Top 1% of Americans Get Largest Share of National Income Since 1928

Not true. Once you account for the full payroll taxes (income tax, social security tax, and medicare tax), the middle class pays a higher rate the the upper class.

 

Maybe he doesn't believe in class warfare and isn't jealous of people who make more money than him.

I would LOVE to be in that top 1% but I'm not. Not even close, frankly. But I don't blame the President for it. Oh yeah...even though I'm not in the top 1%, I'm still pretty happy.

EDIT: LOL, so t_j isn't in the bottome 90%. But you get my point.

 

are you kidding me, which middle class family pays 40% tax?

 

SS tax + Medicare tax total to 15.3% once you include the employer contribution (which would be salary if they didn't have to pay it). If you make $35,000 a year, you're in a 25% tax bracket. In total, you pay 40.3%.

If you make $500,000 a year, you're in a 35% tax bracket - but you don't pay SS tax on the majority of that, though you do continue to pay medicare tax. So as you make more and more money, your tax total will trend towards 37.9%. That, of course, assumes that all of your income is in traditional wages. For the wealthy, more will be in the form of interest, capital gains or dividends, in which case you don't pay the Medicare or SS taxes at all, and in the case of long-term capital gains, are only taxed at 15% or less for dividends, so your net tax bracket on income is likely far lower.

(this all is income-based taxes and excludes sales tax and property taxes)

 

To clarify, you pay 40.3% on your income from $30k to about $75k, and then about 43.3% up to about $95,000 in income, at which point the SS tax stops. This is for single people. Married couples would be slightly higher thresholds.

 

God, why do I even bother, it pretty obvious you either trying to mislead or need to go back to a math class.

Let me put into simplest terms:
Tax bracket:
10% 0-7550
15% 7551-30,650
25% 30,651-74,200
28% 74,200-154,800
33% 154,801-336,550
35% 336,551-MAX

If you make 35,000 a year:
You pay 10% on 7550 =>755
You pay 15% on 30650-7550 => 3465
You pay 25% on 35000-30650 => 1087

For a total of $5308
Which is about 15%, even if you did include employ contribution, which you shouldn't, that's still only about 30% total tax rate. You see 30% is NOT 40%.

Do the same math for 500,000, you get a total of $154882, which is 31%, add medicare and ss, you are looking at 40%.

Let's not even talk about all the deductions you have at 35,000 income, where I CAN NOT use any itemized deduction except mortgage interest and property tax. (and get hit by AMT)

If you are paying 40% tax, then maybe I should be doing your taxes for you, I will give you a clutch discount.

 

Which is why I posted:

To clarify, you pay 40.3% on your income from $30k to about $75k, and then about 43.3% up to about $95,000 in income, at which point the SS tax stops. This is for single people. Married couples would be slightly higher thresholds.


On an incremental basis, you pay 40% tax rate on your middle class income from $30 to $75k, 42% on income up to about $95k, and then 39% above that

What about all the deductions I CAN use by being in the investor class? For example, all my margin interest is tax-deductible. Meaning that not only do I pay only 15% on capital gains, but I can actually borrow money and invest it and get a deduction on the taxes. For someone who has to borrow money for a consumer loan, they get no such benefit.

Perhaps you should talk to yourself?

 

Did you say this? I just proved it to be NOT true, next time stop talking out of your a**.

 

Except you didn't. Your incremental tax rate goes down as you go from middle to upper class. Certainly, there are deductions and such which affect the total taxes. But if you want to talk deductions, there are far more for the wealthy than the basics that the poor can access. You disingenously included the reduced taxes for the incremental rate increases while ignoring everything from deductions for the wealthy to lower rates for capital gains, dividends, and intrerest, which form a large portion of the vast majority of your wealthy. That's a whole separate discussion.

Good job ignoring the substance of the last several posts.

 

Wow....that's incredible. In the interest of complete transparency though, could you further adjust these percentages to adjust for sales taxes? As I look around, I seem to see a rather pernicious display of consumption by the wealthy. The taxes on $30,000 Hermes bags and quarter million dollar Patek watches has to add up to something significant. I mean.....here we have the best and worst of capitalism on full display. People will go the extra mile after the almighty dollar, but a $10,000 Kia will get you the same place a $150,000 Mercedes will.........and leave you with enough left in the bank to buy quite a few bowls of rice for the less fortunate. Still, the rich aren't socking it all away. They spend a lot, and those sales taxes add up. We can't exactly fault the rich for earning a lot if they are giving back enough in terms of sales tax to put them in the highest OVERALL TAX bracket.

Also, you mentioned capital gains rates of as much as only 15%. Of course, the majority of those gains are being paid on investments in real property and financial assets. Would you mind adjusting that 15% figure to reflect the fact the property taxes are paid every year on real estate and and that gains in stocks are due in part to previous, reinvested earnings......that have already been taxed at the corporate rate. I mean, we can't ignore the benefit to us all by investing in the country's businesses, and we shouldn't come down too hard on someone only paying 15% when this isn't Uncle Sam's first dip in the well.

I won't even bother asking about estate taxes..

........but just for good measure, could you further adjust the rates to reflect AMT, the difference between the marginal tax rates that you used in your illustration and the true tax rates we pay based on a tiered rate structure, and the overall effect of the standard deduction and personal exemptions on both lower and higher income brackets?

I think that would give us a clearer picture of who pays the most taxes....as well as who pays the highest rates.

 

LOL, you are the one who brought out the 35,000 and 500,000 example, after I blew up your calculation, you want to talk about deductions now? You might want to learn the basics first, you know, try to walk before you run.

 

Good thing about my situation is that I invest in things I can deduct, too. the only tax I pay will be when I sell properties or if I pay sales tax. Uncle Sam got $0 from me this year. The best part of being rich and having a family that knows how to handle money and pass that information along is that the more you make, the more things you can afford to deduct the taxes.

I may be in a higher tax bracket, but I pay less tax dollars than people in several brackets below me. Even I don't think that's very fair.

 

You know nothing about me, assclown. What makes you think you can put words into my mouth?

 

Like I said, building wealth is the hard part, once you get there, its much easier. Although AMT might hit you if you pay too little.

Of course, you and I are probably quite different, large portion of my income is actually regular income, so taxes are considerable

 

Its useless arguing with deepblue. There was another thread a while back where tax loopholes were brought up. I mentioned that to the wealthy income tax really did not matter much because their wealth is in ownership. He called me an idiot, so I stopped responding.
Interestingly I just watched a show on PBS last night where Bill Gates and Warren Buffet were interviewed by a group of University of Nebraska students. Buffet said that he thought that the income tax should be more progressive and that he and Gates paid almost no tax compared to their wealth. He also stated that if he wanted to he could pay 0 income tax using a borrowing method like you mentioned.

 

My mistake, I am happy that you think I am paying too much tax.

 

I love how people equate Buffet/Gates with top 1% income earners. Most top 1% earner don't have billions of stocks sitting around just to collect interest, most people get paid for their work like doctors/lawyers/accountants do.

 

Interesting that you would ignore this:

(this all is income-based taxes and excludes sales tax and property taxes)

It's difficult to do because every state and county is different. Unlike the federal income tax, sales & property taxes are not federally based, and there are also state income taxes to mix in there. So we can't do a US-wide analysis there, since everyone faces a different situation. But sure let's have fun with that.

For sales taxes, most measures have them as fairly regressive. Obviously, if everyone spent 100% of their income on taxable goods, everyone would pay 8.25% (in Austin - adjust for your locale). The rich, of course, don't spend all of their money, so their net rate goes down. On the other hand, the poor spend a greater portion of their income on basics like food, so their rate also goes down. The middle class kind of fit into the middle, spending most of their income, but less of it on non-taxables. I can't speak to Texas, but generally Sales Taxes are seen as regressive. Here's an example from Washington State:

http://seattlepi.nwsource.com/local/103213_taxstudy08.shtml


The study by the Institute on Taxation and Economic Policy -- which is affiliated with the liberal-leaning Citizens for Tax Justice -- found that the poorest 20 percent of Washingtonians pay 17.5 percent of their income in taxes each year, while the top 1 percent pay just 3.3 percent.

Those numbers are similar to the recent report of the Washington State Tax Structure Study Committee, which has recommended the state adopt an income tax and lower or remove the sales tax and the state portion of the property tax. That study found that households making less than $20,000 -- a slightly larger group -- pay an average of 15.7 percent of their incomes in taxes.


Obviously, that's a study by a liberal group, but sales tax is widely considered the most regressive of all the major taxes. So if you want to add that, the middle class burden grows compared to the rich. Oops.

As to your first point about taxes paid on real-estate, that's a bit misleading. Middle class homeowners also pay such taxes. Renters, generally fitting into the poor and middle classes, also pay that tax in the form of higher total rents. Certainly if you have larger property, you pay more in taxes. Whether property taxes go up faster than income is a subject of much debate. There's not a lot of agreement as to whether property taxes are regressive or progressive. So we'll call that a neutral.

Now, as to the second point about reinvested earnings, I'm not sure the relevance. If I re-invest my income in my own business, I pay regular income taxes. If I re-invest it into someone else's business, I pay less. Why does that make sense? It's a form of income.


....that have already been taxed at the corporate rate. I mean, we can't ignore the benefit to us all by investing in the country's businesses, and we shouldn't come down too hard on someone only paying 15% when this isn't Uncle Sam's first dip in the well.

Except the entire US tax system is built around taxing the same money over and over again. Why would you make a special exception here? Anytime someone makes money off of someone else, they are taxed on it. If I gamble my own money and make a profit, I pay regular income taxes even though the guy who lost the money had already paid taxes on it. If I buy a product which leads to someone else having a job, they pay regular income taxes, even though the money I used to buy the product was already taxed once. If I invest my money into starting a business which generates income, I pay regular income taxes on the income I make from that original money. So why shouldn't I pay regular income taxes on the income I make from my money if I invest in a stock? We should ignore the benefit of starting my own business, but not in investing in someone else's? Seems odd.

But regardless of the logic of it all, at the end of the day, the capital gains tax is lower tax on income than wages. So in the full income-tax scheme of things, it's a regressive tax because the investor-class gets a lower rate not available to traditional wage earners.

The AMT only affects people with fairly significant total deductions (originally just the rich, now reaching the middle class). So the AMT primarily affects people who were paying fewer taxes to begin with. Not sure it's relevance here unless you want to get into all the massive amount of deductions available only to the wealthy (which the AMT is designed to try to counter to some extent).

Better?

 

Your mistake is thinking you can put words into my mouth in the first place. If you feel you pay too much tax, do something about it, instead of b****ing about it. Try doing what I did...start your own business so you can have a few write-offs. The last thing you should be trying to do is putting words into other people's mouths, fool.

 

Simple solution to this one. Scrap social security and medicare, then those regressive taxes go out the window.