crazy beliefs will be the death of this nation. Look at the biggest god living countries. Syria. US Iran Iraq. Most of those places are uninhabitable. Look at the Bible Belt where most people have just given up on education and the English language. It’s not a stretch to think about after trying to communicate with a person from Mississippi that we Have a load of problems. The natives there think science is the devil and so are Liberals as they drive around in their science cars talk on their cells and collect welfare checks. Not an intelligent race. That’s why where you live and they do it is cheap to live. With little money put into schools or something to do the tribes are not educated and drag this country down. Need I mention who the yokels voted for and they still if you could understand their language would stil say he’s a great president and Lock her Up. Who needs a judicial process let’s go crazy and go back 200 years where men weren’t men unless they beat their wives while always carrying their guns on them. Back before science when doctors operated on people while they were awake until they almost always died. God will protect them. Well he was AWOL again until science came to the rescue. Wow I got really sidetracked. This wasn’t my intention sorry to all my fans. I wanted to talk about when somebody interviews somebody from say Georgia says. Yea we got a few problems here in the country but it’s still the best country in the world. Most of these people have never left their state or own a horseless carriage. How do they know. I can think of many better countries. Not to get into it but they are all atheist majority countries. Instead of 30000 people being killed by a gun annually their are 2 or 3. Where the prisons aren’t babysitting millions of criminals and pot smokers. Gov is not corrupt schooling including university is free as well as healthcare. Yes taxes are a lot more but you get something in return. If you have a heart attack you don’t need to sell the house to pay for it. It’s amazing what good you can do if you don’t spend 800+ Billion dollars a year to build more bombs. Funny how Trump says our military is in disrepair. The equipment is old and unusable. Worst the military has ever been. Yet we spend more money than Russia China North Korea Iraq and two more do combined. The next country I think is China which less than half that we do. Over 800B every year and all because we go around and kill people which pisses them off and they hate us so they retaliate. If you were a child and saw your parents killed by a US weapon I’d assume you’d be pissed too. Ok I’m off the tracks now. Thankfully no one will read this and I got my venting out for the week. Freedom. Yeah that’s not a US only thing. Most countries have it and a lot have more freedom than we do. And to the jesustards down southb. Take care y’all
Apart from most of your commentary being inaccurate and clearly without supported facts, I’m only going respond to your remarks that directly disparage me and the rest of my large extended Asian family. In your diatribe above , you have incorrectly stereotyped a Christian as someone who is an uneducated ignorant gun wielding Caucasian wife beater from the south. I am NONE of those things! My parents are from “Red China.” They immigrated to the Silicon Valley in the late 60s after fleeing from China to Taiwan. Our family is well educated and we worked long hard hours for our freedom and relative affluence. In addition, we know a thing or two about freedom and the loss of it as my maternal grandfather was TORTURED by the Japanese when they invaded China in WWII and my paternal grandfather had his entire transportation business and all his wealth stripped from him as the communists took over China. If you are implying that China is awesome because they own America, you are wrong there too. China is quietly allowing Christianity to proliferate in hopes that some of the most egregious ethical violations of humanity will subside. China is not an ideal place to live. Most of the middle class in China are doing everything they can to leave the country. I’ve travelled to every continent in the world and have visited more than 50 countries (including all of the countries you’ve mentioned). America is not perfect, but for its size and diversity, it is still the most amazingly free and affluent country in the world. How can you compare a small one race country with the United States? It’s like comparing apples to ….hippos. Your little rant was offensive and reveals your ignorance and hypocrisy. Thank you for that nugget… I pray that your HATRED towards Christians is replaced with something much more fulfilling (like Love).
Your pontificating and bitter mindset sound similar to the stereotypes you disparage.
Furthermore, name calling is a sign of ignorance.
I feel excited looking at these stats. I really believe if we continue working harder we’ll keep moving up. I’m grateful that my family has taught us to make opportunities.
I feel excited too. I’d like the IRS to keep going higher, like the top 0.5%, and then the top 0.1% because even in the top 1%, there is A LOT of room to grow!
Best, Sam
Definitely feel lucky, though I’d like to be ‘luckier’!!
All about making more of your own luck!
Whenever I think I’m going to make millions of dollars I just remember, “In America, the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.” Not to sound like a debbie downer, but sometimes making the top 1% is more than hard work – it’s luck as well.
That being said, wish me luck!
Good luck! Hopefully people realize that making money is much easier than it seems, especially if one lives in America.
hi!
um, I feel lucky every day. Just had this convo with my dad the other day…..what country you’re born in and what opportunities you’re given as a child are just pure luck. Then, for the lucky ones, it’s up to them/us to be aware that we’re lucking and be thankful every day. Sometimes I forget, but today I remember, especially after reading this.
i consider myself blessed for what i have at this point in my life. as it pertains to the article however, having seen and experienced enough of this world, what jumps out at me that although good to know, these numbers do not mean much when the other side of the equation (cost of living) is not brought into the picture.
i am happy to be an American for many reasons, but not because of the numbers presented. i do agree that anyone can move into whatever income bracket they’d like. the world is out there up for grabs for anyone willing to get out of their comfort zone.
Cost of living is definitely a big factor, which is why we shouldnt try and assault the top 1% and top 5% income earners if we don’t know where they are living.
I agree that we should not punish anyone who works hard to make it up the income ladder. After being in the top 50% for many years I worked by butt off and made it to the top 25% this year. But in the process for all my work and effort I pay $18,000 more in taxes. But then again we are becoming a welfare state where more and more people less then half my age are on welfare, food stamps, medicade, and have HUD paying for their housing. I guess I am getting tried of working hard all these years for those who dont.
Respectfully disagree sunil… Health, family care responsibility (including parents) and opportunity are all factors which can rob that person from achieving their full potential.
I came from welfare and thanks to education and an ambitious spouse, we are living beyond what I ever thought possible. But I just can’t accept that everyone has the “same” opportunity, because it’s much more complex than that.
Grateful I am, but judgmental, I am not.
Makes me want to earn money in America and spend it somewhere cheaper. :)
I do that for about 6 weeks every year – it is great! My wife and I go to either South East Asia (Laos, Vietnam, Thailand, Malaysia, Cambodia) or India. Its nice to make US wages but get things MUCH cheaper!
Are those income percentages (top 1 percent, 5 percent, etc) for sole income wage earners, or what married couples submit to the IRS?
I have always felt incredibly lucky to have been born in the US. I know a ton of people that emigrated to the US, and are incredibly successful. Then I get frustrated with those who were born here and have chosen not to take advantage of all the opportunities we have to offer in America.
That is a huge difference between the top one and five percent!
The figures are based on individual income tax returns according to taxfoundation.org. It would make sense bc a couple making $67k/yr being considered as a top 25% income earner doesn’t make as much sense as an individual making 67k IMO.
What I notice is the effective tax rate is far below the 35% that created so much controversy in Washington, DC. I notice that the effective tax rate is similar to mine and I am not in the Top 1%. It must be good to be King! I realize as income increases that I have more choices to reduce my AGI! This shows if the top tax rate were 39%, the rich would be paying a much lower effective tax rate. Instead of the bottom 50% paying $43 per month additional tax per year, have the top 50% pay it and more. The effective tax rates are fairly low comparatively relative to the earnings. $33K for a family of 4 does not go to far!
These statistics motivate me to earn more because it makes me realize I will keep more of my earnings!
Sorry, pls elaborate. You want the top percentile to pay even more in taxes even though the top 50% pay for already 97% of all taxes? Wouldn’t it be easier to spread the burden around instead? Even just a little bit?
You will notice the effective tax rate of the high income earners is considerably below the maximum tax rate. There are 2 reasons for that, high itemized deductions and/or the progressive tax brackets. They are paying on a net effective rate lower taxes than people who earn considerably less. If you just increased the top 50% earners one percent, never mind increasing the top bracket to 39%, it would yield more than enough taxes. The basis for the progressive tax system is to give a break to lower income earners. Too often, Congress looks for an easy answer versus really solving the problem. For the record, I think it will take a combination of cutting spending and raising taxes, but I have little confidence that it will be fair!
Ok, so even though the highest income earners pay a higher effective tax rate and a mug large absolute tax amount, you still want to tax them more even though half the working American population pays nothing? Please address your thoughts on the bottom half.
If you are for raising taxes, are you also for raising your own taxes? What about equality?
If I had to vote on who should pay an extra $43 per month, the top 50% or the bottom 50%, that would be a no-brainer… the top 50% of course, and that would include myself. For the top 1% (whom so many people seem so worried about), $43 a month would mean absolutely nothing! For the bottom 50%, who at under $2800/month gross, probably have little to no disposable income, it would mean a great deal! At a time when so many Americans are unemployed or underemployed, I find it amazing how some pundits whine about millionaires having to pay anymore! I’m sure most of those in the bottom 50% would love to be in the position to make enough money to have to pay more taxes! Sure, the highest income earners pay a larege absolute tax amount, but they also keep a large absolute amount! How much of my tax money went to bail out the banks, and yet those CEO’s continued to receive multi-million dollar bonuses!
Exactly Janna… no one wants to take money away from the wealthy…but all things being equal, their disposable income is much greater than the lower 50%.
I feel great to be an American. I wasn’t born here and many of my relatives are oversea making a pittance. Any of them would be thankful to make $20,000 a year! I would love to be in the top 1%, I’ll have to start my own business though.
This was an excellent article. You are right, it isn’t too hard to fall in the top 50% if you try. That said, $33K is not a lot to live on and that means that a lot of people in our country are living on far less than I would be comfortable with. That is sort of sobering.
I’d have to agree with Kris – I often feel lucky being born here. There’s basically nothing that you can’t do, and success is there if you’re willing to work for it – no matter how you define success. That’s quite a bit of money that a lot of people live on (to me, where homes are 100k in my area), so making the country average Ive got it better than most in my state.
There’s nothing we really cant do indeed. That is the American spirit we must all embrace!
Traveling the world changes you, which is why I recommend everybody do so.
Big money should be paying their share. So called non-profits like Hospitals who are tax exempt, enjoying billions in revenue, providing less than 5% in community support, which is largely the gap between what Medicare pays, and what they claim services are valued at. That isn’t providing for anyone who can’t pay. Driving on an interstate does cost any income tax payer because that money is paid at the pump. GAS TAX.
Interesting to hear some of you talk about how living in more rural parts of the country saves you quite a lot of money. I did a post on this two days ago. I figure that by the time interest is calculated over the lifetime of the mortgage I saved about half a million dollars on my house by choosing not to live in a big city. This doesn’t mention all of the other ways it saves me money.
I was actually surprised that the USA wasn’t by far #1 in the rankings (and I’m a Canadian). Qatar I can understand due to the low population and surge of oil money, but the rest really surprise me. I would have never thought Norway would be ahead, even with their recent oil findings. It’s no wonder they are coming up as a great place to live in all the surveys. Their tax rates are ridiculously high, and if that is the average income, imagine all that money the government has to play with (re: spend frivolously).
Norway spreads it wealth to its people. Great health care, education and BENEFITS. One year off for both parents after a birth. Five weeks vacation. It was just listed as the happiest country in the world. They use there taxes wisely.
It’s funny how the same data can be spun either way. If you read HuffPo (who, ironically, are being sued for using their writers for free – and saw AOL enact a bunch of layoffs as a result of their deal), all they spew is how the top 1% owns all this wealth, how they should pay more taxes, etc. No mention of the 47% that don’t pay a dime in federal taxes each year.
At the end of the day, our tax policy is set not by sound financial principals or fairness, but by politics. When you have half the country not paying any taxes, it’s kinda tough to enact any change that would force them to do so. It just wouldn’t win you an election (job 1 for politician) or re-election (job 1.5).
Did someone out a gun to these writers heads and force them to writefor free? Or, were they expected to be compensated and didn’t?
I’d write for Huff. Good publicity!
I don’t feel wealthy, but it’s all relative. Sometimes what we perceive isn’t reality, compared to others.
Personally, I’m glad to be an American and have the overall opportunities that I have in my life.
I’m surprised you don’t feel wealthy. I recommend for your next holiday to travel to India, Vietnam, Cambodia, Nepal, or even Many countries in South America. You will feel so wealthy afterwards!
Or you could just go to Detroit…just think of all the money you could save. You could probably even try to wring that $43 dollars out of a lot of people. Seriously I think it is a little silly to complain about paying 97% of the taxes when we are making 87% of the money. The argument IMHO breaks down even more when people making 20% of all the money are paying 38% of all the income tax. Sorry you can afford it. How much money do you really need? Lets just say you only make $410,000 and you pay the average tax for the top 1%. What about 23%? $315k give or take is what is left. Now let’s take the person making $33k after their 2.5% they have $32,175. Is gas, electricity, food and other things 10x cheaper for this person? The actual numbers are much different because someone earning exactly $410,000 is going to pay less of an actual tax, and someone earning $33k is going to pay more of an actual tax, but I think you get my point.
It’s not 23%. You pay a 35% Federal tax rate at $410,000.
If you make over $400,000, then your perspective is valid. But, if you are just pontificating, then, you don’t truly understand the other side of the story.
The ironic thing for me is I only got to be in the upper percentages after moving out of the USA 5 years ago- that is just twisted! I guess to add to your post I’d say it would be good to be born in one of the top 10 countries, get educated and established then move to a lower cost of living area while finding something that pays well and is rewarding.
By the way, the effective tax rate applies to Federal taxes only, still have state, FICA and local taxes to deal with! Most other countries have a single income tax rate but the USA is the home of nickel & dime tactics so you have to add all these incremental income taxes together.
-Mike
That is ironic! Yep, these tax rates are only Federal Tax rates unfortunately. Everyone should tack on another 10% to figure out their total effective tax rate! WHOO HOO! Tax us baby to death!
Tax rates in the US are small compared to most of the first world but it seems that more people complain there than anywhere else. My country has a 45% upper tax bracket (over 200,000).
What country do you live in?
Continuation of my reply:
Since I am in the upper 50%, I expect my taxes to increase. No problem, I am astute enough (tax savvy) to keep my effective tax rate reasonable! I think other people in the upper 50% have access to the same experts as the effective tax rate would indicate. The $33,048 earner is struggling to survive! Whether this is for one person or a family of four, they are ultra sensitive to price changes/increases and the normal difficulties of life. The addition of $43 per month or $516 per year could be devastating. We want them to save, stay out of debt and flourish, just like everyone. I believe the poverty level is around $22,500 for a family four. Additional taxes will drive more people into poverty which means more government programs. There no easy answer to this.
Thanks for your thoughts. Are kids really expensive though? Must not be if you have kids and only make $33k no?
Good to see you are willing to pay more taxes! Cheers
Kids are INCREDIBLY expensive! Which is why birth control and condoms should be free at any public clinic, no matter your age or income and whithout requiring parental consent – as they are in the UK, Europe, and the rest of the civilized world! If you can’t afford the pill, you certainly can’t afford a child!
And that way, we won’t have to keep paying for certain welfare recepients to purposefully keep having children for an additional check every month. Make the birth control and condoms free, stop paying them more per child, and require them to be either working or in college/trade school/job training to be on welfare. Having a program to help people through a slump is good; having people stay on welfare for GENERATIONS, and not even TRY to get off of it…well, that’s what we have.
We must be willing, as a nation, to provide birth control and higher education at low costs, to young people especially, so that they may better themselves and become productive (and tax-paying) members of society.
By the way, as you pointed out, the top 1 percent has become too inclusive a bracket. Why is a Radiologist in the same tax bracket as Mel Gibson and Donald Trump? Especially since the latter two end up not paying anything; Warren Buffet said himself that due to loop holes, his secretary pays more taxes than he does!
That’s the top 0.1% not the top 1%. Hopefully people can stop lumping them two together as it is a BIG difference! thx
I say the USA is the land of opportunity which gives you the chance to move up the money ladder. As a laborer who is in the top 50% I have worked with people who do not have the abbility to move up the ladder. I feel as an American if you do make it to the higher percentages you should pay a higher % and support the system that gives you that opportunity, and be a true american!
America thanks you for wanting to pay more taxes! Cheers
Are you saying this from experience or conjecture? If from conjecture, how long do you think it will take for you to get to the top 1%?
Good point. When people think ultra-rich, they are thinking the top 0.1% not top 1%!
The top 1% are everywhere, which is interesting… since there’s only 1% of them. Hmmmmm.
I’m mindnful of not complaining or taking my wonderful life for granted. Now I feel even better looking at those stats! Jean Chatzky mentioned in a recent book not to compare ourselves with those doing better than us, but with those worse off. You’ll feel much better. Education is a key driver of higher income.
Wow, had no idea Qatar and Luxembourg were that high. It’s fascinating to see how we compare to the other 9 countries, and also how the top 1% of taxpayers in the US pay 38% of the total.
oh yeah and that picture of Obama is hilarious. :)
I think your blog gets several thousand hits Sam, so you must have at least a dozen readers / commenters in the top 1%. Can you post the stats for the top 0.5%, 0.1%, 0.01% to give us yet another target to shoot for?
-Mike
I kinda like the idea of the top 1% paying more these days. With the recession and the media doing the rounds about “wealth” I think some of these higher earners can afford to pump back a bit more of their wealth into the nation’s economy.
I definitely feel lucky to be living in America. I was surprised the Singapore was ranked in the top ten. I didn’t know they were that wealthy.
Maximum tax rate in Singapore is like 22%, no property taxes as well. Consequently, housing prices are just insane. A small detached house is $5 million SGD or $3.75M USD… makes California housing look cheap by comparison.
This is such a brilliant comment! Love this “Raising taxes on the wealthy ultimately does very little. Raise their taxes, and they will raise your rent. Raise their taxes, and your Big Mac will cost more. The costs will always shift from those that have and produce to those that need and spend.”
You try and screw “the rich”, they will end up screwing all of you by passing all the costs down.
Does that mean that no matter how high they raise their prices (tax increase or not) that
we have to buy it? Or will we be able to buy it with our stagnant real wages the last
20 yrs.? No. I don’t think so. They already know how much they can hike prices before
they start losing customers. And that’s what they fix their prices at. Tax or no Tax. In
fact they’re always trying to lower prices to compete for market share. So raising prices
is the last thing they will do. They will more likely try to cut costs if they can, or accept
the lower markup, lest they lose any more money (customers) by hiking prices. You
morons think the middle class survive via the rich. But the opposite is true. They need
us more than we need them. Wake up! When this country was born the people were
mostly self sufficient. There were no rich people or big corporations. People grew
their own food, and raised livestock, wove their own fabric, made their own clothes,
built their own cabins from the trees that were on the land they staked their claim to
and traded their products if they needed something they couldn’t produce themselves.
with someone who did produce them. (blacksmith, cattle rancher, horse rancher etc.)
Let them raise their prices. We will then hold out for more pay or not make their
products for them or run their businesses for them. Oh yeah that’s right you pubes
don’t believe in unions. Just servitude. You are too spineless to stand up to crooks for
yourselves or your wives and kids. Get off your knees and stand up for solidarity like
the greatest generation before us did and fought for the middle class. Which built this
economy not the swindlers and crooked business owners. Divided we fall and that’s
just what the crooks and swindlers in business have gotten fools like you to do. And
that’s the way it’s been going since Ray Gun and other pubes got in and started busting union wages and convincing the middle class morons that if we didn’t let them, they would
fire us all and hire other morons who would work for less than us. Which they did ,
because their is always a clueless moron who can’t figure out that by just worrying
about his own worthless hide he actually hurts his future wealth and that of the
middle class and the growth of our economy. The race to the bottom continues.
I was struck by what was not said. Based on the AGI column it looks like the top 1% makes about 20% of income and pays about 38% in income taxes. So they pay about twice what they would in a non-progressive income tax.
While the bottom 50% make about 12% of income and pay under 3% of income tax. While the payroll taxes are essentially regressive, ending at about 106,000, meaning the lower income, the ones you refer to as paying no taxes, shoulder a larger proportion of that tax. This group, 50x the size of the 1% group, is especially vulnerable to economic hiccups and lack any sort of nest egg to protect against unemployment or medical bills.
The question is if you increase their taxes would you recoup the cost in the increase in social programs, when more of them become homeless or need to turn to government funded emergency rooms for medical care? That $500 dollars a year is significant to many people in this category.
The wealthier on the on the hand whether we mean the ultra wealthy or even people like me (flirting with the top 10% in moderate city, Washington DC) have the resources to absorb increased taxes much more easily.
To be clear, given the deficit and the two wars we haven’t paid for, I think people in my situation should pay more, so I’m not just advocating taxing other people. I’m prepared to do my part and accept that pain. Engaging in two wars without increasing government income in ludicrous.
The people of America thank you for contributing more! You can send extra payments to the IRS directly, but will you though?
It’s ironic that those who pay the least receive the most benefit from those taxes that were collected (including me)…
I’m not rich, but I don’t think it’s fair to have a progressive tax system. The only difference between this for of discrimination and others forms is that there is no perceived victim by lower wage earners because those that are rich are rich… IMHO, by fairness and logic, it’s still wrong.
Income shouldn’t be the only determining factor of how much we pay in taxes. It should also be determined by a persons ability to pay or wealth . Two people can have the same income but if one has no other assets like stocks, bonds, trusts, insurance policies, owned real estate etc. He can not pay his taxes if he gets a costly illness or interruption of income, as easily as the person who does have these other assets, as a safety net. So their should also be a small wealth tax added for the rich. (people making above 250,000). Based on how much more than 250k they make. This would also help alleviate the extreme inequality in wealth in this country which is worse than all of the western European countries. Inequality hurts economies because huge numbers of people can not acquire a decent education and good paying jobs. It’s is a huge loss of human capital, the most important capital of any economy. Lets not make more welfare states like Mississippi, Alabama, and so many other Republican states down south with their low taxes and lousy wages. And lousy education and healthcare. Cut waste by all means but don’t cut investment in our future growth and prosperity.
Finally, it is fair for the wealthy to pay more not only because of their greater ability to pay, but because they benefit much more from all this country has to offer . The business man benefits much more from economic infrastructure such as highways, railways, airports, air traffic control and navigation satellites, Harbors, shipping lanes and navigable waterways, locks and dams, power grids, public education, and protection of his great wealth through police and fire protection, than the private citizen does. Just to name a few. This country once had much higher taxes especially the wealthy, than it does today. And it grew much faster with less inequality than it has in the last 20 years. In fact it grew faster then and the middle class was much larger and prosperous then than any time in U.S. history. We’ve been going backwards as we all know and it isn’t because the rich haven’t been making any profits. We’re now in the second guilded age of inequality. Which ended with the great depression.
I agree income shouldn’t be the only factor. However, I do believe everybody who makes an income should pay some federal income taxes so we all are contributing in this way. It can be only $500 a YEAR in taxes, 50 million non payers who do that would raise $25 billion for the US. Not massive, but that goes a long way to fund various educational endeavors.
I think that everybody should pay something in taxes too. If not, then we live in a welfare state and we all know that such a system eventually fails, especially for the next generation. And for such a system to work it need to be fair. Why should I but my butt only to have it distributed by a tax system that’s unfair when I’m in retirement. What incentive do I have to bust my butt if all my income accumulated and saved goes to some grasshoper (from the grasshoper and the ants story) that just partied?
Because we are heading towards Socialism and should accept it as a way of living for the next 5.5 years no?
“which once again shows that 40-45% of American income earners pay zero taxes.”
Zero INCOME taxes. There is still sales tax (highly regressive, since rich people save more money or reinvest) and property tax (which you pay via rent if you have a landlord). If you are living paycheck to paycheck on 22,000/year, you could still be paying (in WA, with no income tax but quite a sales tax) 9% of your income on taxes.
“It’s ironic that those who pay the least receive the most benefit…”
Additionally, as a high earner, I benefit more from police protection of my property than a low earner does – mostly because I have more property.
Additionally, I see a huge unmeasurable benefit from giving the low earners a tax break, which makes them less likely to turn to illegal activities that could make my life less safe.
There’s a BIG difference between “fair” and “wise”. Taxing the rich a bit more to avoid the poor turning towards more crime or starting a revolution is wise. Food stamps are wise (they stimulate the economy much more than they cost). Free education is wise. We live in a country with an ok but not great balance of fair and wise.
Lastly, it is much much easier to build wealth when one earns more – you don’t have to live paychcek to paycheck and it’s easier to get savings.
-top 5%
Also another thing they conveniently forget to mention is that taxes should be based more on ability to pay (wealth) than just on income. And the top 20% control 93% of the wealth. The bottom 80% control only 7% of the wealth. As of 1998. It’s probably even more imbalanced now after Dumbya.
True – here’s a kind of up to date set of infographics.
It is much easier to save on 500k/year than 50k/year. So every year instead of saving (say) 10k, you save 200k. Even though you earn ‘only’ 10 times as much, you’re able to easily save 20 times as much.
Your after tax income on 500k is about 330k if you are a normal W2 tax payer. You’re probably living in an expensive area to earn that type of income. Saving 200k is doable, but it is certainly not easy if you have any dependents.
Should t we encourage the person making 50k to develop skills and try and earn more in America? One can start a blog and work 30 hrs a week on it for two years and make 50k for example!
You have stated that people in the bottom 50% (making less than 33K) are not paying their fair share in paying only 2.7% of our total tax revenue). Now you state that it would not be easy for someone making 500K to save 200K per year. According to my calculations, their after-federal tax would be more like 380K (based on your figures, 23+% average effective tax rate). 380K – 200K still leaves you 180K for the rest of your expenses. I agree you couldn’t buy everything you wanted, but it is very doable, and much easier than someone making < 33K to pay an extra $43/month in federal taxes.
So you’re asking people who make 500k to also save 55% of their after tax income? The average US savings rate I’d around 0-5%. You need to put things in perspective.
Unfortunately the charts I linked to aren’t apples to apples as far as the top 1% – but the top 20% of earners (top quintile) earn 55% of the income.
They have ~93% of the wealth.
Someone’s saving some money here. The putting into perspective is done.
It is easier to accumulate wealth with higher earnings, because the minimal cost of living does not change. Perhaps some people without good financial decision-making skills manage to not accumulate wealth and spend all of their money.
I am not against everyone paying their dollar to the government, but I am also not against higher taxes for high earners.
Why don’t people just make more money? In America, nothing is stopping them from increasing their income. They can start a blog and several years later make 50k no problem.
Sam – I am not ASKING you to save 55% of your after-tax income. I’m just saying if you have 380K in after-tax income, it should be pretty darn easy to save 200K. If not, how would you expect the average person to save anything at all? With your 180K of after-tax income you are STILL in the top 5% of earners BEFORE taxes! The average person only earns about 33K (according to your chart). All I’m saying is you could easily save 200K if you just tried a little harder.
Jenna, unless you make 500k, you had no idea whether it is easy, or how you will feel regarding the progressive tax structure we have.
You should just be happy and offer to pay more taxes to help out by sending more in to the IRS. We can’t have a proper debate because you’re not there. Sorry, but it’s just the truth and I know you realize it. But, I really do enjoy debating with people who have just speculate and have no idea :)
You’re right. I don’t make 500K, so I don’t understand how hard it is for those who do to save money. But I know YOU realize that YOU don’t make 33K (nor do I), so we don’t really know how hard it is for them to just pay the necessities. However, I, being closer to that than you are, can understand it better than you. So, I guess no one can have a proper debate because everyone comes from a different place.
BTW….. i just found out there are apparently people in ALL income levels, including the top .1% (yes, I meant that – .1%) that pay no taxes!!! They call them HINTs (High Income No Taxes).
Jenna, that’s where you are wrong again. Nobody just wakes up one day and makes 500K. They work towards that figure over their careers. I know what it’s like making 16K/year, 30k/year, 75k/year etc because that’s how I started.
Every 50 year old was 21 years old once. It might be best if you debate someone who also is just speculating.
I follow you Janna. If the bottom 50% of earners are expected to live off less than $33,000 a year then the top 1% should have absolutely no problem saving money. There are a certain number of fixed costs needed in life. A person who earns $500,000 a year I would expect to have good money management and at least a financial planner. The person who earns $500,000 a year can save so much more money than the person earning $33,000 a year. They may have higher fixed costs but that is only through want, not need. If they are unable to save then they are living a lavish lifestyle that will one day become unsustainable.
Statistics can be very deceiving. I think your point about the lower 50% paying $43 per month misses the mark by a mile. Those wage earners are earning an average of $15,355. It’s impossible to exist on that income when you factor in health insurance, food, rent or mortgage payments and all other costs.
Lets take a look at the average income by group:
1% $12.07 Million
5% $418,218
10% $275,540
25% $162,280
50% $105,060
If the top 1% paid an additional $30,000 per year, that would hardly dent their budget, relatively speaking. That would shave off $50 Billion of the deficit. The $43 per month off the lowest rung of the income ladder would truly represent the difference between driving to work or walking. The point being that statistics can be presented in any manner to support a myriad of points. When you start dissecting the data in an meaningful way
you can clearly start to understand the relative burden imposed on each income group.
Where do you get the averages? I find it hard to believe that the average <50% income is only $15,000/year bc that is minimum wage. You saying half the US population only makes what they can at McDonald's? I have my doubts.
Up to 10% of the population is earning nothing because they are unemployed.
Sam, I’m with you on most things, but, yes, according to figures at irs.gov, the average AGI for those in the bottom 50% was $15,287 in 2007, $15,355 in 2008 and $15,295 in 2009. Essentially flat. After all, as you correctly indicated, it only takes about $33k to enter the top 50%. However, everybody should remember that all this is calculated based on the returns which include single, married filing jointly, etc. Therefore, (here’s the biggie) it includes part-time workers, retirees, college and high-school kids who make a little money, etc. It’s anyone who is required to file, and, no doubt, the bottom 50% has the highest % of people who were not fully employed.
Finally as I pointed out elsewhere, the top 1% saw their average AGI fall by 32.5% from 2007 to 2009. Incomes, especially those in the upper range, fluctuate with the economy.
Why should they have to pay more? Because they have the ability? I don’t understand this reasoning. Listen to Sam. Nothing is stopping you from making more money. Trust me. When you have to write a check to the IRS for $70k after you’ve already paid $40k, you’d be a little pissed too. And it doesn’t take a million dollars to get a tax bill that big.
you miss the point of raising $60,000,000,000 by getting bottom 50% to pay a -mere- 43/month. how about raising $60,000,000,000 by asking the top 1% to pay an extra ~300 a month [3,600/year] ? it wouldn’t even raise the effective rate at that income level!!! this is why a graduated tax [tax according to ability to pay] is fair. flat rates are regressive and hurt the weakest the most.
Do you seriously believe that it’s fair that half of Americans don’t pay federal taxes even though they benefit from te same federal services? What is your effective tax rate?
Dont you believe in equality.
How about because more than half of the people in this country don’t make much.
And they don’t benefit nearly as much from infrastructure and other gov’t services as
the wealthy corporations do.
Yes, it is fair that the bottom 50% do not pay income taxes because they are struggling to get by. The bottom 50% in this country control only 2.5% of the wealth. And the bottom 50% are still paying taxes, such as sales, excise, property, state and local, Social Security, and Medicare–taxes that are extremely regressive because lower income people pay a higher percentage of their incomes in those taxes than higher income people do. The progressive nature of the federal income tax is supposed to compensate somewhat for the regressive nature of those other taxes, but it does not compensate completely for it. That’s why Warren Buffet’s cleaning lady and secretary pay higher total tax rates than he does.
What is NOT fair is that those who are benefiting most from our plutonomy and who can afford to pay more in taxes are paying lower rates than they have since the 1920s. And those lower rates are NOT resulting in more job creation. If they were, we would have had an increase in job creation since the Bush tax cuts went into effect. Instead we have had a decrease. The rich are simply NOT paying anywhere near their fair share for a system that only they have benefited from for most of the last thirty years–since Reagan instituted the failed “trickle down” policy of lower taxes and less regulation that led eventually to the financial crisis.
Even with the lower earners paying no federal income tax, we have the greatest wealth inequality in the industrialized world. Our ranking is even worse than that of some third-world countries. We have also moved in the last thirty years from a high score in social mobility to a low score–lower than Canada and most of the European nations. The gap between the rich and the rest has become a national disgrace–along with our crumbling infrastructure and lack of universal access to high quality health care. All of these problems can be solved, but not as long as the GOP makes keeping taxes low for its wealthy overlords its highest priority and insists on just doubling down on the failed policies (low taxes for the wealthy and deregulation) of the last thirty years.
We need to put unemployed construction workers back to work repairing and building schools, highways, bridges, pipelines, the electric grid, the broadband system, etc. We need research and development of green energy and other innovative technologies. We need world-class public education to prepare the workers of tomorrow. However, we will never get anything this country really needs if people keep putting backward Tea Party Republicans in office. All we will get is disastrous cuts to Medicare, Medicaid, Social Security, and all programs that help the poor and the middle class–and more welfare for the rich and corporations in the form of subsidies, credits, tax loopholes, and low tax rates. As long as money is able to play the leading role in our politics, as it does now, yahoos who do not respect workers, scientific knowledge, or the egalitarian principles that made this country great in the past will continue to win enough elections to stop our problems from being solved.
But the rich weren’t alive in 1920 to pay those income tax levels. All they know is what they know over their working lives, which can’t be much more than 40 years.
According to the chart by the IRS in this post, the bottom 50%’s group share of AGI is 12.75%. Where do you get 2.5%?
Sam, I don’t understand your point about the rich not being alive in 1920. What Sandra is saying is that the rich historically have paid much higher rates than they are currently paying. So, if all they know is the rates they have been paying over the past 40 years, they should be happy to now be paying such a relatively low rate.
The bottom 50% make 12.75% of the income, but have only 2.5% of the wealth (net worth). (With these low tax rates for the rich, the rich get richer…) The top 1% controls 35% of the wealth. The top 10% controls over 70%. And over the past few years as wealth has declined, it has declined at a greater rate for the bottom groups.
In 1980 CEOs made 42 times the pay of the average worker. The top federal marginal tax rate was 70%. in 2010 CEOs made 343 times as much as the average worker. The top marginal tax rate 35%. And yet you continue to say we are “heading towards socialism”… Where do you get that?
It’s pretty simple. Because 1) America taxes income, not wealth, and 2) the rich weren’t alive in 1920 so therefore they never knew what it was like paying that level. It’s like saying people now should all go back to writing letters sent by Zeppelins. It’s irrelevant. What we know is what we know in our working lifetimes.
Can you come back and figure out what the income levels were for those top marginal tax rates then? That would be an interesting discussion. The policies put in place moves us back towards Socialism, and like I’ve said before, I’m fine with that and see a brighter future as we redistribute the wealth. It would just be better that we do it after I retire so I can join you and get that wealth redistributed to us!
Sam,
1.) you asked where the figure 2.5% came from. I was just explaining that.
2.) The top marginal tax rate was 70% in 1980. I assume you were alive in 1980. You may not have been working, but many of the rich were working in 1980 and know what it was like paying that level.
3.) History is irrelevant??? Certainly not for your fellow tea partiers who love to talk about the Founding Fathers.
3.) How are you “joining” me??? What wealth is being redistributed to me???
At 70% in 1980, do you know what the income level is to get charged that and what the income equivalent is today?
I always laugh when I hear people claim, with outrage, that the top 1% of earners pay 38%, 50%, 67% or whatever% of all taxes paid by everyone. As everyone knows, statistics can be very misleading, often intentionally by the person citing them. But sometimes, the person citing them may not even understand them. Imagine a society in which there are a hundred people, and one person earns 20 million dollars. The other 99 people earns zero dollars. Flat tax rate of .000005%. The one person pays 1 dollar in taxes. The rest of the people pays zero dollars in taxes. And the top 1% of the earners is paying 100% of the taxes! And the bottom 99% pay 0% of all taxes! My point is that when you claim the top 1% pays whatever, it means absolutely nothing without looking at the total picture.
So you don’t believe the stats from the IRS?
I believe the reports when i file my taxes hoe much money I’m paying in taxes, bc it’s not staying with me!
What is your effective tax rate?
I do believe the stats from the IRS. Thats’s not the point. You state that the top 1% of earners pay 38% of the total taxes. So what??? Without looking at how much people at the top, middle, and bottom earn (and everything in between), it means nothing. What % of the total tax bill should they pay? Should they pay 1% of the total taxes? That’s how much they would pay if every person paid an identical dollar amount of taxes, regardless of income. (eg. if every person paid $1000 in taxes). Is that what you think would be fair?
In answer to your question – my federal effective tax rate last year was 12.05% (checking my 2010 Federal tax return records). What is yours?
Are you missing the point of the article, which is simply to highlight how much people make? 45% of income earning Americans pay no taxes. Don’t you think that’s wrong?
The reason why you are don’t understand is simply because you are paying such a low rate. Of course you don’t really care, because you’re paying 12% and earning under 60K a year most likely based on the charts. I hope you’re not the type who votes for others to pay more taxes, without paying more yourself.
When you get to the highest effective tax rates in the chart, pls let me know, so we can have a balanced argument. Seriously, I don’t understand your rant, nor can I take you seriously if you have never experienced more than a couple marginal tax brackets. I’m not saying we should all pay the same absolute amount, I’m saying we should all have SKIN IN THE GAME and at least pay a similar percentage i.e. flat tax.
Then you factor in the flat-tax factor of taxing on purchases. THAT is where the lower half pays a higher percentage of their income. When counting what people pay to their governments, forgetting that when you sock money into savings, etc you don’t pay additional taxes because you don’t spend it. How much food, household goods, entertainment expense, etc is purchased kind of flattens out as income gets higher, while savings grows. Sure, it’s a State/Local tax … but without it, a larger burden would be put onto income taxes, even at the federal level as governments attempt to balance things out between each other. Practically all of the AFTER income tax income of the bottom 50% is taxed. A much lower percentage of the top 5%’s actual income (not AGI because that isn’t actually a good representation of income with all the loopholes available as an individual’s income gets higher) actually gets hit with those taxes. Here the tax rate is at about 10% between State and Local. On a $33,000 income, that’s $3,000 give or take. How much of your income do you actually spend? What’s the absolute% of taxes paid on your net income (never mind AGI)? Things even out a bit better when you step back and look at the whole picture rather than a single tax. Singling out the Federal government when the states depend on it, and the local depend on the state … and all go in the opposite direction as well, creates a false image.
Having lived at anywhere between $6,000 income and $35,000 income all my life so far, I can say that taxing an extra $43 is $10 per week. That’s 2 gallons of milk my kids don’t drink, or medicine I can’t buy, or the trip to school if (God forbid) my daughter has another seizure there. For the top $50% it might be a movie they don’t watch or a dinner they don’t eat at a restaurant. I don’t GO to restaurants. I don’t GO to the movies. My kids do the free stuff … local parks, local community center pools, play with the neighborhood kids. We already consolidate trips to town. I pay $20.00 every 3 months for an emergency cell phone that has no frills. My kids wear their clothes til they’re worn out. Then we buy “new” ones at Goodwill. Yep. Taxing people more at lower incomes actually discourages productivity and cuts down on what actually powers the economy … the fact that the bottom half SPENDS all their income, moving that income back into the economy to be earned by someone else and spent again kind of makes decreasing their income counter-intuitive to solving economic problems. It doesn’t matter how much is produced if you don’t have consumers to buy. One person keeping an extra 30,000 on top of the 300,000 they is going to spend a tiny portion of it if any. 1,000 people with an extra 30 on top of the 30,000 they have are going to spend it, creating more income for businesses, and driving the economy further. If that income is regular, it’s a more stable repair. Which should be the goal of the governments in question, and the purpose of balancing taxes.
I apologize for any incoherency or jumps in thought. I’ve been going back and forth making supper :)
There was a typo in my last post. Correction#2: I actually fell somewhere between the top 10% and the top 25% last year. My AGI was about 93K. In 2009, my AGI was about 110K, which probably put me in the top 10% for that year. In 2009, my effective federal tax rate was 13.51%. You will see that the top 10% pays an average of 18%, which probably ranges from about 12% for the lower end of the spectrum to about 24% at the higher end. As you will see in one of my prior posts, I would be in favor of raising taxes on the higher 50% rather than on the lower 50% because if they earn 380K, and yet you are whining about having to pay a little more and want to get the money from people making one tenth of what you make.
Also, what I said previously applies to you apparently. You assume I earned under 60K “based on the charts”. I’m not sure where you got that from the chart, but your assumption was incorrect.
I don’t know what is going on with my post… Change that sentence to: “I would be in favor of raising taxes on the higher 50% rather than on the lower 50% because if they earn less than 33K, they can hardly afford to pay more taxes, whereas I, earning 90-110K can affford to pay a little more. And YOU, assuming you are in the top 1%, earning more than 380K, and yet you are whining about having to pay a little more and want to get the money from people making one tenth what you make.”
BTW – I thnk I figured out the technical difficulties in my post. I used the symbols for “less than” and “greater than”, and for some reason, it removed all the words between those symbols!
I actually fell somewhere between the top 10% and the top 25% last year. My AGI was about 93K. In 2009, my AGI was about 110K, which probably put me in or close tp the top 10% for that year. In 2009, my effective federal tax rate was 13.51%. You will see that the top 10% pays an average of 18.71%, which probably ranges from about 12% for the lower end of the spectrum to about 24% at the higher end. As you will see in one of my prior posts, I would be in favor of raising taxes on the higher 50% rather than on the lower 50% because if they earn less than 33K, they can hardly afford to pay more taxes. On the other hand, I, earning 90-110K, can afford to pay a little more. And YOU, assuming you are in the tp[ 1%, earn move than 380K, and yet you are whining about having to pay a little more and want the gpverment to get the money from people making one tenth of what you make.
Also, what I said previously applies to you apparently. You assume I earned under 60K “based on the charts”. I’m not sure where you got that from the chart, but your assumption was incorrect.
The people in the top 1% average AGI is over a million dollars ($1,204,247). At the bottom end of the top 1%, people are earning 380K. At the top – unlimited.
The people in the bottom 50% average AGI is $15,354. At the bottom end of the bottom 50%, people earn 0. At the top – $33,048. Presumably, this is where the people that pay no taxes fall.
You state ” 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. ” I still maintain, as I said before, if you need to tax either the bottom 50% or the top 50% an extra $43 per month, tax the top 50%, which includes me. I could live with it, and I am guessing you could too. But if I were making 15K per year, it would be a real hardship.
Yes, I suggest people in the bottom 50% still pay Federal Taxes to have skin in the game. Even if they paid just $50 a month, that would be good and raise $50-60 billion in revenue a year.
90-110K is a fine salary, it’s just not close to getting to the effective absolute and percentage tax rates of the highest tax bracket. Trust me when I say if you knew how it felt, you’d believe more in equality and having everyone pitch in. When I was earning just 15K/year at McDonald’s, I felt it my duty to pay taxes and pitch in. I didn’t want anybody to treat me special. I wanted an opportunity to achieve.
You need to do some more research. The lower 50% does not pay 0 in taxes. The cut off for not paying taxes is $5000.00. If you make more than that (AGI) you have to pay taxes. Even people working at McDonalds have to pay income tax. Yes they may get some back at the end of the year when they file but not until then. I average about 100k/ year. Yes I see a need to raise taxes on the upper 50%. I may not like it but it is needed. You spouted off about how a person makin minimum wage could get a second job to raise their income. Man you are stupid. Now they are working two full time jobs. I would like to see you work two full time jobs. I have done it and it sucks. No time for family or anything. Just work to make ends meet. Everyone in the top 50% forget that thier quality of life is so much better than the lower 50%.
I work two jobs and have time for friends, family, sports. Your point?
I love how people who make 100K start getting all righteous. Do me a favor, and send the IRS more of your money in taxes and help the country out. If you don’t, then you’re just wasting people’s time.
I may be wrong, but I think you’re young and haven’t seen as much as you think you have. Be happy you are doing well enough to pay the taxes that you do. (btw – what is your AGI and your effective tax rate?) When you were earning 15K at McDonald’s, were you on your own supporting a family? Not that I wish this on you because I definitely don’t… But to parody you, when things change and you find yourself a single mom or dad struggling to raise your family on 20K a year, pls let me know and we can have a balanced argument. Trust me when I say if you knew how it felt, you would be more compassionate.
Do you have any idea how many hard-working men and women have lost their jobs by decisions made by people in the top 1% to make the companies they work for “lean and mean” by outsourcing their jobs to other countries, so that they can make their multi-million dollar bonuses and move on?
Your condescending attitude towards me leads me to believe you effectively dismis 90% of the population. .. Or maybe 99%… Regardless of what you think, you and the rest of the top 1% are not the only ones with “skin in the game”.
Believe me, I have seen enough to know that if I were making 380K or 20 million dollars, I would be happy to pay an effective tax rate of 25%. It would still leave me with plenty left over.
Just out of curiosity, what would you think about having EVERYONE pay an additional $25 per month, instead of trying to get $50 only from the bottom 50%? You would raise the same $50-60 billion (your figures – I didn’t check them) and put everyone’s skin in the game?
Why am I not compassionate for fighting for equality?
You do realize there are plenty people who don’t make much and still pay because they believe it’s an honor to help everyone right? We all need to pitch in to helP others and I’m disturbed why you don’t believe in helping our economy and our brothers and sisters out. We are in such a hole.
Just to clarify – this is data for tax year 2008 and the moniker “individual” tax return includes single as well as couples, and there is no distinguishing the two as the stats are commingled. Note that many in the bottom are retirees, part-time workers, children that have income from trusts or other sources usually from mom and dad, and all the other low income earners. It is tough to use these stats alone to determine policy related to taxes – there are many more layers and complexities.
I want the country to strike a balance. Higher earners should shoulder more of the burden, but lower income earners should not pay little to nothing. Especially those who have little income out of circumstance (trust fund kid) rather than necessity (minimum wage earner supporting a family).
I am in the top category by earnings and think we need to do something that increases the burden across the board. Simply raising taxes on the high earners rings unfair, although a higher burden on the upper income earners may be palatable.
“I remember making $550 a month just working at McDonald’s for $3.50/hour, 20 years ago. With wages 3X higher now, I’d be raking in a nice $$1,650 a month or $20,000 a year! Tack on another side job that pays $1,200 a month and I’m in the Top 50%. Anybody can do it!”
Only someone completely out of touch with reality would make such a statement. You go out there and work 70 hours a week and see how much you manage to save, and god help you if you get sick.
That’s your problem. You think 70 hours a week is a lot. When you realize 70 hours a week is COMMON, then you will realize why making in the top 50% is easy if you put in the effort. I work about 60 hours a week during my day job and 20-25 hours a week online, and it’s been like this for 2 years. I’m not complaining at all. That’s standard to me.
What are you doing?
Sam – you are probably single and love your job, and the 20-25 hours a week you spend online on your website is arguably “working”. In that case, if that’s what you want to do, it may be healthy FOR YOU. However, when you advise others that it is “easy” to work at McDonald’s 70 hours a week, I agree with Scott that you are showing that you are out of touch with reality. Most McDonald’s workers, I would venture to say, do not LOVE their job and may have families they need or want to spend time with. And Sam, if you ever do get married and have a family, please cut back on your work hours for the sake of your marriage and your kids. (you know, that whole work/life balance thing…)
I didn’t say it was easy to work at McDonald’s. I said it is easy to be in the upper 50% if you want to be.
Share with us more of your personal story.
@Sam – I have never worked at McDonald’s, but I worked in a local fast food restaurant in college. I worked very hard there. I am currently working 40 hours a week at a professional job that I like, but I have at times worked 50 hours or more, either at one job or two jobs. I recently quit my second job because I realized what I was making was less than what those hours in my life were worth. I am a firm non-believer in people working 60-70 hours a week unless it is something you truly enjoy, or if you have your own business, in which case it’s probably a necessity. Or if you are doing it on a short-term basis like a big project at work coming to a head, or to save up for something big. But if you are working for someone else and regularly working 60-70 hours a week in order to get ahead, you may end up in several years wondering where your life went. If your income is high enough, I would consider that you have been compensated for all your hours (even though it may or may not be worth what you are giving up), but it really hurts to see people working their butts off for a company who’s really just taking advantage of them. The sad thing is that in this economy, companies can find people who will work those hours without additional compensation in order to have/keep a job. Free labor for the company! But nothing is free… somebody always pays… and you know who it is.
I think the debated topic is an odd one. Whether the top 1 percent ot the lower 50 pecent comes up with an additional 60 billion dollars of tax money, it is clear to see by recent events that it would amount to 60 billion dollars wasted by our elected officials. Let them cut wasteful spending instead of talking about tax increases. Any idiot can decide increased tax will solve a financial problem. In disclosure, I make 140k. I pay enough taxes and do not want to pay anymore. If there was any inkling of hope that increased taxes wouldn’t amount to more wasteful spending, then I would be open to the idea.
NOBODY is proposing someone earning only $140k should pay ONE DIME MORE in taxes (unless you are using tax loopholes and earning millions but using those loopholes, deductions or tax credits to lower your AGI to $140k).
Dems are just proposing that tax rates be raised only on individuals making over $200k and families making over $250k (well actually, it is really only letting Bush tax cuts expire by 1/1/13). This would return those higher income folks to Clinton tax rates. Heck, I only make $60k and my hubby makes $40k and I would be glad to have our tax rates raised back to Clinton levels if we could erase W.Bush economic meltdown ! !
You can definitely send the IRS more tax money if you are really wishing it! Thanks for supporting America!
Wow, the more I read this stuff, the more I realize how much life experience you still need. When I was in my 20s, I regularly worked 60 hours for YEARS. I could never have done it as a mother and wife. Anthropologists have stated that a human being is meant to work 20 hours per week (hunter/gather lifestyle). I will add that it probably takes a toll on you physically as well as mentally and would not doubt that it is responsible for divorce and
obesity (cortisol, irregular meals, etc). Maybe that’s why Europeans are a bit healthier,?
Please Samuri, have an open mind. You can still be stubborn.
I now work part time freelance, attend a state university and care for my husband, child and home (as well as our finances). We are in the 2% and I consider myself blessed everyday.
It was much easier when I did not have a child (school events, his homework, lessons, etc.).
I always like to tell my kids (the ones, if I believed statistics, I couldn’t afford and thus should not have had): “This just in: LIFE NOT FAIR. More at 11:00.”
I have worked hard all my life and made my own success. I have done well in my chosen field and have achieved a compensation level in the area of the top 3% according to the statistics provided here. As such I pay what I will call my share of taxes. The problems I have is with those who, like many construction and other small businesses, do business off the books to keep from paying taxes, and those who are simply too damn lazy to work period and choose to milk the system, lay around watching TV and do prescription drugs while complaining how things just aren’t fair. F them. You make your own successes in this country, your own failures as well. If more people worked for a living we would have much more in the top 50% paying their share.
@Jerry – I totally agree with you on having a problem with those who do business off the books to avoid taxes. Also, I have a problem with a company like GE paying no taxes. Although I’m sure there are people out there who are too lazy to work, right now there are many, many people who would love to work if there were any jobs. Not sure what you mean “we would have much more in the top 50% paying their share”. We will always have the same number of people in the top 50% if the population numbers stay the same. If there were more jobs and more higher-paying jobs available, we might see more people at all levels, including the bottom 50%, earning more and therefore, paying more taxes.
The best part of your comment is “We make our own successes in this country.” Heck, you can even start a blog in your underwear and make over $50,000 a year in a couple years. Seriously, there is so much opportunity in America!
Tell that to a kid who can’t even afford to go to school.
I was just googling some statistics and came across this article so I’m not sure if anyone is going to even read this but you made some points that I have a real problem with.
“You can also see that the Top 50% of tax payers pay practically all of the nation’s taxes (97.30%), which once again shows that 40-45% of American income earners pay zero taxes.”
“Ok, so even though the highest income earners pay a higher effective tax rate and a mug large absolute tax amount, you still want to tax them more even though half the working American population pays nothing? ”
“Are you missing the point of the article, which is simply to highlight how much people make? 45% of income earning Americans pay no taxes. Don’t you think that’s wrong?”
No one disagreed with you on these points which Is unfortunate. You keep saying that half of the population pays no taxes which is completely false. It’s true that about half don’t pay “income taxes”. Fed income taxes are just one of the many taxes everyone pays.
I won’t even get into state/local/excise taxes that everyone pays and I’ll stick to fed taxes. You seem to ignore that the fed takes in as much revenue from FICA as they do from income taxes. FICA is paid by everyone at an equal % rate unless you make over 108k (number might be slightly off but it’s pretty close). After that cutoff rate you’re effectively paying a lower percentage of your income. Someone making $1 mil pays the same as someone making $100k. That’s called a regressive tax but we all seem to ignore that about half of the feds tax revenues come from a regressive tax.
If you look at real effective tax rates taking into account all taxes paid and not just cherry picking one tax out of many you find that that people making roughly 80-100k pay the highest tax rates. In other words the tax system is progressive for a while (up to 100kish) and then it’s flat/regressive.
Sorry to rant…I just hate this 50% argument….One last point, if the tax code punished the wealthy as much as people think the wealth gap in this country wouldn’t be widening. In fact if that idea was right it would be narrowing or remaining stable.
Ummm, the people who pay Federal income tax also pay state, sales, FICA, employment tax too. Whats your point? Are you saying just because you pay state taxes and stuff it’s OK not to pay Federal Taxes and vote for the government to raise Federal taxes on people who already pay all the taxes? huh?
Why do you not believe in equality and have everyone pay some Federal Income taxes?
They don’t make enough. If you make them pay taxes they can’t afford, They’ll just
call it quits and go on welfare and you can then pay Uncle Sam for their entire income
I’m not really sure how you expect me or anyone to answer a question about “equality” if you don’t define it. It means different things to different people. For some people it means you divide the revenue needed for a balanced budget by the number people able to work and everyone pays the exact same $$$ amount. For some people it means a flat tax %. For some it means that if your income bracket earns 20% of the total income you should be responsible for 20% of taxes. Those arn’t all of the definitions people have of course and they are all very different but they all have some “equality” in them. Except for my last sentence in my original post about class mobility nothing else was about what’s fair and what’s not. If you want to know why I agree/disagree with your definition of “equality” define it for me and I’ll be happy to.
As to your first question about what my point was. You picked virtually the only progressive tax that people pay in the country and used the statistics from that one tax as a starting point for a debate. My point was that you picked one tax out of many (the one that most agrees with your point of view) and act as if every tax works exactly the same way. Then despite the fact that you admit income tax isn’t the only federal tax and everyone pays them, (not to mention you completely ignore the fact that they’re regressive) in the same sentence you again imply that that 50% of people pay for all federal taxes.
“Are you saying just because you pay state taxes and stuff it’s OK not to pay Federal Taxes and vote for the government to raise Federal taxes on people who already pay all the taxes? huh?”
You and a lot of people seem to be under the impression that there has been some sort of assault on the top tax brackets in this country. The last time taxes on the top tax brackets were really raised? the nineties. Before that? before I was born. My entire life besides one small increase under Clinton tax rates have been falling at the top tax brackets while effective rates for the middle class have gone up. I fall slightly below the top 25% in the income brackets you posted. While that doesn’t put me in the group that’s seen their effective tax rate go up the most in the last 30 years, I’m right below them.
If you want to have a real debate about tax policy that’s great but don’t start it with cherry picked statistics. No one likes people that use welfare money for drugs, sell their food stamps or that work off the books, drive a Cadillac and receive aid. No one wants to pay for a women that has 10 kids before she’s 30 with no way to pay for them. That stuff makes everyone mad and the vast majority of people (including democrats) that vote don’t like those people either.
It doesn’t matter if tax rates were higher in the 80s or 90s. Most of us weren’t making full-time incomes then. What matters is now.
Equality is when everyone contributes something to help the common cause. To work together to better the greater whole.
Is there reason why you are against everyone paying Federal Taxes because you currently aren’t paying? I’d love to understand your disposition more.
Tx
@Sam – it’s hard to get worked up over your cry for “equality” when you realize the reason the top 50% pay 97% of the federal taxes is that they make 87% of the income! I still find it strange that you are so fixated on the lowest income earners paying more taxes, especially in view of how much money you say you make!
How much money do I make? Most of us started with nothing and had to work for it.
Until we can empower people with education and belief they can achieve, we will find it difficult to achieve equality. The poor don’t want a handout. The poor want an opportunity.
@Sam Let me try this one more time. You are missing the point. The top 50% pay 97% of the federal taxes because we make 87% of the income. That relative tax burden does not seem disproportionate to me. Does it to you?
Of course it does. You just said so in your sentence. If the top 50% earned only 87% of the income, why is the top 50% paying 97%? That 10% should be split by those in the bottom 50%, who benefit from Federal spending as well.
So then nothing but a flat tax is fair to you? In that case, as Jeremy points out, the FICA maximum should be eliminated so that everyone is taxed a flat FICA rate as well.
I love the flat tax. Have a read here and join in on the fun: https://www.financialsamurai.com/2009/10/09/were-idiots-please-tell-us-a-flat-tax-is-not-fair/
then read this as eating one’s own medicine https://www.financialsamurai.com/2009/11/23/tuition-hike-for-the-poor-is-like-a-tax-hike-for-the-rich/
We are actually very lucky in America not only because our median income is the highest in the world but because the chances an average person will make good income is higher compared to many other countries.
Some of these places in the top 10 (like Singapore or Hong Kong) might have a high median income but much of that is controlled by a small percentage of people. I know this is the same everywhere in the world but if you think income inequality is bad in the U.S., you might want to live in a few more places to really see how good we have it over here.
Indeed. We are lucky as heck, so it annoys me when people complain about not earning or having more when all they have to do is try harder.
Tell that to an uneducated poor person working two jobs or more for 8.00 an hour
each and is living from paycheck to paycheck. Are you going to tell him to stop eating
for about 4 years and go to college to get a better job.?
I don’t like the fact that government workers make more then private sector workers and produce less.
I dont know where you get your information, however government workers on average DO NOT make more than there Private sector counterparts. A lawyer for example:
Salary
All graduates
$68,500
Private practice
108,500
Business 69,100
Government 50,000
Academic/judicial clerkships 48,00
What bothers me is not that there is income inequality. It is radio talk show hosts that claim that 50% of the people pay only a small percentage of the total tax bill (2.7% according to this article) without ever revealing that they are only earning 12.75% of all income. Their intention is to get people who don’t think it through outraged by this, when in fact, if they had all the facts they may or may not agree. To me, for the top 87% of income to be taxed 97% of the total tax bill is fine, even though it’s not a flat percentage.
And Sam, what makes you think that “most of us” weren’t making full-time incomes in the 80s and 90s??? Most of us baby-boomers were making full-time incomes in the 70s!!
The chart is from the IRS, so there’s really no intent there, unless the IRS has some intent… which is to broaden the tax collection in America.
I’m not outraged. Heck, if I can pay net 0 federal income taxes, I would too. I just wouldn’t be so mean as to vote to raise taxes on people who already pay taxes when I don’t pay taxes. Don’t you think that’s a little hypocritical and unkind? I would just be merry and tell nobody, and certainly not complain.
Based on the demographics data for readers on this site, 70% of the visitors here are 25-40. If one has worked since the 70s and 80s, it’s rare here as not may are in the 50-70 range. Hence, most of us weren’t making full-time income in the 80s at least. Part-time maybe, not full time.
First of all, the intent I was talking about is from radio talk show hosts like Sean Hannity, not you nor the IRS. It was Sean’s statement that made me google “how much money do the top earners make” and find this article.
Second of all, WHO is voting to raise taxes on people who aleady pay taxes when they don’t pay taxes? Are some congressmen not paying taxes??? Isn’t that who votes on raising taxes?
Third, you certainly CAN pay no income taxes if that’s what you really want. Just lose your job!
“Mean”?? ? “Hypocritical?” “Unkind”?? Seriously? Most people who have lost their jobs are not merrily going along paying no taxes! They would be happy to have a job so they could pay taxes! And a lot of people currently out of work used to have good jobs and paid a lot of taxes. Don’t think that this can’t happen to any one of us.
I’m sure you have worked hard to get to where you are. Be happy for that!! Don’t focus on complaining on how much more taxes you pay than someone who makes one tenth of what you make. It doesn’t become you. Calling those people mean, unkind and hypocritical makes you sound whiny.
Sorry, I should have known you came from Sean Hannity, my bad. You don’t know which party is voting on raising taxes? If not, can’t help you. People vote for congressmen.
Please revisit the title of the post to discover the meaning of the post. I’m just entertaining you bc it’s fun. I’m all for free riding and not paying taxes as you believe. Rich people should pay for my families benefits. I understand it’s increasingly becoming the American way. Therefore, you shouldn’t feel guilty for not paying your fair share.
Although I fall in the top 50% I’d like to make it to the top 25% in the next two years and then the top 5% at least within ten years. I think it’s doable. I think the tax conversation is a sensitive subject but the IRS is basically creating incentive to earn more which supports our capitalist society. And when you think about it, many top earners or net worth individuals give back to the community or charities so they do take the time to redistribute their wealth on their own terms.
Hmmm, based on higher tax rates the more you make, I think the govt and IRS incentivizes people to make only up to around 200-250k/yr and then stop/start evading. 250k still is a good income though of course.
Good luck in your goals!
“Living in San Francisco, it really feels like most are in the top 5% of income earners ($159,619), if not top 1% ($380,354). ”
Really? Even if you live in SF, you only have to walk or drive around a bit to realize this is way far from true.
Are you questioning how I feel? I know the stats don’t bear this out and is not the case, but this is how I feel.
The average starting income package for a 29 year old out of Haas or Stanford MBA is about $130-150,000. What happens when they work after a couple years and are 31? That’s right.
Readers, after looking at these statistics, what jumps out most at you?
I’d have to say, how close the brackets are. I would have guessed you needed a significantly higher income to break the top 10%, let alone the top 5% or 1%. I guess it shows that you can be solidly middle class and still earn more than the vast majority of people in this country. I don’t whether that’s a good thing (not that hard to move up the ranks!) or a bad thing (most people are earning such a low income that with even a modestly high income, you can still out-earn 90+% of the people in our rich country).
Do you feel more lucky or less lucky to be an American and make what you do?
I’ve always felt pretty lucky to be an American, and a modern American, to boot. As a nearsighted, physically out of shape, prone to allergies person, I realize full well that I would have been much worse off in most places in the world and most times throughout history. With few exceptions, I’d probably have died young in most other places and times. That said, particularly seeing as my income as a grad student puts me in that Bottom 50%, I can definitely see room for improvement in my earning. (That’s one reason why I find myself in graduate school, after all.)
Do you think you’ll ever be able to move into the Top 5% or Top 1% of income earners in America?
Eh, maybe. I’m likely to earn around $60k-70k with my graduate degree (assuming I can find a job in my field and work in said field for a while to build up my income), which combined with a hopefully much more robust income from blogging or other side income (to say nothing of Sondra’s income once we are married), might be enough to push me (us) into top 5% territory. Here’s hoping.
(I don’t have much to say about income tax rates and fairness that I haven’t already shared in your article about the Flat Tax or that aren’t shared elsewhere in these comments, so I won’t bother. Well, maybe a little: until we come up with a universally agreed upon definition what is ‘fair’ in the context of taxes, we’re not going to see any agreement between those who think the tax system should be more progressive and those who think it should be flatter. Arguing that the rich (and who are we considering the rich, here? Top 10%, Top 1%, Top 0.01%? And do we look at income, net worth, or some other measure of ‘rich’?) will ‘always pay more than their fair share’, as you do, depends on what we consider ‘fair’. Should they pay more than the ‘average’ earner because America provided them an opportunity to earn more? Should they pay the same proportion as lower earners, so as not to punish them for success? Should we try (as we have) to have a tax system that encourages people to use their money in a particular way, or should we simplify the tax system, even at the cost of, say, decreasing charitable giving and obtaining higher education? I’m pretty sure that even reasonable, well-educated, and compassionate people could disagree on these issues, to say nothing of the dopes who tend to hold elected office…)
I’d say that I feel lucky , though I wouldn’t mind living in Luxembourg!
When you get there, let us know if you still feel the same way. Thx.
the marginal tax rate on my income level is 28%, much higher than the 10% at the lowest level. And I am fine with that, so I think I can understand something Yours is a little higher….33% on what you make between 174K and 379K abd 35%. on the amount you make over 379K. You pay the same taxes on your first 100K as I pay on my 100K.
Another thing to think about….. think about who those people who pay little to no taxes might be…. the rookie NYPD cop with a family…. the soldier deployed in Afghanistan… your grandmother…..
Sam, we don’t all make as much as you, but remember it’s a progressive tax structure. So the marginal tax rate on my income level is 28%, much higher than the 10% at the lowest level. And I am fine with that, so I think I can understand something Yours is a little higher….33% on what you make between 174K and 379K abd 35%. on the amount you make over 379K. You pay the same taxes on your first 100K as I pay on my 100K.
Another thing to think about….. think about who those people who pay little to no taxes might be…. the rookie NYPD cop with a family…. the soldier deployed in Afghanistan… your grandmother…..
The rookie cop will be honored to pay taxes. The soldier should have all he deserves and much much more. Grandmothers want to give back.
Do you see what you are doing though? You are discriminating against people. If we treat people equally, then there would never be any issues.
We’ve been through so much discrimination in America. You’d think you and others would get the point of freedom and equality by now. I suggest you travel the world and see what discrimation does to societies.
Do you really see it as freedom and equality that 50% of the population is earning less than $33,000 a year?! Could you survive on double that? Poverty is a major problem especially as it becomes inter-generational. You tell these people to pick themselves up by their bootstraps but you need to look at their lives of so many people in poverty and low income areas. Growing up without a father and a mother who has to work two jobs at minimum wage so you can keep your house and eat. There is no extra money. If she gets sick serious problems arise. Since these kids have no father and their mothers are always working they grow up without supervision leading to behavior problems. Most drop out or fail high school. Then they have their own children and the cycle gets even worse. Even if they wanted to, they have no role models. They don’t know how a parent should act. They don’t have the knowledge required to do many things including your start a blog and earn $50,000 example. I seriously doubt that your upbringing was anything like that. Most likely you were a upper middle/lower upper class white kid from suburbia whose parents tried to instill him with a good work ethic by making him work during high school. You then went to college and got a good job afterwards.
When was the last time you were actually worried that you wouldn’t have enough money to pay the bills? How much money do you have left over every months that you don’t spend on the essentials (shelter, food, utilities) before luxuries (entertainment, eating out, all luxury goods)?
Tell us your story Matt. Do you make less than 33K a year and grew up without a father and mother?
I’m not worried about paying my $20/month water bill because there is a job opening for $8.50 an hour around the corner that hasn’t been taken for 8 months.
M. Thatcher explains why socialism has never worked perfectly: “evetually you run out of other people’s money”
Sam, it doesn’t matter whether or not Matt is making less than 33K and whether he grew up without a father or mother. I am making about 100K, and I grew up with 2 loving parents, thank God. But I have the ability to see what goes on outside my own little universe.
Matt is exactly right. There are many, many, people who do not start off life on an equal footing. For you to pretend that they have had the same equal opportunity you or I have had is just plain not true.
Not everybody starts on an equal footing. However, I firmly believe anybody can be in the top 50% and make 33k a year in their lifetimes.
Janna, it’s pretty clear you don’t make much, and what income you are paying at 28% is probably a miniscule amount. It’s pretty silly to argue how much others pay or how others feel if you have no idea.
Sam is right. Equality is the best way. We shouldn’t treat people more special or less special. We have a choice to do whatever we want in the US.
Thanks, Genius. The United States has a long history of a progressive tax structure, usually much much more progressive than it is now, and somehow it has served us. But thanks foryour condescending comment.
And, Genius, while I may not make “much”, I still fall roughly within the top 10%, which just goes to show how out of touch you must be.
Wow, 380K a year makes these people the millionaires and billionaires that our President keeps wanting to pillage? If I knew that I was making 25% of what a billionaire makes every year, I’d cry.
What we need to do is increase the CORPORATE taxes for companies with more than 2K employees and severly cut the tax rate for any company with less that 500 employees. That will create jobs and increase revenues. A graduated fair tax would be perfect.
Well, the split point is a little misleading. Yes, the top 1% group includes everyone with AGI over $380K per year, but if you divide the group’s total AGI by the number of returns, the average AGI for this group is $1,204,247.
Info from the tax foundation:
“For the past few years, the IRS has also been presenting data on a small
subset of the top 1 percent, the top 0.1 percent (the top 10 percent of the top
1 percent). In 2008, this top 0.1 percent filed 140,000 tax returns, reporting
nearly 10 percent of all adjusted gross income earned …. The average income
for a tax return in the top 0.1 percent was $6.0 million in 2008.”
This is a great point, which I believe and which more people should know about. Being in the top 1% is all too commonPlace, despite what the definition of 1% declares. We shouldn’t jumble someone making 400k with someone making 2 mil or even $1 mil. It’s a different world.
An interesting article I was reading the other day, which states that according to some study, if you earn more than $10,000 per year, you are consuming more than your share of resources on earth.
You probably know why, only 10%, or less, of world population live in the countries you mentioned. Think of people earning $1 for their days work in 3rd world countries…
When I read this article, I feel great disappointment at this propaganda about how the bottom 50% of income earners don’t pay taxes. EVERY single working American pays 7.65% of their income for Social Security & Medicare, oh, unless you make OVER $106,800; then the % paid gets regressively LESS with each dollar earned. A person making $120,000 pays ONLY 6.8%; at $150,000 pays ONLY 5.4%; a person making $1,000,000 PAYS LESS THAN 1% !
Additionally, all Americans, including the 50% so slandered by statements that they pay NO taxes, pay gasoline tax, taxes on food and clothing, taxes on utilities and telephone bills, they pay fees for driver’s licenses, car tags, marriage licenses, and if they are fortunate enough to own a home, they pay property taxes. AND because most of this group don’t have a huge mortgage, they don’t get to take a tax deduction for their home mortgage interest, when the wealthy are taking tax deductions for million dollar VACATION house, in addition to what they take for their primary residence.
I AM SICK AND TIRED OF THIS CONTINUOUS HARPING OF HOW THEY RICH PAY MORE THAN THEIR FAIR SHARE OF TAXES. GUESS WHAT, top 5% have 62% of net worth; (top 1% have 35%); top 5% have 72% of financial wealth;(top1% have 43%).
Of course, top 20% of earners GROSS income was over 60% of all income earned (if you look at AGI – % is, of course, lower, because top earners gobble LION’s share of tax deductions.)
Because wealthier earners don’t have to spend most of their income just to provide basic necessities for their families (which middle class are required to do as well as low income families,) these wealthy families are able to ACCUMULATE wealth over time and leave it to heirs, who have DONE NOTHING TO EARN IT. Therefore, without progressive tax and public policies, wealth gap just gets bigger and bigger. Witness gap between hard-working Americans and the “fat cats” from 1984-2004 – a DRAMATIC 42% of wealth creation went to top 1%, if you look at top 20%, a WHOPPING 94% of wealth creation flowed to those well-off folks (a big driver of that very un-American phenomenon was due to massive tax cuts, heavily-weighted to wealthy). Now it is very American to financially reward hard work, but does anyone actually believe that the efforts of top 20% of wealthiest Americans contributed so much more in activities that actually contributed to REAL, concrete contributions in America that they deserved 94% of wealth created, with bottom 80%’s contributions were worth only 6% of economic gains? I mean, seriously, the wealthy have not SUDDENLY gotten THST much smarter, if they have, then we need to raise taxes just to address providing adequate education for ALL Americans.
And not only do the savings that wealthy are able to accumulate contribute to wealth growth, the economic power enables them to get favorable tax policy passed (LOOPHOLES, deductions and actual tax credits) and they can load boards of directors with cronies who allow executive salary packages that are ridiculously high and not based on any logical compensation vs value to company, and with obscene bonuses paid even when company is not successful or if they are fired, they get golden parachutes which guarantee multi-million severance packages.
SO DO YA STILL THINK THE RICH PAY THEIR “FAIR SHARE”.
Tax deductions are seriously phased out after 100K. I’m talking about Federal taxes here. I know workers pay for other types of taxes.
Even if the top 1% controlled 90% of all income, if they are paying 95% of all taxes, that’s 5% more than they should no?
Let’s smooth things out. Nobody is attacking the bottom 50%. The stats are from the IRS themselves. What I’m suggesting is EVERYBODY contribute SOMETHING to Federal income taxes to help our country out in a time of need.
When just the top 20% of the of Americans have 93% (in 2007) of the wealth, these numbers dont seem to outlandish. we have to remember, the bottom 50 are paying taxes, they just aren’t paying income tax. The top 20% are taking in a consederable amount of the benefits of living in this country and IMO that should be reflected in the taxes. That being said, I do like the idea of everyone paying something, maybe we could start with the $50 a month and work progressively back to say $10 or so.
There is no answer that makes everyone happy but this “I am so rich and I get taxed to much” sounds a lot like “Mommy ,I took the trash out yesterday make him do it now.”
If people would ask themselves how they can help instead of looking for an enemy or someone to blame, we might be able to get out of this mess intact.
Imagine if you were the sibling who never took out the trash?
If that sibling had a broken collarbone I wouldnt have a problem with it …..
As far as I can tell, collar bones heal in 6 months, then it’s time for him to help mama out.
Do you not believe anybody can make a good living in the US if they just tried harder?
I dont believe everybody could but I do believe most people could. Your statistics in this article do not say how low the bottom 50% have been in that bracket. Many people in the bottom portion do “try harder” (as if thats all it takes) and make it to be one of those lucky ones in the top 50%.
Being poor everyday is a lot more difficult than paying high taxes on one day in April, regardless of what your effective tax rate is. I would argue that a greater percentage of the income of those whom do not pay any income taxes, goes to taxes in general.
Depending on how you frame this arguement it is easy to “pick a side” but I believe the problem is generally with those who are making the laws about these tax rates and not the tax rates themselves.
Those making the laws are filthy rich. https://www.financialsamurai.com/2011/07/23/the-wealthiest-members-of-congress/
It’s easy to say we should all pay more taxes when you are worth $300 million, don’t ya think?
I think there should at least be SOME federal tax contribution by all working individuals. Even just $500 bucks a year. Just something to have skin in the game. United we stand.
It is important to note that the statistics reported include federal income taxes only. To state that 50% of the population pay no taxes is misleading. There are other taxes that individuals pay: (sales tax in most state), excise taxes (on certain goods), state income taxes, and Social Security/ Medicare taxes (for those employed). The burden of Social Security & Medicare taxes which are capped at certain income levels falls heavier marginally on lower and middle income households. (And AGI does not include the tax-exempt income of higher earners).
So — the conclusion, which is oft repeated, that we need to tax the 50% of taxpayers who are not paying taxes so they have some ‘skin in the game’ really does not follow. And the statement that the highest income earners are paying more than their “fair” share makes a value judgement as to what is “fair”.
Why don’t we all just not pay Federal taxes then, since you say it’s OK if half of us don’t? Thx
I believe it is because all of us aren’t poor…. It is amussing that the people who are most well off in this country like to make an arguement that they are being treated unfair, here we go again with the “little siblings got it better than me” arguement, sorry I dont buy it.
Would you have us all pay no taxes? You think thats the answer? If you want you want to live in a civilized society then you want to pay taxes. This is not an us (upper 50%) versus the (lower 50%) issue. It is an us (American people) vs them (elected officials allowing our country to be bought so that they can stay n power) issue. Untill this changes it doesnt matter what % you are in, you will be getting screwed….
Thx
Thx
FS – That is a foolish comment — please read what I wrote. I didn’t say it was ‘ok’ if half of the households don’t pay income taxes. I said that it is misleading to say that almost 50% of households don’t pay taxes. And when it comes down to tax “fairness”, both the ability of someone to pay taxes and the benefits they receive living in a society are important considerations.
To add a little context, it is also worthwhile to look at how incomes and tax rates have changed over the past 40 years –
The (pre-tax) average household income of the top 1% increased from $386,900 in 1980 to $1,203,600 in 2008, while the (pre-tax) average income of the bottom 50% of households, by contrast, has declined slightly from $16,100 in 1980 to $15,400 in 2008. (constant 2008 dollars in both cases). At the same time, tax rates for those in in top 1% of household incomes fell. In 1980 they paid 34.5% of their incomes in personal income taxes, and this fell to just 23.3% by 2008.
There is an avalanche of statistics out there which outlines not only the shift of incomes towards the most fortunate in our society, but also the increased concentration of wealth among the same. We cannot overlook this trend.
People are entitled to earn what they can earn, but there is a very pragmatic political consideration here — and that is that we cannot sustain either a consumer based economy or a stable democracy if income and wealth are concentrated with the few.
Does this figure re: the top 1% paying 40% of all federal taxes mean in gnereal & is this before all deductions & writeoffs?
Wow so your saying if i work 16 hrs a day. I can make it and still be broke if i pay for gas and child support, rent, food.. Iam jus goin to kill myself
If you work 16 hours a day, why would you be broke? All you’d be doing is eating, earning money, and sleeping, with no time to spend money on anything.
That is unfeeling. Try working 16 hours a day at 7.50/hr. Do the math (you seem to know math) 7.50X16=120/dayX6 days (give the guy a day off!) = 720/wkX51 weeks = $36,720 annually. Average rent for a studio apt in the Bay Area (low end) is $650X12 mo = $7,800. $36,720-7,800=28,920. Add cost of car, garaging, service $2,000. 28,920-2000=$26,920. Meals, groceries for one (we’ll assume the party is single) $75/weekX52 weeks (no vacation, here) = $3,900. 26920-3900=23020. Social Security and Medicare taxes = 7.65X36720=2809. 23020-2809=20210. -Utility (gas, elect, phone, water) 200/month = 20210-2400=17810. Income tax with standard deduction 36720-5700=31720-(31720X.15)=4758. 17810-4758_13052. So far, our bus boy has earned, net $13,052. Of course, as you said, since he has no life outside work, he has about $1088 per month to “save”. That is, if his car does not break down, his appendix rupture, his teeth go bad, or he doesn’t get mugged on the way to the bank. How does this compare to the guy who has $500,000 left over after paying his executive assistant, secretary, cook and chauffer (assuming he started out with $650,000 of his taxed million and paid $150,000 in creating jobs). If he has an appendectomy in his future, no worries, right? Please, use real life situations, with real people, in your formation of your “outlook”. It’s not socialism to suggest that those who have more pay more. If one is a Jew or a Christian or a Muslim, one’s holy book has told one that “if you have two coats, give one away…” hasn’t it? Has that changed because people “work hard” “get ahead” and “creat jobs?” Wow. God would be pleased that we have edited His Word… Religion as Socialism. Holy cow!
Comrade Joel, have you read this post yet? I wrote it for you: https://www.financialsamurai.com/2011/08/01/socialism-as-a-means-to-a-brighter-future/
Try working 40 hours a week at $3.15/hr like I did. I never want to work this hard for so little again. I can work differently to figure out his I can earn more, or I can vote to have the government redistribute wealth to me. Either way is rational.
Hi Folks!
Thanks for all your comments. Just wanted to let you know that on the topic of taxes and the way we should run the country, you’ve won me over, and I’ve written a new post called “Socialism As A Means To A Brighter Future.” Hope you guys enjoy!
https://www.financialsamurai.com/2011/08/01/socialism-as-a-means-to-a-brighter-future/
Sam
It seems like companies don`t really hire young people these days, for various reasons. This is a shame as these people are losing the chance to gain valuable work experience which can only help them for the future.
As for a widening wealth gap, what would happen if there was no spigot of money for people to drink from? I doubt that most of the wealth gap comes from ability and will; instead, a great deal of it is connected to special privilege in some form or another (patent wars which employ expensive corporate lawyers and punish small businesses, complex medical regulations which reward insurance companies, credit expansions by the money monopoly which benefits speculators and hurts ordinary people who are stuck with the bust…)
what is interesting is that the .0000028579475735239164 percent of the 1 percent has more wealth than the bottom 50 percent. Now we know the bottom 50 are not hoarding any money and we do live in a economy based on consumption. With that would you rather have 400 who have managed to win the monopoly game but won’t restart the game by reinvesting in this country. If you think the rich have it bad with the taxes they pay ,don’t forget they have a little left for lobbyist,attorneys,accountants,tv,radio and newpaper. This all helps to further there cause, please tell me who is furthering yours if you are in the middle class. And I would like some Names of poeple who are working for your INTEREST.
Where’d you get this stat from?
For those who are wealthy and have the power to hire the rest of us, I certainly wouldn’t try and squeeze them more. What kind of logic is that? We tax cigarettes to prevent people from smoking, or smoke less.
To say that the rich always pay more than their fair share is a bit dishonest. The rich also gains the most from government spending. Take just one simple example. Suppose there were no transportation infrastructure in the country. Economies would then be much smaller and more local. If you were a minimum wage worker at McDonald you are now probably a minimum wage worker on some farm. You didn’t lose much. But if you were a doctor then you are probably no longer a doctor and even if you are you will make less. The doctor stands to lose a lot more with no transportation infrastructure; the doctor may pay more, but the doctor gains much more.
To say it makes no sense “squeeze” the rich even more because they provide us jobs is also faulty. For a business to work, the business has to have money to invest but the people also have to have money to buy things. Right now the rich have too much of the money and the small consumers don’t have any money to spend. If the millions of small consumers don’t have any money to spends, the low taxes on the rich mean nothing because there is nothing to invest in. That’s what’s happening right now; the rich are sitting on their money. Raising the taxes of rich people and then having the government spend money could get money flowing again. Obviously that is a bit oversimplified but it still holds a truth.
So you are saying if I raised taxes on you, and you were in charge of hiring someone for your company, you would be more inclined to hire someone? Huh? Let me guess, you don’t have your own company or don’t make more than $200,000 as a single person so you have no idea and are just making conjectures.
I hope I’m wrong and you will correct me.
It just seems so fallacious when I hear the argument that “the affluent pay MORE than there fair share.” and “taxes need to be lower on the upper brackets in order to garner incentive for business to ‘trickle down’ the benefits to the rest.” First, let’s start off by redefining what it means to be wealthy, this is 2011 after all. I agree that a single person running a small business generating only around $250,000 of income shouldn’t be considered “super-wealthy” and categorized in the higher brackets of the tax code.
However, once we redefine what it means to be wealthy, I believe that the top percentile of income earners should pay around 75% in taxes, as well as eliminating the unfair loopholes and deductions in the tax code that allow people like mutual fund managers and the like to effectively pay less into the system than say, a school teacher. What a lot of people fail to understand is that the progressive tax system is designed to tax one’s ability to generate income the FOLLOWING year. A millionaire has a greater capacity to generate more income next year than a person on the poverty line where the chances of generating more income become increasingly flat lined. As far as businesses are concerned, the trickle down methodology is just plain wrong. These stairs have been carpeted, and when you try to trickle something down, it just gets soaked up at the top. Thus, the aggregation of money that a lot of the corporations are sitting on and paying their heads with while the consumer is suffering. Just look at the 50’s and 60’s when the top rate was 70-92%, we built the interstate, put a man on the moon, stifled communism, built our legendary middle-class, had an education system that was the envy of the world, and our economy was unparalleled. Investment in the country was high. Historically, taxing the rich is not a destructive thing, in fact, quite the opposite. Looking at the present, I choose more taxes.
Cool. You are free to send the IRS more taxes by writing a check. It can even be a tax write-off! Thanks for your support of our country comrade!
Your way of dismissing my arguments is a logical fallacy called “argument from authority.”
The world is just so much more complex then “I’m a business owner and my taxes are down so I’m going to hire.” If every variable is held constant in a standard economy then that will be true. But what about when those other variables are not held constant in a non-standard economy. The world is infinitely complex and there is no magic formula that will work in all circumstances. Might cutting taxes work right now? I am humble enough to say it might. However, I don’t think it will work because taxes are already at their lowest level in like 40 years. Maybe very targeted tax cuts could work. I still think the rich have too much money and that is depressing demand compared to if some of that money was spread out more evenly in society.
Well yup. Spend your profits (taxable income) by investing in your business ( maintain and update your systems and hire employees) or pay taxes. Hoarding the profit is selfish.
Howdy. Just a quick question: where is the flaw in my logic? Let’s say x=cost to deliver product or service, y=price of product or service, c=profit margin so that y-x=c. Whenever c is positive, money flows upwards, the farther to the right of 0 c is, the faster money flows upwards. Is it not logical to conclude that money will eventually be concentrated at the top with minimal amounts at the base? When that happens, does it not force government to redistribute the wealth? And when redistribution gets out of hand, does not that wealth end up flowing out of the economic system in which it was concentrated?
The income numbers that you show represent past performance in 10 counties. It is also important to take into consideration factors such as future growth in a country and the stability of that country.
I would suggest that Canada is one of the best long term choices when choosing where to live. We have an excellent medical system, tons of natural resources, strong banks, good long term economic growth.
On the down side we do have a higher tax rate, but that is how we pay for our medical system.
Canada is definitely a great choice to move to once I’m retired and no longer earning much money. I would be glad to benefit from the infrastructure and free health care.
You are living in an alternate universe. Your stats are accurate, your premise is nuts. In one paragraph you suggest that “Half the battle is just moving to a vibrant location such as the San Francisco Bay Area”.
Look at the real world. A 20 year old non college non highschool graduate working in a resort as a busboy or maid in Tucson AZ can not move to the Bay Area and do well. Sure, they should educate themselves, work hard, etc. Have you ever tried that? Not everyone has the “equal opportunity” you value. I suggest you actually talk to some real “low income non taxpayers” and see how they distribute their income…
Since they have no medical plan (most low income workers don’t), no real way to “invest” “extra” income (since they have none) and no realistic hope of getting out of the low income rut they are in, you might see how the “bottom 50%” actually lives. One thing is immediately obvious: $35,000 (which is actually far more than “average” for “low income” workers) doesn’t go very far, even when $0 tax is paid.
On the other hand, looking at the higher end, the average millionaire (AGI) has 65 to 72 percent of their income (a mere $650,000 to 720,000) to live on and play with. How many of them “create jobs”? I’d like to see a study on how many investment bankers, stock traders, hedgefund managers actually employ anyone. Until you do that, you are, sadly, misinformed. Walk in someone elses shoes for a month. Preferably not one of the upper 50%.
Joel, is this where you walk?
Ive worked for $3/hr, for 40 hours a week for months. I know what it’s like to make little, bust my ass off, and come to the conclusion that education is the only way out of the grind. How about you?
You’re still not getting it. The “work hard, go to school and you’ll be a sucess model does not work as well as it used to. Sometimes not at all. THERE ARE NO JOBS. When 1200 people show up for 250 job openings, you are right. The educated get the jobs, the ones who just want to work, any hours, any job, etc. don’t always get them. Yes, I’ve worked for way less than my current 7.52 an hour. Yes, I’m educated, and yes, I’ve worked for LOTS of money in my prime. I’m past my prime. Can’t get (and haven’t been able to get) any work that pays more and offers more than 20 to 30 hours a week, part time, no benefits, no time off (except for when you aren’t working anyway) and your boss makes sure you know you can be replaced tomorrow every chance he gets. I had (uninsured) open heart surgery 5 years ago, recovered, and have been working ever since. I probably will be until I’m 80 or dead. My retirement went to pay for the surgery. So, please don’t lecture me on how hard YOU work. I have worked since I was 14 years old, and am still working at 69. You don’t know, and don’t want to know the circumstances that put me where I am today. I’m happy, but will never be well off. I have a roof, and food and a car and a loving wife. Many Americans are suffering because they don’t have those first two things anymore. If they can’t work, they can’t be consumers. Without consumers this nation will die on the vine. People who make themselves rich moving paper will NEVER understand that. It’s all about moving the paper and making money. THEY DON’T CREATE ANYTHING, AND DON’T CONTRIBUTE ANYTHING. The people who do (or did until the couldn’t recently) aren’t doing it anymore. If nothing is created, the paper being pushed around will become worthless. What then? Will we all be buying and selling gold to each other? Where will people like me get the gold? I don’t have enough left after expenses to BUY gold. In 10 years, if we don’t figure this out, we’ll be living in a society driven by a barter economy. I would wager that you’ve never met anyone who has a master’s degree and can’t find a job that pays more than min wage. I have. Hundreds. Your financial advice is useless to them.
Joel, you are the kind of American who deserves a break. Hardworking, educated, still up against tough odds. I support raising taxes on the top 1% and cutting taxes for the rest of us. here’s why: if I’m making 380k a yr I’m not worrying about buying my kids clothes for school. If I’m in the top 10% making 113k with a family of 4, I’m budgeting like crazy. If I’m farther down the list, I do NOT need to pay ANY taxes because I can’t afford clothes for school. The Top 1% of earners who pay 40% of all US taxes don’t say is that the % they pay relative to their income has decreased while those who can’t afford the clothes have actually had to pay more!
joel, i’m curious – since the surgery cost has sapped your finances, would the Presindet’s health plan have helped? Would it’s cost have been a burden to you?
Joel,
I’m sorry to hear about your situation. It is exactly your situation which is why I argue that having a universal healthcare system is GOOD, because genetic diseases and accidents do not discriminate among rich and poor. One shouldn’t die in our country b/c they can’t afford it and vice versa.
I do want to understand your story more Joel, so feel free to start a new comment/thread as this one has run its course.
May I ask, if it wasn’t for the the surgery, would you be financially OK to retire? I wonder b/c 55 years of working, saving and investing even just 10% a year would make you a multi-millionaire.
Thx for more perspective. Sam
Certainly, you may ask. The answer is complex. Start with a college loan, back in 1961, so that I could get that degree. Next understand that my moral values would not let me default on it, as many of my contemporaries did and then went on to become doctors and lawyers. What’s a default bankruptcy mean, anyway. Then assume that a war came along, and I got lucky, slotted into a reserve Army Unit. Didn’t die or lose a limb in ‘Nam, didn’t even go there. BUT, when you are spending 20 to 25 weekends a year at a reserve unit, not to mention the 6 months active duty for basic training, you don’t save much, and you don’t get much education done. Particularly if you are putting all of your free “discretionary income” into paying the above mentioned student loan. I had a job with an insurance company, salary $4,900 a year plus company car (did not own my own until 1974). Put 2 children into the mix, one w/o benefit of insurance insurance for doctor and delivery, and it becomes much harder to put away the 10% you speak of. You, and all of the other financial gurus I’ve ever read, do not take into account that all apples are not the same shape, color and size and did not fall from the same tree in the same orchard. Some roll downhill. Some lie in puddles of water and rot. Some get eaten by animals, and some get as far as being picked and taken to market.
I could never put much discretionary income into savings. My fault, I guess. I insisted on buying a car for my wife, so she could work when the children got old enough to go to school. I enjoyed vacations at the lake and paid an average of $800 to $1000 a year to rent a place for two weeks so our family could relax together. I educated my kids to the best of my ability. When I got to where I could save, I was already 45. 10% was about right. I had very little retirement to start with, but we did well, and I had slightly over $200000 when I retired. Of course, things happened to erode that. I won’t bore you with detail, but by the time I had the surgery, several “market adjustments” had eroded my fund to about 75000. The rest went for the surgery, and taxes & fees on early withdrawal. Look, I don’t feel sorry for myself. When one short sheets one’s own bed, one should not complain. I do mind, however, being told that I should just have tried harder to become that multi millionaaire. You have no idea. And it isn’t just you. Many advisors use these cookie cutter formulae to come up with why everyone who is not “lazy” should be rich in America, totally leaving out the randomness of real life. I only ask that you, and others like you, stop telling people how being “conservative” instead of “progressive” is so much better. Real life is real life. If you don’t get breaks (and all you have to do is look at the 50% or so who aren’t getting many lately) on the way up, up dissapears and becomes flat land. When you are on the flat land, getting back into the climb is VERY much harder than people who decry the lower 50% as lazy seem to understand. All I’m asking is that, even if you don’t try their shoes on, stand where they are standing and try to see it from that perspective. Nothing wrong with wanting to be rich. Nothing wrong with being rich. It’s what you do when you get there that you should worry about. Unless one is not at all religious, one is told that from day one in ALL religions. Take a look at the tax returns (which you can’t really do) and see what the average well to do American does with their money…
Joel,
Have I ever said you were lazy? I really feel your comments stem from some sort of guilt. I’m not a financial guru. You don’t need to be a guru to make have money and create wealth. It’s simply spend less than you earn.
What I try to “teach” is for people NOT to depend on anybody else or blame anybody else for their situation. Our situations are our own and I don’t believe anybody is not intelligent enough to understand the concept of saving and investing.
You sound like you are in a swell situation, why? Because all you have to do is ask your kids, whom you say you spend a lot of money and time taking care of, to take care of you.
Did you see 60 Minutes last night? That same 60 billion figure came up. If all those corporations avoiding taxes by having skeleton “international headquarters” outside the US paid their fair share of taxes, we’d have another 60 billion in revenue. Those corporations are the ones that should feel honored to be doing business in the USA and paying taxes. Hopefully, the tax code can be revamped to encourage them to pay their fair share, and it probably would involve lowering the tax rate for corporations.
I think, taxes should be paid in the country where some profit is made, not where the company is located.
It can get difficult to compute when a Caribbean Corp. takes an American patent to India or China to produce a product – then, sell that item outside of it’s place of manufacture. Still, if they assess a high cost in India or China to sell to American consumers, to lower their US taxable profit, the product might not have the competitive advantage of being produced in Asia. Thus, the entry cost to America, the place of final consumption would most likely be competitive to other like goods, reflected by a low country of origin cost. A problem might be that India or China might want to have the company show more profit at the manufacture site for their own taxation purposes, raising the export costs, lowering the retail profits. This tax on the manufacturer being an additional benefit to the Asian country besides having the factory there, with satisfied taxable employees in the country of product origin. Today, China has a priority to keep it’s people employed so, low profits are acceptable.
Today for recourse, a US “Trump” being, if companies don’t assess their costs correctly, a tariff might be assessed so, no dumping.
I believe US is the best country in the world. I cam with $12 from India in 1985, Of course came with Masters degree. Since 1996-2005 Iwas in the top 1% of the income group. From 2006 in the top 5%. I followed Warren Buffet formual and invested small retail business, and real estate. Because of current economic situation little down. I hope all my small business nvestment comes to a profit I can go to top 1%.
Who paid for your Master’s degree?
This argument is totally ridiculous:
“With wages 3X higher now, I’d be raking in a nice $$1,650 a month or $20,000 a year! Tack on another side job that pays $1,200 a month and I’m in the Top 50%. Anybody can do it!”
Really? Let’s not talk about where you can find a McDonald that pays $10.5 per hour (more like $7.5 in real world). To make $1,650 a month you have to work 40h/week. To make another $1,200 a month it is another 30h a week. Working over 70 hours a week on a minimum wage job, can you tell me with straight face that you can do it?
The McDonald’s right here in SF is paying $9.8/hr.
Here is your problem. You think working 70 hours a week is tough. What world do you live in? I have regularly worked 70 hrs a week for the past 12 years.
Sam, Harry is right. Your argument is totally ridiculous You are not working at McDonald’s, and you are not making minimum wage. You are working for a great salary at a job you love. Totally different. You are seriously recommending working 7 days a week 10 hours a day at a minimum wage job for a prolonged period of time and staying sane? You are out of touch and I know you realize it.
You’re right comrade. Hard work and education is overrated. Let’s complain why we deserve better and should only have to work 40 hrs a week. Screw the people working 100 hours a month longer on their work and educating themselves. We deserve the same rewards.
Sam, you totally miss the point yet again. You can work 70 hours a week and be well-rewarded. I don’t begrudge you that, nor do I expect the same rewards you get for that if I choose to work only 40. But if someone else chooses to work 40 hours per week, why would you ask him (with disdain), “what world do you live in?” You are out of touch if you think most people are working 70 hours a week. (People with children, especially, are usually unable to work those kind of hours even if they wanted to.)
And if someone is working 70 hours a week at minimum wage, how is he going to educate himself? Seems like a stupid plan to me. A better use of his time would be to work 40 hours and go to college at night so that he can get a better job.
And please don’t call me comrade.
If someone chooses to work only 40 hours a week, they can’t turn around and complain while life is unfair. That’s my point.
People need to stop complaining, and start doing.
I am not saying life is unfair. And if someone chooses to work 70 hours a week, they can’t turn around and complain life is unfair. You need to stop complaining.
Exactly! Life is very fair. We live in a free world and choose to work as much and make as much as we choose. We have nobody to blame but ourselves for our successes and failures. Thank you for finally understanding what this site is all about!
I’m glad to be an American. Willing to pay my fair share.
In this view, we should pay according to what we earn as it relates to the countries total expenses. A relationship of taxable earnings to the countries expenses. So, if the top 1% pay 38% of the taxes, is that prorated to 38% of societies expenses? After all, the earnings probably came at the expense of some of the other 99% of citizens, even though those citizens might have enjoyed some benefit of the deal or probably, the transaction would not have gone through.
Make sense?
d4u
These are not accurate statistics. Only 34% of Americans earn more than $65,000 a year. If you want to compare American income with worldwide income then let’s also include where America ranks in income disparity. With the top 1% controlling as much wealth as the bottom 50% and the median pay for S&P 500 CEOs is $10.6 million and it’s $19.8 million for the CEOs in the companies listed on the Dow Jones Industrials while the median household income is $46,326. https://sociology.ucsc.edu/whorulesamerica/power/wealth.html
This difference in pay between the executive and the worker places the United States 64th in the world. The pay gap between the richest and poorest is more equitable in Cameroon, the Ivory Coast Egypt, Tunisia and Yemen than in the United States.
https://www.dailymail.co.uk/news/article-2005550/Americas-pay-gap-Inequality-rich-poor-worse-revolutionary-Egypt.html#ixzz1VRqB3GHk
Columbia University just released the 2011 starting salary for journalists in America. Their starting pay is $30,000. The starting pay for a journalist in America is 2006 was $30,000. In 5 years the starting pay has not moved.
“It’s even more revealing to compare the actual rates of increase of the salaries of CEOs and ordinary workers; from 1990 to 2005, CEOs’ pay increased almost 300% (adjusted for inflation), while production workers gained a scant 4.3%. The purchasing power of the federal minimum wage actually declined by 9.3%, when inflation is taken into account.”
While websites like this parrot the propaganda of the financial and power elite the truth is that for the vast majority of Americans the last 30 years of Reaganomics has been a complete failure. More people need food stamps than ever before and CEOs are setting records for salary and bonuses. In the two years following the bailout of Wall Street the executive pay for financial companies set records for salary and benefits as well as bonuses. For the financial elite the last 30 years have been the most prosperous ever. Considering that the corporate media is controlled by the financial elite it is no surprise that the average American actually believes this is the best economic system in the world. And the rest of the world’s financial elite is catching on as one country after another institute austerity programs that gut social programs while protecting the assets of the wealthy. Never before in the history of the world have so few controlled so much wealth while so many of the most vulnerable are left with less and less. The governments of the world, lead by the US Congress, are now focused on protecting and promoting the assets of the financial elite while the middle class is expected to shoulder more and more of the economic burden. The suffering of the middle class will be the downfall of this system. The propaganda of the corporate media has succeeded in wiping from the memory of the majority of the American people the 50 years proceeding 1980. In that time the American middle class was more prosperous and more contented than at any time in the history of America. From 1930-1980, when the tax rate on the top tier was high and the public and private unions were strong, America’s middle class saw their salaries rising every year and keeping pace with the executives. When CEO salaries were only 20x greater than the average worker the average worker could afford 2 weeks of vacation every year and a new car every other. As long as the financial elite continue on their path of greed and short-term profits America’s economy will never recover. Until the government abandons the trickle-down economics of Reagan and returns to a Keynesian economic model with strong financial regulations, moderate corporate taxes and 1970 era tax rate for the wealthy then America’s middle class will continue to struggle, suffer and ultimately sink into the ranks of the poor. When the poor are the majority in America then the end of Capitalism will be close behind.
These stats don’t include capital gains – the biggest portion of income for america’s top earners!
https://www.nytimes.com/2011/08/20/business/questioning-the-dogma-of-lower-taxes-on-capital-gains.html
There is more to life than income. I think average Western Europeans and Canadians have a better quality of life than average Americans do (and without sacrificing much income or productivity). The workers have better benefits (much longer vacations and other time off work, generous paid sick and parental leave, earlier retirement, and more job security), and they do not have to worry about how to pay for excellent health care (with better results than in the U.S.), education, child care, or elder care. They live in societies with less crime, poverty, and other social ills. In most Western European countries, they even have better quality infrastructure: well-maintained highways, fast trains, faster and cheaper broadband, and more reliable cell phone service. Not that everything is perfect in those countries, but I don’t think the average person there would trade his or her way of life for the rat-race life so many Americans have. The thing I find most ironic is that the GOP is always harping on family values, but their policies actually keep people from having time to spend with their families–time that those “socialist” Europeans and Canadians do have.
In short, making the bottom 50% pay more taxes will widen the wealth and income gap between the rich and the rest–a wide and growing gap that is the source of many of our economic and social problems and that is a national disgrace. I suggest reading “Can the Middle Class Be Saved?” in the Sept. 2011 issue of THE ATLANTIC, available online here:
https://www.theatlantic.com/magazine/print/2011/09/can-the-middle-class-be-saved/8600/
The bottom 50% should pitch in and stop being a drag on the economy. They should GIVE more than they take. Everybody should, then we wouldn’t have this problem!
The bottom 50% already pitch in plenty–more when total taxes are calculated than the tope 1%. The bottom 50% pay a much higher percentage of their incomes than the top 50% when ALL taxes are considered because almost all taxes except federal income tax are extrememly regressive. That’s why federal income tax has traditionally been more progressive (thought it is much less so now–to make up partially for the regressive nature of sales, FICA, poroperty, and most local and state income taxes. For example, a person who makes $106,000 or less pays twice the percentage of income that a person making $212,000 makes because FICA is charged only on the first $106,000, making it a ridiculously regressive tax. I’d love to see all the whining that would go on if the rich and big corporations, who receive the really big amounts of “welfare” in the form of tax loopholes, credits, and subsidies had to “GIVE more than they take.” Many of them take billions and pay NOTHING or get money from the treasury. The system is simply not anywhere close to fair. That is why we have the greatest income/wealth disparity of any so-called advanced nation. Actually, we are much closer to third-world nations in that respect as well as in many others, including lack of access for everyone to affordable health care and crumbling infrastructure. We have let the rich rob the whole country blind.
Thank you Sandra. You are completely correct. I notice that no one had the guts to take issue with you, let alone acknowledge that you were correct, but you are in fact correct.
As a small buisness person, i see it very clearly. 15% tax on social security, More on Medicare. These are taxes that everybody pays at below $106k, that are not paid by the wealthy. On the other hand, the wealthiest americans do not pay income tax to any significant degree. They pay captal gains, at 15%. That’s it. My taxes, with state, federal, social security, medicare, sales tax etc easily exceed 50% on the margin. The truly wealthy pay a third of that.
Poor and middle class people pay thier fair share and more than they can afford. Tax cuts to the rich only increase that burden. I think the wealthy should pay at the same rate I do, and I don’t appologize for that. Maybe if they paid their fair share, we coulde make taxes more equitable for everyone.
First of all, name just one one of those BIG corporations, please. You people always talk about them but never identify any of them. Second, if you bothered to check your pension/retirement funds you will probably find that they are invested in one of more of these BIG corporations (i.e. you are a shareholder in them). That means you lose if they tank, or are taxed out of existence. FICA (the world’s largest Ponzi scheme) was originally supposed to be egalitarian; everyone, no matter their incomes would pay only a small FICA ‘contribution’ and everyone would only receive the same small supplimentary pension income. But of course, our liberal Congress over the years kept raising the ‘contribution’ limits. What’s fair about paying a whole lot to Social Security but not being able to collect any more than someone only paying in a fraction of your ‘contribution’? Access to affordable health care? It is federal law that no hospital may deny services to anyone regardless of that person’s ability to pay. Name just ONE person in the country who had died because of a lack of medical care. Or for that matter anyone who has starved to death from a lack of food because he or she was too poor. Wealth disparity? Your average ‘poor’ American has at least a furnished room or apartment (heated and or cooled and with indoor plumbing), food stamps, free bus passes, the best medical care in the world, dozens of federal-state-county-city aid programs, color television, cell phone, and in many cases a car. How much of that does your average middle class (or even upperclass) North Korean have? Finally,progressive is just a socialist buzzword for ‘punish the rich’. If you work extra hard, get really lucky, and by the grace of GOD carve out a better life than your neighbors people like you think it is unfair and you should be punished (taxed even more). Try putting in 18 hour days in university to get that degree, then when you finally do get an entry level job and have a family to support (never mind the thousands in loans to be repaid) drag your butt out of bed at 5am to get to work early after putting in an extra 2 hours the day before and then working at home after dinner until midnight on your graduate degree because it is what your profession demands. THAT’s what rich people do to get ahead. And all so they can support the 50% who pay no income taxes at all.
@dqn:
1.” name just one one of those BIG corporations,” (who paid no taxes).: Bank of America and GE.
2.”What’s fair about paying a whole lot to Social Security but not being able to collect any more than someone only paying in a fraction of your ‘contribution’? ” Social Security benefits ARE based on your lifetime earnings/contributions.
3.”Name just ONE person in the country who had died because of a lack of medical care”. OK, I can’t name one specifically, but you are naive if you think the uninsured receive the same quality medical care that those of us fortunate enough to have good insurance receive. Yes, hospitals cannot turn away someone who has a life-threatening condition, but they don’t receive the same expensive treatments that the insured receive. And if that treatment could have saved their life, (eg. chemotherapy), their lack of insurance could kill them.
4. “Progressive” tax system – Do you believe the United States has been Socialist since 1913?
Thank you, Craig, dqn, and Janna for your responses. Craig and Janna are right. I will just add a few points:
In response to dqn’s claim that everyone in the U.S. has access to affordable health care: ERs have to give life-saving treatment to patients regardless of ability to pay, but they do not have to furnish on-going care for health- and life-threatening conditions like diabetes and cancer. If a person with cancer shows up at an ER, they are going to stabilize him and give him a referral for cancer treatment; but if he is un- or underinsured, actually getting that treatment is going to be iffy. If he is lucky, he may find a charitable organization or medical facility that will give him the hundreds of thousands of dollars worth of treatment he needs; however, in many cases, he will not. If he does get treatment, who do you think is paying for it (and for his ER treatment for that matter)? We are, through higher medical costs and insurance premiums, to the tune of at least $1000 per insured or paying person per year. It would be much less expensive, more efficient, fairer, more effective, and more humane to have a national healthcare system that covers everyone as other advanced nations do.
People certainly DO die in the U.S. because of lack of access to medical care. A Harvard study in 2009 estimated that 45,000 deaths occur each year because of lack of health coverage. That is a national disgrace! news.harvard.edu/gazette/story/2009/09/new-study-finds-45000-deaths-annually-linked-to-lack-of-health-coverage/.
To say that the average poor American has “the best health care in the world” is just ridiculous. Even average Americans do not have the best health care in the world for the most part. We have poorer health outcomes than citizens of other industrialized nations in almost all categories . Our healthcare system was ranked 37th by the World Health Organization in 2000, and a Commonwealth Fund report in 2010 ranked it last in “quality, efficiency, access to care, equity and the ability [of citizens] to lead long, healthy, productive lives” in comparison with six other industrialized countries: Australia, Canada, Germany, the Netherlands, New Zealand, and the U.K. See . The only thing we rank first in is cost. That is what a for-profit health system has given us!
About big companies paying no taxes, see blogs.suntimes.com/sweet/2011/03/ten_giant_us_companies_avoidin.html or many other articles on the web that you can Google. I have seen lists of as many as 50 large companies that have paid no taxes in at least one of the past few years.
However, I think by far the most misguided comment by dqn and others is about how rich people work so hard to get ahead and therefore deserve much, much more than others. First, I think that many rich people have worked hard and provided worthwhile goods and services and therefore deserve to be materially rewarded (just not to the obscene extent the ones at the top are). However, there are also a good many who are trustee babies and have never worked a day; and there are many who obtained their fortunes through taking unfair advantage of and cheating people, selling worthless goods and services, and even participating in illegal activities. So I don’t think it is accurate to say that all rich people deserve what they have. In fact, I can conceive of absolutely nothing that even truly productive and conscientious CEOs do that would justify even 20% of the tens of millions of dollars many of them make. Secondly, many people who have put in 18-hour days to get a university degree and gotten up early and stayed up late to get a graduate degree while working at a full-time job do not get rich because they have chosen a profession that provides great value to society but does not furnish great material rewards, such as teaching, scientific research, engineering, nursing, firefighting, etc. I not only worked long and hard to obtain graduate degrees but also worked 60- to 80-hour weeks teaching, grading papers, preparing lessons and taking frequent continuing education courses for thirty years. It was, I think, extremely worthwhile work; but it certainly did not make me rich. I reject the idea that any rich person worked any longer or harder than I did. I think few work any longer or harder or do anything more worthwhile than teachers, nurses, doctors, physician assistants, firefighters, police officers, scientists, small business owners, trash collectors, construction workers, plumbers, retail workers, or other average working people do. Mostly, they have figured out how to make a great deal of money off the work of other people. I am not saying that all incomes should be equal; but during the past thirty years of government favoritism toward the rich, the degree of inequality has gotten really out of line (the ratio between what the CEO and the average worker make has increased to 325 to 1 in 2010 from about 24 to 1 in 1965) and, if left uncorrected, it will lead to economic downfall and social unrest (which seems to have already started but will get much, much worse) if history is any guide. If rich people have any sense and any knowledge of history and sociology, they will join Warren Buffett in asking to pay a fairer share for a system that they profit from disproportionately out of self-interest if not out of a sense of social responsibility.
You’re a hoot.
Here’s the reality of taxes.
Take a married couple, 2 kids, making $50k a year.
Basic deductions for the husband and wife $5700 each or $11,400.
Standard exemption for the husband, wife and 2 kids, $3700 each or $14,800
So, out of a $50k income, $26,200 is written off. Over half their income.
Next, Federal income tax.
10% of the first $17,000
($17k is about 70% of their taxable income.)
15% of the remainder of $7,800
Lets look at another couple making 10 times the income .
First, the standard deduction for the 2 stays the same $5700 per person. Though their income is 10 times more, the dollar value stays the same. So where the first couple had a $50k income , their standard deductions of $11,400 was about 23% of their gross income, whereas its only 2.3% of the wealthier couples.
Next come the basic exemptions. Both couples get the basic exemptions for their children. $3700 each or $7400. Which is almost 15% for the first couple, but less than 1.5% of income for the second.
Next personal exemptions for the higher income earners phase out above $370K.
So the lower income earners take another approximate 15% off their taxable income.
2 couples, same amount of kids, using the same tax deductions. The only thing that has changed is their income.
First couple reduces their income by 55%, the second reduces their income by 3.8%.
The first couple are taxed 10% on $17k (about 70% of taxable income)
The second couple is taxed the same 10% on the same first $17k (but that is about 4% of their taxable income).
The first couple pays 15% on the remainder of their income. (which is about 30% of their TI)
The second couple pays 15% on the next $52,000 (which is about 9.6% of their TI)
The first couple NEVER gets into the next tax bracket of 25%
The second couple must pay 25% of their next $70,350 of TI (About 16% of their TI)
The first couple also NEVER has to pay the next tax bracket of 28%
The second couple must pay 28% of their next $72,950 of TI (About 17% of their TI)
The first couple also NEVER has to pay the next tax bracket of 33%
The second couple must pay 33% of their next $166,850 of TI (About 32% of their TI)
The first couple also NEVER has to pay the next tax bracket of 35%
The second couple must pay 35% of their next $102,000 of TI (About 21% of their TI)
So where the first couple reduces their taxable income by 55%
The second couple reduces its TI by 3.8% using the same tax rules.
Where the first couple pays 70% of its TI at a tax rate of 10%
The second couple pays 86% of its TI at taxrates of 25% or higher
In fact, the same 70% of TI that the first couple pays 10% tax on
The second pays 28% or higher ( approximately 34%)
So where one couple pays 10% tax rate on 70% of their TI
The other couple pays 34% tax rate on 70% of their TI
Should we also add all the FICA taxes the the wealthier person pays?
And all the unemployment taxes?
And the FUTA taxes?
And the corporate income taxes?
And the property taxes?
Yes, Mountn_Man, you should add ALL the taxes each couple pays, including sales, state, local, and excise taxes, because it is those other regressive taxes that often make those with higher incomes pay a lower percentage of their total incomes in ALL taxes than those with lower incomes. Looking just at federal income tax rates presents an extremely distorted image of the tax system. And you are ignoring the fact that the rich people who get a large amount of their income from capital gains pay only a 15% rate on that part of their income. Of course, there are going to be great variations in individual cases. A person making $500,000 a year purely from a salary is going to pay a higher rate in most cases than a person making $500,000 purely from capital gains.
Sandra, the problem with your FICA illustration, is that employers not only withhold currently 5.65% from payroll checks, they ALSO must pay an additional 7.65%.
So, when you look at your $1000 check and see $56.50 taken out, you are NOT seeing the entire $133.00 paid in FICA taxes. So, the higher the income (up to $107,000) and the more employees, the more tax an employer pays. Also the more payroll paid the higher unemployment insurance must be paid.
Also, corporate taxes.Wealthy investors who own stocks in large companies like BP or Microsoft get dividend checks. These checks are paid on profits, AFTER corporate taxes of 35% are paid. These investors then must pay an additional capital gains tax of 15%.
Sales tax is sales tax. If you buy a TV for $500 and somebody who makes 10 times your income buys a TV, chances are high it will be 10 times as expensive as your TV.
Next, somebody making $50k is less likely to buy a new car. More than likely they will buy a used car. The wealthier people pay the higher taxes on new cars as opposed to used cars. Wealthier people are more likely to buy more cars.
Heres something. Lets say you make $80,000 a year. You buy a house. At $80k your house will be about $250,000. If you put 20% down, thats $200,000. The interest on the mortgage is a write off.
Now lets take someone who makes 10x that much, $800k. They buy a house 10x as much, or $2.5 million. If they also put 20% down that would leave them with a $2 million mortgage. Mortgage interest write offs are limited to $1 million. So where you can write off 100% of your house mortgage, the other person could only write off half of theirs. If they owned a second home on top of that, not of that mortgage would be able to be written off.
If we take a family of 5. Husband, wife and 3 kids. They have a household income of $40k. The Husband and wife could claim $5800 each for standard deductions, thats $11,600, and have 5 personal and dependent exemptions of $3700, for 18,500. For a total deduction and exemption of $30,100 They have eliminated 75% from being taxed, without spending a dime to do it. Lets see a rich person shelter 75% of their income that easily.
Next that family of 5 will pay 10% income tax or $990. or 2.5% of gross income.
A rich person who makes 10x that much, if they sheltered 75% of their income, they’d have a taxable income of $100,000. They’d pay 10% on the first $17,000, or $1,700. They’d then pay 15% on the next $52,000, or $7,800. They’d then pay 25% on the remaining $31,000, or $7,750.
2 families, both writing off 75% of their respective incomes. 1 family making 10x more in income. One family paying $990 in taxes, the other family paying $17,250 or about 17.5x as much.
Lets also look at the lower income family. They will also qualify for the EITC, which the government will pay them $5,666. So instead of PAYING federal income tax, they will get paid $4,676.
$40k a year income will pay $2,260 in FICA taxes. 7 states have no income tax. My state has a 5% income tax. The $40 k income would pay at most $2,000 in state income tax. Subtract that from the $4676 EITC and they are still up $416. If they spent $500 a month on food, thats $6,000 there is a 1% tax on food, that would be $60. That leaves $356. Depending on what county they live in they might be paying 6.5% -11.5% sales tax on most everything else. Lets say 7%. If they spent $6000 on other things besides food, they’d spend $420 in sales tax.
At this point they finally PAID $64 in taxes.
Whoever made this site is a wack-job. Crazier than Bachmann. If we are talking about”fair” and “equality,” how is it equal that I make more money because I am a male, or at an even more elementary level, more intelligent, or taller, or more handsome, than the next guy. It is not “fair”, but that is how it is. The only thing a person really has control over is how hard they work. Is someone who is making minimum wage not working as hard as you are?
@Chris
Please provide logical or factual reasons for calling the person who made this site a “wack-job.” Be specific to back up the name-calling… if you can. If you can’t, then go troll somewhere else.
By all means lets have the poorest among us pay more. On a scale that’s fair. The fact that it’s lacking in a basic tenet of decent humanity doesn’t seem to count.
What’s important is that they pay, not if it’s even feasible. This ‘wack job’ that is stating it’s right and proper to squeeze that 43 dollars out of the working and non able to work poor is just showing us what we all know. Greed is indeed the ailment of this nation.
How hard they work? Remember that half the population has an IQ of less
that 100. If they work as hard as those with an IQ higher than 100 they will,
on average, earn less.
So by working “hard” do you mean how productive they are in absolute terms or doe you mean as a percentage of what they are capable of? If the latter then a person
with an IQ of 80 who is producing as much as he is capable of should earn
more than a person with an IQ of 120 who is producing half of what he is
capable of. Yet the way wages are paid the IQ of 120 person may very well be
earning much more than the IQ of 80 person.
I worked as a paper boy when I was in Jr HS and HS.
I worked as a bus boy in HS and early college.
I worked in a hot dog stand in college.
I worked in a factory as a welder in my early and mid 20’s.
I work harder today than I did then.
My earlier years I learned the skills I use today.
Those skills pay me more money.
Even if I worked the same level today, as I did back then, I get paid more for my skills.
But not only do they pay me more for my skills, they pay me more for the hardness of my work. Which is harder than 99% of minimum wage jobs.
I also make more over the course of weeks, months or a year, because I work 40-50-60-80 hours a week. MORE hours than most workers do.
On top of that, I try and take a portion of that “extra” money that I make, because of the harder, more skilled work, working longer hours, and do financial planning with it.
WHICH IS ALSO more work. More work learning the basics of wise financial planning. More work studying current financial trends. More work implementing the investment.
And then EVEN MORE WORK tax planning, as tax requirements are higher than the minimum wage person.
There was a time I made minimum wage.
BUT…
BUT…I didn’t stay there.
While working minimum wage, I went to school. While working minimum wage, I worked extra hours.
Today, I get paid much more than minimum wage. My job is harder. Requires more skill. Has MUCH tougher working conditions. And requires more time and dedication than anything I did at or a little above minimum wage.
There is also one other factor. Toughness level.
A brand new kid, on a football field can’t play at the same level as someone who’s been playing for a few years. The longer player has practice, practice and more practice. They have weight training and more weight training. They have experience.
So, when both players hit a 300# lineman, are the conditions different for either player? Are the both hitting 300# linemen? Is it harder work for the newbie, or is it easier for the more experienced player. If so, why?
They are stuck pushing 200# lineman around, because that is their limit, while someone else is pushing 300# lineman, because that is their limit (because they put in the work to move 300# linemen)
It requires the SAME ENERGY to lift or move 300# whether small or large, weak or strong. Its the one who trains who is able to move it.
That applies to ALL things in life.
Military people are toughened up and strengthened over their military career vs new recruits.
Special Ops takes that EVEN FURTHER.
Throw a new recruit and a spec op operator in the same scenario, the operator succeeds vs the recruit failing. Why? Same scenario.
Difference being, training, experience, attitude, strength…
Its the work done PRIOR that makes the more experienced better at the task. The task requires the same amount of work.
Likewise, in life, some people never move beyond the minimum wage jobs, because they never do the work or training or exercise to get themselves beyond that.
“Is someone who is making minimum wage not working as hard as you are?”
NOPE!!!!!!
People are here with there income amazing stuff. I’ll also soon in this list.
A McDonald manager median rate in the U.S. doesn’t even make 3x your $3.50 per hour in 2011 let alone a general worker which is in the $7.50 hourly median range. Your $43 a month which is $513 annually includes physically & mentally challenged people and people that for whatever reason do not have the capabilities to do the upper paying jobs. If you are a person who makes over $200,000.00 annually or even $100,000.00 and you cannot give a little more, than you are not handling your money correctly and do not care about your fellow man.
Not in SF. min wage is higher.
You r right comrade. We need to go after the people who pay almost all the income tax even more. It’s not right that they make so much money at our expense! You will enjoy this post. https://www.financialsamurai.com/2011/08/01/socialism-as-a-means-to-a-brighter-future/
It’s not about who pays most of the income taxes, the question should be about who should pay more at this time. I’m sure you think the poor, with their disproportionately large unemployment rates and dead-in-the-water wage growth are the group who should pay more. Personally, I’m still waiting for the 5-10 trillion dollars the Bush tax cuts have returned to the wealthy to trickle down…. waiting… waiting…. oh wait, they did trickle down – in China and India. Do the wealthy pay a higher share of taxes than the poor? Yes. Do they pay less in the US than any other wealthy country on Earth? That’s also a yes. Given our current fiscal challenges, why shouldn’t they pay more?
Because we live in America, not in other countries of the world.
Don’t estimate the poor or those in the bottom 50%. I’m sure most would be proud to pay and help contribute to Federal Taxes given our difficult times. We just have too many loupholds and credits which allow half the population to pay nothing. Most wouldn’t too ifthey didn’t have to. But most would gladly of they did.
Flat tax above a certain poverty level. Always fight for equality!
It’s not the total amount of tax people in different income groups pay that matters. It’s the percentage of their income that goes to taxes. The very top earners average paying only 18%, down from 35-90% during most of the last century. We had a much fairer and better economic and social situation for the whole country when they were paying higher taxes
The top 10%’s effective tax rate is 18.5% and the bottom 50%’s effective rate is 2.7%. Your point?
You’re clearly being highly selective with what specific tax data you reveal here Samurai. And the final data about how much the bottom 50% pay in taxes is completely false because you are ONLY considering federal income taxes.
While it’s true the Top 1% pay 36% of ALL income taxes. They ONLY pay 4% of ALL payroll taxes. Income taxes make up only 40% of all federal revenue. Payroll taxes make up and equal amount of all federal revenue — 40%.
The bottom 99% pay 64% of all income taxes and 96% of all payroll taxes.
And, this does nothing to address the numerous regressive taxes that are far more largely subsidized by the poor and middle class such as sales, gas and similar taxes, which make up the vast.
The vast majority of Americans pay more in payroll taxes than they do in income taxes, which makes it a far more relevant number to study due to its high regressivity.
Why does the “bottom” 99% pay only 96% of all payroll taxes? Why don’t they pay 99% of all payroll taxes? Why is 1% paying 4% of payroll taxes?
Your entire response is complete BS.
What are the differences in payroll taxes and income taxes???
When you get your check 3 taxes are removed. Federal income, state income, and FICA.
After the end of the year, most people will get a return or rebate, on their federal income tax. Meaning they will not have paid as much (if any) federal income tax.
That leaves state income taxes (in mine thats 5%, some don’t have any) and then FICA, which is currently 5.65%.
Now your number that the bottom 99% pay 64% is utter bulls#!t. Since payroll taxes are divided up by Fed, state and FICA . And considereing that the top 50% pay 96% of all federal income tax, its obvious that your numbers are total lies.
Next lets look at FICA taxes. Your check reflects your contribution of 5.65%. What its DOES NOT show is the 7.65% that your employer ALSO must pay. This is not withholding. That is what your check says your employer holds back from your check and pays to the government for you. Your employer must ALSO pay an additional 7.65% out of his pocket, profit or not. Total current FICA taxes are 13.30%
Total federal tax revenues are
42% federal income tax
40% FICA taxes
and 9% corporate taxes
with the remaining 9% being other taxes.
If you’re going to be a liar, at least do a little research so that you’re not so easily exposed.
I have looked up “payroll” taxes to see if MAYBE we might be talking about 2 different things.
Nope! Payroll taxes are exactly as I described.
Until you come up with a better idea than finding the most productive people in society and deciding that they need to part with more of the money they earned so you can distribute it to people who didn’t earn it, you’re going to be nothing but a parasite. You want people who earn over $100K to pay more? Then go earn that much, and pay more yourself. Personally, I think I can decide far better than the government what to do with my money.
The point is, above a certain level the money you earn isn’t due to your own productivity, but rather because you’ve found a way to be a parasite yourself and reap the benefits of other’s labor. In most of the first world countries a company CEO makes between 11 and 30X an average worker – in this country its over 450X – that’s not right, it’s certainly not “productive”.
Actually, that response is so mind-numbingly stupid that I’m hard-pressed to respond. Robert, when you’ve come up with a concept that enables you to provide something valuable to a large group of people and, in so doing, provide employment to another group of people, you may be a number of things, but a parasite isn’t one of them. A parasite is the guy at the protest who smugly demands that the government start handing out the fruits of other people’s labor and ingenuity.
Let me get this straight. I went to school after high school, to develope knowledge and skills, to be used in the work place. I work a job that pays me a very good hourly rate, because I’m more skilled and harder working than someone at McDonalds. I then work 60 hours a week, increasing my income. I then live modestly, so that I can try and make wise financial decisions. I invest my money into my 401k or into buying stock in a company, that provides YOU a job, and then you complain about that.
And who is the parasite?
Tell you what. Quit your job, and take YOUR OWN money, and start YOUR OWN business. Quit being a parasite on other peoples money. Remember. You MUST buy all your own tools and equipment and do all the work yourself, because otherwise you’re being a parasite and benefiting from someone elses labor. You can’t get a loan from a bank either, because your borrowing money other peoples money that they worked for. Meaning your a parasite.
Idiots like you would be the first people I’d fire. If you’re this stupid about the basics of life and labor, you’re probably lazy at your work and lazy at developing your skill, and useless to me as an employee. Seriously, anyone who thinks that a job PROVIDER is a parasite, isn’t going to improve themselves just to be drained by their boss. Anybody who views their employer as a parasite isn’t going to give their boss a hard days work, because their boss is just leaching off them anyway. And if I have somebody who views me that way, they are useless to me and can EASILY be replaced.
Yeah, the 40 year old woman with the IQ of sixty five, who can’t hold down a job just because she’s a little slower than the masses of younger people competing to work at McDonalds… Yeah, she can do it, just like you! Or how about the single mom with the autistic child? She can surely work forty hours a week week at Mcdonalds, just like you did! How about the disabled man who can’t stand up for more than two hours straight? Lets tax him too! That’s fair! These people are all friends of mine. I believe they have a right to complain if they want to. You do realize that $1,650 is barely enough to rent a small appartment in a “vibrant area,” right? Do you actually know anyone that isn’t in the top 25%? Congratulations indeed.
You need to take care of your friends Susan. So should the relatives, kids and parents too. That’s what everybody around the world do. Take care of each other.
Don’t underestimate the power of the human spirit of the poor to want to pay more and contribute to society. Nobody wants a hand out. People want an opportunity. Don’t look down on people Susan.
You are an idiot if you think that disabled people would be able to survive with the help of friends and family. I highly doubt you even know anyone who is disabled, because if you did, you would know how much equipment they need costs. Having a disabled son, I can tell you that something that probably costs a company a few hundred dollars to make costs in the tens of thousands of dollars to purchase… and guess what… the majority of the time insurance does not cover it.
Thanks for your kind words. I know a couple immediate disabled folks, one who cannot walk, and a couple who have mental retardation. The one with mental retardation is being taken care of by her family, and the support of her sisters. The one who cannot walk has learned to roll and is working a desk job at a high tech company. The last thing he’d want is a hand out from the gov’t and pity from you.
What are your suggestions to the solution then? You might want to read this article with the healthcare portion https://www.financialsamurai.com/2011/08/01/socialism-as-a-means-to-a-brighter-future/
I am a student, and have been working since I was 7 years old. I see people all the time who are satisfied just living paycheck to paycheck, I made up my mind that I am going to be in the top 10% my goal is to be there by age 35. I do get tired of all the parasites in this world living on unemployment not looking for jobs and having kids just to get food stamps, I understand not everyone on these programs are bad, some just have had some bad breaks, but not one would ever get to the top of the mountain if the quit climbing every time the slipped. I thought your post was beneficial and enjoyed reading it. Thank you Anderson
Hi Anderson,
Good on you for having a strong work ethic! I hope you achieve the goal by 35, and continue to do great things for yourself!
Sam
I don’t think you will ever achieve your goal because you sound like someone who is not very bright. You sound like someone who has been brainwashed by those right wing talking points
I think people who think the poor and disabled and lower class have the ability or opportunity to support themsevles are ignorant. Especially these last several years with jobs leaving and highest level of unemployment most of us have ever experienced.
Most of the people who need government assistance long before 2007 are the “undesirable or disabled or elderly” there are no employers willing to hire within this class of people… So all you right wingers who claim to have compassion and support life- Please tell us all who specifically are the employers willing to hire anyone in this group if they even have an jobs to offer.. Secondly, please break down in detail how a person who may be lucky enough to land a low skill full time minimum wage job is supposed to survive on minimum wage without living ? please break down where the person’s entire $1200 per month is going to cover? most of these jobs do no cover health insurance so calculate that too and then you go read “Nicke and Dimed” 2 real people who quit their over 40K jobs to take a year off to see if they could really live off minimum wage in this country.
I challenge you to do the same- and God help you if you even have one child to care for..
Grow a heart and some eyes.
I agree living on $1,200 a month is next to impossible but this is why people need to get a good education or at the least learn a trade. By the way all of us right wingers do not claim to have a heart I honestly could care less about those who have less then me. My answer is that they should work harder if possible and if not then seek help from friends, family, church or private charity group willing to help. I just do not want to pay the way for others no mater how much I make a year. No matter what liberals like to think my money is not theirs it is mine and I just want to be left alone to do with it as I see fit.
I think what toni is referring to is the Right Wingers who supposedly have such strong “family values”, and those who tout their religion as if they are better than other people. If you think about it, “What would Jesus do”? He would NOT be a Tea Partier!
Good for you , seaton, to admit you have no heart! Not many would admit that!
I cant belive you are human. to not care far others is not human , i care more far a dog thaqn you do people. !!!
May God have mercy on your soul (if you have one)!!
I grew up poor in New York. My Mom made $22,000 with two kids and we came out fine. I am in the top 10% and it’s BS to think that no one else can make it too. It’s all about work ethic and smart decisions. Oh yeah I’m Black BTW, since I was told I wouldn’t even make it past the age 21 where I grew up.
That’s awesome to hear! Glad you made it out and have achieved success beyond what others said you would do.
Neither me nor any ‘left-wing’ politician I have listened to are saying that “no one else can make it”. That claim is a pure strawman.
The problem is expecting that a high, or even a medium-sized, portion of them can make it. Most people from poor families must get near-minimum-wage jobs to support their parents. Worse is that dividing one’s time between a job, a family, and school cuts performance in one or more significantly, especially for youths.
So between the forfeit of college for knowledge of a job and sacrificing grades to keep a job, you can’t logically or morally expect most of them getting to the same point you have.
I won’t get into how your mother having a $10.57-per-hour-at-40-hours-a-week job in a household with two working people would have made you not that poor.
Minimum wage is near starting point pay. Nobody needs to stay there. I started there.
I went to a community college while making just over minimum wage. I worked 30-40 hours a week plus carried a full load at school, and paid my own way. My mom worked in a factory. My parents were divorced and my dad paid NOTHING-EVER, to my mom or for my education.
When I got done with school I STARTED my career working in factories making $7 an hour. I worked my way up from there.
All you people who mention minimum wage.
You might as well be saying minimum work.
“Hey, I only make minimum wage.” “Hey I only do the minimum amount of work to get paid.”
Minimum wage is fine for kids. Its where the learn to work. Those who STAY there aren’t trying.
Good for you Anderson, but the entire argument that we’re somehow in this current situation or the cause of our ills is somehow related to lazy, unmotivated poor people is a complete farce and a total strawman argument — it’s empty headed and without any common sense.
Of course there are leeches at the bottom just as their are vampires at the top. And, for the most part this is fine, there are people who suck from every single walk of life, race, creed, culture, etc. The REAL problem is that the vampires at the top have the ABILITY, MEANS and, most importantly, the MOTIVATION to actually affect change for their own benefit to the detriment everybody else.
Seaton’s comment is a classic example. He just doesn’t give a crap about anyone below him, so why would he give two squirts about corrupting the system to his benefit and their detriment? And, that’s the point — he wouldn’t.
We’ve been seeing the results of this behavior for the last 30 years. Massive policy changes enacted by the affluent for the benefit of the affluent — enormous reductions in tax rates, huge loopholes, massive changes to capital gains and dividend taxes, etc. Creating the most massive movement of wealth from the poor to the rich in our nation’s history.
At the same time, unsurprisingly, we’ve seen the middle class stagnate and shrink and poverty rates have soared. Why do you think this is?
What exactly do you think the endgame is going to look like if we don’t stop it? For one, if you’re in the top brackets your taxes are going to SKYROCKET as more and more wealth accumulates at the top. So, for your own benefit, you might want to reconsider how much pain you can tolerate now to avoid what’s going to happen in the next decade.
Yeah, it’s just 43 bucks, that’s only about a 3 percentage point hike for the lower half, or only a little more than double their current effective tax rate. And an equal increase for the upper half would raise over 210 billion more. 210 plus 60. But that’s still way short of the trillion dollars needed to balance the budget. But if the top 1% kicked in at 50%, that would raise a total of over 1 trillion. Budget balanced. Really, no one is going to live much worse on 650,000 than at 1.3 million, the average household income for the top 1% (Center on Budget and Policy Priorities), not that anyone living on 1650 a month would notice, anyway. And if they did, no one would feel sorry for them.
Are you seriously asking people to contribute 50% of all their income, while half the population is contribution 0% of their income to Federal Taxes?
Do you realize that a person in the bottom 50% (that doesn’t pay income taxes), would have to work over 100 years to make what a person making $350K after income taxes makes in one year? In the 1980’s I worked for a couple of small businesses where the owners made this kind of money. If it wasn’t for the hard work of low paid workers these businesses wouldn’t make any money.
And if the small business owner hadn’t taken the risk and invested the capital to start that business, those low paid hard working employees would have been unemployed.
Yes, 50% is the least people who make over $1 million a year should contribute. Otheres, in most cases, contributed to their success but do not make nearly that much money: the teachers who educated them, the people who built the infrastructure they probably used more than average, the people who probably worked for them for a pittance so that they could reap most of the benefits–if they even earn their money by working. Many are trust-fund babies who have never worked a day in their lives and just live off investments. At any rate, anyone should be able to do just fine on $500,000 a year, and most of the CEO would still take home many millions even after paying 50% in income tax. The shame is not that some people pay no federal income tax (and remember that they still pay a large percentage of their incomes in other taxes); the shame is that in the richest country in the world 50% of the earners do not make enough money to pay federal income tax!
Do you make $1 million? Do you even make over $350,000? How would you know how much they pay and how they feel? How can you judge someone when you have never walked in their shoes?
Why do you think 50% of American earners don’t make more than 33K?
I am in the top 5% and do not mind paying more taxes to get our deficit reduced. The rich pay less in taxes now than at almost any other point in our history. Yet all you hear from the rich is how high taxes are And how much it hurts the economy. BS. The best way to avoid taxes is to spend money or invest it in new business or real estate. If the rich get taxed more, they will spend and invest more in the economy in order to avoid taxes. Win win.
No one is stopping you from paying more taxes, so if you dont mind doing so, why dont you voluntarily pay a higher percentaget than what you are legally obligated to? Put your money where your misguided mouth is.
If you read my post I said I would not mind if it meant our deficit was reduced. One person paying a few percentages more is not going to change the deficit and is pointless. If everyone in the top 5% paid a few percentages more than it would make a huge difference. We might actually gain some ground on getting the country back on track.
Please tell me how I am misguided? Or do you just like tell people they don’t know what they are talking about without actually basing it on anything or being able to counter their argument?
The top 5% made an AGI $1,685,472,000 or $1.685 TRILLION approximately THIS YEARS deficit, last years also.
Raising taxes on the top 5%, a couple of percentage points, will have virtually no affect on the deficit.
The silly talking point of ” go ahead and voluntarily pay more taxes” is tiresome and nonsensical.
Actually Lucy it is not tiresome and nonsensical because it is true. It would show us that Buffet means what he says, rather than simply trying to “impose his morality on the rest of us”. I for one (and I make less than $70,000 a year – gross) am sick of the envious leeches in our society. When is the last time any of you have reached out and bought lunch for the pan-handler, or better yet, when is the last time you took a street person in, fed them and let them sleep in your home? When is the last time you took warm clothes to someone trying to stay warm on the grates in the middle of winter, or took the time to serve them food in a soup kitchen. If you haven’t done these things and continue to do them on a regular basis then you are nothing more than bags of wind. Your self-righteous talk is cheap, and shows you what you really are – hypocrites. Pull your damn wallets out and do something. Otherwise shut the hell up. I’m tired of you attempting to “impose your morality” on the rest of us, especially given the fact that you are nothing more than thieves. And because you might have the majority in power doesn’t make you no less a thief, but it does turn you into thugs. Having power and making something legal does not make it moral.
How’s this idea, we raise the taxes to 1990 levels for those peole who got about a Trillion dollars in tax cuts over the last 10 years, and use that money to pay down the 5 TRILLION dollars that our last president added to our national debt. Seems like a good idea, don’t you agree?
Actually, I raised the deficit quite a lot too in case you’ve forgotten…
Congress is in charge of spending.
Half of the debt incurred under Bush was the last 2 years when Pelousi and Reid were incharge of spending. In Zeros first 2 years Zero and Pelousi and Reid increased the debt by $3 TRILLION.
Soak the poor! Let ’em eat cake!
Boy, you’ve got a generous spirit! As long as it’s other peoples’ money!!!! Something tells me you’ll be quite generous with your neighbor’s neck when they come with the guillotine…
What you do not realize though is the people who make over 50% are the people who are also making silent income. In other word they are the ones who own homes and are able to write off all of their interest which makes them have even less taxable income. Plus the appreciation (and I know the housing melt down has killed this) that they make year after year. For example a person buys a $200,000 home and see’s his equity go up 6% a year, which historically is where real estate has been until recently, and he’s making an extra $12,000 a year compounded. Then a little bit higher up you have people who own business’s who can turn around and sell their business’s. And having owned a business for 22 years I know all of the write-off’s a person gets. Look at Warren Buffet who paid 7 million when he’s worth billions. These are the people who take their personnal jets and fly to Hawaii to golf and write the whole thing off because they took 10 minutes to talk about something business related. The poor will never own anything and will do nothing but rent, which will make even more money for the top 50%. Sticking it to the poor is not the answer. Clinton was the last one to have a balance budget and he did it with higher taxes. We need to get rid of all of the Bush era tax cuts starting with the richest 2% like Obama wanted to do and then after the economy heats up the rest of us need to step up to the plate until we get our budget under control. Go back to what works.
wouldn’t a flat tax solve this problem? after a certain income level of course. let’s say after 25k you are taxed at a flat rate of 20%. no write offs, nothing. FLAT…
” In other word they are the ones who own homes and are able to write off all of their interest which makes them have even less taxable income.”
“And having owned a business for 22 years I know all of the write-off’s a person gets. ”
Your not near as smart as you think.
Mortgage interest write offs are capped at $1 million of mortgages. If you have a $200 mortgage you can write off the entire amount of interest. If you have a $2 million dollar mortgage you can only write off the interest on up to the $1 million point. If you own a home beyond that with a mortgage. Too bad so sad, no write off.
“These are the people who take their personnal jets and fly to Hawaii to golf and write the whole thing off because they took 10 minutes to talk about something business related. ”
You’re full of S#!T
If you believe that, then YOU NEVER owned a business for 22 years.
“Look at Warren Buffet who paid 7 million when he’s worth billions. ”
Again, if you believe that, then you never owned a business. 7 million in taxes is paid on income or capital gains. He’s WORTH billions. Worth IS NOT income. If you can’t tell the difference between worth and income, you’re a lousy business person.
You’d also realize that though Buffet is worth $39 billion, his wealth has been sheltered because he never really SELLS anything. His investments keep appreciating. Until he sells them, his fortune is locked up. When they are sold they will be subject to capital gains taxes, thats when he pays $7 million.
But the bottom 50% only own 2.5% of America’s wealth. Taxing them more doesn’t make any god damn sense. They don’t have the wages to tax. Just because they don’t pay income tax doesn’t mean they don’t pay taxes– they pay federal, state sales tax, plus payroll taxes, and since they make less money and devote a higher percentage of their income to necessities like food, they pay “more” in relative terms than the rich do. If you don’t think most people in the bottom 50% would be happy to make enough money to qualify to pay income taxes, put your money “where your misguided mouth is” and switch salaries with one of them.
WEALTH and income are 2 seperate things.
Income is what you get today, wealth is aquired over time.
“If you don’t think most people in the bottom 50% would be happy to make enough money to qualify to pay income taxes, put your money “where your misguided mouth is” and switch salaries with one of them.”
I have been there. I’ve made minimum wage in the past. But I’ve improved myself. I made myself marketable. I’ve also had periods of unemployment, but have always returned to work-BECAUSE I was marketable.
Marketable means more than JUST an education. Its developing skills, its developing quality, its drive, its work ethic. When people are looking to hire someone, they’re looking for more than filling a position and paying a check. They’re looking for someone who not only HAS the ability to get the job done, but the drive to do it, to show up and get it done, and the drive to do it well.
Like John Wayne said: “Lifes hard. Its even harder if your stupid”.
Thats life. Hard. If you’re not going to be motivated enough to improve yourself, to make yourself marketable, to get that better paying job, THERE ARE others who are, and will get that higher paying job, leaving you whatevers left over.
Of course thats where todays tax system comes in.
We have “sin” taxes on cigarettes to discourage smoking, “sin” taxes on alcohol to discourage drinking, “sin” taxes on fast food to discourage eating fast food…
And “sin” taxes on income and wealth to discourage prosperity. Wealth today is viewed as a sin.
We can’t have one person earning more than another, so lets tax the one earning more. Who cares WHY he’s earning more.
So, you’re proposing filling $60billion of our deficit with a 2.5% increase of taxes on people in the bottom 50%. You want to double taxes on people who, in many cases are having trouble feeding their family or keeping a roof over their heads. I accept your proposal. Let’s double the taxes the poor are paying on one condition. That we double the taxes the rich are paying. That seems totally fair. It does seem curious to me that you were only planning on doubling the taxes of the poorest people in the country.
You question whether we should call people making $200,000/ year wealthy. The average income in our country is around $46,000. If people making more than 4 times the average shouldn’t be considered wealthy please tell me where you would draw the line.
You said: “Ironically, it’s during downturns where the less wealthy are relatively better off on an absolute basis.” which is an odd way of putting it. Yes, Warren lost $8billion, which is probably more than I’ll make in my entire life combined but he didn’t lose his livelihood. He didn’t lose his ability to keep a roof over his head or feed himself. On an absolute basis someone who lost their job and is no longer able to feed their kids is absolutely in worse shape than Warren Buffet.
Why is it that if we raise taxes on the bottom 50% by 2.5% is horrible, but if we raise 2.5% for the top 20%, it’s OK? Don’t you know discrimination is illegal? We need to fight for equality every single day.
Do you not see the difference between taking away a poor family’s grocery money and taking away a portion of a wealthy family’s private jet fund? Seriously, if someone’s making $20,000 they’re barely making ends meet. If you take 2% of that you’re only getting $400 but you’re making it harder for them to support themselves. If someone’s making $2,000,000 and you take away another 2% you get $40,000 and you don’t make it remotely more difficult for them to support themselves. Maybe they can’t buy that second Porche but you’re not taking away their ability to feel their family or to keep a multi-million dollar roof over their heads.
So, you can tax the poor, get virtually no money out of it and seriously impact their ability to support themselves.
Or, you can tax the rich, get tons of money and they would barely even notice the difference in their paycheck.
As an alternative you could just tax all income at the same rate. I’ve never understood why you would pay a lower tax rate for the income your broker makes you buying and selling stock than a miner pays on his income hauling coal out of a mine. You’d pull in a lot of money taxing capital gains at the same rate as wages.
Why are we talking about extremes here i.e 20K vs. the $2,000,000?
Why don’t we talk about $33,000 single guy in Iowa, or the $150,000 couple in San Francisco vs someone making $300,000? These are much more common examples, and the whole point of the debate.
Yes of course it’s fair to raise taxes $825, $3,725, and $7,500 for the three incomes below. Why are we just raising money from the person making over $200,000? We need to all pitch in and not discriminate! You can’t make $33,000 in Iowa and call to raise people’s taxes who make over $200,000 if you aren’t paying more yourself.
Of course if you are at the poverty level, we’re not asking you to pay more taxes.
For some reason it’s not letting me reply to your most recent post, so I’ll reply to your previous one.
I believe that we should eliminate all of the Bush era tax cuts, not only those on the wealthy. Leaving out those in poverty of course. I don’t believe that anyone would even notice a 2-4% increase in their taxes and that would make a far bigger dent in the deficit than just a 2% increase on those making over $200k.
I was bringing up the “extreme” of someone making $20,000 because some people here keep pitching such a fit about the “50% of people who aren’t paying any taxes”. Most of those people are poor. Very poor. There’s a percentage that make somewhat more but get various deductions (kids, house, etc) that bring them down to $0 but most of those people are just extremely poor. BTW, I do support repealing most of those deductions.
I hadn’t mentioned people making 33k or 150k because no politicians have the balls to raise taxes universally so the only tax increases on the table are those for individuals making over 200K or couples making over 250K. If you’re an individual making over $200K you’re rich. I don’t care what anyone else says but if you’re making well over 4 times what the average American makes then you’re rich. If you’re having trouble getting by while making $200K then you’re just bad with money and you should take a class or give power of attorney over to someone with a clue. I don’t care where you’re living. I have friends in San Francisco and NYC making 30-40K and surviving just fine.
So, in short, I agree that everyone should chip in to solve our problems but sadly our politicians are spineless weasels and won’t propose that. The options currently on the table though, increases on wealthy families, are a good start. Bringing taxes on high income earners up from the near record lows they’re currently at is not unreasonable and it’s not class warfare.
Why does $200,000 + $200,000 not equal $400,000? Why does it equal $250,000 as a target for a couple to pay more taxes? Does the govt expect one spouse to suddenly take a 80% pay cut?
I understand, and no one wants to help a freeloader – however when you are in the bottom bracket and do not have adequate access to education, healthcare, etc it means the mechanisms to pull yourself up by your bootstraps isn’t present at is was back when education was considered a public good and not a private investment. Right now the bottom aren’t fighting for fairness, they are fighting for survival, and a chance that maybe tomorrow will be better for them and their kids. You can order yourself a pizza and eat it in front of a child who hasn’t had anything to eat that day, after all, this child hasn’t done anything to contribute to the making of that pizza. You know you can’t eat all of it, but that’s not the point, this child didn’t earn it so in order to teach this child a lesson you refuse to share. When the child dies of starvation – well good riddance, she was being a lazy parasite anyway…
Complaining that the top 20% pay 80% of the taxes (a frequent complaint) – when they indeed earn about 60% of the income … is sort of like suggesting that skewing the income tax rates towards high income earners is unfair. Sort of like saying the bottom 50% ought to pay their fair share…
Do you think it would be more fair to ask the bottom 50% to pay 50% of the income tax? That is about the same logic that drives your complaint about the tax burden placed on the top earners.
That would be fair, right? Half the population pays half the tax.
The folks earning only 12.75% of total income ought to pay 50% of the taxes, right?
C’mon folks…saying “top 20% pay 80% of the taxes” is an unfair representation.
It is interesting that the “burden” placed on a top earner means that a person earning $380,000 per year pays an effective tax rate of 23%, and I’ll bet a person at the next tier down is paying pretty darn close to that (20%) yet earns less than half as much per year ($160,000 per year…).
Uh, if the top 20% earn 60% of income why are they paying 80% of taxes? Come on now. They should pay 60% of taxes. Always think math and equality. Why would you tax them more?
because when you make that much more it is rarely because you are really creating that much more value, but rather found a way to exploit the working poor?
Also the rich use far more government services and infrastructure to keep their businesses going…
“Also the rich use far more government services and infrastructure to keep their businesses going…”
REALLY???
Government spends ON AVERAGE just under $11,000 per student per year on education.
How many families do you know that pay $11,000 in federal and/or state income taxes, that would cover their portion of just one childs education, let alone 2 or more??? And thats JUST for education. Let alone defense and infrastructure and others. If families aren’t even paying their portion on education, then they are’nt paying their portion on the rest.
That money has to be coming from somewhere. Either the poor are paying for the services they use or the rich are paying for the services that they use. Seeing that the bottom of the top 25% make about $67,000, that means $67,000 AGI is the top of the bottom 75%. when you figure how much tax even the very top of the bottom 75% pay, that doesn’t cover education expenses. If the the top of the bottom isn’t covering even their portion, that must mean the the top 25% are paying all the rest, PLUS THEIRS TOO.
Thank you for bringing that point up. It infuriates me when people spew out those percentages that in no way represent the actual percentage of taxes paid in relation to income earned. Those numbers are meant to overdramatize the tax burden of the top earners. Another assumption that is made is that the bottom 50% of wage earners are full time workers or heads of households, when in reality it is not specified, just that they are income earners which would then include for part time workers, students, seniors who have income to report, disabled workers who are in work programs, etc. I know of parents who have their daughters file income taxes on their babysitting pay to teach them the right thing to do. These are many of the people who constitute the bottom 50%. I doubt that most of the spouses, children or disabled family members in the wealthier families need to take minimum paying jobs to make ends meet so they are not even considered in the equation as wage earners or tax payers, while there are many more wage earners in poor families therefore what the top/bottom 50% of wage earners actually represents needs to be clarified.
If all the top earners pay 100% you still wouldn’t get rid of the national debt. Why not have a flat tax? Do you want to pay more for a loaf of bread or twice the electric rate just because you make twice as much as your neighbor? How much is enough? Just because you make more money doesn’t mean you have more to keep at the end of the month. If you have a bigger house, you might have a bigger mortgage payment, your electric bill is higher, your water bill is higher and with it comes you…r lawn guy, your pool guy, your housekeepers, your nannies,your insurance, your car payments (if you finance all) add up to higher bills. Don’t forget that often someone making 1 million a year,already is giving back beyond their income tax contributions. They give back every time they hire someone to do something for them. Go drive around some of the Big & Rich areas of Dallas, Bev Hills, New Port Beach, Man.Bch.CA, NYC and the like. If you think all those people are socking away all the money the make, well I have a bridge to sell you. Some of the million dollars paychecks have more going out than coming in. Many million dollar check makers also are investing in business’s with their income. Business’s that will provide jobs for others. All the people listed above that provide services make a living from those who make enough money to hire them to do it. Don’t hate those who make a lot of money.. many of them help put food on the table for many American families. Take more money from those who pay most of the money already and you may find that all you are doing is “Cutting off the nose to spite the face”. You’ll see.. just like NY did.. raise taxes and watch how many people move away and fill out the Monaco Citizenship application.
It’s really not like paying more for a loaf of bread than my neighbor. We would both pay the same amount for the first loaf of bread. I would pay a higher price for the second loaf (that my neighbor can’t afford to buy).
People are saying that we hate those who make a lot of money… that is not true. But if we need to create more revenue by raising taxes, the author of this blog thinks we should do so by raising taxes on the poorest among us. I just think it more reasonable to raise them on those who could most afford it, rather than on those who can least afford it.
If people want to move to another country because their taxes are too high, I say good luck and send us a post card once in a while. It is so stupid and petty, when you hear people like Bill O’Reily say that if his taxes are raised he would quit his $10 million a year job at Fox, and people who work for him would lose their jobs. If his income taxes go up, he would only have $5 million a year left. A bottom 50% worker would have to work over 150 years to make $5 million.
I cannot believe these people who make a ton of money who whine and cry about how much they pay in taxes. Why don’t they just think of the ton of money they have left after taxes.
I don’t listen to bill o Reilly. However, his point is that he feels he busted his butt to get to his 10 mil, so he feels assaulted when others don’t.
If Bill O’Reilly quits his $10 million per year job, there will be lots of talented people lining up to take his place, and the people that work for him will just get a new boss!
Samurai – one of your misapprehensions is that you equate earnings with how hard a person works. Assuming you make about 500K per year, do you think Bill O’Reilly works 20x harder than you do? And that the teachers that taught you work 10% as hard as you do? It’s not that simple. We need all kinds of people in all kinds of jobs in our society, not just corporate bigwigs. Your constant belittling of people in lower-paying jobs is truly demeaning.
OK, so let’s pick a number and tax 100% over that number. If $5 million is enough, shouldn’t $2.5 million really good enough? And seriously, if $2.5 million is enough, couldn’t he get by with $1.25 million? Let’s not stop there though, please tell me how much is enough and let’s keep on going. I live comfortably on $100K so that really should be the max anyone needs to make. Let’s tax all income at 100% over $100K and world will be a better place, no doubt.
Jakee, no one is suggesting the highest tax bracket should be at a rate anywhere near 100%. We have always had a progressive tax system, and the highest marginal tax rate has been as high as 91%. It is only 35% now. (For capital gains, the rate is only 15%, no matter how much they make.) Everyone agrees the deficit is a big problem and that something needs to be done. Creating a new marginal tax bracket with a higher rate for income over a million would be a start. What would you suggest?
Lindz Sangalli, I don’t want to nitpick but your first sentence is blatantly false and is proven false by the chart in the original post. You said “If all the top earners pay 100% you still wouldn’t get rid of the national debt.” The entire Federal budget is under $4 trillion and the deficit is just over $1 trillion. Based on the chart provided in this post the top 1% of income earners alone report income of $1.7 trillion and currently pay $.4 trillion in taxes. So, if we increased their taxes to 100% then that would fully cover the deficit. BTW, I’m not suggesting we increase taxes to 100%, just correcting your statement.
From 1936 to 1986 top tax rates were over 70%, peaking over 90% from 1950-1963. During that period our country experienced consistent substantial growth. In the 80’s taxes on the wealthiest were reduced to 50% and the number of people taxed in the top tier was dramatically reduced. Ever since then we’ve seen a substantial decline in the middle class. Our GDP has only continued to grow due to the dramatic increase in income of the top 10%. You might also note that the last time taxes on the wealthy were as low as they are today was just before the great depression.
Now I’m not saying that this proves that taxes on the wealthy inherently create growth. There’s clearly a lot more to it and this data is insufficient to prove that. What it does clearly prove is that higher taxes on the wealthy do not hurt growth.
https://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213
Actually, Lindz’s statement is correct – “If all the top earners pay 100% you still wouldn’t get rid of the national debt.” Lindz stated “debt” — currently over $14.8T — not “deficit”. Our debt is a huge problem. Just addressing the current annual deficit does nothing to address that debt. Raising some taxes will likely have to be done because our politicians have done the equivalent of buying a car they didn’t need and expect us to pay for it. I would rather they didn’t buy the car in the first place, and would prefer they not to buy another one they don’t need. Figuratively speaking, of course. The “tax the rich” solution naively ignores that a huge chunk of money goes toward paying debt interest alone ($400B+ per year) without even addressing the principal of those loans. Cutting out-of-control spending is crucial to attacking the debt. You are correct in stating that raising taxes to 100% would cover the deficit, but deficit reduction is meaningless by itself. Come up with a solution to tackle the debt. Not to nitpick.
COMMON Sense, how exactly do you address the debt without addressing the deficit. The only way to possibly address the debt is to address the deficit. The deficit is the short term version, the debt is the long term version. We need to fix the deficit so that we have money to put towards the debt.
If you eliminate the deficit and create a surplus you can start paying down the debt. That is, of course, if we don’t end up with another Bush style president who comes into office saying “it’s not the government’s money it’s yours” and immediately gives up the surplus and plunges us back into deficit spending. Eliminating the deficit would, over time, pay off the debt.
Also, there is no plan whatsoever that could possibly pay off the entire debt immediately. You could raise everyone’s taxes to 100% and eliminate 100% of government spending and still not pay off the entire debt that year.
Finally, the “tax the rich solution” is not a solution. It’s a part of a solution. There is no real solution that doesn’t include both spending cuts and tax increases. The reason the wealthy are the primary “target” of tax increase talks is that 1) they can afford it and 2) they have seen the largest tax cuts over the last 30 years, going from 80% at the beginning of Reagan’s first term to just over 30% now.
At no time did I say that you shouldn’t address the deficit — I stated that “deficit reduction is meaningless by itself”, indicating you have to address debt and deficit. Also, at no time did I ever say that the debt can be handled in one year. I was simply correcting your statement that Lindz was “blatantly false” when you ignored or misread what was actually written there — pay more attention to what is actually written. Stating something is blatantly false then misquoting the statement is just funny. I think you need to read more carefully and not assume that Lindz and I are saying something that we are not.
This whole thread, though, indicates that deficit is all you should address, and then only by raising taxes. “Eliminating the deficit would, over time, pay off the debt” is not entirely accurate as you state above. Mathematically, if you have a $1T deficit and you increase taxes enough to cover exactly $1T, you have successfully balanced the budget for that year, very simply. However, you still have $14T in debt that you did nothing to affect. You do allude to that in your above statement about surplus, so I think you get that. But, the interest on those loans will continue to accrue, so while you’ve successfully balanced for this year, without doing something else you will again be in deficit next year with the added interest. Eliminating the debt and creating a surplus are two different things. If you stop at eliminating the debt, you can never pay off debt. Creating a surplus is how you pay off the debt, and you can only do that in a significant way with the amounts we’re talking about by doing both raising taxes (because we’ve been forced into that scenario) and cutting out of control spending, which you state above. This whole thread ignores the importance and effect of cutting spending, though, and indicates that increasing taxes on the rich will solve all ills.
The whole point of the opposition to raising taxes is that given the scenario that we are in, you will never get to a point to where the amount you’ve raised taxes is sufficient or “just” as many on the left would say, especially with the current administration’s appetite to increase spending at a catastrophic rate. You will then want to increase the rates again or lower the bar for defining the cutoff line of the rich you want to tax while failing to understand that increasing taxes on the rich does affect the plight of the middle and lower classes.
The rich have gotten tax cuts over the last 30 years is because the philosophical intent of the founding of our country was property ownership, including money, if done legally and honestly. Until you clean up the abuse by the some recipients of handouts they receive as well as abuse by some providers and government, you cannot come up with a system that will fairly tackle our fiscal challenges. Increasing taxes on the rich facilitates continued abuse by both rich and poor in the name of “fairness”. Unfortunately, this approach tries to address the rights of one group by infringing on the rights of another group. That is just wrong in our country.
“If you stop at eliminating the debt, you can never pay off debt.” Meant to write “If you stop at eliminating the *deficit*, you can never pay off debt.”
Like all too many analyses this one focuses exclusively on income taxes which are our only significant progressive taxes and especially on federal income taxes only which represent a little over a quarter of all tax receipts (state, federal, and local). Payroll taxes, sales, fees, etc are either flat or regressive, which all averages out to a total tax system which is almost flat from the 25th though the 99th percentile, with steep dropoffs at the bottom and the very very top (mostly due to capital gains rates).
The American President 1995
QUOTE: “People don’t drink the sand because they’re thirsty. They drink the sand because they don’t know the difference.”
Point 1. Taxing the top 25% Federal income brackets is a DEM tactic to get votes. Scare the bottom half of the TAX tax bracket to vote for “woe is me”. The have nots will always want to take from the haves and complain that the system keeps them down. Why should 1 in 4 amercian’s pay for people “who in majority make less effort to contribute to society.” The problem is people use to have pride and where humble. Now today the people thinks its a right to have CABLE, Cell phone, Internet, Job, 9 kids, marring an illegal, 4 car’s, beer, sigs, going out to eat.
Point 2. You can tax the top 10% income earner’s to 70%. And the Dem’s will scream we need more money to balance the budget tax them more. It will create more program’s that the masses will abuse.
Point 3. Education cost for public schools/ trade/ and college need to be capped or should be free to students with 3.0 or higher. Coaches, School staffs, teachers (yes teachers), do not deserve to make $500k a year to do there job.
Point 4. Controll the cost meds & health insurance. No drug company needs to fleece amercia for billions. Controll the cost meds & medical services, and competition in insurance market will lower rates.
Point 5. No unsecured loans! Simple – verify with IRS a actual copy tax forms, not what the person/ business brings into the office. In accurate evaluation of property value’s should be held accoutnable.
Point 6. KILL N.A.F.T.A. Clinton & Dem “con”gressianal gift to job sucking america. It allowed america to move manufacturing over seas and stopped many import taxes.
Quote: The dems
1.) Where do you get that we are only taxing the top 25%??? Only 1 in 4 Americans pay taxes? Or are they the only ones who you consider to be making an effort to contribute to society? Many people in lower-paying jobs (e.g. Social Worker) make a much bigger effort (as well as results) to contribute to society than many people in high paying jobs…
(Oh, I get it… YOU are in the top 25%!)
2.) Are you serious? “The masses”???? You are really an elitist, aren’t you?
3.) What teacher do you know that makes 500K, or anywhere near that????
point 7. NO free HEALTH CARE FOR any politician EVER. Make them pay for there own insurance. We will have socialized mediine in by the next election. Run on that platform. You got my VOTE!
Great information! I’ll use this to battle my liberal friends who want to make wealthy people pay even more than the outrageous amounts they pay already. Is the income information for individuals, households, or just overall returns? Thanks.
Where exactly are you getting from these figures that wealthy people pay “outrageous amounts”? I see these figures as just the opposite – that despite the rhetoric that the top 1% pay 38% of the total tax bill, that is NOT an outrageous amount when you see what % of total earnings and wealth they control.
“NOT an outrageous amount when you see what % of total earnings”
Looking at % of total earnings is precisely why I feel it is outrageous. They make 20% of total earnings but pay 38% of total taxes. If they paid 20% it would not be outrageous. But they pay nearly double that.
So you believe in the flat tax. The top 1% would pay 20% of total taxes if we had a flat tax rather than the progressive income tax system we have. But the United States has NEVER had a flat tax. This is nothing new. The top earners were paying a much higher marginal tax rate during the Reagan years than they are now. The top marginal tax rate is historically very low now.
I don’t think these numbers are going to impress your liberal friends very much, but I applaud you for trying to give the full picture rather than what the right-wing pundits usually like to do….. just say the top 1% pays 38% of the tax bill without also disclosing how much income/wealth they control.
I don’t necessarily believe in the flat tax because it would further cripple the economy, but I do think that a flat tax would be the most fair method of taxation. I’m OK with the progressive system but when is enough enough? The rich already pay more than their “fair share” in the progressive system, and now that we’re in a huge hole, we want to make them pay even more? When does it end? They’re already giving their fair share. Get the revenue elsewhere. I’m far from rich but I just don’t think what we’re trying to do is fair.
It ends when we all make the same amount of money. Trust me on this one. It will never end.
over all, varies from single married etc.. most info is found on .gov sites for statics.
Wow. So in your fantasy land, the poor are doing better than Warren Buffet. Great argument there.
And your answer to the poor is to work two full-time jobs, so that they can survive. That to you is better than millionaires paying a slightly higher marginal tax rate. And not only is this right-wing/conservative/tp/Republinut ‘logic’ deplorable and wrong, it doesn’t take into account all the other taxes, some of which are paid at a higher rate by the lower and middle-class.
You also don’t take into account total financial wealth. The top 5% in the US control 72% of all the financial wealth in the US. The top 10% control 83%. And that was in 2008, they likely control more now. By contrast, the bottom 80% controls just 7% of all US financial wealth!
It seems you want to compare our poor with the truly desperate and starving. And that in your mind, the poor in America should pay more taxes until they are truly desperate. That only when they become comparable to the poor in the worst nations on earth, only then can they claim they are poor. Is that right? Or at that point would you simply call them whiners and lazy? which is essentially what you do here.
Why do you belittle the poor and those making under 33k a year? You will be surprised with how much strength we have and how much we do care about the country and happy to contribute.
I’m a firm believer that Obama will get reelected in 2012, because All of America wants to help out and contribute more, not just the wealthy would already contribute the most.
Nowhere do I belittle the poor. And you didn’t address a single point in my post. But I suppose that’s typical of the right-wing. If you can’t speak to the issues at hand, deflect and change the subject… or speak in rhetorical whimsy.
Comrade, I am as left wing as you and believe we should get the rich and shake em for all their worth to provide for the rest of us. in fact, I’m willing to bet anybody up to $500 that Obama will win in 2012 (see 9/19/11) post.
https://www.financialsamurai.com/2011/08/01/socialism-as-a-means-to-a-brighter-future/
Nice. If you want to disregard my points and direct me to your tongue in cheek socialism post, fine. But as is typical of those on the right, you use lazy arguments, slanted stats and hyperbole to misrepresent the truth.
The funny part is, I think you know, intellectually, that some of that socialism post is true. For instance, I think you actually do believe that some form of universal health care should be given to all Americans. But you couch that in the rest of the socialism post, which is clearly tongue-in-cheek.
So go on, keep calling people comrade and misrepresenting the views of those on the left. Most on the right no longer care about the truth anyway, so I imagine most of your readers wouldn’t believe you anyway, if you told them honestly that the left-wing (or at least the vast majority of us) has no interest in ‘shaking the rich for all their worth to provide for the rest of us’. We simply believe that the marginal rates of the Clinton years or Reagan years were far more conducive to a more prosperous and just society.
“I remember making $550 a month just working at McDonald’s for $3.50/hour, 20 years ago. With wages 3X higher now, I’d be raking in a nice $$1,650 a month or $20,000 a year! Tack on another side job that pays $1,200 a month and I’m in the Top 50%. Anybody can do it!”
Tack on a side job that pays nearly as much as your full time job? Good luck buddy.
Why is this hard? Why do you not believe that you cant take on a side job for $1,200 a month?
You clearly do not have children. Who picks them up from school (at 2pm, since our schools haven’t caught up with the fact that people can’t afford to have one parent stay home anymore). Those is the higher brackets pay their nanny, chauffeur to pick up the kids. They could even pay someone to work that extra job because that mcdonal working single mom sure isn’t going to be able to do that unless she’s lucky enough to be able to rely on family, friends, and neighbors. Not many of us have that luxury.
I dont’ know who you are or why I ended up on this post and I’ve never even commented on on a stranger’s post before, but you are a deeply misguided if not utterly cold-hearted person. I take great offense at everything you’ve written, your tone and your glib sarcasm. People are out there every day working and yes, paying taxes! who cannot afford food, healthcare or decent living conditions. And you tell them to work two jobs and move to San Francisco? I live in San Francisco, and if I forget to move my car on trash night I get a $65 ticket. Then if I have to choose between paying it and buying groceries it grows to $110 and more…Being poor is expensive, have you seriously no idea? $43/month may be Blue Bottle coffee for you, for others it’s the medication that keeps them alive. Read Barbara Ehrenreich’s “Nickle and Dimed” someday if you really want to say you understand being a low-income wage earner. Good uck with that karma.
Bad karma happens when you wish bad on others. So, I say to you good luck.
You shouldn’t discriminate against the poor. The poor just want a chance to succeed. Dissemination is horrible, and you might as well be living in the 1960’s.
Great post,
didn’t know Hong Kong was on the list
If the so called job creators can’t be taxed more in fear that jobs won’t be created then they have a responsibility to either create jobs (which in turn will create more taxpayers and more consumers) or pay more more in taxes.
The only people who labor “job creators” seem to be the one’s who want to increases taxes on the job creators. Isn’t that ironic?
Not true…. it’s the Republicans who are constantly talking about the “job creators”… How about giving a tax break to those who actually DO create jobs and not just those who MIGHT create jobs?
Business isn’t about creating jobs. That line of thinking only comes from those who want others to carry their water.
Business is about making money.
That means if hiring more people will make it more money, then they will hire more people.
If a company makes more money, more taxes are paid.
Its that simple.
If you want more tax revenue, get out of the way of business, and let them make more money. They make more money, they hire more people. More people who work receive less welfare and pay more taxes.
Less welfare means less government spending.
Less government spending and higher tax revenues mean lower deficits and finally surpluses.
Would you rather have 15% of $10 million or 25% of $5 million?
@Mountn_Man – Our economy isn’t all about taxes. It’s also about JOBS…. AMERICAN JOBS. Maybe I should stated my previous comment a little differently: “How about giving a tax break to those who actually DO create jobs and not just those who MIGHT create AMERICAN jobs?”
You are right that business is all about making money. And too many businesses are finding they can make a larger profit by outsourcing work to foreign countries like India. So, instead of paying someone here, say $50/hour, they can pay someone, say $15/hour in India.
I would rather that the government receive 15% of whatever profit a company hiring American workers makes, and on top of that, taxation on the wages of the American people that company employs. More people who work receive less welfare and pay more taxes, as you said.
If the company prefers to make more money by outsourcing jobs to India…. FINE. Then let them pay 25% of their larger profit.
Again, as you say, it’s that simple.
If you really look at the numbers the bottom 50% of earners who pay 2.7% of the total tax burden only have a total income of 4.6% of all dollars earned in the US. I don’t think anyone should complain about that unless you are willing to try to live and pay bills on less than 33K per year. And yes, the great blessings that the wealthy in our country have should actually compel them to desire paying more taxes to help keep our country in one piece.
The bottom 50%’s group share of AGI is 12.75% yet they only pay 2.7% of taxes. Don’t you think they should pay somewhere close to 12.75% of taxes?
The bottom 50%’s group share of the number of sons and daughters sent to fight and die in needless wars is close to 100%. Don’t you think the top 2%, who own 40% of the real wealth of this nation should invest 40% their children as cannon fodder for the wars that enrich their portfolios? Wars they often bang the drums for.
The top 400 families hold as much wealth as the bottom 150,000,000 combined. How many of those 400 families have lost a child in Iraq or Afghanistan? How many of the 58,000+ people etched in the Vietnam Wall came from those families? Answer to previous two questions – Zero
Until the uber rich begin to share in the ‘ultimate sacrifice’, your calls for shared sacrifice and equality ring hollow.
I agree with your statement. There is a disproportionate amount of people in the bottom 50% who have fought our wars to provide us freedom. Hence, those who are veterans and first generation relatives of veterans should get everything and more.
They shouldn’t have to fight for a good job and benefits back home!
I worked for corporate america for 24 years and got let go as a commissioned rep because I sold too much and made too much commission. The major corp was taken over by a Canadian corp who quickly filed for bankruptcy. NO severance after 7 years of hard labor and millions in sales. I was unemployed for 2.5 years and collected unemployment and did not default on my mortgage. I hated being on the doll. SO I sold my house, started my own company and will make be in top 3.5% this year-Total commission. I made $22,000 last year on handouts/unemployment. My point is this is the land of opportunity! This is the greatest country on earth based on a free market society not a socialist country. Quit your complaining pull yourself up and seize the day! What sense does taxing the producers vs non producers make? If you do not like the way America is set up leave! Keep the faith!
Good story Gerry.
Maybe it’s because it’s easier to stay drunk on the beautiful ever flowing fountain of gifts from the government? It’d be a hard habit to kick once you start getting the $1,600/month. I know I’d have a hard time.
$1,600 a month sounds great to you? You must know nothing about paying bills. After rent, car payment, car ins, and gasoline, there would hardly be anything left to buy food. And you don’t seem to know that employers pay towards unemployment benefits, and I can bet they adjust employees wages to to make up for this. That is probably part of the reason that middle class wages have been flat for the lat 30 years.
Why would have a car, car insurance, and gas expenses? You might want to rethink your entitlements and why you are struggling if you think you can afford a car if you making under $33,000.
Follow my 1/10 rule of car buying, which states that you should not spend more than 1/10 of your annual income on the purchase price of a car.
People who make $200,000 can buy $20,000 cars, not people making less!
Sam – many people need a car to get to work. Some areas have great public transportation at all times of day, but many places don’t. Depending on when and where you work, public transportation may not be safe, even if available.
30 years ago was 1981. I was in my second year of community college and working at a hot dog stand for $5.25 an hour.
1983 I finished (for the most part) my schooling in auto mechanics and welding. Got my first welding job making $7 an hour
1985 got a different welding job making $9 an hour + overtime.
1987 got a different welding job starting at $10 an hour + overtime
left 1 year later making $12 an hour + overtime.
1988 quit a job making $12 an hour + overtime, to start an apprenticeship in the building trades making $5.50 an hour with very seldom any overtime.
I know make OVER $100k because I work OVERTIME.
6 years ago things were very slow. Went looking for a welding job to make ends meet. The place I left in ’88 was still paying the same in 2005.
I went to work for a different company, through Man Power. Paying me $15 an hour.
They bought my contract through Man Power out after 1 week, because in that time I was matching output of a guy who had been there 13 years. They increased my pay to $20 an hour + over time, with garauntees of more $$ in the future as I’d prove more that my skills were what I said they were. My skills were/are beyond anything they could have ever used.
I went back to the building trades when the opportunity arose.
The point being. Yes wages HAVE held relatively flat.
The job I left 23 years ago, still pays about the same as it did when I left.
The difference is me.
That job hasn’t changed.
I have.
Yeah, 1600 a month in unemployment in SanFran is awesome! Let’s see, what a month in SanFran might cost a young person:
Rent in SanFran: $700(very basic, very small)
Food in SanFran: $300
Transportation
(gas, car repair,
car payment, bus
tickets): $75
Phone Bill: $60
Electric: $90
Garbage $30
Water: $45
Clothing: $25
Medicine/hygiene $30
catfood $10
ONE night out
to a restaurant
with friends $20
One movie
out with friends $15
basic home upkeep
(fix laundry machine,
plumber bill, replace
fridgerator etc.) $25(averaged out. Some months less, others, much more!)
medical insurance: $175…oh, oops, looks like we can’t afford that! Better hope you don’t
fall down the steps you dirty leech! Now get off your butt and try to find an opening at McDonalds for $10 an hour($1600 a month!).
@David Scott
Not sure what you mean by unwilling to help your fellow man (at the end of your statement). Let’s be honest, the overwhelming majority of those earning the bottom 50% are NOT mentally handicapped, disabled, ect. And those at the poverty level? Studies confirm they have, across the board, some of those basics you would not expect “poverty” to provide – central air conditioning, automobiles, flat screen TV’s, cell phones, cable, ect. Where’s the poverty in that? And the hungry children? Same studies show over 90% of said “poverty-stricken” are able to feed and clothe themselves and their families – that’s over 90% of the poorest, not everyone mind you. There is a pervasive and ever-increasing downward spiral of the American mind leaning towards government hand-outs and “all things free”. The American work ethic is shrinking in ever-increasing numbers, which, of course, continues to contribute to the ever-widening gap of wealthy vs. poor. I get the feeling that Karl Marx is alive and well in the mind’s of today’s youth. If you’re making 33k a year, you’re simply lazy. NO TWO WAYS ABOUT IT. I can guarantee you that your parents and grandparents would not think twice about holding 2 or 3 jobs to double their income for their families. Today’s workforce somehow feels they are entitled to a comfortable 9-5 job that pays well and has benefits. Right now I have 2 full-time jobs and side-jobs for extra income and I’m a doc. If you don’t like your income and you’re not working 400 hours a month, you’re wasting my time with class discussions.
I was wondering the same thing. Are there really people who work only 40 hours a week or less and complain? I am totally perplexed if so!
https://www.financialsamurai.com/2011/08/31/are-there-really-people-who-only-work-40-hours-a-week-or-less/
@Eric Mims:
Your statement that if you’re making 33K a year, you’re simply lazy is simply stupid. NO TWO WAYS ABOUT IT. Plenty of young college graduates just starting out are making that. They may be going to graduate school at night, or they may just be minding their own business, enjoying their lives. They’re paying income taxes and not on this blog arguing about class warfare. For you to make a blanket statement like that is ignorant Doc.
Are we talking about recent college grads, or people who’ve been in the work force for a while with plenty of time to save and invest for their future?
I thought college grads who don’t have work can just stay at home with their parents?
Sam – your comment is totally irrelevant to what I am saying. All I am saying (to Eric Mims) is that his comment that “If you’re making 33k a year, you’re simply lazy. NO TWO WAYS ABOUT IT. ” is ignorant.
NO TWO WAYS ABOUT IT.
I accept your opinion, but the truth is everyone has the capacity to do more at that level of income and if you are complacent and happy with your 33k a year, you shouldn’t complain about it, you should do more. So, in essence, I’m not being ignorant, you just truly don’t want to accept the fact that there’s the capability and opportunity to do more and make more – not wanting to DO that does not make my statement ignorant, it just confirms laziness. And I reiterate my point, unless you’re working 100+ hours a week, you shouldn’t even be chiming with a rebuttal because arguing about income amongst the content 40hr/week lemmings means you’re still buying into the “I’m entitled” crowd. Sorry, that’s not my ignorance, I believe your’s is the head in the sand.
@Eric – Maybe you are too busy working to notice that many people are doing more things with their lives besides just working 14 hours a day 7 days a week (15 hours on weekends). Education, volunteer work, sports, hobbies, caring for family, whatever… There is more to life than work, contrary to what many of you 100hr/week lemmings believe. If a young person can support himself and chooses to work only one job, how is this “entitlement”??? Who said anything about complaining???
NYPD cops start out earning under 35K per year. Do you consider them lazy for not taking a side job at McDonalds??? I for one would rather not entrust the safety of the city to someone who barely gets enough sleep. (And no, I don’t think what you doctors do working 100 hours a week while training in hospitals is safe either…)
Plenty of people who work 100 hr/week are just digging themselves an early grave. Sure, they have a beautiful home, but who cares? They are never home to see it! And parents of young children who work 100 hours a week may be making a lot of money but are failing at their parental role.
I earn a little over 100K a year working 40 hours a week, and that is fine with me. I have a middle class home and life that I’m happy with. For you to claim that unless I am working 100 hours a week, I can’t make a rebuttal is absurd.
YOURS is the head in the sand if alll you see in life is the bottom line.
You’re certainly taking extremes to twist my thoughts. I didn’t say someone who only made 33k a year was lazy, I said someone that was content with 33k a year yet COMPLAINED about it was being lazy if they weren’t doing more. Cudos to NYPD. Ask how many cops do extra work to buff that income. Most DO, which means they are willing to do what it takes to provide a better life for their families than 33k provides. This is a pointless circle if you’re not seeing my argument. The host of the thread certainly did. My original point stands. There is an ever-growing balloon in America of the working class expecting more while doing less. The indigent care burden on this nation has mushroomed to staggering figures compared to the 1980’s. And yes, I agree that there are more things to do in life than work. However, the age where someone in the family took the burden on their shoulders to allow the rest of the family those LUXURIES, and please step out of the 100k/year mentality and realize that your sports, hobbies, volunteer work, ect., are LUXURIES, is rapidly fading away. You paint me the villain for the sacrifices I make when it has allowed my family to enjoy the very things you mention, somehow distilling my work down to frivolities such as a beautiful home, ect. It a classic tactic liberals apply when confronted with the reality of what used to be the standard family work ethic (farming aside). All I’m saying is, America has deteriorated into an ever-increasing “freeloader” society. You can argue with me, but you can’t argue the numbers of those living off my tax burden, a burden that would be far less onerous if the lion-share of fully capable beggars and panhandlers would be only left with the option that they work or they perish. Even the most destitute beggar during the Depression was more than eager and willing to actually work for his “handout”. Nowadays, their most difficult task is not tripping over the 360 cords while walking to the mailbox to get their monthly “due” from Uncle Sam. We as a nation would do well to learn to true reason Rome fell. The pathway we’re on is strikingly similar as the population relies more and more heavily on less and less that work to pay for them all.
Reread your original post to see what you said. NO TWO WAYS ABOUT IT.
I never heard of the 100K/year mentality. What exactly is that? I understand that you are insulting me, but I’m not sure what exactly you are insulting.
You talk longingly of “the age where someone in the family took the burden on their shoulders to allow the rest of the family those LUXURIES”…. What age was that? I grew up in the Leave it to Beaver age…. we were a middle class family, with one car (only my Dad drove or went to work), one black and white TV, one bathroom. My sister and I shared a room. We went to public school, and eventually state University…. We didn’t have luxuries, but we did have the luxury of our Dad coming home EVERY day at 5:15. We ate dinner as a family, and both my parents were home at night. My parents were married over 50 years… THAT is the age that has faded…. that’s what a 40hr/week family looks like. Sure, if my Dad had taken on a second job, maybe we could have had more luxuries, but who needs luxuries compared to a happy family to spend time together?
You people who speak derisively of 40hr/week workers have fallen into the ultra-materialism that has arisen in our society.
Also – that tax burden you find so onerous would be a hell of a lot more in the 1980 Reagan years.
And all these beggars and panhandlers you are seeing.. I’m not seeing them.. instead I am seeing hundreds of people applying for ONE job. Also, I am seeing the people at the top of corporations saving their companies $$ by outsourcing jobs overseas, meanwhile taking millions and millions of dollars in bonuses for themselves. Or by cutting jobs, trying to “do more with less” (aka try to get your salaried employees to work 100hr/week for free, and laughing all the way to the bank.) Those are the freeloaders I am seeing.
Wow.. You really, truly do spew an insane amount of ignorance here.. First of all, if you are working more than 40 hours a week, then you either do not have a family of your own at all or you severely neglect any wife and/or kids that you do have (and they, with 99% certainty, WILL hate you for this for the rest of their lives). In fact, working at that rate.. Despite however much money you might bring in, you will be very likely to find a wife who is only with you for your money (what else do you have to offer when she never sees you?), infidelity on her part, children who feel as though they are bastards, and a likely divorce as soon as the wife can claim that she has become acclimated to this style of living and is deserving of 50% of everything you own =]
Beyond this, I can tell you.. I am a recent graduate from Miami University (in Ohio). No, this is not a Harvard, Stanford, Cornell, Princeton, Dartmouth, or anything of that sort, but it is openly recognized as being one of the top 50 universities in the nation. I received a bachelor degree after completing two majors, Psychology and Sociology. No, these are not Business, Engineering, or Computer Science degrees, but they are respectable nonetheless. I was deeply involved in a few student organizations and involved in the leadership of two and the creation of one throughout my college career. I was also involved in research, and I worked full-time through all of my summers and 20 hours/week each of the school years while taking an average of 18-20 credit hours per semester. I graduated with Latin Honors: Cum Laude and a GPA of 3.67, which, in my opinion, is pretty good.
While all of this admittedly might not have prepared me for many jobs that are available in today’s economy, I believe that it does show that I am driven, committed, and capable of learning. However, over the past 6 months (before and after graduating), I have applied for and either been completely ignored or denied from over 100 jobs. I will admit that I began applying for jobs that offer around 50k/yr in salary, but, over time, I learned to reduce my expectations significantly. I began to apply for jobs that pay only 25-30k/yr and would have been more than happy, but found that I was not wanted there either. In fact, I have even reduced myself to applying to places like Best Buy, local factories, Wal-Mart, Kroger etc. and have still found that there is no job to be had.
Now, tell me, does this make me lazy? I can’t even receive unemployment, because I have not ever had any official employment that was not ended on my own volition. Where am I supposed to be working these two jobs when I can’t even find one? I can’t even find a place that will give me part-time work, much less those 40 hours. Even when I was working full-time over my summers, I was still only getting 30-35 hours in a week, and I’m supposed to be working more than 40 hours a week now? I would honestly prefer a job that pays me 35k to work 40 hours in a week, because I actually do have friends and a life…
So.. Again. Where are these two jobs coming from? Are you going to hire me? If anyone on here wants to hire me, then I will gladly relocate to wherever it is that you need me to be =D But.. I don’t see that one happening. All I see is people saying that the rich create jobs. I don’t see any of them actually doing it. And, by the way.. It’s obvious that many of you on here are rich. Just saying…
I’m not going to hire you because 1) You want to Miami, and it’s not even in Florida. Why would you go to Miami Ohio when you could go to Harvard? 2) You come across as entitled, 3) You find working more than 40 hours a week is too much, which is a serious problem and why other people won’t hire you, 4) You are derisive for your comments about divorce, 5) You got a 3.67 GPA which doesn’t meet the cut off of many top firms at 3.8 , and 6) Although Latin Honors is nice, you haven’t shown me you’ve taken any initiative to learn other things that might help you.
I’m glad you are at least trying to apply for jobs at Best Buy, Wal-Mart, etc. Keep on going and don’t give up. I won’t hire you, but maybe someone else will. Maybe you can start your own business too.
First, FS, if it makes you feel any better, my post on here was not necessarily a direct reply to anything that you said. I believe it was actually directed to Eric Mims, if I recall correctly.
Now, to address your response to what I said.
1) I wish I could have went to Harvard, but that wouldn’t have been the easiest thing in the world, coming from a working class family and a (very) mediocre high school. I didn’t even know college was an option for me until my senior year. Yes, that was how ignorant my family and my high school was about what a student can and cannot do without having money directly in their pocket. I made the college thing happen on my own =D I found out about the options that I had in terms of scholarships and grants etc, and I made them work out to get me through the best school I could get into on such late notice. By the way, I was also accepted into Michigan State University, but I didn’t understand the aid process well enough to know that I would have went there for free until after being at Miami for a few weeks.
2) I feel like I should be entitled to a studio apartment, some food, gas to put in my car that I already own (paid off myself), and some clothes on my back at the least. Should all humans be entitled to this? Probably… But I certainly feel like I should be able to, considering that I will be feeding thirty grand to our banks over the next several years, and I did what everyone says to do. I went to college and finished, and what awaits me in the real world? I can’t even get jobs that I could get if I did not have my degrees. And, to be frank, I don’t really want to work for minimum wage along with kids who are still in high school, lol.
3) I never said that I would not work 40 hours or more in a week. I likely committed more time than this throughout several of my weeks in college, and I certainly pulled off plenty of all-nighters, as well as any other discomfort you would expect to come along with a decent college experience. I was simply saying that, if I had a family of my own, I would focus more on them than my work. Americans seem to have lost what is really important in life these days. Why do you work for the money you get anyway? To make your family happy.. Do you really think that they are happier with the money than they would be with having quality time to spend with you? I doubt it. And, if they are, then, I’m sorry, but you chose the wrong family.
4) As I said before, the post wasn’t directed at you. There are several ways that workaholics could balance work with family. The best way, in my opinion, is to have work that you can include your family in, but a lot of people do not do this. Speaking in a broader sense, my statement was dead on =D Can you give a better explanation as to why 50% of today’s families are ending in divorce? And let’s not fool ourselves.. There is certainly another 25% that wear that facade of happiness, particularly in the middle and upper classes, simply because they feel that they have some reputation to maintain.
5) I would say a top firm would certainly pay more than the 25-30 k that I said would be willing to work for. Perhaps I was applying for positions in what you would consider to be top firm material in the beginning of my process, but, as I said, I quickly lowered my standards. I would think a 3.67 would be fitting for a more middle of the pack firm where I could prove myself through my personal talents and work ethic to move into the top firms in the future, if I should choose to do so.
6) Yeah. You got me on this one, but I didn’t send you my resume or anything, lol. I really didn’t learn too much other than the ability to think and learn for myself in college, which I personally believe is one of the most important qualities for any individual to have. However, some things that you might actually find to be valuable in the world of business..
While I was a Psychology and Sociology major, I am capable of doing much more than that in life. Those were simply the subjects that most interested me. I was also the Financial Director of a student organization at Miami, so I had to manage our funds through allocating them to the appropriate parties in good time, ensure that we had enough funding available to do whatever it was that we wanted to do as an organization, and apply for grants from local and national businesses in order to fund our presentations, events etc. In doing research, I was also to develop a fairly in depth knowledge of statistics and a couple of software programs that are designed to perform statistical determinations (mostly SPSS). Beyond this, I was also involved in a competition in which an interdisciplinary (based on major) group of students were required to produce a new technological idea that would somehow serve the campus. Needless to say, I didn’t have much to do with the technological development itself, but I did help to construct surveys to gauge the need and interest levels for our product, and I also helped with the advertising of the product.
By the way, I did read your other post, and I hope this helped to clear up some things that were brought up on there.
Oh.. and, I actually am a guy, just to let you know. I just have an understanding of the world through multiple perspectives (which, by the way, could be very helpful to any company), so I can understand why you might believe that I was a woman after some of my comments in the previous post.
And, if it makes things seem any more fitting, I tend to be the kind of guy that business people like you hate =] I was never really looking to be a lawyer or a walking, talking suit in some big business. I did apply for several jobs along those lines in the beginning, because I felt that I had to. But I have more recently been looking into certain non-profit jobs. I’m not all that big into the idea of government work either.. Unless it has to be done. And just to let you know, my rhetoric and my attitude receives a much better response from those on the other side of the ball =D I haven’t landed a job quite yet, but I’m getting much closer, and it will be in doing something that I will enjoy much more. Win-win situation there, right?
Thanks for the clarification! I hope you’ve found some of the feed back useful in the comments. I tried to be as objective as possible in the words I used around your comment.
My best advice is to embrace feedback and tweak your attitude towards the suggestions given. Employers want the hungriest, friendliest, and frankly cheapest people to work with them as possible. It’s up to you to make a decision.
Hey College Grad, I feel your frustration. This is not a good time to be looking for a job. Things will change, though, eventually. In the meantime, the holidays are coming, and the stores will be hiring temporary help. You may very well be able to get a temp job in a store (if you’re lucky, you can get a job in a store you or your family likes because you’ll probably get a pretty nice discount). If you do well there, and are a hard worker, they sometimes hire permanent workers from their holiday help. Anyway, it’s a way to make some money while looking for something else.
Another thing which I would recommend f you haven’t done so is to get a volunteer job. Check out http://www.volunteermatch.org, and try to find something that really appeals to you, It could be a stepping stone to a paying job. Also, it’s a good way to meet people. (Networking is the best way to find a job.)
Good luck!!
Ah, the hallmark of every republican. If I can do it, anyone can, because I am everyone, and everyone is me. ANYONE can get a $1,650/month job and then a supplemental income that pays 75% as much on top of it. Just “get” that income, as with a flick of the wrist. Anyone.
Comrade, agreed. $1,600/month is what they are paying for unemployment benefits here in San Francisco, and $50/hour cash is what a group of 3 people pay me to teach them tennis at a public court.
Fight on!
you’re joking, right? you’re not truly unemployed? you honestly don’t know that unemployment benefits are based on previous salary? low wages= low unemployment benefits?
and if you’re truly being paid under the table, then you’re a hypocrite on top of everything else. but at least tennis is a nice elitist sport – that fits
whack! oops sorry did i hit you in the eye with that tennis ball? geez, do you have health care? no? why don’t use those $43 dollars you saved for monthly taxes and see a dr? stitches cost more? well, then you’ll just have to go out and get a third job. good luck with that.
Don’t be so elitist.
And if you have low income, you are used to low income which means you shouldn’t be as shocke with lower unemployment income.
Now this, in a sense, is true. If you have low income, then a lower income shouldn’t really shock you. But unemployment tends to come in at half of what you are making. So, if you are making 14/hr and you are already strapped for cash, then that minimum wage pay that comes in from unemployment check is really going to be a slap to the face. I don’t think you’re really going to be able to make it work out all that well without adding something on top of it, which is technically illegal if you don’t report it =]
Now.. If you make 80,000 a year, receive half of that through unemployment, and find yourself unable to manage your life, then I laugh at you. You’re obviously to used to living above your means and incapable of escaping your addictive, consumption based lifestyle, and that, good sir, is your own problem to fix =D
If you are earning less than $33,000 AGI a year(bottom 50%) it will most likely be necesary for you to take out a 30-year loan in order to afford even a modest home, even if you pay almost no taxes. Most of your cost will be in paying off the interest on the loan. Everything else you earn will be used to meet your basic needs:transportation, food, clothing, rent, daycare, medical bills, a few basic luxuries etc.
If you are earning $160,000 AGI a year(top 5%) you can afford to buy a nice home IN CASH every three years(130,000 after taxes, and it is reasonable to meet ALL of your basic needs on $40,000 a year. That leaves a potential of $90,000 a year of savings. 90,000 multiplied by 3 is $270,000, which should buy you a very nice home in most places of the country).
But I’m supposed to feel sorry for the guy who makes 160K a year because he has to pay 20% taxes?! BOOHOO, cry me a river.
Why does a person making 33k “deserve” to buy a home?
The majority of folks who make $160 k do NOT live in an area where they can buy a 130k home bc none exist!
In SF, a 3 bedroom home in a mediocre area costa 700k. You areclearly speculating what it’s like to make 160k and have no IDEA.
Don’t you think people who use to make 30k and now make six figures plus have a way better idea?
Sam – No one “deserves” to buy a home, nor do YOU “deserve” to pay less taxes. But if someone one with low income is able to buy a home with a mortgage who are YOU to question whether they “deserve” it?
Of course I deserve to pay less taxes. I should not be discriminated against. Don’t you know discrimination is illegal? Once you make over $200K, you’ll understand.
Sorry, you can’t say that. I’m not in the lowest marginal tax rate and I don’t feel I’m being discriminated against. This is not discrimination and it’s not illegal. Everyone, you, me, even the guy making 30 million pays the same 10% on their first 8k of regular taxable income, 15% on their next 26k, 25% on their next 48k, 28% on their next 90k, 33% on their next 202k, and 35% on anything over 374k. If you are making 400k gross you probably don’t have any income in the 35% bracket because of your deductions. Anyway look on the bright side and thank your lucky stars you aren’t Michael Jordan. MOST of his 30 million income would be taxed at the 35% rate whereas for you it is probably little to nothing!!
Uh, of course you don’t feel discriminated against, you aren’t in the 33% and 35% income tax bracket.
I love it when people tell people in the highest tax brackets how much we pay and how we feel when you have NO IDEA.
Ah… but what you don’t know is that I used to be in a higher tax bracket than you have ever been in…. and when you tell people in lower tax brackets (I am not talking about myself now) that you know how they feel because you once made 30K….. YOU never made 30K while trying to support a family, so you have NO IDEA how that feels.
That’s fair. And so when you were in a higher tax bracket which was hopefully being assailed like now, what was your view?
Why didn’t Warren Buffet fight for higher tax rates when you wasn’t so rich?
Honestly, it was just a fact of life. I don’t think I thought much of it at all, except I do remember being amused by people who apparently didn’t understand marginal tax rates, and who lived in fear that they would make too much which would push them into a higher tax bracket, and that somehow they would end up netting less! (kind of like what “Genius” below seems to be implying…)
I don’t understand your second question. But if there were a new tax bracket for the excess over a million dollars, you really think that would be a bad thing?
I’m fine with tax over 1 million a year income. If you spend some time reading other posts on this site “Big Government Love” you will see.
Well now we know why your in the$33k and under crowd.
Your too stupid and ignorant to be able to EARN above that.
Case in point “If you are earning $160,000 AGI a year(top 5%) you can afford to buy a nice home IN CASH every three years(130,000 after taxes, and it is reasonable to meet ALL of your basic needs on $40,000 a year. That leaves a potential of $90,000 a year of savings. 90,000 multiplied by 3 is $270,000, which should buy you a very nice home in most places of the country).”
$160,000 AGI, which means at least $180k gross income.
$4,452 SS tax
$2,710 Medicare tax
$6,572 Self employed SS tax
$2,710 Self employed Medicare tax
$8,000 State income tax
$38,417 Federal income tax
———-
$62,861 just in taxes
Lets compare that to someone making $42,400 gross, $33k AGI
$2,395 FICA taxes
$1,650 State income tax
$3,675 Federal income tax
——–
$7,720 in taxes
I make the kind of money I do because of a list of things.
FIRST- After HS I went out and got an education. Maybe I only went to a community college, but the education served me well. It helped me develop the knowledge and skills I need and use.
SECOND- I CONTINUE to get an education. 30 years after graduating HS I’m still going to school, still going to seminars and workshops, still reading, still trying to learn more.
THIRD- I travel to where the work is at. I spend 2-3/4 hours a day on average, commuting back and forth to work. (I did this LOOOOOONG before I was making good money) I also travel away from home at times, because thats where the work is at.
FOURTH- I put in loooooong hours.
10 hour days are the norm, sometimes 12, occasionally 16 and once in a great while 24, to get the project done. 5 days a week is an easy week. 6 days is pretty standard. And once in awhile 7. My average week is 6 days at 10 hrs. But when its time to s#!t and git, 7days at 12 hours is typical. And when the project absolutely must get done, 7-16’s.
FIFTH- I do what the AVERAGE person won’t. I work in conditions that 90% of the people would run away from screaming. The AVERAGE person would complain about being too cold, or too hot, or wet, or dirty, or too high, or, or, or, or ,or.
SIXTH- I work harder than not just the AVERAGE, but harder than MOST people. My line of work would make the AVERAGE person cry. When I work with friends who tell me HOW HARD they work, and HOW HARD their job is, they start complaining when they work with me, that they can’t keep my pace, or they’re taking breaks more often than I do, or complaining how hard the work is, or how tired they are. My response is “Hey, I work like this all the time” “I thought you said your job was hard, I do stuff like this all the time”.
SEVENTH- Oh, thats good enough, IS NOT good enough.
There are only 2 words I hate more than “thats good enough” and they are “I CAAAAAAAN’T” (Waaaaaaaaaaaaah)
The money I make is because of ALL these things added together. I often get called back because of what I can do, how I can do it, what I’m willing to do, and the quality that I put in.
Years ago, I worked in factories, and realized by my mid 20’s that I was as good as I could get in those settings. There was no more challenge. And I was HUNGRY. And still am.
If I was still working in factories, I’d be making 50-60K gross. MAX.
Next, there is one thing that is more important than money. Because without this, it doesn’t matter if you make a little or a lot. You’d still be broke.
Thats wisdom. Wisdom in living right. Wisdom in making wise decisions. Wisdom in proper financial planning. There are people who live better and are in better financial shape making $40 or $50k, than some who make $75 or $80 or $90.
All because one makes better choices.
I could care less whether you cry for me or not, on how hard I work and how much I pay in taxes. I chose my line of work, and I LIKE what I do. Not because of (or not only because of) the money. I’m PROUD of the work I do, vocationally and qualitatively. I’m PROUD of my work ethic.
I-EARN
Let me repeat that…I EARN…everything I make.
The government didn’t make me what I am.
The government didn’t give me special considerations.
The government didn’t allow me something it didn’t allow somebody else.
I don’t steal from others.
I don’t cheat others.
I don’t step on others.
I help those I can help. Whether financially or physically or whatever.
I feel…I…am here to help people.
I also KNOW, that I’m a better judge of character and better judge of work ethic than a government bureaucrat.
I also KNOW, that what I do with MY money, to help others, will be 10 times better than what the government will do.
The same as you won’t cry for me, as hard as I work, and the money I make and the taxes I pay, I won’t cry for you for how you work, or the money you make or the taxes you pay. Its your life. You make your choices each day. You live with them.
Somebody in my life has a tragedy or an unexpected down turn in their life. I’ll help them. I’ve done it before AND I’ll do it again. I’ll help the less fortunate who I have never met.
But I OWE no one anything. If you’re not willing to do… EVERYTHING… that YOU CAN DO to provide for you and your family, its not MY RESPONSIBILITY to.
Okay, first all MountainMan, it is clear that your education did not include a course in debate, because if it had you would know that it is extremely bad form to insult your opponent and even more foolish to make assumptions about them.
I actually make about twice the 33k that you assume I do. I do some of the most brutal and dangerous work on the planet. I have a small business(sole propriotership), and I have a 4-yr degree from a very good college. I, like you, also travel extensively for work.
So I think you owe me an apology of sorts for your unfounded insults and demeaning assumptions.
But let’s get to the meat of the subject…I think you missed the point of my original post. I do not begrudge wealthy people their wealth, but I do begrudge wealthy people who complain about how unfair the world is for them. The guy who wrote this article is implying that he is being discriminated against because he pays “more than his fair share” of taxes. If you are in a high income bracket, congratulations, you have most likely earned it by working hard. But to insult those who are poorer than you as being lazy and/or stupid and to claim that you are being picked on for being rich is absurd.
Many people in this country work their butts off for very little pay and have done so for their entire life and, most likely, their labor made someone else a great deal of wealth. So, once again, don’t expect much sympathy from me when someone in the top 5% of income earners starts wining about unfair taxes are.
What an idiotic response.
You’re right I never took debate. I don’t have time to mollycoddle people.
When they need a bitch slap, they get it.
You whine about others complaining that they pay more than their fair share.
Actually you said:
“The guy who wrote this article is implying that he is being discriminated against because he pays “more than his fair share” of taxes. If you are in a high income bracket, congratulations, you have most likely earned it by working hard. But to insult those who are poorer than you as being lazy and/or stupid and to claim that you are being picked on for being rich is absurd.
Many people in this country work their butts off for very little pay and have done so for their entire life and, most likely, their labor made someone else a great deal of wealth. So, once again, don’t expect much sympathy from me when someone in the top 5% of income earners starts wining about unfair taxes are.”
You’re right MOST of the people who are in the upper 5% have worked hard to earn it.
This is where their labor differs from others around them. I’ve worked hard all my life. Worked in factories, early in my career, with others, doing the same work. What set me apart wass hunger. Hunger to learn. Hunger to excel. While others were content to just show up and do their job, I wanted to do mine better. I wanted to be faster.
I took machine shop courses in college, after my auto mechanic and welding courses. When the machine shop was behind, I was called over from the welding shop to give an extra hand. Because of my versatility it allowed me to work with model makers to develop jigs and fixtures because I could think like a welder AND a machinist. With an auto mechanics background, it also allowed me the critical thinking required to KNOW how things worked.
Most of those around me WANTED to do just what was required of them day in and day out. Every part we made was time studied, as to how long it should take to make pieces. If we were at 80% or above we were in the green. Below 80% was in the red. Department average was 94%. With 54 people in the department. My average was between 125%-175% sometimes reaching 215%, depending on the parts being made.
I was the youngest person in the department, and next up to be “master welder”.
I was sent to other areas of the department to trouble shoot things and possibly tweek things to improve production.
There were some who resented me, because my performance skewed results. Results they were happy with. Most people respected me and my abilities.
My problem was, I couldn’t see anymore challenge. I was as good skill wise as the job would allow. I could jump into anywhere in the welding department and INSTANTLY match the most seasoned welders, if not surpass them. I could also go almost anywhere in the machine shop and take over for someone, and run at almost their level. Time study wise my numbers were in the green.
This wasn’t luck. This was determination.
I also couldn’t see myself improving much more. There was nothing much left to learn there. And I couldn’t see myself working in THE SAME PLACE doing THE SAME THING with THE SAME PEOPLE…year after year after year, for the next 40 years.
So I MADE the opportunity and left.
Today my skills and talents have far surpassed anything I could do back 23 years ago. Skills and talents that were advanced THEN.
I have broadened my knowledge in many different areas, not just limiting myself to one small area of expertise.
49 years old, and STILL going to school to learn more or get better.
This makes me more valuable, in 2 ways.
One-my knowledge and skill earn me a MUCH higher base pay than I was making 23 years ago-when others thought I worked too hard.
Two-When things get slow, I have a tendancy to keep working because of how I work and what I can do.
School just means I’m learning more, so that I have another avenue, to working more.
Next, I work in conditions that others won’t.
I put in the hours that others don’t.
There are people like me, all over, who EXCEL because of their work ethic. They are the top 5%.
40 hrs in a factory doesn’t get you into the top 5%.
You have to go BEYOND the norm. BEYOND mediocre. YOU have to chose to be better than everyone else.
And yes, that sounds arrogant.
But then, everyone else is making what everyone else is making.
Nobody waves a magic wand and suddenly, voila, high income.
I have to prove my skill on a regular basis, day after day. to keep me working, when others aren’t.
After all my “work” that “earns” me my income, I take a portion of that and invest. That takes more work. Investing isn’t something you just DO, and then reap rewards. Theres work involved learning financial basics and strategy. There’s work studying trends and current conditions. There’s work implementing the investments.
This is all MORE WORK than the AVERAGE person can do, because they didn’t do the work I was willing to do.
So now…I work harder, smarter, more hours, in worse conditions, THAN THE AVERAGE person is willing to work. For that I earn more than the average person earns. And now you want to tax me and people like me at a higher rate.
Thats called a double standard.
I’d have no problem to be taxed at the same rate. Whether I make $50,000 or $250,000, just tax me at the same rate.
You said : “I actually make about twice the 33k that you assume I do.”
That means if you’re married, your highest tax bracket is 15%, pretty average.
Mine currently is 28%
Your 15% and my 28% are quite aways apart. Seems to me a double standard (Almost literally DOUBLE).
You have no real idea of what I do, and yet YOU ASSUME, that me, and others like me should be held at a double standard.
My investments, are taxed at 15%, the same as you. My capital gains, if realized in less than a year are taxed at 35%. Almost 2-1/2 what you pay.
My investment dividends are taxed at the corporate rate of 35%, again almost 2-1/2 your rate. I THEN pay a personal capital gains tax of 15%.
Yep, sounds like a double standard to me.
As far as your statement: “Many people in this country work their butts off for very little pay and have done so for their entire life and, most likely, their labor made someone else a great deal of wealth. ”
My labor has been PART… of making other people wealth.
Most importantly it MAKES ME wealth.
VERY, VERY, VERY seldom does one persons labor make another person rich.
You say: “I have a small business(sole propriotership)”
If thats the case, then you know that you don’t make alot of money off any one employee. In fact with what you state as an income, you’re not. Wealth in a company comes from making a little bit from a lot of people. Sam Walton wasn’t made rich by A Walmart greeter. He was made rich by 1,000’s of Walmart greeters and cashiers and the like. In FACT…EVERY Walmart employee made more money from Walmart than Walmart made from them.
If thats something you can’t comprehend, your business is sure to fail.
mountainman,
Once again, thanks for the insults to my personal intelligence. You’ve also made, once again, some inaccurate assumptions about my tax status, but let’s save that for later. Let’s get to the meat of the issue.
There are many things in your last post that I take objection to, but for the sake of simplicity I will comment on just two:
1) You claim “This wasn’t luck. This was determination.” when referring to how much you excelled compared to your fellow workers. A typical claim I hear from my conservative friends who are even moderately successful is that they “did it all on their own, with no help from anyone else..”. You know, the ol’ maxim about “pulling yourself up by your own bootstraps” etc. The problem with this type of argument, of course, is that luck had a lot to do with your success and the determination you are so proud of did not develop in a vaccum. We’ve all been the beneficiaries(or victims!) of economic systems, schools, parents, friends, teachers, environment, religious leaders, infrastructure, random chance etc…and that includes YOU too mountainman. So before you pat yourself on the back too hard, you may want look around you and give a bit more thanks to the good fortune that you have encountered on your path to success.
2)Your use of the term “double standard” to describe an individual of a higher income being taxed at a higher rate than a lower income earner is, I believe, a misuse of the term and is a good way to highlight how you and I see things differently. A double standard is “the unjust application of different sets of principles for similar situations”(got that from Wikipedia!). The problem with your use of the term is that a man making 40k a year is not in a “similar situation” as a man making 240k a year. In fact, I attest that it is hardly similar at all!; The man at 35K trying to support a family will stress every day about meeting the basic necessities of his family(food, clothing, shelter, a decent education for his kids etc.) while the man at 235k a year need not worry much at all about meeting these basic necessities. His biggest stressor, in fact, may be how he is going to invest all of the extra cash he has left over after meeting the basic needs of him and his family. So, since the situations are so extremely different, I have no moral qualm whatsoever about embracing a tax system based on a PRINICIPLE of progressive taxation. Get it?
3) I know I said there were two points I wanted to make, but I want to throw one more observation out there: There are many ways that people can become rich and not all of them are noble. There are many ways people become poor, and not all of them are ignoble.
I do not understand why you take this issue so personally. The fact that I expect you to pay a higher tax rate than myself is not meant to suggest to you that you are undeserving of your success and your material compensation. I pay a higher rate of taxes than many( I am single and with no children by the way and make over 60k) and I do not take this to mean that those less wealthy than myself are being given preferential treatment or that I am being discriminated against. I just take it to mean that I am in a much better financial state and, in turn, I should contribute back a bit more to the common good. At the end of the day, I am still happy, wealthy(by my standards), and healthy, so I’ll leave the complaining to the likes of the FinancialSamurai, and I suggest you to do the same.
“You’ve also made, once again, some inaccurate assumptions about my tax status, but let’s save that for later.”
No lets take care of that now.
You said:
“I actually make about twice the 33k that you assume I do.”
and you just admitted:
“I pay a higher rate of taxes than many( I am single and with no children by the way and make over 60k)”
So Mr. I’moffendedthatyouinsultmyintelligence,
Here we go. You stated first that you make twice the $33k. Then you stated you make over $60K. So lets go with the $66k
You said you’re single no kids.
First lets start with the personal deduction of $3700. That brings $66k to $62.3.
Seeing you have a business, I’d assume you own a house. At $66k income, that would mean your house is about $200k, with a 20% down payment, meaning your mortgage is about $160k, with mortgage interest payments of about $7000, which brings your taxable inc to $55.3k. Subtract property taxes, I’ll guess $2k, thats $53.3k. Lets not forget 401K contributions. I’d figure 10%, thats $6.6k. Thats reduced your taxable income to $46.7K
So oops, I was a little off.
Lets do the math
Your first $8500 is taxed at 10%=$850
Next, $8501-$34,500 is taxed at 15% = $3,900
Your remaining $12,200 is taxed at 25%= $3,070
So about 18% of your income is taxed at 25%.
Or about 35% of your taxable.
Lets talk about what you call “LUCK”.
Luck for me was being born into a low to MAYBE middle income family. Both my parents worked jobs in factories, until my dad was “disabled”. We were’nt poor, but we couldn’t do things like eat out at McDonalds. Part of that reason was my dad smoked 3-4 packs of cigarettes a day.
My parents got divorced right after my freshman year of high school. And though my dad and I really didn’t have much of a relationship before, he had nothing to do with me after.
I was fortunate (I guess you’d call it luck) that my mom had me involved in church my entire life. So there were some men I could look up to, since I didn’t have a dad at home. I was involved with the AWANA clubs as a kid, and involved with the HS group in church, while in HS.
I was the class clown, and though my mom did the best she could to raise me, what I needed was a dad to set me straight, which I didn’t have. So I ALMOST didn’t graduate HS. I had no idea what I was going to do past HS and really didn’t care.
Along comes my best friends dad, Walt.
Walt calls me up one day, and says he’s taking his son to the community college 30 miles away, to check out the auto program there, and if I wanted to go with. I liked cars, and auto mechanics sounded cool. So I went.
So I went to community college and took auto. In there I had to take a welding course. The first course, gas welding, was ok. It was recommended we take arc welding also. About half way through the course, it was like a lightbulb went on. And my welding skills started to grow. With each success I got hungrier and hungrier, and worked harder and harder. When I finished I had taken every welding course that was there. I was the best that had gone through there.
The head instructor there recommended I go into welding engineering, but I was still to young and cocky. One of the other instructors hired me to weld in the factory he was a foreman at, pretty much of the recommendation of the head instructor and my reputation.
By the way, I give credit to Walt for getting me into school when I had no idea or care what I was going to do after HS. But Walt didn’t pay for my eduction. My dad didn’t pay for my education. My mom couldn’t pay for my education, she didn’t even get child support from my dad. I went to school full time, and worked 30-40 hrs a week to put my self through school. Except during school breaks when I worked 50-60. I grabbed every hour I could.
So what you call luck, I call hard work.
You mention about not being in a vaccuum, and that my success was the outcome of others. True- TO AN EXTENT. It still took effort on my part to take advantage of opportunities that came my way. After that most opportunities that came my way were BECAUSE of things I did or decisions I made.
Speaking of that vaccuum. My sophmore year in HS, while I was part of the church youth group, I also realized that I loved the AWANA programs at my church, and wanted to be a leader to younger kids, that they could enjoy AWANA like I had. I did that for 3 years in HS. I did it for 5 more years post HS (While I was going to college and working for 3 of those years).
I left the church I grew up in, because they didn’t have much of a singles group, and started going to a larger church a few towns over. I got involved with the Jr High ministry there, and did that for 13 years. 13 years of 8:30- 12 or 1 on saturday mornings. 13 years of 2 weekend long retreats every year. 13 years of camp for 1 or 2 weeks.
All because I wanted to plug into others, like I had been plugged into.
So don’t talk to me about a “vaccuum”. I’m well aware of the “vaccuum”.
There was one man who was more influential than Walt in my life. My grandfather Roy. He lived 300 miles away. He was a farmer, with just an 8th grade education. But as a kid I thought he could do anything. He never really showed me how to do certain things, he just did them. But the fact that he did them, as an impressionable child, I wanted to do them to. So as I grew older, I learned to do carpentry and plumbing and electrical and roofing and auto mechanics and welding and diesel mechanics. My grandfather lived to see me become a pipefitter. He remembered telling me not to watch the weld arc when he welded, when I was a kid. Then he told people that I was a certified welder welding in nuke plants and oil refineries.
I developed most of the same skills my grandfather had. I just took them to the professional level. To craftsmanship.
The BIGGEST skill my grandfather taught me? Work ethic. My grandfather was a bull. I’m bigger and stronger than he ever was, but I’d like to think I could have kept up with him. He’s been gone 17 years now, and I still wonder if I’d make him proud.
Because of my grandfather, he also gave me the drive to help others. I can’t tell you how many roofs I’ve done, or how many times I’ve helped people move. How many times I’ve rewired rooms or wired lights or fans. How many bathrooms I’ve moved or remodeled. Or how many times I’ve been under a car or under the hood. How many trees of cut down. Decks that I’ve built. Rocks or dirt that I’ve hauled. All for the payment of cold pop or dinner.
Heck, my mom yells at me-STILL, for dropping things to go help others.
So now lets talk about double standards.
You mentioned you went to a good 4 year college. I didn’t. And yet I’m as equally successful as you.
Heres where the double standard kicks in. It doesn’t kick in because I make $150k and you make $66k.
It kicks in back when we went to college (maybe even before that). We both went to school for our educations. We both got out and we both started at starting jobs. Its what happened after that where things change. I don’t know what you did. Frankly I don’t care. I do know that I continued to learn things. Continued to strive for EXCELLENCE. Worked as hard IF NOT HARDER than most around me. Its because of that that my income grew.
Lets say you and I both have identical families. Identical education. And start with identical jobs making identical pay.
If we both make $10 an hour and work 40 hour weeks, we get identical paychecks of $400. And we both get taxed the same.
Now if I work 60 hours in a week I’ll get a check for $700.
What you want, is that you pay one tax rate because you made $400 but demand that I pay another because I made $700, irrespective of the fact that I did more work than you.
Even though by paying at the same rate, I’m paying more tax than you.
Next, I continue learning and developing knowledge or skills, while you choose to do things the same. I get a raise of $2 an hour. Now I make $840 and even at the same tax rate I’m paying more tax than you, you demand even more from me, simply because I make more, because I’m working harder and smarter than you.
I continue to get better educated, meanwhile your content to just do your job. I get a promotion to a new position because the education I got gave me better qualifications. The new position pays me $5 an hour more. Now I make $1140 a week and you demand I pay a higher tax rate.
We both started out the same, but I chose to work harder and longer and get better or do more, and because of that you feel I should pay a higher tax rate.
Thats a double standard.
Here’s maybe a better scenario.
You mentioned you went to a good college for 4 years.
Lets compare you to a HS classmate.
You both get good grades and go to the same college.
You take Womens Studies, she takes finance and pre med.
4 years later you both graduate.
She goes on to med school, you go on to the working world. The problem, there’s no market of jobs for someone with a degree in Womens Studies, so you get a job at Home Depot.
So now you’re in the working world, MAKING $12 an hour at Home Depot.
Your friend is PAYING $40k a year to go to med school 4 more years.
4 years later.
You’ve gotten raises at Home Depot, and now make $15 an hour.
Your friend finishes med school, and still hasn’t earned any money, because she’s been paying and going to school.
Next.
Still no jobs for Womens Studies major, so you keep working at Home Depot EARNING $15 an hour.
Your friend continues on in education to become a specialist and surgeon.
2 more years of going to school. 2 more years paying $40k a year. 2 more years of not working and earning a living.
After those 2 years,
You’ve worked your way up to the head of Windows, Doors and Cabinets department. Your making $20 an hour.
Your friend FINALLY gets done with SCHOOL and becomes an intern. (Yeah, thats great pay) She works the graveyard shift and works 50-60 hours a week.
You-you work 7am -3:30 go home and pop a few cold brewskis and complain about how hard your job is and how unfare.
1 year later your friend finishes her internship.
Your still the top dog in Windows, Doors and Cabinets at Home Depot.
Still no jobs looking for Womens Studies majors.
You friend starts her residency. Low man on the totem pole. Low pay and crappy hours and crappy cases. But she’s finally practicing medicine.
5 years later.
Your still Head of Windows, Doors and Cabinets, making $22 an hour.
Your friend FINALLY finishes her residency and gets to go into private practice.
With $500,000 in school loans.
Now you work the same hours, 7 am -3:30 pm, 5 days a week.
Your friend the Dr., works Monday 9 am-5:30-6pm,
Tuesday is surgery day. Pre op starts at 5am. First patient at 5:30 or 6am. Surgeries are stacked one after the other. The last surgery ends around 8pm.
Wednesday, back in the office at 1 pm til 6 pm. But before going into the office, there is checking up on all the patients from yesterdays surgery.
Thursday, in the office from 10a-6p, and again checking on patients before AND after office hours.
Friday in the office 10a -4 pm. And once again stopping in the hospital checking on patients, before and after office hours.
Yeah, your Dr friend is still working 50-60 hours a week.
You haven’t seen your friend in a number of years, so you go to a bar and have a couple. You complain about your job, your boss and the shitty pay you get, and the fact that there are no jobs for anybody with degrees in Womens Studies, and that Home Depot should pay you more for having that degree.
And whats your Dr friend making her first few years in private practice??? Maybe $125-$150k, with a $500,000 student loan.
5 years later.
Your still at Home Depot. Complaining about your job. Complaining about your boss. Complaining about your pay.
Complaining that a cabinet order got botched and some windows got broke, and how YOUR BOSS YELLED AT YOU.
Your Dr friend is still working 60 hrs a week. Goes to seminars and lectures 1-2 weeks a year to keep up with the latest techniques and reads journals and trade papers.
Oh yeah, she’s being sued because she didn’t notice something on a patient, that the other 2 drs she went to didn’t see either. And now complications arose.
But hey, she’s making $300k (and still owes $350,000 on school loans)
And she should be paying a higher percent in taxes than you, because she’s making more and was “luckier”
Something you FAIL to understand about income. Not all jobs are equal. I don’t expect Drs to earn what a Walmart greeter does. What happens when a Walmart greeter makes a mistake? What about McDonalds hamburger flipper? Or the Home Depot employee?
What do you think a CPA thinks about while he’s crunching numbers? Do you ever think a Dr worries about losing a patient on a table? Who’s got more responsibility, the Dr or the office manager.
Like I said not all jobs are equal. And not all drs are equal. Some are better than others, because they work at it.
In so many words, you’ve said that the wealthy OWE society, simply because they are wealthy.
In reality, whether you admit it or not, what you’re saying is that the wealthy OWE-YOU.
The wealthy owe society. YOU are part of society, ie, the wealthy owe you.
It doesn’t matter what they’ve done to earn that money. It doesn’t matter the hours they’ve worked. It doesn’t matter how hard they’ve worked. It doesn’t matter the risk they’ve taken or endured. It doesn’t matter the responsibilities they have.
They are wealthier than you, and they OWE-YOU!!!
So I have a question for YOU.
Since you feel that wealthy people should be held at a higher standard and do more, than less wealthy people. What are YOU- DOING to be to be at that same standard as the wealthy person? What are you doing to increase your income? What are you doing for your fellow man.
You want to hold others up to a seperate standard. Its seems hypocritical to hold someone else to a standard that you yourself aren’t trying to or feel no obligation to obtain.
If a wealthy person OWES something to society, what DO YOU OWE to society?
I work 60 hours a week for my income. How about you?
I’m taking classes. How about you?
I’ve spent years volunteering for others. How about you?
I’ve spent countless hours/days/weeks of my time helping others. How about you?
Funny thing. You called me a conservative, like it was loathsome. I GLADLY admit I am.
Funny thing. I hear people spout the same trash you do. Claim its FOR THE POOR, and yet DO NOTHING THEMSELVES.
Repeated studies have been done on the giving of liberals vs conservatives. 2 things repeatedly occur. Conservatives GIVE more time and money to charities and people. And Liberals TALK more about people giving and doing more for others.
Here’s a little secret about earning money maybe you haven’t figured out yet. The work comes before the money.
That means, if somebody has more money than you now, somewhere along the line they probably worked harder, longer or smarter before you did.
FS, the trouble with your way of thinking is this: if the average worker in a county in Kansas earns 22 per hour (which includes those earning minimum wage and those earning 47 per hour) do you see any way in the world that the minimum wage earner (who exist in order that those earning 22 per hour may have a good life) will catch up in standing? Your concept of a fair tax structure is wanting actuarial sense. The number who earn minimum wage cannot decline because the number of jobs available at higher wages is stagnant. The GDP is moving upward, floating boats without leaks. Leaving nada for those with ambition but naught but minimum wages. FS, you’re a joke.
Your argument is simply wrong.
The job might be minimum wage, and static, never moving or changing. But the worker isn’t. 40 years ago, as a kid, I had a paper route. Not even minimum wage. I did that for 4 years. At 15 I got a work permit and started busing tables. Did that for 3-1/2 years. Went to college full time while working at a hot dog stand almost full time. Did that for 2-1/2 years. Bussed tables again for 6 months while “finishing” school. Got my first welding job 2 months before “finishing” school. Moved from one welding job to another, always moving up in pay. Took a cut in pay to become a construction worker, and have moved up since.
There are still people bussing tables and working in hot dog stands. They don’t HAVE to stay there. They can get an education and/or develop a skill and move on.
Working at McDonalds isn’t a career choice, unless you want to move along in management. And then, thats a CAREER…CHOICE. (With emphasis on CHOICE. One chooses what they want to do for a living. And with that choice comes outcome)
And your absolutely WRONG about jobs at higher wages being stagnant.
You’re telling me, that the amount of people making $250,000 a year or more, in this country, is the exact same as it was 10-15 years ago? That would be stagnant.
All one has to do is look at tax revenues and the income brackets who pay them to know that there are more higher paying jobs today than there were 10 years ago.
Who pays the highest tax rates? Think about ALL the taxes people pay:
Take a wage earner who makes $30,000 a year. Lets call this taxpayer John. John pays 15% social security/medicare tax on every dime he earns. (Yes, half of that is “provided” by the employer or both halves by self-employed taxpayers.) Then he pays 10% federal income tax on his income to $8,500 and 15% federal income tax on the rest. John pays 4% state income tax. Then he pays $1250 annual property tax on his $70,000 house at an income rate of 4.2%. John pays $300 (1%) annual property tax on his 5 year old Ford Escape which he just paid off. (He paid an extra 8% sales tax of $1440 the year he bought the car.) He spends the remainder of his income on food, medicine, clothing, and goods which are all taxed at 8% sales tax in his state. Once a week he buys a 6-pack of beer and pays special excise taxes on top of the sales tax. He takes two weekend vacations per year and pays an hotel room tax of 12.5% as well as sales tax. He pays a toll tax to drive to work every day. He also pays special gasoline excise taxes and special utility and phone taxes. And when he buys the beer and food and goods, he is reimbursing the manufacturer for a share of the highway tax, property tax, social security tax, and business tax that is added into the price of the beer/food. Taxpayer John doesn’t have any money left to save or pay into IRA’s or any other tax escapes. John is paying about 45-55% of his income in total taxes.
Compare this to a small business owner Rick with total income of $300,000 a year. Rick pays the 15% social security tax on only the first $106,000 of self paid wages from his business, so he is paying a rate to income of only 5.3%. Rick pays 6% state tax in the same state as John, which is 2% higher than John’s. For federal income tax Ric pays the exact same federal income tax rate (10%) as John on his first $8500 of income. Rick pays the same (15%) rate as John on the next lump of income, then 25% on the next lump ($34,000-83,600), then 28% on the next lump of income ($83,600 to $174,000.) About this time some special tax breaks kick in. Rick gets to contribute $30,000 income-tax-free to a special SEP IRA for small business owners. $25,000 of his income is from non-taxable bonds. The remainder of his income is capital gains/dividends and is taxed at a top rate of 15%, not the 33% normal tax rate. Rick has a $500,000 home and pays $8929 in property tax for a rate on his income of 3% compared to John’s rate of 4.2%. He paid $1000 in property tax on his brand new Ford truck, but his own company paid the other $2000 because the truck is used in town for business. His truck property tax-to-income rate is one third of John’s. Rick’s company paid 67% of the sales tax on the truck and got a tax write-off on 67% of the price. Rick buys about 5 times as much as John per year of food, medicine, clothing, and goods. But Rick’s income is 10 times as much, so Rick is paying sales tax at half the rate John does. Like John, Rick also buys one 6-pack of beer a week, so his excise and sales tax is the same dollar amount but is one tenth the percent of income as John’s. Rick’s phone is necessary to his business so it is paid through his company. Rick pays more toll taxes and utility taxes, but as a percent of income, the rate is lower than John’s. Rick is able to invest some of his company’s earnings back into a new building, so he does not have to show that money as income for taxes. Individuals pay tax on wages they use to pay their food and shelter and transportation so they can earn their wages. Rick’s business has a high tax rate of 30%, but only on its profit. Everything paid by a business to earn the profit is deductible. Rick will pay special capital gains rates of 15% when he sells the business, not income tax rates of 33%. Overall, Rick is paying about 30-40% of his $300,000 income in total taxes, while John pays 45-55% of his $30,000 in overall taxes.
Well articulated TeranH. I am currently in the top 5% of earners in the US and know for a fact that we are afforded many more tax loopholes and opportunities to keep our money than the poor (my effective tax rate last year was 11.5%). The poor simply have fewer choices and are truly disadvantaged, especially when in sheer survival mode. I know that, because growing up I’ve been working since I was 12 years old, starting from nothing. 5 of us lived in a one BR state subsidized apartment for 8 years, before my mother and I could afford to finally buy a little house with federal program help (she worked, seriously, 12 hours a day, 7 days a week, and sometimes more). Sure there are charities and friends and relatives that some people can rely on, but I can tell you, without state and federal assistance in job training, education, food stamps, lunch programs, etc. our family would not be the contributing citizens we are today. There are definitely abuses of these social support programs that must be vetted out and stopped, but I do not believe in judging the entire set of programs by those abuses. The rich owe a lot to the people that work for and with us, and to the governments that provide and support our physical and commercial defense, the education of our workers, and the physical and virtual infrastructure that our customers, supply chain and product distribution networks avail themselves of. Hell, even the internet was spawned by a government activity. As a business person I work, and have worked with many government agencies that supported both my individual businesses and my industries as a whole. I am happy to work within specific regulations, and in fact my business strives to perform BETTER than certain regulations, as we know the value of protecting things like the environment, intellectual property, and our public relations (ie, good corporate citizenship). I am happy to support those agencies through tax dollars, and sometimes give more than what is asked. I also know, that as a person of wealth, and as a successful business person, there are many, many business people, and those of great means, that are not as “altruistic” as I am. Actually, I dare say some “captains of industry and wealth” are down right sociopaths when it comes to greed, corruption and the accumulation of “more wealth, power, and “stuff””. If you have ever watched the “Housewives of “Insert Name of Major City here”, you have only seen the tip of the iceberg when it comes to self-indulgent behavior. I know for a fact, that many of these types of people will not voluntarily “give back” to the society that has enabled and supported their success, any more than they absolutely have to, and very often not even that (that’s what crafty accountants, and off-shore accounts are for). There is a reason why the income disparity in this country has grown, along with poverty rates. Some people have convinced themselves that they alone are responsible for the fruits of the efforts of hundreds, sometimes thousands of people, and the network of support systems they get from their government and other support groups. To think otherwise would cause them to wonder why they have accumulated such wealth and power and pull down the salaries they do (am I jealous, no – I live very comfortably and define my “wealth” in different ways :)). Many of them do work hard, and spend lots and lots of time “making money” in many ways. Some of those ways are honorable, productive and helpful to society, their customers, and the general public, some of them are not. Some are deceptive, ill intentioned, and downright dangerous to either public health, safety, the environment, and society as a whole, but it doesn’t matter, because profits and shareholder “value” are king. So do I feel bad, or am I bitter that the wealthy are asked to return some of their gains back to the society that helped create it -versus- asking someone who is just trying to survive to do so? Absolutely not. I will also vote that way as well, much to the chagrin of some of my fellow wizards and hob-nobbing socialites. There is still good will and altruism in the world, in spite of Ayn Rand’s rantings, just not enough of it, and there are forces out there that are trying to make sure that doesn’t change.
Good analogy. The table in the article is base on AGI which is after deductions, of which the top 50% will have more than the bottom 50%.
Absolutely misleading. The table should be based on gross income.
There is likely a huge chunk of income not counted in the upper 50%.
And what exactly is this “gross income” that this table is not capturing?
Everything from line 8A to 36 on IRS form 1040. If you follow the thread you will
notice a HUGE one — line 13. This is where rich people get to pay far less
income tax on wealth that comes in the forms of capital gains and deferred
income, and is the basis for the “Warren Buffett Rule”.
https://www.irs.gov/pub/irs-pdf/f1040.pdf
The original idea to have this taxed less than ordinary income is an honorable
one, to encourage capital investment. Unfortunately smart people have figured
out how to abuse it via what the definition of capital gains has become, and it
appears to not be helping in terms of growing brick and mortar, equipment based
investment (e.g. job producing in the US). It’s a nice benny for those that are
compensated via stock options and other deferred income however, driven by
the lobbying efforts of the financial sector and executives of many corporations.
capital investment in this country.
WOW, have you totally skewed and screwed everything.
Here’s the reality.
John works for Rick.
John pays (Rick withholds) 4.2% for SS tax
John pays (Rick withholds) 1.45% for medicare
Rick pays out of his pocket 6.2% for SS tax for John.
Rick pays out of his pocket 1.45% for medicare for John.
John makes $30k a year.
Johns standard deduction is $5950
Johns basic exemption is $3700
John made $30k but will be taxed on $20,350
The first $8,500 will be at 10% = $850
The remaining $11,850 will be at 15%= $1,778
For a total of $2,628
or 8.8% of his pay.
Rick pays not only 6.2% SS tax for John, but for EVERY other employee he has.
Rick pays not only 1.45% medicare tax for John, but for EVERY other employee he has.
Rick pays 4.2% SS tax on himself, as an employee, up to $106,000
Rick pays 6.2% SS tax on himself, as an employer, up to $106,000
Rick pays 1.45% medicare tax on himself, as an employee, with no limit.
Rick pays 1.45% medicare tax on himself, as an employer, with no limit.
Rick writes off ALL SS and medicare taxes he pays as an employer.
Rick does not write off SS and medicare taxes he pays as an employee.
FICA taxes combined were 15.3%, until the 2% SS reduction, on employees contribution. There is no reduction for the employer. And medicare taxes, which are 2.9% of the original 15.3% FICA taxes, are taxed with no limit on income. Whether one makes $30k, $100k or $300k, 2.9% medicare taxes are taken out.
The very fact that you miss this VERY BASIC point and yet point out other things not known by the average tax payer, suggests a deliberate omission and an attempt to mislead, and calls into question some of your other points.
But lets start with a few.
The biggest is you choose to change the standards by which each individual is taxed. You put John in one state vs Rick in another. You conveniently put one person in one area, while another in the other. If we reversed the locations, or even kept them the same, your comparison wouldn’t have been so starck. Or John could move to Ricks state if he doesn’t like his taxing.
Here, lets tweek the scenario a little bit.
Both John and Rick are married with 2 kids.
Johns wife, Sally, works making minimum wage. Ricks wife, Ann, works as Ricks secretary and makes $50k.
Sally pays 4.2% SS tax and 1.45% medicare tax.
Ann pays 4.2% SS tax and 1.45% medicare tax, Rick pays 6.2% SS tax and 1.45% as Anns employer.
John and Sally file married jointly. They each get $5950 standard deduction which is $11,900. They also get a $3700 exemption for each of them and both their kids, which is $14,800.
Their combined income is $45,000.
Their standard deductions and basic exemptions are $26,000.
Their taxable income is $19,000.
Because they’re married filing jointly, they pay 10% in federal income taxes on the first $17,000 which is $1,700
They then pay 15% on the remaining $2,000 which is $300.
Total they pay $2000 in federal tax on an income of $45,000, which is 4.45% of their gross pay.
Because they made so little and have 2 kids, they get an EITC refund (earned income tax credit) of $5,036.
Meaning in actuality they paid no federal income tax and got an extra $3,036 from the government.
You mention ” About this time some special tax breaks kick in. Rick gets to contribute $30,000 income-tax-free to a special SEP IRA for small business owners. ”
Well this is WRONG!!! Its not income-tax-free. Its tax DEFERRED. When the person starts withdrawing money from this IRA, they will be taxed on the full amount withdrawn every year.
Also, anyone with a small business can set up a SEP, its not limited to making $175k or more a year.
You mention the taxes John pays when he goes on vacation or the beer he buys. Rick pays those same taxes also.
You also don’t mention the commercial property tax Rick pays, for the office and factory that John works at. Commercial property taxes are sometimes twice what residential taxes are.
Don’t forget utilities. If Rick is getting his utilities at a corporate, they are generally higher than residential rates.
Also, your skewing taxes on company stuff vs personal stuff, and business operating expenses and income. You can’t start off with the premise that Rick makes $300k, AND THEN pays taxes. When it comes to business, gross income is offset by operating expenses. Operating expenses are payroll and utilities and taxes and other things.
Ricks income would be AFTER operating expenses. You cannot lump Ricks company truck and those expenses and then at the same time attribute it to personal income.
When you mention the property taxes they pay, its important to note that Rick pays lower taxes NOT because he’s wealthier but simply because he lives in another state. John could pay lower property taxes also if he lived in Ricks state.
With everything you mentioned, You haven’t owned a business.
And if you have, and YOU are doing your taxes, and this is the way you view or itemize things, you’re going to be hearing from the IRS in short order.
FYI, clarification; the deductions in 23-36 are excluded from gross income. The income reported is of course still there.. but not necessarily taxed at the same rate as ordinary income. It should still show up in the totals of your table though…
I have to be honest, I haven’t taken the time to read all the comments above. I just wonder Mr. Whatever Samurai, if you’re aware that the lower 50% pay a large percentage of their income in payroll, excise, sales and state and local taxes, for which they’re disproportionately paying compared to the top earners?
Are you actually saying that, like Gretchen Carlson, that half of Americans are freeloading on the upper half? If that’s what you’re saying then you’d better keep your address secret because those at the bottom may not stay so well-behaved as things get tougher and more unfair. This ain’t the USA I was raised to think it is. Cruelty is in, kindness is out. Embrace the suck Samauri-boy!
I got my pitch fork ready comrade. Let’s get these greedy rich people!
Here’s a figure for you, Mr. Schwartz.
The average amount, nationwide, in tax $$$, that a public school receives is just under $11,000 a year per student.
How many people pay $11,000 or $22,000 or even $33,000, for THEIR kids to go to school?
Who pays for that, if it ain’t the bottom 50%.
Hey, and thats just education. What about school lunch and breakfast programs? Who pays for those. More importantly, who uses them???
People who tell others to pay more taxes, who don’t pay more themselves perplex me. Those who make $199,999 are the worst.
You think there is a big difference between 199,999 and 200,000?
yes one will pay more taxes because they are in a different bracket I believe?
This is a common misconception, and it’s important for people to understand this. Your MARGINAL tax rate is what you are taxed on your last dollar. In this case 199,999 and 200,000 are currently in the same tax bracket for single people. However, if the brackets changed at 200,000, only the dollars in the higher bracket are taxed at the higher rate. In this case, the ONE dollar (200,000 minus 199,999) would be taxed at a higher rate. The first 199,999 would be taxed the same as the guy that makes 199,999. If you were making 300K, and if the bracket changed at 200,000 then 100,001 would be taked at the higher rate. (300,000 minus 199,999) Also, all your deductions come off the top (off your highest dollars.
It is NOT true that if you earn MORE, you would end up netting less.
Having lived in Australia, Asia, Canada and United States, Mr. Samurai, I can tell you you are spot on. In places like Australia & Canada, where salary is comparable to the US, the tax rate and the living cost are far more greater there. in Australia, it is said that a household income must be around $100,000 just to maintain an ordinary life in a middle-class neighbourhood.
Asia is the worst, the salary hardly increased, yet living cost has skyrocketd. Boom in China means millions of more people are wealthy but billions of more people now floating in between – they are not as poor before, but young people have to share accomodation, hardly have any money for meals.
So by that standard, US is quite fortunate as cost of living remains the most reasonable in the world. People will argue against me about poor economy, unemployment…etc.
My answer is: At least in the US, you have a freedom and have a choice. You can decide to set up a business, you can decide to move to another city. Most countries do not have choice.
People say things about China, I have lived there before…no job? The Government doesn’t care, people don’t care, you get kicked out and stay on street next day. Retirement? Pensions? you are on your own…Is this the type of life you know in the US?
Europe, completely different, tax is close to 50%, yes, you get pensions and benefits but wait until 65, 70 or better, never get there…
Life is tough in the US, so is everyone else in the world – but which country has the most choices? It is still the USA.
I wish folks like you complaining about the segment of Americans who pay little or nothing in federal income taxes would take a moment from your mouth-foaming to consider what it is you’re actually talking about and the implications of your proposals…
“40-45% of American income earners pay zero taxes.” That’s just flat out wrong. They may pay no income taxes, but they pay payroll taxes (Social Security, including unemployment insurance, and Medicare). Since Medicare is a big contributor to our long-term budget concerns (Social Security isn’t really), it’s simply an ugly lie that lower-income wage earners aren’t contributing toward the federal budget. And guess what… they also pay state sales taxes, property taxes, and other fees. Sales taxes and fees especially are regressive as a percent of income.
Now what do you suppose will happen if you increase the income taxes on the lower classes? You are disincentivizing work; increasing the so-called “dead zone” where the implied tax rate (including direct taxes plus loss of social services) increases faster than income, encouraging people to not work, or stay in low-income work, to continue receiving benefits.
The reason that the wealthy pay a “disproportionate” share of taxes is they own a disproportionate share of the nation’s wealth and receive a disproportionate share of the income. If you consider the effective tax rate of all taxes paid, in fact the wealthy on average pay about the same proportion of taxes as their proportion of national wealth. But the point of the proposed “Buffett tax” (more of a principle at this point, actually) is that some of the mega-wealthy pay a much lower tax rate, primarily because most of their income comes from capital gains, which is taxed at a flat 15%, with no payroll taxes at all. So while millionaire baseball players may for the most part be paying the top marginal income tax rates, m(b)illionaire investors don’t.
Finally, your McDonalds example doesn’t stand up to scrutiny. If you were making $3.50/hr, you’d have to work 35-40 hrs/wk to get $550/wk, and that’s *gross* (i.e. before taxes). Not a lot of room left for a secod job. And even if you didn’t pay any state or federal income taxes, you’d be losing 7.65% of that to FICA. Oh, and that’s with no benefits. Now, the highest minimum wage in the country is Washington state at $8.67. Working 40hrs/wk for 52 weeks/yr, that comes to just over $18k/yr, again before taxes, and typically with no benefits. But those folks can just a second job, right? I mean, there’ll be time to sleep when they’re dead (sped along by lack of health insurance, no doubt).
Are the poor and low-income better off in the US and the West in general than in many other parts of the world? No doubt. But is that how we should measure ourselves? Against the worst of the world? Hey, in Somalia (and parts of Florida), they have slave labor, so you know, things could always be worse! Then again, in Russia and China they sent their wealthy and educated classes off to reeducation camps, so, you know, things could also be worse for them.
On one thing we agree, though: the wealthy have no reason to complain.
Again, if you think working more than 40 hours a week is too hard, then you have no hope of making it out of the lower class.
I didn’t realize the rich are benefitting for the majority of social welfare programs they pay for. Tell me how this works?
Working 40 hours a week with a couple kids is quite difficult. Likewise when the majority of the paycheck goes towards supporting the children, getting them food and getting them clothes and getting them stuff for school so they can try to make something of themselves…and paying for a house, electricity, gas, heat, water, and such…
Or they could put the money they make from over-40-hours-a-week into paying for a nanny for the time they spend at work. But that would leave little (if any) benefit for the worker (their extra money goes primarily to the nanny) and hence would be rarely done.
Which is a very nice mirror of what the company-owners do. The cost of one more worker has little profit compared to the cost of hiring so they don’t hire that one more person. That ‘one more person’ must then get social welfare, and it actually quite logical that the greedy person who won’t help someone support their family ends up through taxes supporting the person. [Note: I am not saying that it is the ONLY logical position, but it is ONE of them.]
Here’s a post for you to read: https://www.financialsamurai.com/2010/04/19/please-dont-have-children-if-you-cant-take-care-of-yourself-orphans/
I work with 600 guys on nights and 1200 guys on days. About 1/2 our job people are travelers from out of the area. Some guys leaving home and family and traveling 2000 miles to work here. We work 6 days a week, 10 hour days, some guys 12 hours. These guys live in inexpensive motels or trailers, out of suitcases.
I myself drive 120 miles roundtrip, spending 2-1/2 to 3 hours a day commuting.
But hey, at least its work.
Do you think thats just A LITTLE MORE than “Working 40 hours a week with a couple kids is quite difficult. Likewise when the majority of the paycheck goes towards supporting the children, getting them food and getting them clothes and getting them stuff for school so they can try to make something of themselves…and paying for a house, electricity, gas, heat, water, and such…
”
WAAAAAAAHHHHHH!!! Life is quite difficult, waaaaaaahhhhhhh!!!
You OBVIOUSLY have no idea what it costs to run a business.
Companies aren’t interested in cutting employees to save money.
Companies make money off employees.
You have a choice. Cut employee and “save” money, or hire employees to make money.
Of course if business downsizes, then so does employment. Yes, its all about the bottom line. Business environment dictates business actions.
Cutting employees is never a money making strategy. Its all about saving. Saving jobs, saving the company.
Wow, I at first felt less intelligent after reading this terrible article. I am very happy to see the comments that have ripped it apart and exposed much of the defunct logic and ignorant statements. I do find the author’s inadequate attempts at defending him/herself in the face of sound logic and examples quite amusing. Case in point the comment directly above mine.
Point is that you can tax the upper class a hell of a lot more and I promise we aren’t going anywhere. If you don’t like paying for social welfare programs that you don’t benefit from than move somewhere else; simple. As for me, call it a home bias or call it like it is; the rich have it great here in the USA. Even Bill O’Reilly admitted his ‘threat’ that he would “stop doing what [he’s] doing” if the government taxed him even 50% to be completely empty. Besides, more taxes is simply motivation to make up for it somewhere else. One thing that you can not argue with is that it is far easier for the wealthy to make more money based on the fact that we have far superior expendable income for investments, etc. Trust me, anyone in the top 1% knows how to create money out of thin air (potential exceptions are celebrities) and I’m not talking about a second job. So bring on the taxes; we’ll be just fine.
One last thing. I’m sure most people reading this piss $43 a month if what you said about most being in the top 25% is accurate, but if you think that is true for the bottom 50% you have simply lost touch with reality and you should probably pull your head out of your ass and look around. You kind of sound like a 12 year old that has been watching too much Fox News, but that is a bit of an ad hominem so you can disregard that last part.
Are you in the 1%? Or, are you postulating and looking up, wondering what it’s like? Thx
Censorship huh? You are certainly part of the problem. Nice.
I can support that! However, lots of people believe in our government, which is why they are happy to vote for tax increases…. well, so long as it’s not going up on them :)
Sam -your original premise indicates that you are one of those people wants to increase taxes… As long as it doesn’t affect you!! Remember??? You want to get an additional $43 per month from the bottom 50% and leave you alone!
“Sam -your original premise indicates that you are one of those people wants to increase taxes… As long as it doesn’t affect you!! Remember??? You want to get an additional $43 per month from the bottom 50% and leave you alone!”
No…Sam is postulating that the bottom 50% pay the same as us. Or we pay the same as them.
Either way works.
I support this thought: less taxes for everyone and some serious governmental cuts and no bailout for company who afford more and more to gamble with our money. I’ve recently discovered something quite disturbing: our politicians hate marriages and double income families.
Suppose you make $50,000 of taxable income (after deductions and exemptions) and your spouse doesn’t work. Together you pay $8500 in taxes. A single person with the same income pays $10,700. You’re enjoying a $2200 marriage bonus. (Even more, if you’ve taken the standard deduction.)
The penalty comes for double-income marriages. You make $50,000, and your spouse makes $40,000. You pay $19,700 in taxes; if you were both single you’d pay a total of $18,600– about $1100 less.cIs it fair to tax double-income households more? Well, why not? If you have a double income, you can certainly afford to pay more than those of us who have just one.
I feel I have to take issue with using the less than half of working household pay income tax. Yes the numbers are right, because included in the 2009-10 stimulus package was the largest tax cut given to Americans ever! Unfortunately these tax breaks will be timing out in 2011 and 2012 so the numbers of households paying taxes will go back to the Bush era.
The rich always pay more than their fair share. I hope this is sarcasm the wealthy pay overall a smaller percentage of their earnings than most Americans, excluding those below the accepted poverty level. Much of the most affluent only pay capital gains which is taxed at 15% capital gains should be subject to the same income tax that a person that works to earn a living.. period .. anything else is totally unfair.
Emanuele
“The rich always pay more than their fair share. I hope this is sarcasm the wealthy pay overall a smaller percentage of their earnings than most Americans, excluding those below the accepted poverty level. Much of the most affluent only pay capital gains which is taxed at 15% capital gains should be subject to the same income tax that a person that works to earn a living.. period .. anything else is totally unfair.”
You have a problem with the capital gains tax rate huh?
That the wealthy pay a smaller percentage.
What is the capital gains tax rate?
And what is the tax rate for a couple earning $85,000 and a taxable income of $69,000?
What is the corporate income tax rate?
I’m barely in the 1% and already pay six figures in taxes. You cannot imagine the live/work balance I have sacrificed, stress level in a high powered job where I can’t “check out when my shift is done”, and pressure that kind of job has… I pay 35% in taxes. I’m single, still saving for a house, and have given up a lot to be where I am. It’s my choice, but why should I have to pay more taxes?
I agree that the Government should look at corporate tax loopholes, but we are not a socialist society.
A couple of questions: Why can’t we tax based on where we live? $100k in SF is very different than $100k in Iowa.
Why isn’t there a luxury tax on items over $100? My ex boyfriend with 3 kids can barely put food on the table, but when he got his tax refund check back, he bought a new flat screen TV.
If you are in the bottom 50%, you shouldn’t “need” many things that costs over $100. If you are in the top 25%, you would buy luxury items and pay a little more for them.
You need to pay more taxes Katlyn, because the majority of people don’t work as hard, or make as much, and don’t pay as much in taxes, yet they still have an equal vote. As a result, they will vote to raise your taxes, even though you are already paying a higher percentage more and absolute dollar more to fund their lifestyles.
This is the American way. It’s a beautiful thing to allow someone who pays no Federal income taxes to vote on raising taxes on someone who already pays plenty!
Katlyn, the average person in the top 1% pays 23.27% of their income in federal taxes. You are not paying 35%. You are paying 35% on the portion of your income that is over 379,150. If you want to pay less taxes, you should probably stop saving for that house, and buy it now! Then you can deduct property taxes and mortgage interest. If you make 400K, you may not be able to buy the house of your dreams, but you could buy a starter home anyway.
Janna, what right do you have to tell Katyln what she is paying in tax? Seriously, you are not her and only make 100K a year so how do you know? There are plenty of states that charge a 10% state income tax such as California, New Jersey, and New York City. You think Katlyn only pays 13.3% in Federal taxes when she makes over 400K? Are you clueless?
Seriously, please stop commenting when you have no idea. It makes you look completely clueless.
Janna, you should probably stop commenting. You make yourself and everybody making less than 380k seem so stupid!
You are an average paid worker whose highest marginal tax rate is just 25%. It’s pathetic that you are telling other people what they are paying in taxes.
Just putting 500K into a tax calculator with a 50K mortgage interest leads to a 33% effective tax rate for Federal + State. Pretty sad how little you know.
It’s pretty sad she can’t do math and tells people they are wrong about their own financials when she has no idea. Best to just ignore. It’s a waste of time arguing with someone who is not in the same financial situation.
Wow “Genius”… that is quite a zinger! “You are an average paid worker whose highest marginal tax rate is just 25%. ” You must be quite a little bully on the schoolyard!!
But wait a second… 25%…. now we’re talking federal only???? I am so confused. Are we talking federal only (as you to me), or are we talking all taxes (as with Katlyn)?
I agree. There’s a huge difference in $100k in SF or NY or Chicago compared to lets say Arkansas.
A friend of mine sold his house here in Illinois and moved to Colorado.
Did a lateral move $$$ wise. Property taxes in Colo are 1/4 they were here in Ill.
Heck, Chicago is bad enough, I can’t/don’t want to imagine SF or NY.
Its easy for someone in small town Louisiana to think $100k is a lot, if a decent 1200 sq foot ranch home sells for $120k. Its a totally different animal if the same home somewhere else sells for $300k. If the $120k home has a property tax of $1200 a year vs the $300k home paying $6000.
Then you can add on state income taxes. 7 states don’t have any. Here in Ill its 5%.
@Pete
katlyn, you took the words right out of my mouth!! I have the privilege of being a stay at home mom because my husband and I worked our tails off, earned graduate degrees, put crazy hours in, and became successful. Life is all about choices. My husband is a top 5 percent wage earner and we will apologize to no one. He earns every penny. I also agree, cost of living should be considered. We live is So Cal where a little fixer upper in a good school district costs over $700k. I don’t agree the bottom 50 should pay more but we can’t handle paying any more either. Btw, in CA that amounts to over 55 percent in taxes!!
“katlyn, you took the words right out of my mouth!! I have the privilege of being a stay at home mom because my husband and I worked our tails off, earned graduate degrees, put crazy hours in, and became successful. Life is all about choices. My husband is a top 5 percent wage earner and we will apologize to no one. He earns every penny. I also agree, cost of living should be considered. We live is So Cal where a little fixer upper in a good school district costs over $700k. I don’t agree the bottom 50 should pay more but we can’t handle paying any more either. Btw, in CA that amounts to over 55 percent in taxes!!
”
I second that.
It’s amazing how people who make less than $250,00 a year try and pretend how people in the top tax brackets feel and how much they pay in taxes. If you aren’t in the tax bracket you have no idea!
And guess what? Most of the people who are in the top tax brackets have an idea because they were once in the lower tax brackets.
Ask what you can do for your country and start contributing people! At the very least don’t go after people who are the most productive of society already.
Would this be those who’s productivity was the fabrication of securities exchanges that tanked the global economy? Productive how? How much more does your average CEO produce in a day than the person who cooks their food, manufactures their goods or builds their homes? Earnings are by no means the sole measure of productivity.
Unless you’re the business owner/s who hires the CEO, the income of the CEO has no bearing and no business to you.
Your just pissed he has more than you.
If you’re so concerned with employee wages, start your own company and pay people how much you think they’re worth.
Employee wages are not my concern, economic input/output is. I would like to know what exactly it is that a CEO earning 150,000 a year plus a million in bonuses actually produces. As a consumer, it is my right and my responsibility to judge the value of the products and services I purchase to decide if I am spending my money as I see fit. That is how market forces work (in theory) and those forces are the foundation of capitalism as a viable economic model.
As for “being pissed,” I’m not. I am not in the top tax bracket, but I’m perfectly comfortable and content with my income and my possession. There are those of us who believe that ice is to be lived, rather than just be spent accumulating as much “wealth” as possible.
As for starting my own company, in order to do so I would need to be able to stay competitive, both in the buyers market and in the job market, which requires knowing what wages come to and what their value for output is.
And finally, I am not the one who decided to run a blog post exactly about how much people make, thus inviting a discussion about that very topic. I believe that people have the right to earn a fair amount for what they contribute to society, and by no means doubt that a quarter million dollar a year salary can be rightfully achieved, I just want to know what the societal contribution (i.e. production) is which warrants that amount of compensation.
I’d rather give by choice.
Both how much and who I give to.
Taxes everybody can pay the same rate.
I have never done this before, so excuse me if I stumble through this. I am 61. My husband and I both put ourselves through college. My husband worked 12 hr nights loading freight trains and then went to school during the day. I got my 2 year RN, worked and then went back and paid for my bachelors degree (working full time with 5 kids) . Then went back and got my Masters as a nurse pracitioner ( worked full time and paid for it). My husband is an engineer and has always worked 10-12 hr days. He is currently working 180 miles from home, because that is where the job is. I see him on the weekends. We never, never lived beyond our means. Never had a new car or big vacation. We lived in a small split level home. My husband was adament that we save 15% for retirement. Now we are making decent money, and now everyone says that I have to pay more and more taxes. Do you not have the same options that we had? Are you willing to sacrfice the way we did? I work with the poor, I know the poor. Would someone please tell me why this is fair? One of the main person of “Occupy Wall Street” said “He lost his job and his wife had to go to work!! They live in an apartment in upper east side New York City!!
For everyone who asked about “the old days” and blasted my original post – THIS (Linda’s post) is EXACTLY what I was referring to. A couple who did not feel “entitled” to a standard of living that so many today believe they “deserve” (such as College Graduate in his infinite wisdom at the ripe old age of mid-20s) actually worked their butts off doing whatever it took to make a better living. Neither of them complained. Neither of them wondered if “their children would hate them for not being home all the time”. Seriously, the degree of whining amongst so many in this forum about what they “should” have….Where do any of you get off making the statement that you are entitled to ANYTHING? “Ooh, look at me! I’m a college grad with honors! I DESERVE a good job!” Well, that’s just plain BS. Nobody here deserves anything and if you believe you do, then you’re just buying into political bunk that is spewed by politicians who continue to get votes for promising something that just isn’t a reality. The only think we deserve, as a species, is what we earn. You get to eat what you kill, no different now than 50,000 years ago. Except now its currency instead of meat. Grow up and get a clue if you believe otherwise. And more to my original point, which has been thoroughly butchered into nothing of its original content…”If you are CONTENT with making 30 or 40k a year and not interested in working harder to improve your way of life, then you do NOT have the right to complain about the luxuries you can’t afford. You are NOT entitled to a house, a car, cable, internet, a nice neighborhood, or financial security. EVER. You may want that and believe that your education should allow that, but it is NOT a guarantee to anyone. And if you do not have these “expected” luxuries and you are not willing to do more than what you are currently doing because “nobody should have to work an 80 hour week”, well, enjoy your blue-collar existence. Now, if you have a blue-collar existence and you are happy with that, GREAT! I’m happy for you. Then again, you’re not here on this forum complaining about what someone else should hand to you. To call me ignorant is laughable from the mouths of those that expect entitlement. Strip away government, strip away societal “norms” and strip away “the American way of life” and you are left with the basic truth – get what you work for, nothing is deserved. Taxes be damned, the problem here is the modern day American work ethic. Its in the crapper and every single person complaining is part of the problem.
My hat off to you and your husband. Well done.
I wish this country had more like you.
People need to be allowed to dream and work for towards it. Some people work hard and some dont want to work at all. We made this system of freedom to allow capitalism very much due to the fact I stated above. Communism certainly did not work. Taking a larger percentage from hard working people’s salarys alone is a mistake…Huge. How many union employees have a deal which allows retirement at age 55 to 6o with a pension paying them 50 to 60% of their income for life? Now compare that benefit to a couple making $250,000 per year with no pensions…one has a salary, one is in sales and self employed paying both sides of fica (15%). If they just got to this income level at age 50 to 53, they will not be seeing SS since its going bacnkrupt. They are not “wealthy” as they can no possibly put away enouph to live like the people with pensions (look at the Fed Gov. Pensions) They have to put away in the area of 1 to 1.5 million to be able to purchase an annuity to get anywhee near those with pensions. Plus they are being taxed around 50% before they 0put away savings. The real issue is the fifly rich….Not the top 5 to 2% earners. Hollywood continues to support the liberal movement as they must in order to work…since it sbillionares who control both Hollywood and the media. I say we stop capitalism from becoming a game of minopoly. Cap what a person is allowed to earn in a year to 1 million. Take 90% of any total assetts over $25 million. Hey…I’m a conservative…..but I and many other conservatives want the fifly rich and hollywood stars and professional sports figures to get real. Leave 49% of the 50% payng taxes and making life livable for the 50% fatasses sitting at home and make the top 1% give back to the deficit and social security any amount they have above 25 million. Finally, my wife and I have decided to take back what we paid in by having her collect SS. $460 per week…. then its my turn. :) I’ll give up the long hours and pay to see what its like to get more than 3 weeks a year off. Sit my my lazy ass and maybe even join a protest or two. Once was in China and had a little china man tell me “we’re goin to beat you. I told him we worked for the same company…he said no we China are going to beat the US. and he smiled. They will, they WORK together with a common goal….and lauph at the lazy union workers and fatass Americans who would rather join a protest than stand togther and face them in their challaenge they are throwing at us.
Have you ever sat and done the math???
Seriously.
Go to Forbes and add up the top 403. 403 billionaires. Their worth will not pay this years defict.
What happens when you take away Bill Gates wealth? Where does it go. Where is it now. In a bank? In a safe?
No. Its in Microsoft and other companies. How do you liquidate those assets and not destroy the company? In order to liquidate Microsoft assets they’d have to be sold. To whom? You want all the super rich to forfeit their money. If There are no super rich, who will buy Microsoft stock?
Don’t be too impressed with China. Their economy is quite over extended. With the problems in Greece, Italy, Spain and the US, the leaders are sweating bullets.
Their economy is built like the same house of cards ours is. There problem is that the foundation for their house is the US.
Don’t be surprised if within the next year, 2 at the most, you start to hear rumblings from China.
No country’s economy is safe right now. Even the strongest economies in Europe are being dragged down by the others.
I think in America people think that a good degree is insurance you’ll get a great paying job but seeing how many lawyers and even some doctors are looking for work in this economy, I know that there is no sure thing these days. Trying to have several streams of income leads to the best results, I find.
Again, bingo – some people actually do understand what life is about.
I think I know what I pay in taxes as I write the check. I also know what it’s like to be in the bottom 50%. 15 years ago I made $30k. I live in SF where a starter house is $900k and I’m supporting my parents. I may sound like a jerk, but $300k- 35% taxes (state, federal, and SS which I will never see) nets out to about $16k a month. Sounds like a lot, right? A mortgage on a “starter house” in SF is about $6k. I pay my parents morgage/expenses of $4k. Anyone in this kind of job has higher living expenses. It’s just the cost of doing business….So, without those expenses I will net $6k a month when I buy a house. Minus $1k in bills, minus $1k in clothing/entertainment/travel/food which I can’t expense, but is expected in my job. Wow. We are down to $4k. I’m so glad I’m so rich!
The kicker is that the majority of my career I haven’t made that much. I’m not exactly signing up to buy the private jet or island on a tropical beach. There is uber wealthy and folks that have busted their ass to have a comfortable life.
PS. Samurai. If you know a nice guy in SF with 10 kids, I’ve been too busy working these past 15 years to focus on my personal life…I sure could use a tax write off! haha
I am lucky to be firmly in the tiop 1%. One of the problems is that even though wages are 3x higher than 20 yrs ago, the minimum wage is only twice as high. So, even though you *could have* but *didn’t* pull yourself up into the top 50% 20 yrs ago, now it’s just that much harder because the minimum wage earners are farther behind the median wage. Do the math: a single Mcdonald’s job pays about $14,500 a year. Two of them, say McD and BK, working 16 hrs a day, 80 hrs a week (no O/T because it’s a 2nd job) earn $29,000 a year. This is STILL below the median! Are you suggesting they should take a 3rd job and work more than 100 hrs a week? I have never done that in my life. Have you?
It is as simple as this. Were the tax code an equation, it should absolutely not be linear. When you take more of the capital you dont add a proportional amount. You add more than your “fair share”. This is because the relative wealth that each individual enjoys per work hour is disproportionate. Forty hours a week as a Mcdonalds worker yields much less than 40 hours per week as a CEO. Is that fair? Is that equality? If it were simply a matter of working hard I can tell you that there would be a far greater number of wealthy Americans than what exists today. Class warfare is a term pinned to this idea by those that are wealthy and do not wish to part with their money. I cannot say that I blame them, but lets call a spade a spade. This is not in the name of equality, but rather in the name of maintaining the massive disparity that exists between the wealthy and the poor. I cannot say I blame the wealthy, but anybody who exists outside that demographic who believes this load of bs is honestly an idiot.
How does one know what it’s like to be wealthy and feel discriminated against for being wealthy if they are not wealthy?
@Ben
I am aware that there might be typos. I do not proofread. Disregard them and pay more attention to what I am saying.
I’ll admit it I’m quite firmly in the top 1%. I grew up in the bottom 50% and worked my way up, and the only “handout” I took was a scholarship. I wanted to be able to pay for myself and my family, and not have someone else pay for me. Due to location and income/housing tax, I pay about 40% of my income away. While I don’t necessarily think that the bottom 50% should be taxed, why should I, who spent my entire life working extremely hard, to reach where I am, pay for them as well? I donate to charity, and pay massive taxes! If the tax on “millionaires” is 50%, I guarantee many people will hover below that mark, solely because they will pay less in taxes. But despite that, what of the people that just live off of welfare and don’t even try to get a job? Not the ones who can’t, the ones who don’t care. Why should we pay higher taxes to support them? If you want to balance the budget, cut spending on stupid programs and raise taxes slightly (Although I’d rather not have this one, but 1% isn’t a nightmare thought.), and cut “foreign aid” we need it for our own country. No, we don’t need to give pakistan 800 mil in military aid then have them (obv not all, but some in the military, no doubt. And for those who would like to argue with this, I got my information from a mid-high Pakistani official (family friends). ) harbor terrorists and allow the chinese to look at our military secrets. Thank you this was an interesting article!
oh and yes, lets not forget the money I pay into social security that I will never get because it will be given to others.
You do realize that the income split point is the lowest level of income that can be considered in the top 1 %. So why don’t you know what you are representing a little bit better next time.
And just so you know that means that is the low end of the top 1 percent….
What do you think about this:
https://finance.yahoo.com/blogs/daily-ticker/top-5-facts-america-richest-1-183022655.html
good clip
Flawed math.
Take the bottom 50%. Total AGI $1,074,514,000,000 (since the numbers in the graph are in millions.) Total number of people: 69,980,290.
Average income: (Total AGI divided by number of people) $15,354.
Take the top 1%. Total AGI $1,685,412,000,000. Total number of people: 1,399,606.
Average income: $1,204,204
I could win the (minimum) jackpot of my state lottery, and still not be in the 1% this year… (And I’m by no means ‘low-income’ now.)
Also flawed assumptions:
These are ADJUSTED gross income that is taxable on a 1040. That doesn’t include Capital Gains, which are taxed at much lower rates, and which higher income individuals are significantly more likely to have. It also doesn’t include Medicare or Social Security taxes. Yes, Medicare is a “flat tax” at all income levels. But Social Security isn’t. SS caps. Meaning your ‘effective’ total tax rate drops as you exceed the cap.
Try NON-ADJUSTED, COMPLETE gross income vs. COMPLETE taxes paid. Then see how the numbers stack up.
How about just looking at everybody whose name starts with a G and over 5 ft 5 inches tall?
By the time you get through all your scrubbing, the figures will be what you want them to be.
Samurai this guy totally called you out on you posting something flawed and and misleading and this is how you respond… I hope your readers can see how false you are in this article…
Funny, I thought I was asking you to STOP looking at people whose names start with G and are over 5 foot 5 inches tall…
Adjusted Gross Income DOES include capital gains, even though they are taxed at a lower rate.
@CharonPDX
You said:
“Also flawed assumptions:
These are ADJUSTED gross income that is taxable on a 1040. That doesn’t include Capital Gains, which are taxed at much lower rates, and which higher income individuals are significantly more likely to have. It also doesn’t include Medicare or Social Security taxes. Yes, Medicare is a “flat tax” at all income levels. But Social Security isn’t. SS caps. Meaning your ‘effective’ total tax rate drops as you exceed the cap.”
Ahhh yes, where to begin. Lets start with
“and which higher income individuals are significantly more likely to have.”
Capital gains are paid by companies to shareholders. Shareholders are OWNERS of the business.
Businesses withhold 4.2% in Social Security tax (up to an income of $106k) and 1.45% in Medicare taxes. Those are taxes removed from the employees check by the company and paid to the government directly.
ON TOP of those FICA taxes WITHHELD from the employees check, the COMPANY must also pay ANOTHER 6.2% in SS taxes (up to an income of $106k) and ANOTHER 1.45% in medicare taxes, FOR EVERY employee, from its own bank accounts.
As these taxes are a COST TO THE COMPANY, they are a tax deduction to the company.
Another tax cost to the company are FUTA taxes. FUTA is Federal Unemployment Tax Act. It is a 6% tax on the company, on the first $7,000 of income for EVERY employee. This is for funding unemployment extensions and doesn’t include the initial tax that companies must pay for unemployment insurance when they lay an employee off.
These are taxes paid by companies, before profits (if there are any). Dividends come after these taxes are paid. Since shareholders are owners of the company, as owners, they are paying these taxes.
Next. Companies pay corporate income taxes. These taxes are progressive. Meaning the more money a company makes, the higher their tax rate. This tax rate is anywhere from 15%-35%. This rate is based on overall company profits and not on dividend amounts. (Oh, and 15% is for companies making $50k and less. Any company making over $100k is approaching 35%)
When a company pays a dividend, it is AFTER corporate taxes have been paid.
The shareholder recieves the dividend and then pays 15% capital gains on that.
So if a shareholder owns lets say Exxon/Mobil, the dividend they recieve will be AFTER a 35% corporate tax, which they then will have to pay another 15% capital gains tax on.
Exxons last quarterly profit had an ROI (Return On Investment) of about 2.7% or just under 11% a year.
Oil companies make about 7¢ per gallon. Government makes about 46¢ per gallon.
YEAH, them eevil rich guyz made 11% profit.
i added up the numbers from the chart. 337 million individual tax returns filed in 2010!!!! the number of people filing taxes is greater that every man woman and child that is said to live in the US. whats up with that?
WOW!!!!
Ever think about being an accountant?
——————-Number of returns with positive AGI
ALL tax payers . . [ 139,969,580 ]
Top 1% . . . . . . . [….1,399,606 ]
Top 5% . . . . . . . [….6,998,029 ]
Top 10% . . . . . . [ ..13,996,058 ]
Top 25% . . . . . . [ ..34,990,145 ]
Top 50% . . . . . . [ ..69,980,290 ]
Bottom 50%. . . . [ ..69,980,290 ]
. . . . . . . . . . . . . .—————–
. . . . . . . . . . . . .[. 337,304,998 ]
Yup…Yer right, 337,304,998. According to the census bureau there are 312,456,963 people in the US.
Of course, if we assume that when the top line that says ALL taxpayers, it means ALL, which usually means 100%.
So if we take ALL or 100% and add the top 1% that equals 101%
Then if we take 101% and add the top 5% that equals 106%
Then if we take 106% and add the top 10% that equals 116%
Then if we take 116% and add the top 25% that equals 141%
Then if we take 141% and add theTOP 50% that equals 191%
Then if we take 191% and take the BOTTOM 50% that equals 241%
Then if we take 337,304,998 and divide by 241 that equals 1,399,605.8 per percentage point.
Then if we take 1,399,605.8 and multiply it by 100 to equal 100% that equals 139,969,580.
Or we could just assume that when they say all tax payers they mean 100%
Or we could add the bottom 50% to the top 50%, which equals 100%
Whatever way you like works fine by me.
DOH!!!!
Firstly, why are you using per capita measures of income? In a country with inequality as wide as the in the US per capita measures are meaningless. You are an intelligent and educated person so I assume you know that median measures of income are far more important. Why haven’t you used them?
Secondly, if you are using income tax figures to calculate incomes your numbers will be way off, because the rate caps at $372,951, which is utterly miniscule compared to what the top earners actually make per anum.
Lastly, I do not know nearly enough about economics to debate point for point with you. But I do know that Joseph Stiglitz and Paul Krugman (two Nobel Laureate Economists) think your arguments are full of shit, that inequality in the US is a massive problem and that the system is being gamed by the wealthy to only benefit them.
Shall we rally against the top 0.1% then? That’s kind of the point. Definitely work on elaborating your case here, or on your site. I read your 1% post, and it was 3 paragraphs long. Not very convincing. Come on now. Do better. Tell us why the IRS stats are wrong etc.
Just wondering if the tax numbers you have take into consideration the many tax deductions and credits? These typically assist those who are financially well off to lower their taxes, sometimes significantly.
I think I can answer that because these are the typical IRS stats. “Adjusted Gross Income” is pretty much all income for the “entity”(more on that later). For businesses taxed on the individual return, it includes NET income from the business (business expenses are deducted). It doesn’t include tax exempt income (munis, etc) and doesn’t include all of Social Security income). The effect of itemized deductions, lower rates on capital gains and dividends, etc is reflected in the tax liability shown. What’s a bit confusing and annoying about these statistics is that they are tabulated by entity, so joint returns are in for the joint income while single filers are in for the individual. So when you look at the “top 1%” you may be talking about a single person with no dependents or a married couple with several kids. But AGI is the easiest tabulation so many IRS tables are complied that way.