As usual listening to politicians and pundits opine on taxes is a totally meaningless exercise. One of the most oft repeated messages of late has been "The Top 10% of American income earners pay 70% of the income taxes." While this statement is no doubt accurate, it doesn't mean anything in an of itself. The reason this group pays what appears to be a disproportionate share of taxes is because they get a disproportionate share of the income.
As recently as 2007, the top 10% of income earners accounted for 50% of all the income. In a progressive tax system the top earners should be paying a somewhat larger proportion of their income which accounts for the 50% vs 70% shares.
However, the story doesn't end there. When you start to look at those top earners, you'll find that an ever larger portion of their intake comes not from salaries, but from investments which are taxed as capital gains. Long-term (assets held for more than 12 months) capital gains are currently taxed at just 15% for those in the 25% income tax bracket and above. That means that the people most likely to have a significant proportion of their income from capital gains are taxed at a lower rate than those in the middle class that typically have little or no capital gains.
Again using data from 2007, just before the bottom fell out of the housing market (destroying the net worth of a huge proportion of Americans), those same top 10% of Americans accounted for over 73% of the net worth. As a result of the recession and the unemployment that has come with it, that share has undoubtedly been skewed even more toward the top end.
Given that the top 10% of Americans account for such a large proportion of both income and overall wealth, the fact that they pay 70% percent of income taxes at least fair (from the perspective of the rich at least) and in fact if we really intend to have a progressive (or even fair) tax system. That's before you even factor in payroll taxes. One of the richest people in the world is Warren Buffet and even he acknowledges that in part because of the cap on payroll taxes, he pays only 17.4% of his income in taxes http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html That's half or less of the rate that most of the people in his office pay.
As the old statistician's line goes "tell me which side of the argument you are on and I will give you the statistics to prove that you are right." Any time that a conservative complains about being over-taxed, odds are they are lying.
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It's the Inequality, Stupid
Eleven charts that explain everything that's wrong with America.
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In order to have a capital gain, you must have had income that was already taxed. Let's celebrate the rich instead of telling them that they are not doing their fair share. I say that it is the bottom 50% that is not doing their fair share.
In order to have a capital gain, you must have had income that was already taxed. Let's celebrate the rich instead of telling them that they are not doing their fair share. I say that it is the bottom 50% that is not doing their fair share.
Without the bottom 90% going to work to pick the crops, make the stuff and provide the services so that they can spend virtually all of their income to buy that stuff, there would be no wealth for that top 10% to celebrate.
I have no problem with celebrating those that have done something important or innovative to create their own wealth, be it Henry Ford (aside from his anti-semitism and anti-unionism, Warren Buffet, Bill Gates, Mark Zuckerberg, Larry Page and Sergey Brin.
On the other hand I see no reason to celebrate those that have inherited their wealth like the Koch Brothers or Sam Walton's descendents.
Without the bottom 90% going to work to pick the crops, make the stuff and provide the services so that they can spend virtually all of their income to buy that stuff, there would be no wealth for that top 10% to celebrate.
I have no problem with celebrating those that have done something important or innovative to create their own wealth, be it Henry Ford (aside from his anti-semitism and anti-unionism, Warren Buffet, Bill Gates, Mark Zuckerberg, Larry Page and Sergey Brin.
On the other hand I see no reason to celebrate those that have inherited their wealth like the Koch Brothers or Sam Walton's descendents.
While we're at it, let's find a way to not celebrate means of making money that do so not by creating a product or service but by articificially creating a shortage or other market problem, like rampant energy speculation (Koch brothers, Enron), sub-prime credit default swaps (almost all of the Wall Street players), or privatizing government monopolies and then artificially creating "business" for them (the Luzerne Country jail scandal).
While we're at it, let's find a way to not celebrate means of making money that do so not by creating a product or service but by articificially creating a shortage or other market problem, like rampant energy speculation (Koch brothers, Enron), sub-prime credit default swaps (almost all of the Wall Street players), or privatizing government monopolies and then artificially creating "business" for them (the Luzerne Country jail scandal).