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

[JeffM]

It's soccer boy. In his mind, the evil rich are always getting over at his expense.

First, I've done enough high end "wine and cheese" parties over the years to meet a number of well connected "philanthropists."  And if I want a soccer team to play at the old Driller Park, I'll have to find some more of those people..... I DO NOT BEGRUDGE WEALTH..... but.....

The "evil rich" were paying a 35% tax rate which was reduced from 39.6% when this country was supposedly running a "surplus".... the Bush tax cuts should have expired and been replaced with War taxes earmarked for Afghanistan and Iraq a long time ago...

And yes, I worked my butt off back in the 80s as a full time college  student.... while at the same time the "supply-side" Reaganistas made sure the minimum wage was frozen for the years I was in college.... and the Gramm-Rudmann budget cuts asked "shared sacrifice" of me but asked nothing of my richer college classmates who used their newfound Reaganomics tax status and sense of priviledged entitlement to "stimulate the economy" by buying their first new BMW's........ go figure.

From the mouth of Teddy Roosevelt.......

"Every dollar received should represent a dollars worth of service rendered, not gambling in stocks, but service rendered. The really big fortune, the swollen fortune, by the mere fact of its size, acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes, and in another tax which is far more easily collected and far more effective, a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate."

[Red Arrow]

While they are paying into social security and medicaire.  They are supposed to be paying for themselves.  You are correct in that a greater proportion of their income will go towards sales tax that the higher brackets.

One way around that would be to exempt necessities like real food (not junk food snacks), clothing, and prescription drugs from sales tax.  Pennsylvania did that when our family lived there (until 1971).  I don't know about now.

[Red Arrow]

And yes, I worked my butt off back in the 80s as a full time college  student.... while at the same time the Reaganistas made sure the minimum wage was frozen for the years I was in college....

Making sure you had a job for some wages rather than nothing at all....

From the mouth of Teddy Roosevelt.......

"Every dollar received should represent a dollars worth of service rendered, not gambling in stocks, but service rendered. The really big fortune, the swollen fortune, by the mere fact of its size, acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes, and in another tax which is far more easily collected and far more effective, a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate."

And when Teddy R was president there were very few social programs.  Not until (I believe his second cousin) was elected did SS etc exist, changing everything.

See, I know where the BOLD button is too.

[Red Arrow]

and I shouldn't be paying the same rate as someone who makes TEN TIMES THE MONEY I DO.....

Same rate, yes I believe you should. The total dollars will be a lot higher but I have no problem with the same rate (as in percentage of taxable income).  Loopholes are another issue.

We will probably have to disagree on this issue.

[JeffM]

Same rate, yes I believe you should. The total dollars will be a lot higher but I have no problem with the same rate (as in percentage of taxable income).  Loopholes are another issue.

We will probably have to disagree on this issue.

Then you'll also have to disagree with the last 100 years of tax history in this country.....

Historical Income Tax Rates & Brackets
http://www.ntu.org/tax-basics/history-of-federal-individual-1.html

[heironymouspasparagus]

guido said;

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.


And now for something entirely different - reality!!

Ahhh...the name calling again!  Yeah, team.  Good to know we can always count on guido to revert.  At least there is one point of stability in this world!

I wonder sometimes how someone can get through a college education with no better comprehension skills?  Oh, wait, there IS the George W. Bush example...

As has been explained so many times before, the poor are not exempt from income taxes as the RWRE would have you believe.  You know this for a fact, and yet persist in the misinformation and lies!  And the percentage they pay is on a par with anything you pay - unless of course most of what they buy is from GE.

As for your tax situation - well, I am sorry you only get a 14% break over what I and so many on a W-2 have to pay on every penny over the $106,000 or so...  

And as for the rest of the other 15% or so break, well I submit that is your own ignorance (see, not the only one who can do name calling!) for not listening to me about ISO's.  I hand it to you on a silver platter, and all you can do is blather the RWRE script!  What are we gonna do with you??  Buy you books, send you to school, and what?  Become a lawyer....  well, we tried!

As for paying the same rates as the rich??  Would that the bulk of the middle class could get by at such low rates!!  Your failure to learn how to "game the system" does not constitute either uninformed or ignorant on my behalf!  I DO understand how they game the system.  (And yes, I admit, I would love to be there with you!  Class envy, and all that...)

The big problem is that Warren Buffet, Bill Gates, and John Bogle, among hundreds of others of the richest have been saying for years how unfair the system is.  And they are the ones that can be believed.  Not Murdoch/Rove/Cheney, LLC.

[Cats Cats Cats]

The question is, is FICA a tax or a charge for a service.  Obviously you shouldn't pay for a service you won't be using.  I know for certain that most self employed people would much rather opt out and put the same % in their own savings account.  I actually think that is a good deal.  However, I still want people who can't handle money to save for retirement and have some sort of investment for dummies option.

[heironymouspasparagus]

The reality of the last 30 years or so is that it has been blended into the main general fund so deeply that it is meaningless to talk about it in terms of a "trust fund". 


Investment for Dummies.  Sounds like you might be buying into the idea that a 401k is the "solution", or a viable replacement for a defined benefit pension system.  Sad.  The 401k has been an absolute catastrophe in this country.  It took professional money managers out of the equation and turned everyone into their own professional money manager.  (Yeah, that was clever.)  But it did allow corporate America to get a windfall raiding all those pesky old pension funds.  Another Reagan benefit - pension "reform".

[Cats Cats Cats]

For dummies=treasuries

[Red Arrow]

Then you'll also have to disagree with the last 100 years of tax history in this country.....

Historical Income Tax Rates & Brackets
http://www.ntu.org/tax-basics/history-of-federal-individual-1.html

Actually I do disagree with the last 100 years of tax history.

Surprised?

[Red Arrow]

The question is, is FICA a tax or a charge for a service.  Obviously you shouldn't pay for a service you won't be using.  I know for certain that most self employed people would much rather opt out and put the same % in their own savings account.  I actually think that is a good deal.  However, I still want people who can't handle money to save for retirement and have some sort of investment for dummies option.

Tax or service or something else?  I don't know what to call it.  FDR and his buddies evidently knew how to beat the Commerce Clause issues.

Opting out may sound like a good deal, right up until your intelligent investment schemes collapse for unforeseen reasons.  Since SS is a bottom line starvation prevention tool, I believe that everyone needs to be in the system.  That includes politicians too.

As far as paying for something you may not use, I believe most defined benefit retirement programs are that way.  They are transportable to a spouse at a lower benefit rate.  My dad's is that way. My mom gets benefits but they will not transfer to me upon her death.  If they had both died early there woul be no money for me or my brother and sister.  The hateful 401K partly addresses that issue.

[we vs us]

Actually I do disagree with the last 100 years of tax history.

Surprised?

I suppose you could disagree that it isn't fair from an ideological standpoint, but the last 100 years are undeniably successful from the standpoint of the American economic juggernaut.  Our tax policy has been part and parcel of funding that success.  Our current tax policy -- specifically the Bush tax cuts -- are an historical aberration, and the rich literally haven't had it this good since the Great Depression, which is 85+ years ago.  It's not so for the rest of us, who have seen better days. 

Conservative ideology these days seems to discount even the success of recent historical tax levels -- during Clinton, only 15 years ago! -- that helped us balance the budget and run surpluses.  The Bush tax cuts certainly aren't the only problem with our budget, but they are a couple trillion dollars worth of it.  Rescind them for every income level and you have a major component of the deficit solved.

And what evidence is there that the government will misspend Clinton level revenue?  Why do you think that the government today will do something that the government of 15 years ago didn't?  Is it the intervening years of Bush II's corruption and incompetence?  I'd like to suggest that the Bush II experience isn't the way American government always has been, and isn't proof that government will always eat itself.  It's more about where it will go if pushed.  And it's less a lesson about the nature of government itself and a lesson about the character of the person who is installed as the chief executive. 

[Conan71]

Spot on Sheen. Heiron is among those that think all of the "rich" should be treated the same. And dammit I'm jealous over your GE investment.  

If you had bought significant amounts of GE, Ford, or especially Dollar Thrifty stock the first week of March of 2009 you'd be whistling Dixie out your rear end right now. 

[nathanm]

Making sure you had a job for some wages rather than nothing at all....

I seem to recall posting the stats. Reagan made things worse on the job front.

Edited to add: As long as we all realize where we are, where we've been, and where we want to go:





Compared to who pays taxes:



But it's understandable why a certain segment of society would be spending a lot of money to protect themselves. They haven't had it so good since the introduction of the income tax! They get complainy about paying tax in proportion to their income because they don't want you to notice that you pay tax far out of proportion to your wealth, despite them deriving more benefit from most of the expenditure:



Edited again to add: One more tidbit. Those state taxes, where all of the growth in tax is coming from?

[Red Arrow]

I suppose you could disagree that it isn't fair from an ideological standpoint,...

My personal preference (assuming we continue to tax income rather than use a different tax) would be to have a single rate (percentage of taxable income) after a reasonable deduction for the cost of living.  For example (I don't know if these numbers would provide the needed income) a $15,000 deduction for every wage earner followed by a 20% tax on the remaining taxable income.  This would help protect the lower wage earners and is actually the one progressive part of taxing income that I would support.

Someone with $30,000 income would pay $3000 in tax, or 10%.
Someone with $1,000,000 income would pay $197,000 in tax, or 19.7 %


This intentionally does not address Social Security.  I have addressed SS in other posts in this thread.