9 Things The Rich Don't Want You To Know About Taxes

[Conan71]

And why should I have to pay while almost half of us do not?

Because you can afford it. 

[Cats Cats Cats]

https://failedempire.wordpress.com/2011/04/20/save-the-rich-pay-your-taxes/

good example of how bad the rich have it when it comes to taxes (of course this assumes capital gains tax)

[Red Arrow]

https://failedempire.wordpress.com/2011/04/20/save-the-rich-pay-your-taxes/

good example of how bad the rich have it when it comes to taxes (of course this assumes capital gains tax)

Using the table at your link, the best way to correct the tax inequity would be to get rid of Social Security & Medicare/Medicade.  That would leave the millionaire's tax at 13.66% but reduce the janitor's tax rate to a mere 9.58%.  Everyone would be happy.  The millionaire won't care about the loss of Social Security income since, presumably, he will be well taken care of without it.  The janitor will be happy knowing that the millionaire will be burdened with a high tax rate because he makes so much money.

[Cats Cats Cats]

Using the table at your link, the best way to correct the tax inequity would be to get rid of Social Security & Medicare/Medicade.  That would leave the millionaire's tax at 13.66% but reduce the janitor's tax rate to a mere 9.58%.  Everyone would be happy.  The millionaire won't care about the loss of Social Security income since, presumably, he will be well taken care of without it.  The janitor will be happy knowing that the millionaire will be burdened with a high tax rate because he makes so much money.

Yeah, but we will have to raise the tax rate for all the people that don't save for retirement and live longer than they expect.  Removing social security creates a new problem that will nee to be funded.  I am unsure what the savings would be.

[Red Arrow]

Yeah, but we will have to raise the tax rate for all the people that don't save for retirement and live longer than they expect.  Removing social security creates a new problem that will nee to be funded.  I am unsure what the savings would be.

I don't really propose to eliminate SS. 

My point is that for the people that really need it, it's going to be a significant portion of their income to pay for at least some of it.  It's a forced entry retirement plan. You are going to save for your retirement whether you want to or not.  (Yes, kind of like ObamaCare wants to be for health care.)  It is now more than a program to keep people from literally starving to death and they should be willing to pay for it.  The money everyone puts in is an investment in their future with a direct benefit to them.  It's not like infrastructure, the military, police, fire and so on where everyone chips in but the benefits are usually indirect.  Everything that the less than really wealthy spend or buy is likely to be a greater portion of their income than the really wealthy.  Housing, food, clothing, transportation, big screen TV, cell phone ...  The interest deduction on your mortgage is a greater proportion of your income than for the really wealthy.  The only way to "correct" that is to put a cap on income.  Care to pick a number?

I know that SS is essentially a generation behind the recipients regarding payments but the payments allow you to join the club.

The various self funded retirement programs are more benefit to the middle class than the wealthy.  They have caps on them to prevent the wealthy from benefiting from the deferred tax benefit to the same percentage of their income as the less wealthy.  Once a person makes enough money to save  anything, there are ways to participate in the Capital gains benefit.  One of the most obvious is downsizing your home, assuming you bought a home and managed to sell it for more than you paid for it.    My employer has a stock purchase plan where I can buy stock at a discount twice a year.  If I keep it more than a year, the gain on the value is at the capital gains rate.  Dividends are taxed as ordinary income.  I can guarantee you that the only way my income can be counted as 6 figures is to count numbers to the right of the decimal point.

[Cats Cats Cats]

The benefits aren't there for the higher wage earners.  I agree, I don't think that they should pay on all their interest.  I am trying to point out that 2-3% higher income tax is within the budget when you don't have to pay the other 13%.

[Red Arrow]

I am trying to point out that 2-3% higher income tax is within the budget when you don't have to pay the other 13%.

Which gets us back to the question of whether you think the government would spend that 2-3% more wisely than individuals.  Some of us say yes, some say no.

[Red Arrow]

3% of $100,000 is $3000.  That's enough to tick one off and maybe delay a purchase.

3% of $10,000,000 is $300,000.  Not enough to break the bank account but certainly enough to pay for a few hours of a tax accountant/attorney.

[Cats Cats Cats]

Which gets us back to the question of whether you think the government would spend that 2-3% more wisely than individuals.  Some of us say yes, some say no.

Ahh, see you missed the the major concept.  It isn't being "spent".

[Red Arrow]

Ahh, see you missed the the major concept.  It isn't being "spent".

Ahh, I see you believe the rich stuff their mattresses with their spare money.  You miss the concept that if they do anything else, someone else has access to some of it somehow.

[heironymouspasparagus]

Red,
Wow!  Something we agree on absolutely 100% right down the line - the government can't spend money well or smartly or any other positive way.  Look at the hundreds of billions squandered on worthless, pointless nonsense in Iraq over the last 8 years!  With no real reason other than either imperialistic voyeurism OR maintaining the concept of continuous war as an economic policy!

And isn't is also amazing how when we re-focused on the REAL issue - Afghanistan and Al Qaeda - the Republicontin's jumped on the bandwagon to nay say??  But I wouldn't expect it any other way.


CharlieSheen,
You have fallen into the trap of accepting what guido spews about how horribly mistreated the rich are because they have to pay an extra 3%.  When in actuality they don't.  As has been shown here repeatedly.  And has been voiced by Warren Buffet - you remember how he has said over an over that his rate is way less than his secretary.  

And it doesn't just apply at millions - it starts WAY before the magical $250,000 of recent propaganda fame.  guido has been enjoying a 15% break for years.  And is now likely investigating a way to get ANOTHER 10 to 20% break.

And the other part of it where the poorest half of the country pays no income tax.  Well, anyone with even half a brain knows that just isn't so.  (Except of course, it they are buying anything from GE!!)  But for most corporations, income tax is a pass through - passed through to the customers who buy the product or service.  That was a point that was made in 8th grade economics.  Too bad so many RWRE missed that one.  I guess they should have stayed to actually experience 8th grade!
(It's their "handlers" that went on to college and Harvard MBA and law school!)

Don't let the rich, or even the very well off ($250,000 and above) con you into believing the RWRE Murdochian/Rove misinformation and distortion.  It just ain't so.

[guido911]

CharlieSheen,
You have fallen into the trap of accepting what guido spews about how horribly mistreated the rich are because they have to pay an extra 3%.  When in actuality they don't.  As has been shown here repeatedly.  And has been voiced by Warren Buffet - you remember how he has said over an over that his rate is way less than his secretary. 

The rich are being "horribly mistreated"? How about the lower/middle class getting a free ride on the rich folk's backs. Sheesh, Sheen sees the point. All of us should have at least some skin in the game. However, you appear okay with almost half of us paying no income tax while hitting up the other half for more money.

And for finality, stop with your dumb@ssed understanding of what I pay in taxes. I am not Buffett or any other millionaire/billionaire. After the meager deductions I still qualify for, I pay much higher tax rate than your uninformed and ignorant brain believes.

[Cats Cats Cats]

Ahh, I see you believe the rich stuff their mattresses with their spare money.  You miss the concept that if they do anything else, someone else has access to some of it somehow.

You know what i did with my free money a few years ago?  Bought GE stock.  Up 22%.. Good for me.. Oh, yeah the government got 0 tax revenue from them or me so far.  Bought some land too, at least the real estate agent made a few bucks of it.  The bank will get a little less money on the other peoples loans.  Our economy is sadly based on people buying crap they don't need.  The investment money is used to pay the upper management a crap load of money and hopefully make the shareholders money (which will probably be taxed 15%).  

The top 95% continue to make money while the plebs at 100k below are going to stay where they are.  They rich are investing it in huge companies that shift their profits to overseas units.  BTW, investing in companies that don't have people buying their products doesn't help the economy.

http://upload.wikimedia.org/wikipedia/commons/0/01/United_States_Income_Distribution_1947-2007.svg]http://upload.wikimedia.org/wikipedia/commons/0/01/United_States_Income_Distribution_1947-2007.svg]http://upload.wikimedia.org/wikipedia/commons/0/01/United_States_Income_Distribution_1947-2007.svg

[Cats Cats Cats]

The rich are being "horribly mistreated"? How about the lower/middle class getting a free ride on the rich folk's backs. Sheesh, Sheen sees the point. All of us should have at least some skin in the game. However, you appear okay with almost half of us paying no income tax while hitting up the other half for more money.

And for finality, stop with your dumb@ssed understanding of what I pay in taxes. I am not Buffett or any other millionaire/billionaire. After the meager deductions I still qualify for, I pay much higher tax rate than your uninformed and ignorant brain believes.

I doubt Guido is rich enough to have a substantial portion of his income coming from stocks/dividends.  Correct me if I'm wrong. 

[nathanm]

The way I see the chart, the rich appear to be paying a proportion of taxes higher than their proportion of income.  Is that correct?

Slightly higher, yes. Makes sense, given that they buy more things and own more things, thus pay more sales and property tax.

I need to look around for the graph, but the rich pay significantly less tax in proportion to their wealth than the middle class (and the lowest quintile, for that matter). You'll never hear that from the Wall Street Journal, of course.