Fact check: The wealthy already pay more taxes

[TomServo92]

I think you answered your own question.

 

BTW - are you sure we weren't separated at birth?

 

Must have been triplets separated at birth because I'm with both of you on this.

[fordmantpw]

BTW - are you sure we weren't separated at birth?

 

Hmmm, I always told my parents I was switched at birth! I think you're a tad older than me though...

 

But yes, you and I do agree on quite a few things, and you often post the first thing that comes to my mind. Well, except that one MSSQL debate. But hey, we at least agreed to disagree there.

 

 

 

Must have been triplets separated at birth because I'm with both of you on this.

 

And my wife tells me I'm "different!"

Edited September 26, 2011 by fordmantpw

[xr7g428]

People who agree with you will "+" the comment. People who disagree, who think that you should vote straight party line, will give you a "-". I will leave it to you to decide who might fit into the categories.

[RangerM]

From the American Thinker......

 

The rich pay lower tax rates than we do. Bush's tax cuts were only for the rich. Both the Reagan and Bush tax cuts were sops to the rich. Schmucks like you and me pay all the taxes so the rich can ride free.

 

You hear these lies every day........These lies are rebutted by a single graph produced by the Congressional Budget Office, below.

 

The taxes included in this chart are for all federal taxes, not just income taxes. Each quintile is one fifth of taxpayers, based on income. The top quintile is the one with the highest incomes.

 

From just this one graph, several observations can be drawn.

 

• The most obvious observation is that the higher your income, the greater your federal tax rate is. Taxpayers in the top quintile paid about 25% of their income in federal taxes, while those in the bottom quintile paid about 5% in 2007.
  
• The rate for the top quintile has been very steady for the last thirty years: about 25%. In fact, the rate since the Bush cuts went into full effect (2003-07) was about the same as twenty years before (1983-87).
  
• The same cannot be said for the lower quintiles; they have trended downward, especially since the Bush cuts in 2003. For the lowest quintile in particular, the rate has drifted downward since 1984, from about 10% of income to about 4%. That is a cut in the tax rate of about 60% for the lowest quintile, versus no cut in rate for the top quintile.
  
• Changes in these rates cannot be explained by changes in income. The rate is taxes paid divided by income. If your taxes went up only because your income went up, then your rate would not change.
  
• Reagan's tax cuts became fully effective in 1983. But look at the trend in average tax rate for the highest quintile of earners after that. It went up. That upward trend on the richest Americans went up for seventeen years after Reagan's tax cuts.
  
• The same cannot be said for the lower quintiles. Tax rates for the lower 80% of taxpayers remained virtually flat, or trended downward, from 1983 to 2000.
  
• A cut on the capital gains tax rate became effective in 1997. Do you see any kind of accompanying dip in the average tax rate for the highest quintile in that year or shortly after? Nope. The rate is pretty flat from 1993 to 2000.
  
• The Bush tax cuts did cut tax rates -- for all income groups. The cut was about 2%-3% of income for all quintiles. But since the lower income groups were paying lower rates in the first place, the constant cut across income groups meant that tax rates were cut proportionally more for lower income groups. For example: the top quintile was cut from about 27% to about 24%, which is a cut in the rate of 11%. But the bottom quintile was cut from about 7% to about 4%, a cut in the rate of over 40%.

[RangerM]

-deleted (double post)-

Edited September 27, 2011 by RangerM

[RangerM]

-deleted-

Edited September 27, 2011 by RangerM

[RangerM]

-deleted- (damn hotel internet)

Edited September 27, 2011 by RangerM

[grbeck]

The American Thinker chart still shows that the rich pay the lion's share of federal taxes, while the tax burden on those with lower incomes has declined since 1980. It rebuts the contention that the rich are not paying their fair share of taxes, or are somehow receiving a "free ride."

 

That is the main point of the chart, and I see nothing that proves it incorrect or somehow "biased."

[retro-man]

Federal taxes only tell part of the story - which varies state by state. How about the rest of the story?

 

Of course as long as there are people who think paying 30% of a $200,000.00 income in taxes and paying 30% of a $20,000.00 income in taxes are morally and practically equivalent, we will continue to disagree.

[xr7g428]

as long as there are people who think paying 30% of a $200,000.00 income in taxes and paying 30% of a $20,000.00 income in taxes are morally and practically equivalent, we will continue to disagree.

 

What I want to know is this: How do you determine what is fair, if you start by defining fair as something other than equal?

 

At what point should taxes begin, and at what point should they max out? IE: 1% tax at $24K and 100% tax above $1 million.

 

Back when the tax rate was extremely high, those that could not work loop holes simply stopped working any more. Movie stars didn't make that next picture, etc. Who do you think benefited and who was the loser in that scenario?

 

Is it really okay in America to compete, but immoral to win?

[mettech]

Federal taxes only tell part of the story - which varies state by state. How about the rest of the story?

 

Of course as long as there are people who think paying 30% of a $200,000.00 income in taxes and paying 30% of a $20,000.00 income in taxes are morally and practically equivalent, we will continue to disagree.

 

 

[akirby]

Of course as long as there are people who think paying 30% of a $200,000.00 income in taxes and paying 30% of a $20,000.00 income in taxes are morally and practically equivalent, we will continue to disagree.

 

Of course it's not morally or practically equivalent. The person making $200K probably worked 10 times harder to get where they are than the person making $20K and now they have to pay 10 times as much tax just because they're successful. It's totally unfair IMO.

 

Please answer this question that you keep avoiding:

 

Does a rich person use more military protection than a middle class person?

Does a rich person get more representation in Congress than a middle class person (bodies, not influence - 2 different things)?

Does a rich person use more federal highways than a middle class person?

 

Please explain why a rich person should pay 10 times more for the federal government than someone else when the services rendered are identical?

 

Should the plumber charge a rich person $2000 for a $200 service call, just because they're rich?

Should the doctor charge a rich person $200,000 for a $20K operation just because they're rich?

 

Next time we're at a restaurant - let's find the richest person there and let them pay everybody's bill. That's fair, right?

[mettech]

Of course it's not morally or practically equivalent. The person making $200K probably worked 10 times harder to get where they are than the person making $20K and now they have to pay 10 times as much tax just because they're successful. It's totally unfair IMO.

 

Please answer this question that you keep avoiding:

 

Does a rich person use more military protection than a middle class person?

Does a rich person get more representation in Congress than a middle class person (bodies, not influence - 2 different things)?

Does a rich person use more federal highways than a middle class person?

 

Please explain why a rich person should pay 10 times more for the federal government than someone else when the services rendered are identical?

 

Should the plumber charge a rich person $2000 for a $200 service call, just because they're rich?

Should the doctor charge a rich person $200,000 for a $20K operation just because they're rich?

 

Next time we're at a restaurant - let's find the richest person there and let them pay everybody's bill. That's fair, right?

 

+1

[fordmantpw]

One of the best examples I have ever seen:

 

Suppose that every day, ten men go out for Ice Cream and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

 

The first four men (the poorest) would pay nothing.

 

The fifth would pay $1.

 

The sixth would pay $3.

 

The seventh would pay $7.

 

The eighth would pay $12.

 

The ninth would pay $18.

 

The tenth man (the richest) would pay $59.

 

So, that's what they decided to do. The ten men ate in the Ice Cream Parlor every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. 'Since you are all such good customers, he said, 'I'm going to reduce the cost of your daily Ice Cream by $20. Ice Cream for the ten now cost just $80.

 

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still eat for free, but what about the other six men - the paying customers?

 

How could they divide the $20 windfall so that everyone would get his fair share? They realized that $20 divided by six is $3.33.

 

But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to eat his Ice Cream. So, the parlor owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay!

 

And so:

 

The fifth man, like the first four, now paid nothing (100% savings).

 

The sixth now paid $2 instead of $3 (33%savings).

 

The seventh now pay $5 instead of $7 (28%savings).

 

The eighth now paid $9 instead of $12 (25% savings).

 

The ninth now paid $14 instead of $18 (22% savings).

 

The tenth now paid $49 instead of $59 (16% savings).

 

Each of the six was better off than before. And the first four continued to eat for free. But once outside the restaurant, the men began to compare their savings.

 

'I only got a dollar out of the $20,'declared the sixth man. He pointed to the tenth man,' but he got $10!'

 

'Yeah, that's right,' exclaimed the fifth man. 'I only saved a $1 - it's unfair that he got ten times more than I!'

 

'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only two? The wealthy get all the breaks!'

 

'Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The system exploits the poor!'

 

The nine men surrounded the tenth and beat him up.

 

The next night the tenth man didn't show up for Ice Cream, so the nine sat down and had Ice Cream without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

 

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax deduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start eating Ice Cream overseas where the atmosphere is somewhat friendlier.

 

 

[akirby]

One of the best examples I have ever seen:

 

Brilliant!!!!

 

My favorite is the little girl and her dad. They're walking home and encounter a homeless man on the street.

 

"Daddy - can we give the man some money so he can buy some food?"

 

"I'll make a deal with you honey. The leaves need to be raked in the front yard. If you'll go home and rake the leaves I'll give you $20. Then you can come back here and give the man your $20 so he can buy food."

 

The little girl thinks for a minute and says "But Daddy - why don't we just let the homeless man rake the leaves and pay him the $20 instead?"

 

"Congratulations honey - you're a Republican!"

[fordmantpw]

Brilliant!!!!

 

My favorite is the little girl and her dad. They're walking home and encounter a homeless man on the street.

 

"Daddy - can we give the man some money so he can buy some food?"

 

"I'll make a deal with you honey. The leaves need to be raked in the front yard. If you'll go home and rake the leaves I'll give you $20. Then you can come back here and give the man your $20 so he can buy food."

 

The little girl thinks for a minute and says "But Daddy - why don't we just let the homeless man rake the leaves and pay him the $20 instead?"

 

"Congratulations honey - you're a Republican!"

 

Excellent!

[jpd80]

Of course it's not morally or practically equivalent. The person making $200K probably worked 10 times harder to get where they are than the person making $20K and now they have to pay 10 times as much tax just because they're successful. It's totally unfair IMO.

 

Please answer this question that you keep avoiding:

 

Does a rich person use more military protection than a middle class person?

Does a rich person get more representation in Congress than a middle class person (bodies, not influence - 2 different things)?

Does a rich person use more federal highways than a middle class person?

 

Please explain why a rich person should pay 10 times more for the federal government than someone else when the services rendered are identical?

 

Should the plumber charge a rich person $2000 for a $200 service call, just because they're rich?

Should the doctor charge a rich person $200,000 for a $20K operation just because they're rich?

 

Next time we're at a restaurant - let's find the richest person there and let them pay everybody's bill. That's fair, right?

Anytime people try to increase taxation rates for the wealthy, they forget that this encourages those people to

minimize tax through deductions and investments. Wealthy people will do this because of the amounts involved.

So it really doesn't matter a fig what the tax rate is if the person's accounts are skillfully managed to eliminate the

tax that would normally be paid on the upper income areas...

 

I'm not saying that it's right or wrong to do that, just that it seems a futile waste of time to try to charge higher rates

than seems fair to a lot of people...in the long run, it's better to have a simpler and fairer system....

 

A better system would charge much lower rates of tax but prevent investors and business from negative gearing

which can allow investors and business to wipe out nearly all of their tax bill through claiming legitimate deductions.

Edited September 27, 2011 by jpd80

[akirby]

Anytime people try to increase taxation rates for the wealthy, they forget that this encourages those people to

minimize tax through deductions and investments. Wealthy people will do this because of the amounts involved.

So it really doesn't matter a fig what the tax rate is if the person's accounts are skillfully managed to eliminate the

tax that would normally be paid on the upper income areas...

 

I'm not saying that it's right or wrong to do that, just that it seems a futile waste of time to try to charge higher rates

than seems fair to a lot of people...in the long run, it's better to have a simpler and fairer system....

 

A better system would charge much lower rates of tax but prevent investors and business from negative gearing

which can allow investors and business to wipe out nearly all of their tax bill through claiming legitimate deductions.

 

It's no different than trying to add tax to a corporation like the oil companies. It's not going to hurt the oil companies - they'll just add the taxes to their cost basis and increase prices to maintain the same profit level. That means customers end up paying for the tax, not the oil companies. But of course it doesn't sound as good in the campaign speech to say we're going to raise your taxes. It's a lot more palatable to say we're raising taxes on those evil corporations who dare to make profit.

 

We don't have a revenue problem - we have a SPENDING PROBLEM!!!!!!

 

Cutting government and therefore taxes will put more money back into everyone's pocket. How is that not a good thing?

[Ron W.]

 

We don't have a revenue problem - we have a SPENDING PROBLEM!!!!!!

 

 

Can't tell you how many times I've seen that posted but I agree with it every time.

[suv_guy_19]

Well, technically, since the recession caused a drop off in revenues, both problems exist.....and not that I support Obama (I don't), but most come as a result of Bush era spending that hasn't been cancelled.

[akirby]

Well, technically, since the recession caused a drop off in revenues, both problems exist.....and not that I support Obama (I don't), but most come as a result of Bush era spending that hasn't been cancelled.

 

Do you know whose fault it is? GOVERNMENT! The democrats only want to blame the republicans and vice versa. The truth is they BOTH want your money - they just want to spend it in different ways.

 

If both parties would stop trying to blame the other one and get re-elected maybe they could figure out how to do something productive.

[TomServo92]

Do you know whose fault it is? GOVERNMENT! The democrats only want to blame the republicans and vice versa. The truth is they BOTH want your money - they just want to spend it in different ways.

 

If both parties would stop trying to blame the other one and get re-elected maybe they could figure out how to do something productive.

 

Bravo!

[suv_guy_19]

Do you know whose fault it is? GOVERNMENT!

 

That's just a cop out that people use. It's the people who are at fault. They elect people to form governments. They're the ones who put up with the things that go on. Blaming everything on government is just a way for people to make themselves feel better about the situation.

 

 

 

[retro-man]

What I want to know is this: How do you determine what is fair, if you start by defining fair as something other than equal?

 

At what point should taxes begin, and at what point should they max out? IE: 1% tax at $24K and 100% tax above $1 million.

 

Back when the tax rate was extremely high, those that could not work loop holes simply stopped working any more. Movie stars didn't make that next picture, etc. Who do you think benefited and who was the loser in that scenario?

 

Is it really okay in America to compete, but immoral to win?

You know my point. At $22k / yr., an extra 10% in taxes comes right out of your mouth. At $2m / yr., an extra 10% in taxes means ...... I don't know what it means. There is a moral difference, and it has nothing to do with the simplicity of numbers or barren legalism. At my former income of low 6 figures, an extra 10% wouldn't have hurt me at all. Even now, I could still bear it. If it keeps a few people (no matter how unworthy they may be) from hunger or cold, I am fine with it.

 

One of my clients in the past was the daughter of the owner of the largest construction company in Sweden. In Sweden they do have a 100% tax bracket. And yet, they continue to produce companies like 3H Biomedical, Ericsson, Electrolux, Husqvarna, Hasselblad, Ikea, ..... need I go on? Do you really think a person is going to throw in the towel if they aren't allowed to "win"*? Really? Who are these movie stars who didn't make the next picture because they would only take in $10m instead of $14m? Are we talking about artists here, or petty hustlers? A motivated, smart person, is going to just give up and go live the high life on food stamps if his tax rate goes up 5 or 10%? In that case, it's amazing this country ever managed to accomplish anything back when our tax brackets were higher - a lot higher - than they are now. What were those idiot investors and Entrepreneurs thinking back in the 50s and 60s? (Well, they didn't know any better, so they just did it I suppose.) It's a miracle that Northern Europe functions at all. By rights, they should be living in caves by now picking ticks off of each others hairy backs.

 

*Let's make sure we agree on the definition of "Winning": Do you mean "winning" like my hero David Tepper, whose personal compensation in 2009 - much of it gained by trading in companies whose shares were turned around by TARP at the taxpayers expense - equalled roughly 265,000 years worth of minimum wage? Or, to put it another way, David Tepper, whose income alone could have employed enough people at minimum wage to lower our national unemployment rate by 2% that year? (Do the math.) "Winning!"

 

But you know, pointing out inequities that glaring assumes there is some culturally shared sense of right and wrong left to appeal to. That appears to not be the case. The 16th century proverb "Every man for himself, and the devil take the hindmost" (contrary to Tea Party belief, those words did not come from The Sermon on the Mount) for centuries was understood as a moral caution against the collapse of civil society into anarchy. Today, it could just as easily serve as the Republican Party slogan. The hand-wringing over the plight of the wealthy really has taken on a bizarre, almost macabre aspect - completely divorced from reality or moral foundation. Wake up from your thrall. DDE would shit his pants if he could see today's Republican party.

Edited September 28, 2011 by retro-man

[fordmantpw]

But it is not up to the government to push morals by raising taxes. If an extra 10% won't hurt, then donate 10% to your local homeless shelter, food bank, etc. (and guess what, you don't have to pay taxes on that 10%). That 10% will be put to much better use if you donate it than if you pay 10% extra in taxes to keep someone warm and fed. You don't need the government to help keep the homeless off the street, you need people with morals that like to look out for those less fortunate. And if taxes are less, there is more $$$ to go around to donate to places that help others out, without the government waste scraping their portion off the top.