The top 5 percent of income earners paid 55 percent of the taxes in 1999. I wonder if that has something to do with the fact that 4 of 5 feel tax cuts help 'someone else'-- the fact that most taxes are paid by someone else. I loved this remark from the Yahoo! News article (italics and bold mine): "President Bush's big tax cut..." That's an objective remark. "Big" by whose standard? "Big" compared to what? What does the size of the tax cut have to do with the context of the article anyway?
For a person making under $26,145 a year, the burden of paying taxes is heavier than it is for the person making $120,846, even if the latter is paying at a higher rate. God willing, I'll be in that higher rate in a year or so, and I'll be happy to pay some more, as long as the right people are benefitting.
Boohoo... Perhaps the biggest reason the rich are paying a higher share is that they continue to get richer, said Joel Slemrod, economics professor at the University of Michigan. Between 1980 and 1999, the share of taxable U.S. income earned by the top 5 percent rose from 21 percent to 34 percent.
BK: Instead of complaining about how much we all individually pay in taxes, what we should ALL be complaining about his how LITTLE corporations pay in taxes. From Newsweek: Out of each dollar the government collects in tax revenue: 53 cents comes from individual income tax 35 cents comes from social/insurance taxes including social security, disability, medicaid, etc. 4 cents comes from estate, excise and misc taxes 8 cents comes from corporate income taxes So, giant companies that make billions in profit create only 8 percent of tax revenue for the government, while receiving billions of dollars each year in financial aid. That doesn't sound very capitalistic to me.
One other note on this issue... According to the same article, 90 percent of those who earn more than $100,000 per year (household income) itemize deductions on their income tax while only 37 percent of those earning less than $50,000s (household) do. In addition, the wealthy derive only 32 percent of their income from actually working. 68 percent comes from capital gains, interst and dividends. On the other hand, those earning less than $50,000 per year (household) recieve 80 percent of their income from wages. In essence, the one's working more take fewer deductions (mainly because it is difficult to afford a CPA on $20,000 per year) including things designed to help the working poor like child deductions meaning they pay a much higher percentage of their taxes each year than the wealthy do because the wealthy can afford to look for all the loopholes and tax breaks. When you break it down, wealthy people pay a higher amount of money but a lower percentage of actual income than those making less than $50,000 (household) per year.
Depends. Sony, who does a sizable amount of business in the US, is not subject to the same tax laws because their corporate headquarters are in Japan. In addition, companies are able to shelter their income from taxation in other countries. The average American cannot possibly do that. Take a simple analogy. If you or I want to buy tickets to a Rockets game, we just have to suck it up and spend the money. However, corporations can buy them and write them off to taxes even though studies have shown that most of these tickets are just for the bosses, VP's and employees as a way to goof off. It isn't a legitimate tax write-off. Nevermind the vacations paid for corporate VP's, the private jets, etc. etc. This isn't just money that would be going to some guy and his family through their 401K (or not going as in the Enron case). In addition, companies can shelter millions of dollars in other countries who don't charge them taxes. They can then filter this money through non-taxable means as a way to fund the company tax free. I'm not sure why you would want to defend corporations from taxation. As individuals, we all struggle to pay our taxes while companies like Enron spend their time hiding their profits in overseas corporations free of US taxes. I don't know if you realize it, but Enron recieved TAX REFUNDS worth hundreds of millions of dollars over the past 5 years. This is money out of OUR pockets. I own a business and I find it ridiculous. This isn't like some mom and pop store that needs the break to survive. This is really just a way for businesses to avoid subsidising an economy that, very often, subsidizes them.
Pick up a copy of Newsweek, but I'll re-phrase for you. <b>When you break it down, wealthy people pay a higher amount of money but a lower percentage of actual WAGES than those making less than $50,000 (household) per year.</b>
So, giant companies that make billions in profit create only 8 percent of tax revenue for the government, while receiving billions of dollars each year in financial aid. That doesn't sound very capitalistic to me. Corporations are owned by people, though. That profit sits in the corporation until it's paid out to individuals. When it's paid out, the wealthy individuals that own the corporations have to pay taxes on it. "Corporate taxes" really are a 2nd tax on no-one, basically. According to the same article, 90 percent of those who earn more than $100,000 per year (household income) itemize deductions on their income tax while only 37 percent of those earning less than $50,000s (household) do. This is because itemization is specifically if you have tons of "necessity"-type expenses. If you're poor, you're not going to have those. In addition, the wealthy derive only 32 percent of their income from actually working. 68 percent comes from capital gains, interst and dividends. On the other hand, those earning less than $50,000 per year (household) recieve 80 percent of their income from wages. Again, I don't see a problem here. Of course rich people are going to own stocks, bonds, etc, so yeah, they are going to make more money on those types of things. Why is this bad? In essence, the one's working more take fewer deductions (mainly because it is difficult to afford a CPA on $20,000 per year) including things designed to help the working poor like child deductions meaning they pay a much higher percentage of their taxes each year than the wealthy do because the wealthy can afford to look for all the loopholes and tax breaks. While this is true to some extent, the primary reason the poor don't take deductions is that they don't use more than the automatic deduction as-is. I agree that the rich get some wacky breaks that should be closed, though. In the newsweek article you're referencing, there were two interesting cases (Bank of America and some toolmaker) that pointed out two very obvious loopholes in the tax code. The Bank of America thing was a little bit more of a gray area, but the toolmaker simply re-incorporated in Bermuda and saved $30,000,000 in annual taxes even though the company still operates here exactly as it did. When you break it down, wealthy people pay a higher amount of money but a lower percentage of actual income than those making less than $50,000 (household) per year. According to the Yahoo article, this isn't true, at least at the highest levels of the tax population: The wealthiest 1 percent — those earning $293,415 and up — paid more than a third of the taxes, while their share of the nation's taxable income was 19 percent. They actually did pay a larger percentage of their income than their total share of the earnings.
Corporations are owned by people, though. That profit sits in the corporation until it's paid out to individuals. When it's paid out, the wealthy individuals that own the corporations have to pay taxes on it. "Corporate taxes" really are a 2nd tax on no-one, basically.[/quote] But, should they also be allowed to reap millions in tax refunds? Again, I don't see a problem here. Of course rich people are going to own stocks, bonds, etc, so yeah, they are going to make more money on those types of things. Why is this bad? It's not. The point is that often people with lots of money complain about their "hard-earned dollar" when, in fact, that is a very "soft-earned" dollar. The guy's making the least are doing the most work yet it is often those with the most that complain about how expensive it is to be rich. Ironic. While this is true to some extent, the primary reason the poor don't take deductions is that they don't use more than the automatic deduction as-is. I agree that the rich get some wacky breaks that should be closed, though. In the newsweek article you're referencing, there were two interesting cases (Bank of America and some toolmaker) that pointed out two very obvious loopholes in the tax code. The Bank of America thing was a little bit more of a gray area, but the toolmaker simply re-incorporated in Bermuda and saved $30,000,000 in annual taxes even though the company still operates here exactly as it did. Agreed. According to the Yahoo article, this isn't true, at least at the highest levels of the tax population: The wealthiest 1 percent — those earning $293,415 and up — paid more than a third of the taxes, while their share of the nation's taxable income was 19 percent. Read the above. I meant "wages" not "income." By the way, major, I hate having discussions with you because you are too damn smart. Cut it out, ok???
I don't support corporations who abuse the system. I also don't support BS propaganda. <html> <head> <title>Federal Individual Income Taxes by Income Class, 1980-1999</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body bgcolor="#FFFFFF" text="#000000" link="#0000FF" vlink="#000080" alink="#FF0000"> <br> <p align="CENTER"> <center> <table BORDER cellspacing=1 bordercolor="#ffffff" width=650> <tr> <td valign="TOP" colspan=8> <tr> <td valign="BOTTOM" colspan=8 height=23> <b><font face="Verdana"><big>Summary of Federal Individual Income Tax Data, 1999 & 1989</big></font></b></td> </tr> <tr> <td valign="BOTTOM" colspan=8 height=23><b><font face="Verdana">(See historical data below)</font></b></td> </tr> <tr> <td valign="BOTTOM" colspan=8 height=23> <p align="center"><b><font size=3 face="Verdana">1999</font></b> </td> </tr> <tr valign="bottom"> <tr> <td width="13%" valign="BOTTOM" height=39> <p></p> </td> <td width="13%" valign="BOTTOM" height=39> <font face="verdana" size=2> <p align="CENTER"><a href="#Number of Returns">Number of Returns</a><br> (000) </font></td> <td width="13%" valign="BOTTOM" height=39> <font face="verdana" size=2> <p align="CENTER"><a href="#TotalAdjustedGross">AGI</a> <br> ($000,000) </font></td> <td width="13%" valign="BOTTOM" height=39> <font face="verdana" size=2> <p align="CENTER"><a href="#TotalIncomeTax">Income Taxes Paid</a> <br> ($000,000) </font></td> <td width="13%" valign="BOTTOM" height=39> <font face="verdana" size=2> <p align="CENTER"><a href="#AdjustedGrossIncomeShare">Group's Share of Total AGI</a> </font></td> <td width="13%" valign="BOTTOM" height=39> <font face="verdana" size=2> <p align="CENTER"><a href="#TotalIncomeTaxShare">Group's Share of Total Taxes</a> </font></td> <td width="13%" valign="BOTTOM" height=39> <font face="verdana" size=2> <p align="CENTER"><a href="#DollarCutOff">Income Split Point</a> </font></td> <td width="13%" valign="BOTTOM" height=39> <font face="verdana" size=2> <p align="CENTER"><a href="#AverageTaxRate">Average Tax Rate</a> </font></td> </tr> <tr bordercolor="000000" valign="bottom"> <td align="left" bordercolor="808080"><font face="Verdana" size=-1>All Taxpayers</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>126,009 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>5,909,329 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>877,292 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>100.0%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>100.0%</font></td> <td align="center" bordercolor="808080"><font face="Verdana" size=-1>-</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>14.4%</font></td> </tr> <tr valign="bottom"> <td align="right" bordercolor="808080"><font face="Verdana" size=-1> </font></td> <td align="right"><font face="Verdana" size=-1> </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1> </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1> </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1> </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1> </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1> </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1> </font></td> </tr> <tr valign="bottom"> <td align="left" bordercolor="808080"><font face="Verdana" size=-1>Top 1%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>1,260 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>1,152,820 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>317,419 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>19.5%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>36.2%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>above $293,415</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>27.1%</font></td> </tr> <tr valign="bottom"> <td align="left" bordercolor="808080"><font face="Verdana" size=-1>Top 5%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>6,301 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>2,011,763 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>486,464 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>34.0%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>55.5%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>above $120,846</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>23.6%</font></td> </tr> <tr valign="bottom"> <td align="left" bordercolor="808080"><font face="Verdana" size=-1>Top 10%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>12,601 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>2,652,835 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>583,002 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>44.9%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>66.5%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>above $87,682</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>21.4%</font></td> </tr> <tr valign="bottom"> <td align="left" bordercolor="808080"><font face="Verdana" size=-1>Top 25%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>31,502 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>3,927,308 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>732,890 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>66.5%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>83.5%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>above $52,965</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>18.2%</font></td> </tr> <tr valign="bottom"> <td align="left" bordercolor="808080"><font face="Verdana" size=-1>Top 50%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>63,005 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>5,126,164 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>842,168 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>86.3%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>96.0%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>above $26,415</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>16.0%</font></td> </tr> <tr valign="bottom"> <td align="left" bordercolor="808080"><font face="Verdana" size=-1>Bottom 50%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>63,005 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>783,165 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>35,124 </font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>13.3%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>4.0%</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>below $26,415</font></td> <td align="right" bordercolor="808080"><font face="Verdana" size=-1>4.4%</font></td> </tr>
But, should they also be allowed to reap millions in tax refunds? This is a bit murkier issue. I'm not a big fan of "corporate welfare" by any stretch. However, I understand the concept behind it. Dell gets all sorts of tax-breaks here in Austin because they bring so many jobs in. Cities and states basically use the tax breaks to generate jobs which ultimately benefits the city or state involved. In that respect, I think they serve as huge positive incentives for job growth. Ultimately, though, the tax refunds are simply refunds on taxes already paid. Now, as far as what can be expensed and such (the Rockets tickets you mentioned), that's a separate issue. I do think there are problems with what is/isn't considered a legitimate business expense. It's not. The point is that often people with lots of money complain about their "hard-earned dollar" when, in fact, that is a very "soft-earned" dollar. The guy's making the least are doing the most work yet it is often those with the most that complain about how expensive it is to be rich. Ironic. I'm not so sure investments are a "soft-earned dollar". For one, there's quite a bit of risk involved (at least with the markets). While wages are a guaranteed income, people who invested their money in technology may have lost upwards of half of it in stocks over the last two years. Easy come, easy go. Second, investing that money is what ultimately creates the jobs and provides the wages that pay the rest of us. By the way, major, I hate having discussions with you because you are too damn smart. Cut it out, ok??? To be honest, we probably agree more than you think. I'm not a big fan of the current tax system -- especially as it relates to corporations. I do think they get way too many breaks, but I think that can be justified to some extent. I have more serious issues with the various accounting loopholes and such that are used by specific corporations to avoid tax payments. If you eliminated that and, for example, made Bank of America pay their extra $400 million in taxes, you could lower the overall rates. Where we probably disagree is that I think if you do lower the overall rates, you should do it across the board. I didn't like Bush's tax cut because I still think it is too big and will cause major problems as it really starts taking effect over the next 4-5 years, but I did agree with this aspect of it .
I think the verb you used there is telling. "Goes". Nice passive verb, as though the rich do nothing to earn their income. Timing: why do you think it is that the rich get richer?
Man, threads like this just frustrate the hell out of me. I like you guys way too much to argue about it anymore!
Was it rude of me to just tell the guy that was cleaning the toilets at the office building I work at that the reason he doesn't make that much money is because he doesn't work hard?
Hehe... a graduated tax system necessitates that the title of this thread be true. Of course, I don't think that's a bad thing . Like RM95, I think it's the burden imposed, rather than mere percentages, that matter.
What does this have to do with anything...? I read this thread over and couldn't find a post from anyone stating or implying that janitors (or the poor) don't work hard.
