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First off, I used the numbers to demonstrate percentage of income. There was no intention or effort made to make the numbers match actual percentages because we don't know state tax rates, deductions or anything.
We do know that most states have some form of sales taxes, and everyone pays property taxes. For renters, the property taxes are factored into their rent.
So even if the person with $20,000 in income pays little or no federal tax, they still pay property taxes, sales taxes, gas taxes, etc.
The guy with the $1,000,000 income has more deductions and ways of reducing his taxes. He gets to deduct his mortgage. His car is leased or owned by his company, and likely tax deductible, as are the golf club memberships.
My friends had a RV business. They worked long hours, often late into the night, during the season. When they picked up their financial statements for the year, their company had made $100,000, or $50,000 each.
My friend said she couldn't believe they had worked that hard for so little but then she thought about it. Their house and business were all on the same property so all of their expenses for the property were deductible, as were both their vehicles, and even her show horses (they sold horse trailers so the horses promoted the trailers).
So they paid tax on $50,000 each, after deducting over $150,000 in expenses they would have been paying out of net income if her husband had worked for someone else.
Editorial by Lee Ohanian, Professor of Economics at UCLA
Here's a question you're likely to hear whenever the subject of taxes comes up: Do the rich pay their fair share?
There are two parts to this question:
Who is rich?
And, what is fair?
Let's start with who is rich:
Nearly everyone assumes that a person who is among the top ten percent of all income earners qualifies as rich.
But according to 2011 data, a top ten percent household makes around $150,000 or above in gross annual income -- that's income before deductions and taxes. Now, $150,000 is a nice living, but it certainly doesn't make you rich.
OK, then. What about the top 5%?
You get into this percentile if your household makes around $190,000 or above. That's a nice bump. But it hardly puts you in the rich category.
How about the top 1%? That's $500,000 or above. A great income, but remember, most people only get to that level after many years of hard work and, quite possibly, the accumulation of serious debt to fund their education or build their business.
Of course, there are people who make more than $500,000. And there are some who make many millions, even billions. But the number who do is very small.
Now, let's talk about fair.
Fair would seem be that the group of taxpayers who earn 10% of the country's income would pay 10% of the country's taxes; the group who earned 20% would pay 20% of the taxes and so on.
But what If I told you that, according to IRS data, the top 10% of all earners -- the people making $150,000 and above -- pay 71% of all federal income tax while earning only 43% of all income.
If anything, the top ten percent pay more than their fair share.
So, as it happens, do the much reviled top 1%. They earn 17 percent of all income, but pay 37% of all federal income taxes.
And what about those at the other end of the income scale, the lower earners? Are we squeezing them? Hardly. Those who make $45,000 or less, 47% of all earners, pay little and often no income taxes.
Ah, but what about payroll taxes -- the money we pay to fund Social Security and Medicare? That takes a bigger bite of the paycheck of lower earners than higher earners. Isn't that unfair?
Consider two points:
First, it's misleading to call the Payroll Tax a tax. It's really an insurance payment that guarantees we receive social security and Medicare after we turn 65.
Second, the benefits we receive from Social Security are capped, no matter how much we have paid in. This means that the payroll taxes of high earners actually help subsidize the social security and Medicare benefits that low earners receive at retirement.
How do all these numbers stack up against other countries?
The US income tax system is substantially more progressive - meaning that income tax rates rise as income rises -- than other advanced countries, including Germany and Sweden.
So, if you think that our tax system is unfair because it coddles high earners, then you must conclude that tax systems in these other countries are even more unfair.
So how high are tax rates on Americans today? Well, throw in federal tax increases mandated in 2013 and state taxes, and top earners face a tax rate of more than 50 per cent in California and New York. Other states like Maryland and Connecticut are not far behind. Do you think a tax rate of greater than 50% is fair? If so, is there any rate that wouldn't be?
Nobody is calling for bake sales for anyone in the top ten percent of earners. And no one wants to minimize the struggles of those at the lower income strata. But to say the "rich," however you might define them, don't pay their fair share is simply wrong.
Finally, numerous academic studies, including ones that I have done, show that when tax rates are too high, investment, risk taking by entrepreneurs, and therefore job creation all decline. And when that happens it's the poor who suffer, not the rich. The rich do fine.
It may feel good to take even more money from the top ten percent, but it doesn't do good. And it sure isn't fair.
- Lee Ohanian, Professor of Economics at UCLA
Sorry, but payroll taxes are taxes, plain and simple. You also do not include state taxes which are completely regressive and where the lowest income earners pay the highest percentages, in many cases more than five times what the wealthiest pay. Personally, I think the current rates are adequate, but I would like to see the capital gains rate raised to equal the earned income tax rate.
The "rich" are anyone making more than me.I'm not going to look through 44 pages, just curious:
Has anyone specified precisely who "the rich" are, precisely what "fair" is, and/or precisely who is charged with making those determinations in the future?
.
"Fair" is "more".
I decide.
That's the gist of what I see.
First off, I used the numbers to demonstrate percentage of income. There was no intention or effort made to make the numbers match actual percentages because we don't know state tax rates, deductions or anything.
We do know that most states have some form of sales taxes, and everyone pays property taxes. For renters, the property taxes are factored into their rent.
So even if the person with $20,000 in income pays little or no federal tax, they still pay property taxes, sales taxes, gas taxes, etc.
The guy with the $1,000,000 income has more deductions and ways of reducing his taxes. He gets to deduct his mortgage. His car is leased or owned by his company, and likely tax deductible, as are the golf club memberships.
My friends had a RV business. They worked long hours, often late into the night, during the season. When they picked up their financial statements for the year, their company had made $100,000, or $50,000 each.
My friend said she couldn't believe they had worked that hard for so little but then she thought about it. Their house and business were all on the same property so all of their expenses for the property were deductible, as were both their vehicles, and even her show horses (they sold horse trailers so the horses promoted the trailers).
So they paid tax on $50,000 each, after deducting over $150,000 in expenses they would have been paying out of net income if her husband had worked for someone else.
It is easier to discuss this topic in a more, object oriented manner; we can distinguish between Capitalists with capital and Laborists with labor usually on a capital gains versus earned income basis. that should work in any given scenario; merely for the sake of argument instead of policy technicalities.Rich in my own terms is not really about the number of cars or houses you have, but the satisfaction that comes from the little you have, Having the peace that superceeds even if you have a cent on you... That is wealth.
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What the hell are you trying to do? Make sense?All this bullshit over "fair share". Geezus.
Why not just create a fair system instead? You know, one which doesn't hand out special favors in the form of credits, deductions, and exemptions that have to paid for out of other people's pockets?
How about a system where two people earning identical incomes pay the exact same taxes?
It doesn't get more fair than that.
Payroll taxes aren't taxes at all. They are advance payments for services. You pay in every check in return for a check each month and medical overage when you retireEditorial by Lee Ohanian, Professor of Economics at UCLA
Here's a question you're likely to hear whenever the subject of taxes comes up: Do the rich pay their fair share?
There are two parts to this question:
Who is rich?
And, what is fair?
Let's start with who is rich:
Nearly everyone assumes that a person who is among the top ten percent of all income earners qualifies as rich.
But according to 2011 data, a top ten percent household makes around $150,000 or above in gross annual income -- that's income before deductions and taxes. Now, $150,000 is a nice living, but it certainly doesn't make you rich.
OK, then. What about the top 5%?
You get into this percentile if your household makes around $190,000 or above. That's a nice bump. But it hardly puts you in the rich category.
How about the top 1%? That's $500,000 or above. A great income, but remember, most people only get to that level after many years of hard work and, quite possibly, the accumulation of serious debt to fund their education or build their business.
Of course, there are people who make more than $500,000. And there are some who make many millions, even billions. But the number who do is very small.
Now, let's talk about fair.
Fair would seem be that the group of taxpayers who earn 10% of the country's income would pay 10% of the country's taxes; the group who earned 20% would pay 20% of the taxes and so on.
But what If I told you that, according to IRS data, the top 10% of all earners -- the people making $150,000 and above -- pay 71% of all federal income tax while earning only 43% of all income.
If anything, the top ten percent pay more than their fair share.
So, as it happens, do the much reviled top 1%. They earn 17 percent of all income, but pay 37% of all federal income taxes.
And what about those at the other end of the income scale, the lower earners? Are we squeezing them? Hardly. Those who make $45,000 or less, 47% of all earners, pay little and often no income taxes.
Ah, but what about payroll taxes -- the money we pay to fund Social Security and Medicare? That takes a bigger bite of the paycheck of lower earners than higher earners. Isn't that unfair?
Consider two points:
First, it's misleading to call the Payroll Tax a tax. It's really an insurance payment that guarantees we receive social security and Medicare after we turn 65.
Second, the benefits we receive from Social Security are capped, no matter how much we have paid in. This means that the payroll taxes of high earners actually help subsidize the social security and Medicare benefits that low earners receive at retirement.
How do all these numbers stack up against other countries?
The US income tax system is substantially more progressive - meaning that income tax rates rise as income rises -- than other advanced countries, including Germany and Sweden.
So, if you think that our tax system is unfair because it coddles high earners, then you must conclude that tax systems in these other countries are even more unfair.
So how high are tax rates on Americans today? Well, throw in federal tax increases mandated in 2013 and state taxes, and top earners face a tax rate of more than 50 per cent in California and New York. Other states like Maryland and Connecticut are not far behind. Do you think a tax rate of greater than 50% is fair? If so, is there any rate that wouldn't be?
Nobody is calling for bake sales for anyone in the top ten percent of earners. And no one wants to minimize the struggles of those at the lower income strata. But to say the "rich," however you might define them, don't pay their fair share is simply wrong.
Finally, numerous academic studies, including ones that I have done, show that when tax rates are too high, investment, risk taking by entrepreneurs, and therefore job creation all decline. And when that happens it's the poor who suffer, not the rich. The rich do fine.
It may feel good to take even more money from the top ten percent, but it doesn't do good. And it sure isn't fair.
- Lee Ohanian, Professor of Economics at UCLA
Sorry, but payroll taxes are taxes, plain and simple. You also do not include state taxes which are completely regressive and where the lowest income earners pay the highest percentages, in many cases more than five times what the wealthiest pay. Personally, I think the current rates are adequate, but I would like to see the capital gains rate raised to equal the earned income tax rate.
You keep repeating that like it's supposed to mean something. It doesn't.The "rich" are anyone making more than me.I'm not going to look through 44 pages, just curious:
Has anyone specified precisely who "the rich" are, precisely what "fair" is, and/or precisely who is charged with making those determinations in the future?
.
"Fair" is "more".
I decide.
That's the gist of what I see.
we can distinguish between Capitalists with capital and Laborists with labor usually on a capital gains versus earned income basis. that should work in any given scenario.
Not very specific, is it?You keep repeating that like it's supposed to mean something. It doesn't.The "rich" are anyone making more than me.I'm not going to look through 44 pages, just curious:
Has anyone specified precisely who "the rich" are, precisely what "fair" is, and/or precisely who is charged with making those determinations in the future?
.
"Fair" is "more".
I decide.
That's the gist of what I see.
we can distinguish between Capitalists with capital and Laborists with labor usually on a capital gains versus earned income basis. that should work in any given scenario.
Some on the federal left believe we should abolish our warfare-State in favor of willful obedience to our Commerce Clause and that lack of infidel-ism, protestant-ism, and renegade-ism; or even insurrection-ism nor rebel-ism to our supreme law of the land.Payroll taxes aren't taxes at all. They are advance payments for services. You pay in every check in return for a check each month and medical overage when you retireEditorial by Lee Ohanian, Professor of Economics at UCLA
Here's a question you're likely to hear whenever the subject of taxes comes up: Do the rich pay their fair share?
There are two parts to this question:
Who is rich?
And, what is fair?
Let's start with who is rich:
Nearly everyone assumes that a person who is among the top ten percent of all income earners qualifies as rich.
But according to 2011 data, a top ten percent household makes around $150,000 or above in gross annual income -- that's income before deductions and taxes. Now, $150,000 is a nice living, but it certainly doesn't make you rich.
OK, then. What about the top 5%?
You get into this percentile if your household makes around $190,000 or above. That's a nice bump. But it hardly puts you in the rich category.
How about the top 1%? That's $500,000 or above. A great income, but remember, most people only get to that level after many years of hard work and, quite possibly, the accumulation of serious debt to fund their education or build their business.
Of course, there are people who make more than $500,000. And there are some who make many millions, even billions. But the number who do is very small.
Now, let's talk about fair.
Fair would seem be that the group of taxpayers who earn 10% of the country's income would pay 10% of the country's taxes; the group who earned 20% would pay 20% of the taxes and so on.
But what If I told you that, according to IRS data, the top 10% of all earners -- the people making $150,000 and above -- pay 71% of all federal income tax while earning only 43% of all income.
If anything, the top ten percent pay more than their fair share.
So, as it happens, do the much reviled top 1%. They earn 17 percent of all income, but pay 37% of all federal income taxes.
And what about those at the other end of the income scale, the lower earners? Are we squeezing them? Hardly. Those who make $45,000 or less, 47% of all earners, pay little and often no income taxes.
Ah, but what about payroll taxes -- the money we pay to fund Social Security and Medicare? That takes a bigger bite of the paycheck of lower earners than higher earners. Isn't that unfair?
Consider two points:
First, it's misleading to call the Payroll Tax a tax. It's really an insurance payment that guarantees we receive social security and Medicare after we turn 65.
Second, the benefits we receive from Social Security are capped, no matter how much we have paid in. This means that the payroll taxes of high earners actually help subsidize the social security and Medicare benefits that low earners receive at retirement.
How do all these numbers stack up against other countries?
The US income tax system is substantially more progressive - meaning that income tax rates rise as income rises -- than other advanced countries, including Germany and Sweden.
So, if you think that our tax system is unfair because it coddles high earners, then you must conclude that tax systems in these other countries are even more unfair.
So how high are tax rates on Americans today? Well, throw in federal tax increases mandated in 2013 and state taxes, and top earners face a tax rate of more than 50 per cent in California and New York. Other states like Maryland and Connecticut are not far behind. Do you think a tax rate of greater than 50% is fair? If so, is there any rate that wouldn't be?
Nobody is calling for bake sales for anyone in the top ten percent of earners. And no one wants to minimize the struggles of those at the lower income strata. But to say the "rich," however you might define them, don't pay their fair share is simply wrong.
Finally, numerous academic studies, including ones that I have done, show that when tax rates are too high, investment, risk taking by entrepreneurs, and therefore job creation all decline. And when that happens it's the poor who suffer, not the rich. The rich do fine.
It may feel good to take even more money from the top ten percent, but it doesn't do good. And it sure isn't fair.
- Lee Ohanian, Professor of Economics at UCLA
Sorry, but payroll taxes are taxes, plain and simple. You also do not include state taxes which are completely regressive and where the lowest income earners pay the highest percentages, in many cases more than five times what the wealthiest pay. Personally, I think the current rates are adequate, but I would like to see the capital gains rate raised to equal the earned income tax rate.
too simple for the Right to obfuscate? it is no wonder the left refuses to authorize any general advance for the honest injuen contingent; due in full and not in any Part--to the continual bifurcation of the Right.You keep repeating that like it's supposed to mean something. It doesn't.The "rich" are anyone making more than me.I'm not going to look through 44 pages, just curious:
Has anyone specified precisely who "the rich" are, precisely what "fair" is, and/or precisely who is charged with making those determinations in the future?
.
"Fair" is "more".
I decide.
That's the gist of what I see.
we can distinguish between Capitalists with capital and Laborists with labor usually on a capital gains versus earned income basis. that should work in any given scenario.
we can distinguish between Capitalists with capital and Laborists with labor usually on a capital gains versus earned income basis. that should work in any given scenario.Not very specific, is it?You keep repeating that like it's supposed to mean something. It doesn't.The "rich" are anyone making more than me.I'm not going to look through 44 pages, just curious:
Has anyone specified precisely who "the rich" are, precisely what "fair" is, and/or precisely who is charged with making those determinations in the future?
.
"Fair" is "more".
I decide.
That's the gist of what I see.
we can distinguish between Capitalists with capital and Laborists with labor usually on a capital gains versus earned income basis. that should work in any given scenario.
.
Now that you have laid this foundation, perhaps you could provide some empirical specifics on how you would see to it that the rich are paying their fair share.we can distinguish between Capitalists with capital and Laborists with labor usually on a capital gains versus earned income basis. that should work in any given scenario.Not very specific, is it?You keep repeating that like it's supposed to mean something. It doesn't.The "rich" are anyone making more than me.I'm not going to look through 44 pages, just curious:
Has anyone specified precisely who "the rich" are, precisely what "fair" is, and/or precisely who is charged with making those determinations in the future?
.
"Fair" is "more".
I decide.
That's the gist of what I see.
we can distinguish between Capitalists with capital and Laborists with labor usually on a capital gains versus earned income basis. that should work in any given scenario.
.
too much consistency for moral absolutists?
ok; to keep it simple for the Right and the South, i believe the capital gains distinction should end whenever wages for Labor don't outpace inflation.Now that you have laid this foundation, perhaps you could provide some empirical specifics on how you would see to it that the rich are paying their fair share.we can distinguish between Capitalists with capital and Laborists with labor usually on a capital gains versus earned income basis. that should work in any given scenario.Not very specific, is it?You keep repeating that like it's supposed to mean something. It doesn't.The "rich" are anyone making more than me.
"Fair" is "more".
I decide.
That's the gist of what I see.
we can distinguish between Capitalists with capital and Laborists with labor usually on a capital gains versus earned income basis. that should work in any given scenario.
.
too much consistency for moral absolutists?
Specific marginal tax rates, specific estate issues, specific changes to capital gains, new laws & regulations, et cetera.
.
Thank you for keeping it simple for those who aren't very bright.ok; to keep it simple for the Right and the South, i believe the capital gains distinction should end whenever wages for Labor don't outpace inflation.Now that you have laid this foundation, perhaps you could provide some empirical specifics on how you would see to it that the rich are paying their fair share.we can distinguish between Capitalists with capital and Laborists with labor usually on a capital gains versus earned income basis. that should work in any given scenario.Not very specific, is it?You keep repeating that like it's supposed to mean something. It doesn't.we can distinguish between Capitalists with capital and Laborists with labor usually on a capital gains versus earned income basis. that should work in any given scenario.
.
too much consistency for moral absolutists?
Specific marginal tax rates, specific estate issues, specific changes to capital gains, new laws & regulations, et cetera.
.
Otherwise; i believe we should abolish our warfare-State to abolish direct income taxes; merely to be Faithful to our Commerce Clause.
it only depends if there is some need for a capital gains tax with a more market friendly welfare-State than can be accomplished by a more centrally planned warfare-State.Thank you for keeping it simple for those who aren't very bright.ok; to keep it simple for the Right and the South, i believe the capital gains distinction should end whenever wages for Labor don't outpace inflation.Now that you have laid this foundation, perhaps you could provide some empirical specifics on how you would see to it that the rich are paying their fair share.we can distinguish between Capitalists with capital and Laborists with labor usually on a capital gains versus earned income basis. that should work in any given scenario.Not very specific, is it?You keep repeating that like it's supposed to mean something. It doesn't.
.
too much consistency for moral absolutists?
Specific marginal tax rates, specific estate issues, specific changes to capital gains, new laws & regulations, et cetera.
.
Otherwise; i believe we should abolish our warfare-State to abolish direct income taxes; merely to be Faithful to our Commerce Clause.
So no personal income taxes, but we would tax capital gains, and all capital gains would be based on wage increases and inflation?
That would certainly cut revenues to the government pretty drastically, yes?
.
It's like 1/4 of a theory. If he would expand on it, we could debate it.Not very specific, is it?You keep repeating that like it's supposed to mean something. It doesn't.The "rich" are anyone making more than me.I'm not going to look through 44 pages, just curious:
Has anyone specified precisely who "the rich" are, precisely what "fair" is, and/or precisely who is charged with making those determinations in the future?
.
"Fair" is "more".
I decide.
That's the gist of what I see.
we can distinguish between Capitalists with capital and Laborists with labor usually on a capital gains versus earned income basis. that should work in any given scenario.
.
