Tag Archives: fair share

Let’s look at facts for the top 1% earners in the United States

9 Aug

Here is a flash bulletin, the top 1% of earners in the US don’t earn $250,000 per year, they earn six times that much, but they may actually being paying their fair share.  Take a look at a few facts shown below.

Internal Revenue Service (IRS)

Internal Revenue Service – let’s make the tax code really simple and turn this building into a mall

 Excerpts from an August 6 WJS article:

From Ronald Reagan to Barack Obama, the tax code has been tweaked and the economy has had its ups and downs, and the share of federal taxes paid by the top 5% and the top 1% has risen faster than their share of income:

In the 1980s, the top 5% averaged 22.6% of income and paid 28.5% of taxes.

In the 1990s, the top 5% averaged 25.3% of income and paid 34.3% of taxes

In the 2000s, the top 5% averaged 28.4% of the income and paid 40.3% of the taxes.

That doesn’t mean that the best-off are living on less. The top 1% averaged income of $1,530,773 this year (up $174,083 from 2004, when the data series begins) and paid federal taxes of all sorts of $422,915 (up $20,704 from 2004), according to estimates by the Tax Policy Center, a number-crunching joint venture of the Brookings Institution and Urban Institute.

For those in the top 1%, whose incomes are more volatile than others, the average tax bite in 2007 was 28.9%, below the 1995 Clinton-era peak (35.3%) but higher than the 1986 Reagan-era trough (24.6%.)

The rich do, on average, pay more of their income in taxes than the middle class. So do the super-rich—on average.

The annual Internal Revenue Service scorecard of the top 400 taxpayers—who reported average incomes of $200 million—showed they paid 19.9% of their adjusted gross income in federal income taxes in 2009, well above the rate paid by the middle class. Those with incomes between $100,000 and $200,000, for instance, paid about 12%. (The IRS tally for the top 400 counts only income reported on tax returns, and only income taxes. Neither the IRS nor CBO calculates figures for the 1% using the broader definitions of income and taxes.)

A growing number of Americans don’t pay any income tax. They don’t make enough or live on Social Security or are getting tax breaks targeted at low-wage workers.

In 2011, according to the Tax Policy Center, about 46% of households didn’t pay any U.S. income taxes, a proportion swollen because so many have seen paychecks shrink or evaporate. But even in the better years of the mid-2000s, roughly 40% of households didn’t pay any federal income tax.

Many did get hit by the payroll tax, which helps finance Social Security and Medicare. But about one-fifth of households didn’t pay either federal income or payroll taxes; many did pay state and local taxes.

More important than the debate over fair share is where are we going from here.  The answer at this point is nowhere good.  Both Obama and Romney are either lying to you, think you are a fool when it comes to taxes and spending or are fools themselves or more likely a combination of all of the above.  They both certainly think you are gullible and will swallow all their campaign gobbledygook.

Lowering the deficit and debt, and dealing with the many issues facing the Country cannot be done on the backs of Americans with incomes above $250,000, nor can it be done by lowering all taxes for all Americans and merely by cutting spending … spending on what you may ask.  And if you think it can be done by magically changing the tax code and its many deductions and exemptions without affecting you then you need a new definition of taxes.  Let’s say your tax rate is lowered to 10% from 15%; a good thing right?  But now consider that to accomplish that your deduction for mortgage interest and your tax-free employer-provided health care is eliminated or severely limited.  How happy are you about that 5% tax break now?

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How immune are you to political rhetoric? Do you want your fair share? The Buffett Rule, rules

27 Apr

Recently in relation to the ear catching phrase “Buffett Rule” the President said it would “strengthen our economy and create jobs.” That sounds like a good deal to me; squeeze the rich and create jobs. On the other hand I have this annoying habit, I have to ask, how?

How will adding $4.7 billion a year to government revenue strengthen the economy and create jobs? How will a few billion more do that when the trillions we have already spent have done little? I bet you have a question or two as well.

Keep in mind that the interest the government pays just on U.S. Savings Bond is over $500 million a month or $12 billion a year and that is a small fraction of the total interest paid on public debt.

There once was a man from Nantucket,
Who went to the well with his bucket.
The well was dry and he began to cry, but could not deny,
his trips had been more than a few.
We need a new rule to solve this mess, let me see, let me guess.
Oh, I have it, I’ll just take what I need from you!

A modest decrease in the national debt could generate interest expense savings far exceeding a new tax on a very small percentage of Americans freeing money to spend more productively.

That man from Nantucket dashed to a neighbor,
there is water in this well, I must have some,
you have more than me, that’s no fun.
He lowered his bucket as far as he dare, filling it up to the absolute top,
He leaned into the well and disappeared with a plop.
Need I say more, he got his fair share.

The next time you hear all that appealing rhetoric, ask “how”.

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What has luck got to do with it? Millionaires should give us more of their winnings

20 Apr

The following is an excerpt from an opinion piece on Bloomberg.com April 13,2012

A Guide to the Class Warfare of Presidential Politics Lucky, Not Evil Thirty percent is a perfectly reasonable tax rate on incomes over a million — even if the recipients are sainted small businessfolk. Whether 30 percent constitutes class warfare depends on the rhetoric that goes with it. People who make more than a million a year are not evil. They’re just lucky. Obama’s rhetoric has largely avoided cheap shots that imply otherwise.

“Just lucky?”

If I win the lottery for an equivalent of a million dollars a year, I’m lucky . If a rich relative leaves me a million dollars in his will, I’m lucky.

If I start a business and make a lot of money, get a good education and a good job and make a lot of money, if I invent something truly innovative and make a million dollars I am not lucky I am rewarded for the effort and sacrifice that any of the above take to achieve.

Extreme success may be accompanied by an absence of misfortune, but so may failure or mediocre success.

The essence of the fallacy surrounding our current debate over “fair share” to be paid by the 1% is that they are classified as lucky as if the day after they graduated high school they started earning $1,000,000 or even $250,000 a year.

This is a big political game that assumes the bulk of American voters are losers with an axe to grind against the more successful among us. If pitting the wealthy against everyone else had any serious impact on the deficit because the wealthy really didn’t pay their fair share, that would be one thing, but that is not even true. The truth is that the only reason high income earners pay a lower percentage in taxes is because the bulk of their income is in dividends and capital gains and taxed at 15% as is the case for every American, that and because they contribute generously to charity.

In the year 2000, families earning $20,000 or less gave an average of about $450 to charity, while families earning more than $100,000 gave away an average of a bit more than $3,000. The top 10 percent of households in income are responsible for at least a quarter of all the money contributed to charity, and households with total wealth exceeding $1 million give about half of all charitable donations. The American rich are generous, on average (interestingly, lower income people tend to give a greater percentage of their income to charity. This is thought to mostly be because of strong religious affiliations promoting giving). It is also true that lower income Americans spend a greater percentage of their income on lottery tickets than do the wealthy.

There is a great deal of unfairness though. Take for example the widow on a fixed income who can’t afford to stay in her family home of forty years because of high property taxes caused by irresponsible spending at state and local levels. Or how about the lucky gal who wins a big lottery, pays 35% in federal taxes dies the next year and her children get to pay another 35% in estate taxes. What about all the special benefits, tax breaks, and discounts for seniors based on income, but ignoring net worth or total assets? Is it “fair” that struggling young couples have their payroll taxes increased (and they will) to pay for the benefits for the boomers who in all too many cases did not plan for their own futures? Fair is fair.

So what say ye? Do you think that high income people should pay more in taxes? Do you think they are not paying their fair share? How do you define wealthy?

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