Just a Friendly Reminder: You Aren't Rich

The Times has been doing a great series on how class influences destiny in America: Day 9 is The Hyper Rich.

To truly understand just how not rich you are, and how much richer the truly rich are becoming than you, one must look to the pre-1929 stock market crash era that signaled a world wide economic crisis.

Not Since the 20's Roared

And to further grasp exactly what those extreme disparities of hyper rich and "regular rich" mean look at the decrease in disparity during the past half century of recovery following the New Deal. Old deal now I suppose, but America's former and future dust bowl did vote for Bush on purpose I'm told.

The Wealthiest Benefit More from Tax Cuts

Richest Are Leaving Even the Rich Far Behind
NYTimes.c om
By DAVID CAY JOHNSTON
Published: June 5, 2005

When F. Scott Fitzgerald pronounced that the very rich "are different from you and me," Ernest Hemingway's famously dismissive response was: "Yes, they have more money." Today he might well add: much, much, much more money.

The people at the top of America's money pyramid have so prospered in recent years that they have pulled far ahead of the rest of the population, an analysis of tax records and other government data by The New York Times shows. They have even left behind people making hundreds of thousands of dollars a year.

Call them the hyper-rich.

They are not just a few Croesus-like rarities. Draw a line under the top 0.1 percent of income earners - the top one-thousandth. Above that line are about 145,000 taxpayers, each with at least $1.6 million in income and often much more.

The average income for the top 0.1 percent was $3 million in 2002, the latest year for which averages are available. That number is two and a half times the $1.2 million, adjusted for inflation, that group reported in 1980. No other income group rose nearly as fast.

The share of the nation's income earned by those in this uppermost category has more than doubled since 1980, to 7.4 percent in 2002. The share of income earned by the rest of the top 10 percent rose far less, and the share earned by the bottom 90 percent fell.

Next, examine the net worth of American households. The group with homes, investments and other assets worth more than $10 million comprised 338,400 households in 2001, the last year for which data are available. The number has grown more than 400 percent since 1980, after adjusting for inflation, while the total number of households has grown only 27 percent.

The Bush administration tax cuts stand to widen the gap between the hyper-rich and the rest of America. The merely rich, making hundreds of thousands of dollars a year, will shoulder a disproportionate share of the tax burden.

President Bush said during the third election debate last October that most of the tax cuts went to low- and middle-income Americans. In fact, most - 53 percent - will go to people with incomes in the top 10 percent over the first 15 years of the cuts, which began in 2001 and would have to be reauthorized in 2010. And more than 15 percent will go just to the top 0.1 percent, those 145,000 taxpayers.

The Times set out to create a financial portrait of the very richest Americans, how their incomes have changed over the decades and how the tax cuts will affect them. It is no secret that the gap between the rich and the poor has grown, but the extent to which the richest are leaving everyone else behind is not widely known.

The Treasury Department uses a computer model to examine the effects of tax cuts on various income groups but does not look in detail fine enough to differentiate among those within the top 1 percent. To determine those differences, The Times relied on a computer model based on the Treasury's. Experts at organizations representing a range of views, including the Heritage Foundation, the Cato Institute and Citizens for Tax Justice, reviewed the projections and said they were reasonable, and the Treasury Department said through a spokesman that the model was reliable.

The analysis also found the following:

¶Under the Bush tax cuts, the 400 taxpayers with the highest incomes - a minimum of $87 million in 2000, the last year for which the government will release such data - now pay income, Medicare and Social Security taxes amounting to virtually the same percentage of their incomes as people making $50,000 to $75,000.

¶Those earning more than $10 million a year now pay a lesser share of their income in these taxes than those making $100,000 to $200,000.

¶The alternative minimum tax, created 36 years ago to make sure the very richest paid taxes, takes back a growing share of the tax cuts over time from the majority of families earning $75,000 to $1 million - thousands and even tens of thousands of dollars annually. Far fewer of the very wealthiest will be affected by this tax.

Continue to Page 2

An educational read. Aside from conservatives that want to make a new law a minute telling the rest of us what we can and can't do while calling civil libertarians "politically correct" my next biggest pet peeve is poor people that don't know they're poor. If you're "comfortable" making a decent salary and haven't been hit by tragedy yet, super. But you're closer to being one of those "poor people" you hate so much than you think. And getting closer all the time as it turns out.

There's only about 144,000 people the government really cares about (144,001 if you count Terri Schiavo) and you are not one of them.

[edit on 6-6-2005 by RANT]

The tax system in this country baffles me, truly.

Corporations pay about 200 billion a year, give or take, on their earnings.

Taxpayers meanwhile pay somewhere in the neighborhood of 900 billion to keep the country running, and that's just from income tax.

The facts are clear, the individual is an endangered species, being pushed to the limits of the window of survivability by corporate predators.

I think what we all want, and need, is simple self sufficiency. The rest is simple greed, base and not very inspirational. We just need enough to survive, but that's asking too much.

The ship of state is being piloted by remote, it's under the control of a bunch of oligarchs in far away distant lands. They don't care if the ship crashes, they have a thousand or so others to choose from in that situation. In fact, when a nation crashes and burns, there is a great deal of profit to be made by those who know the ropes. They don't care if they run us aground, it's all just business to them.

So what are you going to do about it? Complain and moan or actually stop paying your taxes?

The tax system in this country baffles me, truly.

Corporations pay about 200 billion a year, give or take, on their earnings.

Taxpayers meanwhile pay somewhere in the neighborhood of 900 billion to keep the country running, and that's just from income tax.

The facts are clear, the individual is an endangered species, being pushed to the limits of the window of survivability by corporate predators.

It is a mistake to believe that corporations represent some kind of independent source of wealth, just waiting to be tapped for tax revenue so that citizens can pay less. This is a favourite myth of the left.

The truth is, it takes a certain sum of money to run the government, and that money comes out of the economy. If you tax corporations more, they raise their prices in order to maintain the rate of return they need to justify their capital investment.

The only way to reduce taxes is to reduce government spending. Raising corporate taxes only means the government is adding it to the cost of your purchases instead of deducting it from your paycheck.

Originally posted by AlexofSkye

The tax system in this country baffles me, truly.

Corporations pay about 200 billion a year, give or take, on their earnings.

Taxpayers meanwhile pay somewhere in the neighborhood of 900 billion to keep the country running, and that's just from income tax.

The facts are clear, the individual is an endangered species, being pushed to the limits of the window of survivability by corporate predators.

It is a mistake to believe that corporations represent some kind of independent source of wealth, just waiting to be tapped for tax revenue so that citizens can pay less. This is a favourite myth of the left.

The truth is, it takes a certain sum of money to run the government, and that money comes out of the economy. If you tax corporations more, they raise their prices in order to maintain the rate of return they need to justify their capital investment.

The only way to reduce taxes is to reduce government spending. Raising corporate taxes only means the government is adding it to the cost of your purchases instead of deducting it from your paycheck.

There is no doubt two sides to the balance sheet. I guess though before you can really take into account what you are stating you have to know both sides, that is the amount of revenue from the corperations in the way of taxes of both the company and it's slaves, err, employee's. Then you'd have to figure out how much that corperation cost them, in terms of corperate welfare, maintenance, subsidies, waste, pollution, etc. It is only then do you have an accurate picture. IMO, there is no corperation alive today that would show to be benificial to humanity if all issues were considered.

Big corperations are notioursly slow moving, unresponsive and generally horrible to their environment. The only advantage in a market sense that being large has is that it, by way of sheer size, effect pressures on the government to allow laws that are benificial to a certain way of doing things.

In a truly free market large corperations simply wouldn't exist for very long.

Passer by
I don't pay taxes. I endeavor to earn less than the minimum to file every year.

Alex
I believe there needs to be a discussion about acceptable profit margins. What you're saying may be true, but it's unacceptable. It's nothing less than the corporate control of government through economic blackmail. They are allowed the excuse that they need to keep making the same obscene amount of money, when in fact they only want to keep making that obscene amount of money, there is no need. I think there are certain levels most people would be comfortable with..but that's nuts and bolts stuff.

The distillation of the argument is that corporations should not gain perks like billion dollar tax breaks when the average joe is struggling to maintain his mortage. It just doesn't make sense from an economic standpoint. Wealth doesn't migrate down, it doesn't trickle. It slowly travels up, like kerosene in a wick.

The economy should reflect that, by increasing wages, increasing the tax burden of corporations, and removing the immunity these behemoths have to prosecution. They're above the law in the sense that they have all the rights of an individual, and none of the legal responsibilities.

It's a very large double standard in my eyes.

Just look at the percentage of people ensnared by the damn AMT. This was enacted in the late sixties to ensure that the wealthy weren't escaping paying taxes via loopholes... well, guess who is paying it now?

Because it isn't indexed to inflation, every year, more of the middle class get sucked in. The AMT is in essense a flat tax on families making more than $58,000 a year--if you have a larger amount of deductions. This means that it impacts those with kids and higher property & state taxes to a greater extent.

Ironically, more people are paying the AMT because of Bush's tax cuts. A greater number of people making between $100,000 and $200,000 paid more taxes this year even after the tax cuts because of the AMT.

And next year will be much worse. The current AMT exemption expires at the end of 2005 and it nothing is done about it, approximately 20 million people will be subject to the AMT. Currently, about 2.3 million people pay it. This means that even people making as low as $30,000 a year will be subject to greater taxes in 2006.

The sad part is that Bush campaigned on this issue, knowing that the middle class was going to be seriously dinged by the AMT. He was counting on the middle class paying higher taxes. Because of expiration of the AMT exemption at the end of 2005 and the inclusion of greater numbers of middle income Americans, the AMT will generate $610 billion in tax revenues over the next 10 years. These funds are very prominently factored into his already overburdened budget.

This is why the current bipartisan legislation that attempts to limit the AMTs impact faces a tough battle in Congress. Bush has promised to reform the AMT--but any reform is unlikely to reduce the burden as the AMT is funding a large part of the budget.

If history is an indicator, it is also unlikely that this burden will be shifted to higher income brackets, even though they are paying a lower share of taxes. One of the ways to help reduce the burden on the middle class is to scrap plans to repeal the Estate Tax--which will save about $300 billion a year and only affects the very wealthy. But its doubtful that will happen---better to tax families with kids making $60,000 a year rather than subject the rich to the stress of having to pay taxes on their multi-million dollar inheritances.

money.cnn.com...
www.denverpost.com...

There is a reason it looks like corporations don't pay taxes.

Most corporations are small enough to file as S corps which means that the taxes owed are passed down to the shareholders.

Those shareholders in turn claim their share of profits or losses on their personal returns.

While the company I started may pay no taxes, I assure you I pay them for it.

Originally posted by lmgnyc
Just look at the percentage of people ensnared by the damn AMT. This was enacted in the late sixties to ensure that the wealthy weren't escaping paying taxes via loopholes... well, guess who is paying it now?

Exactly (bottom of second graph).

It's the six figure suckers. That's what I'm talking about.

You aren't rich and you did not get a tax cut!

Tax cuts are not for you, unless you're part of the chosen ones: the 144,000 hyper rich.

[edit on 6-6-2005 by RANT]

The econnomy onlly helps the rich to be richer not for the poor or middle class people

Originally posted by eazy_mas
The econnomy onlly helps the rich to be richer not for the poor or middle class people

That would be because the vast majority of the poor and middle class have the mindset that they will only survive if they work FOR someone else. They have no chance of becoming rich unless they hit the lottery.

Could Joe the janitor who cleans the office become a millionare highly unlikely because he is trading the hours of his life for money, he only has 24 hours per day and therefore can only make so much money.

Now lets say Joe through his experience as a janitor develops a remarkable cleaning product, he decides to start his own business marketing this product. Guess what he has just put himself into a position to possibly become rich. He has created new jobs and should be allowed to reap the rewards from his endeavors because he is the one who put himself on the line to start out on his own.

The sad part of the story is that it seems like the vast majority of people have resigned themselves to working for someone else. They grow up thinking "I'll get a decent education and when I grow up I'll get a nice safe job working for someone else where I can get a guaranteed paycheck and have little risk to my life."

Most people want to be rich, but other than buying a lottery ticket every week they don't do much to put themselves in the position to become rich, they continue to go to work for their employer and turn in their 8 hours a day and get their paycheck at the end of the week.

Originally posted by Skibum

Originally posted by eazy_mas
The econnomy onlly helps the rich to be richer not for the poor or middle class people

That would be because the vast majority of the poor and middle class have the mindset that they will only survive if they work FOR someone else. They have no chance of becoming rich unless they hit the lottery.

Could Joe the janitor who cleans the office become a millionare highly unlikely because he is trading the hours of his life for money, he only has 24 hours per day and therefore can only make so much money.

Now lets say Joe through his experience as a janitor develops a remarkable cleaning product, he decides to start his own business marketing this product. Guess what he has just put himself into a position to possibly become rich. He has created new jobs and should be allowed to reap the rewards from his endeavors because he is the one who put himself on the line to start out on his own.

The sad part of the story is that it seems like the vast majority of people have resigned themselves to working for someone else. They grow up thinking "I'll get a decent education and when I grow up I'll get a nice safe job working for someone else where I can get a guaranteed paycheck and have little risk to my life."

Most people want to be rich, but other than buying a lottery ticket every week they don't do much to put themselves in the position to become rich, they continue to go to work for their employer and turn in their 8 hours a day and get their paycheck at the end of the week.

usually for those people ( middle class and poor ) they cant have a limit in reaching something because usually if you have and idea and want to you use it onther guy with much power and money than you will take your idea and use it for his use.

Most of these business peopl like Bill Gates and other Celeb give out money for there publicity and states not because they love world peace.

Money has the power to own something if you give this power to someone else in a way he could develop it in his own good and the people then its like ripping of yous.

usually for those people ( middle class and poor ) they cant have a limit in reaching something because usually if you have and idea and want to you use it onther guy with much power and money than you will take your idea and use it for his use.

Thats what patents, copyrights and trademarks are for.


Funny you mentioned Bill Gates because IIRC he didn't start off being the richest person in the world. Imagine if he had resigned himself to finishing college and going on to work for someone else. Instead he had the guts to drop out and persue his own wealth.

[edit on 6/6/05 by Skibum]

Flat tax!!!! On ALL income, including interest. Same for everybody, no tax breaks on anykind.

No other way to do it.

I am perplexed we as voters and TAX PAYERS have tolerated anything else all these years.

Why should somebody earning triple my income pay a different % on thier taxes? One reason: We the sheeple have alowed it to happen.

FLAT TAX!!! And no breaks or incentives...EVER.

Originally posted by skippytjc
Flat tax!!!! On ALL income, including interest. Same for everybody, no tax breaks on anykind.

No other way to do it.

I am perplexed we as voters and TAX PAYERS have tolerated anything else all these years.

Why should somebody earning triple my income pay a different % on thier taxes? One reason: We the sheeple have alowed it to happen.

FLAT TAX!!! And no breaks or incentives...EVER.

Absolutely, lets raise the taxes on the poor and lower them on the rich.

Originally posted by Skibum

Absolutely, lets raise the taxes on the poor and lower them on the rich.

You read the story posted here at all? Read just a little bit of it? The rich get more breaks than the non rich. If taxes are derived from a percentage, a flat percentage, people will pay relative to thier income. Flat tax is the only way to go. The extreme rich would pay out thier noses with a flat tax.

How do the extereme rich make a good deal of thier money? INTEREST. Well, guess where they get the most breaks on taxes? INTEREST. Tax that interest based on the same rules regular income is, and the playing field is nice and level.

Flat tax, its the only way.


As it stands right now, the middle class gets the shaft. The rich get all the breaks, but the middle class makes to much to take advantage of any lower income breaks and programs.

[edit on 6-6-2005 by skippytjc]

What percentage do you propose? 10 %, 20 %?


Remember we are talking about actual taxes paid, not how much of a break from deductions people get.

As it stands now people below 30k on average pay 6.7 percent of their income(that includes S.S. and medicare not counting those they average almost nothing)

People who make over 100k average over 20% actually paid.


So what flat tax rate do you propose that would not lower the burden on the rich and raise it on the poor?

How much? Id say a decent percentage. But an entire tax system overhaul would need to accompany a switch to flat tax, so its not that simple as "how much".

Ill open a can of worms with this one I am sure: I don’t think you should be able to claim more than 2 dependants either. Paying LESS taxes for having more than two kids is insane. More people = more taxes required...So why pay less money for them? people who want a bunch of kids need to be able to pay the costs associated with them, not get discounts.

I think overall, your total taxes (all taxes) including state or regional taxes shouldn’t be more than 30-35% your income combined. But, whatever it is, it needs to be the same for everybody.

How much? Id say a decent percentage.

So what would a decent percentage be that would not burden the poor while not benefiting the rich?

But an entire tax system overhaul would need to accompany a switch to flat tax, so its not that simple as "how much".

Yes it is that simple, it means scrapping the current tax code and saying that everyone pays X% of their income to taxes. Thats how I see flat tax.
The question is what percentage does everyone pay.

I think overall, your total taxes (all taxes) including state or regional taxes shouldn’t be more than 30-35% your income combined. But, whatever it is, it needs to be the same for everybody.

I think a total tax burden of 30-35 percent on everyone would be way too much, you would be giving the government MUCH more than they get now.

It amazes me how no one questions the patriotism of big companies, like Hilliburton or Enron, who make huge profits in the US, and set up P.O. boxes in places Bermuda or the Cayman Islands, to avoid paying little or no taxes. I mean, if you make billions off of a country, your country, it'd be nice to put some of that money back, into things like roads or the military.