Why is it shocking that the top 1% of Americans pay 40% of the income tax?

[asterism]

Conservatives on this site (and others) love to quote the statistic that says 40% of the income tax revenues come from the richest 1% of Americans. This statistic is true.

What these same posters ignore is that the top 1% of Americans control 40% of America's wealth. Seems to me that they pay exactly the percentage they should.

Except taxes are on income, not wealth. Stored wealth has already been taxed once (or twice). The top 1% of income earners pay way more than their corresponding share of total income.

This is the level of stupidity the GOP spin machine depends on!!!

Unrealized capital gains is not taxed at all, not once and not twice.

For example, if you have $1 million in stock and it doubles to $2 million, the 1$ in capital gains is not taxed at all until it is realized. If you sell the $2 million the $1 million in cap gains is taxed for the first time and the $1 million you paid for the stock is not taxed.

Now you please explain how any of that $2 million got taxed twice!!!!!!!
I won't hold my breath for your reply.

For starters, the initial million has already been taxed once perhaps twice. Then the second million is taxed upon realization in most cases. In some cases it is taxed before it is realized.

Double taxation occurs when a closely held C-Corp earns income and then that income is passed to the owners.

 

[asterism]

Conservatives on this site (and others) love to quote the statistic that says 40% of the income tax revenues come from the richest 1% of Americans. This statistic is true.

What these same posters ignore is that the top 1% of Americans control 40% of America's wealth. Seems to me that they pay exactly the percentage they should.

Except taxes are on income, not wealth. Stored wealth has already been taxed once (or twice). The top 1% of income earners pay way more than their corresponding share of total income.

Since by your sig you are a DittoTard, you will probably love this quote from your MessiahRushie.

The Truth About Taxes
August 6, 2007
RUSH: But there's no tax on wealth. There is a tax on income, and the tax on income is designed to keep everybody who is not wealthy from getting there.

I'm talking about genuine wealth, not the way Democrats define "rich."

We should replace the income tax, corporate taxes and payroll taxes with a FLAT tax on wealth, with no exceptions or deductions.

I read the phrase, "Politics is show business for ugly people," in a piece about Paul Begala (certainly not Rush Limbaugh).

Now if you'd like to propose a wealth tax, do it. How much and what mechanism?

 

[asterism]

Conservatives on this site (and others) love to quote the statistic that says 40% of the income tax revenues come from the richest 1% of Americans. This statistic is true.

What these same posters ignore is that the top 1% of Americans control 40% of America's wealth. Seems to me that they pay exactly the percentage they should.

I think it's shocking that they're paying so little, given how well they're doing compared to the rest of us.

But hey, I realize that that's just me.

I have very little sympathy for those poor put upon billionaires.

What prick I am, huh?

You're certainly a prick.

 

[asterism]

Since by your sig you are a DittoTard, you will probably love this quote from your MessiahRushie.

We should replace the income tax, corporate taxes and payroll taxes with a FLAT tax on wealth, with no exceptions or deductions.

A wealth tax is unworkable, as wealth can be in non-liquid assets, while the tax must be paid in a liquid one, i.e. cash. So you get situations where your wealth tax payment could exceed your liquid assets and income, forcing you to sell said assets to pay off your wealth tax, and for most people "assets" means "house".

There may be some cases where people with multiple houses might have to sell one, but people who own only one home would only be paying a tax on the increase in value each year over what the house was worth the previous year, which would probably be much less than they would have paid in income tax, FICA tax, etc.

And when the value drops? Tax refund?

 

[rdean]

The 300x is true. The 600x is not true and over 500x was only true during the tech bubble.

Who Rules America: Wealth, Income, and Power

Hmmm, if you take $120,000,000.00 and divide it by 600, correct me if I'm wrong, but doesn't that work out to 200,000?

CIGNA took in $19.1 billion dollars in revenue last year, with a $292 million dollar income. That doesn't include the salaries given to people like CEO Ed Hanway. He made a cool $12 million last year, and over the past five years he took in $120 million.

CIGNA Denies Cancer Patient Care, CEO Makes $120 Million In Five Years

Divide 200,000 by 5 and you get $40,000.00. A pretty average salary.

Just to go through it again.

120 million - paycheck

divided by 600, the number I used

equals 200,000

Divide 200,000 by 5 - the number of years

and that leaves $40,000.00 - which is a pretty average salary. Ask anyone working at an insurance company who is not a CEO.

Check my figures. Prove I'm wrong. I wish I were.

And this isn't the "tech bubble".

Oh, you're talking anecdotally. Individual distributions between CEOs and the average workers existed at that level in the 1960s and 1970s also.

CEO Compensation 1970-2000 » Graphic Sociology

http://www2.census.gov/prod2/popscan/p60-080.pdf

I did the math, you merely published a couple of links. Besides, looking at ALL CEO salaries and the salaries of the top 20% is way, way different. I suspect the top 20% make many times MORE than all the rest put together.

$120,000,000.00

That's a lot of insurance policies to skim for a single paycheck. A lot. Especially for a company that doesn't employ any doctors, nurses or own any hospitals. They are middlemen who "skim" policies. That's it. That's all they do. And it's legal. The right calls it "capitalism". I call it a "con".

 

[snjmom]

Double taxation occurs when a closely held C-Corp earns income and then that income is passed to the owners.

Easily avoidable by becoming a partnership. Why incorporate if it is such a tax burden?

 

[edthecynic]

A wealth tax is unworkable, as wealth can be in non-liquid assets, while the tax must be paid in a liquid one, i.e. cash. So you get situations where your wealth tax payment could exceed your liquid assets and income, forcing you to sell said assets to pay off your wealth tax, and for most people "assets" means "house".

There may be some cases where people with multiple houses might have to sell one, but people who own only one home would only be paying a tax on the increase in value each year over what the house was worth the previous year, which would probably be much less than they would have paid in income tax, FICA tax, etc.

And when the value drops? Tax refund?

Absolutely!!!

 

[martybegan]

A wealth tax is unworkable, as wealth can be in non-liquid assets, while the tax must be paid in a liquid one, i.e. cash. So you get situations where your wealth tax payment could exceed your liquid assets and income, forcing you to sell said assets to pay off your wealth tax, and for most people "assets" means "house".

There may be some cases where people with multiple houses might have to sell one, but people who own only one home would only be paying a tax on the increase in value each year over what the house was worth the previous year, which would probably be much less than they would have paid in income tax, FICA tax, etc.

And when the value drops? Tax refund?

Thats not a wealth tax. A wealth tax is that you have assests of X, and each year you are taxed a percentage of X. What you are talking about is taxing a gain in the value of assets, even if you dont sell the assets not a wealth tax.

Your tax would make you a ton of money the first year, and basically nothing after that.

Also if you implemented a real wealth tax, how do you asses things like clothes, electronics and furniture?

 

[skeptic]

Conservatives on this site (and others) love to quote the statistic that says 40% of the income tax revenues come from the richest 1% of Americans. This statistic is true.

What these same posters ignore is that the top 1% of Americans control 40% of America's wealth. Seems to me that they pay exactly the percentage they should.

This is hugely disingenuous and here is why:

Personal taxes are levied at a Federal level in three distinct ways. Income tax, FICA and capital gains.

Income tax burden is born mostly by the wealthiest because they have the most income and we adopted a progressive tax. But income taxes are less than half of all personal taxes collected by the Federal government.

Capital gains taxes are also disproportionately levied on the wealthy because they are often the only people who have capital gains, this rate of tax is fairly low. It is in fact a tax shelter for the rich to escape the fury of the upper tax brackets for income.

FICA taxes are the largest personal tax revenue stream for the Federal government and these taxes are born disproportionately by the poor.

Ask a real question about the tax burden instead of one that is biased out of the gate.

The top 1% DO NOT pay 40% of the Federal individual taxes. That is a lie.

 

[MitchMan]

To be fundamentally correct in this thread, you have to look at the big picture. Talking and debating the details of a situation that is fundamentally incorrect is rather a futile endeavor and will tend to go round and round with no resolution nor any agreement in sight.

The big picture problem (which is THE problem) is that our version of a market/capitalistic economic system (which is supported by our legal and political institutions and our culture) is erroneously skewed to consistently result in an inequitably lopsided concentration of wealth and income at the top. In fact, the USA is the second worst offender of this unfortunate situation in the world. The top 1% own 37% of the country's wealth, the top 10% own 71% while the bottom 60% own only 4% and the bottom 40% have less than 1%! The top 20% own 85% of the country's wealth and the bottom 80% have only 15% of the wealth. Man, that is lopsided! This is in spite of the fact that per capita production is increasing.

Now there are those who correctly say that the top income earners pay a lopsided larger proportion of the income taxes. True, but what they never admit and never recognize is the blatant absolute fact that while these top earners pay the larger proportion of income taxes, that, even after that tax payment, the top still have been able to amass their lopsided concentration of wealth and income as mentioned herein above! So, in the final analysis, the top still haven't really felt any pain at all. In fact, through these last three years of economic downturn, the top's share of wealth has even increased in spite of progressive income tax rates and an estate tax. In fact, the worsening lopsided concentration of wealth and income at the top is evidence that the progressive tax rates aren’t progressive enough (never have been progressive enough) and the estate tax is too low.

Now, the right wingers and cons (and I do mean ‘cons’ in every connotation of the word) often retort, “You just hate and envy the rich”. Not true. This is not an indictment of the rich. In fact, most of the wealthy and well-to-do that I have known and currently know have been/are usually hard working, self-disciplined, moral, knowledgeable upstanding citizens. Yes, I have known some lazy, immoral, ignorant, greedy bastards, even some that were/are stupid. This is not an indictment of the rich, this is an indictment of our system and our culture that allows this inequitable system to persist.

The real remedy to the problem is that our culture together with our legal, political, and therefore our version of our market system need to change in the right direction. We need better regulation and enforcement and we need more unionization. Yes, better regulation of business and better regulation of unions, especially when they get big and powerful. As big business has gotten out of hand with way, way too much influence in politics (no help from our immorally right-wing biased Supreme Court), unions can and have gotten abusive as well.

Regulation is needed to prevent Wall Street abuses, to temper unfettered free market dynamics that result in under-compensation as well as overcompensation, to more actively and effectively disallow monopolistic abuses, to provide caps on certain outrageous income levels and secure truly adequate minimum wage levels, to temper over pricing of goods and services that are non-discretionary and especially those that tend to have inelastic demand (medical services and prescription drugs come to mind). We also need to be more protectionist in our international business dealings. We need a great change in our regulation so that outsourcing our services and especially our manufacturing to other countries (because of their cheap labor) does not occur. We need to reign in the shadow banking system that directly precipitated the 2008 crash in our and the world’s economies, sufficiently regulate CDOs and CDSs (derivatives) and put them under the insurance regulations where they belong, curb that nonsense and do something about the rampant financial speculation markets, especially with regard to oil if that can be done.

Don’t let the right wingers falsely convince you that it is impossible and even immoral to regulate the given free trade, free market capitalism and still have a true market driven economy. They even have the crass to associate God and the free market. Heck, the right wingers will even try to convince you that anything less than an absolutely totally free and unregulated market is impossible and still have capitalism. That’s just plain crap!

The greedy and most of the right wingers immorally and illogically don’t see a problem with the lopsided concentration of wealth and income at the top. They think it is wonderful and the way it should be and even wish that it were more so as they want a flat tax, a small one at that, and a large reduction to safety nets to the poor and to public service and public projects and to the lower income working class. Shame on them, and most of them call themselves Christian. What frauds.

 

[WillowTree]

Conservatives on this site (and others) love to quote the statistic that says 40% of the income tax revenues come from the richest 1% of Americans. This statistic is true.

What these same posters ignore is that the top 1% of Americans control 40% of America's wealth. Seems to me that they pay exactly the percentage they should.

yep, but that's not good enough for you bastich's you want more and more and more and more. Gimmie Gimmie Gimmie.

 

[MitchMan]

What's the problem? Can't you see the forest? Or are the trees in the way?

Suppose a US household family of four has an annual income on $1 million USD. Let's say that household pays half of it in income taxes, leaving that household with $1/2 million. Sorry, I don't feel bad for the wealthy family of four. Now, let's say some other family of four has a taxable income of only $50,000 USD. Now, that family really has to tightly budget, and I hope that they do not have to pay any income taxes. Let's see what we have here: Fam-1 has $500,000 to live on and Fam-2 has $50,000. Now, consider what life style that Fam-1 can have, what they can do, what they can enjoy, what vacations they can have, how big a house that they could mortage, what kind of car(s) they can drive, what kind of restaurants they can frequent, what kind of health insurance they can get, what kind of clothes they can afford. Actually, if you think that that Fam-2 can get along just fine and have all their basic needs met (you'd be wrong), geez, that means that Fam-1 could support 9 other families.

Are you getting any kind of sense of proportion here? You know, Fam-2 could pay another 20% more in tax or in other words, an additional $200,000 in income taxes and still have $300,000 to live on. Do you know what kind of life style that can buy a family of four for one year?

Any sense of proportion yet?

 

[asterism]

What's the problem? Can't you see the forest? Or are the trees in the way?

Suppose a US household family of four has an annual income on $1 million USD. Let's say that household pays half of it in income taxes, leaving that household with $1/2 million. Sorry, I don't feel bad for the wealthy family of four. Now, let's say some other family of four has a taxable income of only $50,000 USD. Now, that family really has to tightly budget, and I hope that they do not have to pay any income taxes. Let's see what we have here: Fam-1 has $500,000 to live on and Fam-2 has $50,000. Now, consider what life style that Fam-1 can have, what they can do, what they can enjoy, what vacations they can have, how big a house that they could mortage, what kind of car(s) they can drive, what kind of restaurants they can frequent, what kind of health insurance they can get, what kind of clothes they can afford. Actually, if you think that that Fam-2 can get along just fine and have all their basic needs met (you'd be wrong), geez, that means that Fam-1 could support 9 other families.

Are you getting any kind of sense of proportion here? You know, Fam-2 could pay another 20% more in tax or in other words, an additional $200,000 in income taxes and still have $300,000 to live on. Do you know what kind of life style that can buy a family of four for one year?

Any sense of proportion yet?

What's the incentive to make $1 Million if 70% is taxed away?

 

[DaGoose]

What's the problem? Can't you see the forest? Or are the trees in the way?

Suppose a US household family of four has an annual income on $1 million USD. Let's say that household pays half of it in income taxes, leaving that household with $1/2 million. Sorry, I don't feel bad for the wealthy family of four. Now, let's say some other family of four has a taxable income of only $50,000 USD. Now, that family really has to tightly budget, and I hope that they do not have to pay any income taxes. Let's see what we have here: Fam-1 has $500,000 to live on and Fam-2 has $50,000. Now, consider what life style that Fam-1 can have, what they can do, what they can enjoy, what vacations they can have, how big a house that they could mortage, what kind of car(s) they can drive, what kind of restaurants they can frequent, what kind of health insurance they can get, what kind of clothes they can afford. Actually, if you think that that Fam-2 can get along just fine and have all their basic needs met (you'd be wrong), geez, that means that Fam-1 could support 9 other families.

Are you getting any kind of sense of proportion here? You know, Fam-2 could pay another 20% more in tax or in other words, an additional $200,000 in income taxes and still have $300,000 to live on. Do you know what kind of life style that can buy a family of four for one year?

Any sense of proportion yet?

What's the incentive to make $1 Million if 70% is taxed away?

THE FACT THAT YOU CAN PAY IT.

Besides, it must be working since the number of millionaires grew 8% last year.

U.S. millionaires population expanded by 8% in 2010 - Yahoo! Finance

.

 

[MitchMan]

To answer your question: the $300,000 you get to keep. That is a ton of incentive! You could afford the livelihood of Fam-2 nine times over! Did you ask yourself the question that I posed of using your imaginiation to imagine what kind of life style you could afford at $300,000? Probably not. Right? Your mistake is the common right winger mistake. You and your buddies go around telling each other that in order to be incentivized to work hard, you need 'sky is the limit' compensation. Not true. All you need is a good incentive. $300,000 and what that can buy a family of four is fantastic. Think about that, please.

 

[kaz]

Conservatives on this site (and others) love to quote the statistic that says 40% of the income tax revenues come from the richest 1% of Americans. This statistic is true.

What these same posters ignore is that the top 1% of Americans control 40% of America's wealth. Seems to me that they pay exactly the percentage they should.

So you're saying the left is wrong in trying to jack that up?

 

[edthecynic]

There may be some cases where people with multiple houses might have to sell one, but people who own only one home would only be paying a tax on the increase in value each year over what the house was worth the previous year, which would probably be much less than they would have paid in income tax, FICA tax, etc.

And when the value drops? Tax refund?

Thats not a wealth tax. A wealth tax is that you have assests of X, and each year you are taxed a percentage of X. What you are talking about is taxing a gain in the value of assets, even if you dont sell the assets not a wealth tax.

Your tax would make you a ton of money the first year, and basically nothing after that.

Also if you implemented a real wealth tax, how do you asses things like clothes, electronics and furniture?

So you are saying that capital assets like stocks never go up in value, they just stay the same generating no taxable wealth from year to year.

 

[edthecynic]

Conservatives on this site (and others) love to quote the statistic that says 40% of the income tax revenues come from the richest 1% of Americans. This statistic is true.

What these same posters ignore is that the top 1% of Americans control 40% of America's wealth. Seems to me that they pay exactly the percentage they should.

So you're saying the left is wrong in trying to jack that up?

No, he's saying that the Right is wrong to whine like little babies that the wealthy are taxed too much.

 

[WillowTree]

What's the problem? Can't you see the forest? Or are the trees in the way?

Suppose a US household family of four has an annual income on $1 million USD. Let's say that household pays half of it in income taxes, leaving that household with $1/2 million. Sorry, I don't feel bad for the wealthy family of four. Now, let's say some other family of four has a taxable income of only $50,000 USD. Now, that family really has to tightly budget, and I hope that they do not have to pay any income taxes. Let's see what we have here: Fam-1 has $500,000 to live on and Fam-2 has $50,000. Now, consider what life style that Fam-1 can have, what they can do, what they can enjoy, what vacations they can have, how big a house that they could mortage, what kind of car(s) they can drive, what kind of restaurants they can frequent, what kind of health insurance they can get, what kind of clothes they can afford. Actually, if you think that that Fam-2 can get along just fine and have all their basic needs met (you'd be wrong), geez, that means that Fam-1 could support 9 other families.

Are you getting any kind of sense of proportion here? You know, Fam-2 could pay another 20% more in tax or in other words, an additional $200,000 in income taxes and still have $300,000 to live on. Do you know what kind of life style that can buy a family of four for one year?

Any sense of proportion yet?

Yes, my sense of proportion is you are one of those let's punish the successful and give their hard earned money to the not successful. you must be a redistribution of wealth guy.. I thought you were in Libya.

 

[rikules]

Conservatives on this site (and others) love to quote the statistic that says 40% of the income tax revenues come from the richest 1% of Americans. This statistic is true.

What these same posters ignore is that the top 1% of Americans control 40% of America's wealth. Seems to me that they pay exactly the percentage they should.

I would not be surprised to find that the top 1% controls MORE than 40% of the wealth