FACT: Why the Rich should pay LOWER tax rates than the Poor

Discussion in 'Politics' started by tooAlive, Dec 5, 2012.

  1. tooAlive
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    tooAlive Silver Member

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    Lately I've heard the argument that the rich are paying a lower effective tax rate than the poor used quite a bit. And while that is true, there is a very good reason for that.

    Here's why there is nothing wrong with the rich actually paying a lower effective tax rate than the average worker. And no, it has nothing to do with the fact that 20% of the wealthiest Americans are already paying for 70% of all federal taxes. (Although that is also true. :redface:)

    [ame=http://youtu.be/H8f59IuijFo]RTS: Thomas Sowell vs Occupy Wall Street and Obama - YouTube[/ame]

    -- For those that would rather not watch the video --

    Most of the income earned by the wealthy are capital gains, and not taxed at the same rate as regular income because they aren't present at any given year.

    For example, you may have stock options that have been accumulating for 5 or 10 years. The year you cash these out, your income will spike up. But only for that year. Capital gains tax takes into account that the income you've just cashed out on has been earned throughout a period of time.

    Which is why it is taxed at a much lower rate. Combine that with the income they earned that is taxed at the highest rate, and that's how you have the rich paying a lower effective tax rate. Which in reality, is perfectly fine.
     
    Last edited: Dec 5, 2012
  2. Lakhota
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    Lakhota Diamond Member

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    Are you retarded or on drugs?
     
  3. bripat9643
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    bripat9643 Diamond Member

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    You didn't watch the video, did you, moron?
     
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  4. tooAlive
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    tooAlive Silver Member

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    Of course he didn't.

    Otherwise he would have added a meaningful response to the discussion.
     
  5. ilia25
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    ilia25 I can do math

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    Right wing lies debunked countless times:
    * very few people reach 1%
    * the rich pay more in taxes because they receive more income
     
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  6. TNHarley
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    TNHarley Gold Member

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    What did he say? I have no sound
     
  7. tooAlive
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    tooAlive Silver Member

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    As per your first point, it's quite common for people to move in and out of the "1%" in any given year. Some may have sold a house, a business, cashed out on some investments, ect.. Which may have put them in the 1%. But they might not do the same thing the following year.

    And as for your second point, the rich do pay much more in taxes that the poor. I've already mentioned a few times that 20% are already paying 70% of all taxes. But that's usually shot down by liberals claiming that the rich pay a lower effective tax rate than the average Joe.

    The video I posted explains why that is perfectly fine. I think you just watched the first minute or so.
     
    Last edited: Dec 5, 2012
  8. Lonestar_logic
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    Lonestar_logic Republic of Texas

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    Thee vast majority of the wealth held by the top 1 percent doesnÂ’t come from income, but from stocks, securities, business equity and other investments.
     
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  9. ilia25
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    ilia25 I can do math

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    That video is just another pack of lies. Nobody unloads all his stocks in one year.

    Most rich remain rich, and very, very few people ever get to 1%.
     
    Last edited: Dec 5, 2012
  10. tooAlive
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    tooAlive Silver Member

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    Muost of the income earned by the wealthy are capital gains, and not taxed at the same rate as regular income because they aren't present at any given year.

    For example, you may have stock options that have been accumulating for 5 or 10 years. The year you cash these out, your income will spike up. But only for that year. Capital gains tax takes into account that the income you've just cashed out on has been earned throughout a period of time.

    Which is why it is taxed at a much lower rate. Combine that with the income they earned that is taxed at the highest rate, and that's how you have the rich paying a lower effective tax rate. Which in reality, is perfectly fine.
     

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