Fact Check: Are rich taxed less than secretaries?

I hear this from obama all the time, and I see this sentiment on the news, and in post after post here on ATS.

We have to tax the rich! They have to pay their fair share!

But somehow obama and his fellow progressives never say exactly what "fair share" means.

So, here's some fact checking by the Associated Press on these tax the rich comments (my bolding for emphasis).

AP Source

WASHINGTON (AP) — President Barack Obama says he wants to make sure millionaires are taxed at higher rates than their secretaries. The data say they already are.

"Warren Buffett's secretary shouldn't pay a higher tax rate than Warren Buffett. There is no justification for it," Obama said as he announced his deficit-reduction plan this week. "It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million."

On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.

The 10 percent of households with the highest incomes pay more than half of all federal taxes. They pay more than 70 percent of federal income taxes, according to the Congressional Budget Office.

That last paragraph shows obama's class warfare rhetoric to be false.

And since this same information was freely available to obama directly and through his administration, it is correct to say that obama knew his words were false when he said them.

Purposefully saying something that is false is also called a lie ...

Which gives us the conclusion that obama is lying to promote class warfare.

1% own 70%...
The income tax rate may be higher than secretaries on the books...but when you take into all of the loopholes, they end up paying less as a percentage of their income.
The reason they still pay the majority is because they own so freakin much and their incomes are so freakin high.

The war is being waged against you and I, not the rich.

Originally posted by Ghost375
1% own 70%...
The income tax rate may be higher than secretaries on the books...but when you take into all of the loopholes, they end up paying less as a percentage of their income.
The reason they still pay the majority is because they own so freakin much and their incomes are so freakin high.

The war is being waged against you and I, not the rich.

I believe the above is net taxes paid, after "loopholes" and deductions.

As some have said, class warfare pure and simple.

I am self employed and make around $200,000 per year. With all of my deductions my tax rate comes out to around 10%. This is a lower rate then when I worked for someone else for $70,000. The system is set up for people who make good money, not the middle class.

They are two different arguments.

1- What group pays the majority share of the total taxes collected? That is the argument made in the story.

2- What group pays more as a percentage of their income? That is the argument being made by Obama and Buffet.

All of that information looks good on paper. The truth is that the people making millions of dollars have sheltered their money so well, they pay little or nothing in income tax.

"The 10 percent of households with the highest incomes pay more than half of all federal taxes. They pay more than 70 percent of federal income taxes, according to the Congressional Budget Office."

Again, this is on paper. They are supposed to be paying more than half of all federal taxes. They are supposed to be paying 70 percent of federal income taxes. In reality, they don't.

Originally posted by DragonTattooz
They are two different arguments.

1- What group pays the majority share of the total taxes collected? That is the argument made in the story.

2- What group pays more as a percentage of their income? That is the argument being made by Obama and Buffet.

Yes, I'm glad you brought up Buffet's name.

For such a rich guy, he either doesn't know his math very well, or he's also in on the lies.

source

“It’s hard to argue against that. Warren Buffett’s secretary shouldn’t pay a higher tax rate than Warren Buffett. There is no justification for it,’’ Obama said.
Buffett actually was taxed twice on his investment income.
First, Buffett had to make the money he invested. Those earnings were taxed as corporate income, at about a 35-percent rate.
Then, Uncle Sam took another cut when Buffett invested the money and earned a profit. That’s when Buffett paid the 15 percent capital-gains tax rate.
All told, after combining corporate taxes and capital gains taxes, Buffett forked over about 45 percent of his earnings.

Well, well, well ...

How many folks out there don't understand that Buffet's 45% actual tax rate is much higher (in percentage points and actual dollars) than his secretary's 30%?

How many folks besides obama and buffet, that is ...

reply to post by centurion1211


I'm all about not giving the Corporations their tax breaks. I'm pretty sure rich families pay their taxes just like the rest of us, so thanks for the facts.

Originally posted by N3k9Ni
All of that information looks good on paper. The truth is that the people making millions of dollars have sheltered their money so well, they pay little or nothing in income tax.

"The 10 percent of households with the highest incomes pay more than half of all federal taxes. They pay more than 70 percent of federal income taxes, according to the Congressional Budget Office."

Again, this is on paper. They are supposed to be paying more than half of all federal taxes. They are supposed to be paying 70 percent of federal income taxes. In reality, they don't.

I provided sources.

How about some from you to back up those claims?

Originally posted by diatribe
I am self employed and make around $200,000 per year. With all of my deductions my tax rate comes out to around 10%. This is a lower rate then when I worked for someone else for $70,000. The system is set up for people who make good money, not the middle class.

OK.

As a member of the "undertaxed", will you now be voluntarily sending in those extra checks to the IRS?

When Obama explains how General Electric paid no taxes last year and then has the audacity to gripe about "Big Oil's excessive profits", then we can look into this. Until then Obama can pound sand.

Three things:

1) I'm against higher taxes because I think it's a bad idea. The economic argument about how taxes negatively affect growth and prosperity are compelling.

2) People like Warren Buffet and many other very wealthy individuals make much of their money from capital gains as opposed to conventional income. Capital gains aren't taxed like conventional income, which is why it is possible to make a lot in capital gains but not pay the same amount of taxes that you would if you made that same amount via conventional income. This accounts for the disparity that liberals love to point out. Income tax is progressive, and capital gains taxes are fixed. This means that you could pay a higher income tax rate if you're in a high tax bracket than the rate you would pay on capital gains, even if you made a killing on capital gains.

3) There is a sense in which Obama's statement is true. There are secretaries who are in tax brackets wherein they pay a higher percentage of their income than wealthy people who make much of their money from capital gains, which is taxed at a constant rate of around 15 percent. So, as a percentage of their income - as a rate - there are middle class people who pay higher taxes than some wealthy people who are making a lot more money in capital gains. That being said, federal income tax is progressive. You always either pay a higher rate if you make enough to be in a higher tax bracket or pay the same rate because even though you make more, the difference isn't enough to put you in another tax bracket. It's simply not the case that income tax rates go down at the high end - they only go up. High income earners pay a lot more in taxes than low income earners, both because they make more (so whatever their tax rate, it ends up being more in dollars than someone making less paying a comparable rate), and because their income tax rates are actually higher. Warren buffet paid 17.7% in taxes on ~$46 million (mostly capital gains) while is secretary paid 30% on ~$60 thousand (conventional income). Seventeen percent of 46 million is a lot more thirty percent of 60k, no matter how you slice it. His secretary would have to pay 13,000% in taxes in order to pay the same amount in dollars as he paid.

It is telling that in order for Obama's argument to be compelling, he has to be deceptive in this way.

Originally posted by DragonTattooz
They are two different arguments.

1- What group pays the majority share of the total taxes collected? That is the argument made in the story.

Unless you bother to read the story; then you see that :

The 10% with the highest incomes pay 70% of all federal income taxes.

The 10 percent of households with the highest incomes pay more than half of all federal taxes. They pay more than 70 percent of federal income taxes, according to the Congressional Budget Office.

FACT CHECK: Are rich taxed less than secretaries?

The data also show that the lowest 25% of wage earners pay the smallest share, even down to 0 or a net-payment back to them from other peoples' tax payments.

2- What group pays more as a percentage of their income? That is the argument being made by Obama and Buffet.

This was also in the story you didn't bother to read:

This year, households making more than $1 million will pay an average of 29.1 percent of their income in federal taxes, including income taxes, payroll taxes and other taxes, according to the Tax Policy Center, a Washington think tank.

Households making between $50,000 and $75,000 will pay an average of 15 percent of their income in federal taxes.

Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5 percent of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7 percent.

This is for ALL federal taxes, which include fuel and Social Security.

"Aha," you and the "tax-the-rich" demagogues will exclaim. "What about income taxes?"

I'm glad you asked, because the IRS publishes these rates, and they were part of the linked story you didn't read:

The latest IRS figures are a few years older — and limited to federal income taxes — but show much the same thing. In 2009, taxpayers who made $1 million or more paid on average 24.4 percent of their income in federal income taxes, according to the IRS.

Those making $100,000 to $125,000 paid on average 9.9 percent in federal income taxes. Those making $50,000 to $60,000 paid an average of 6.3 percent.

Obama's claim hinges on the fact that, for high-income families and individuals, investment income is often taxed at a lower rate than wages. The top tax rate for dividends and capital gains is 15 percent. The top marginal tax rate for wages is 35 percent, though that is reserved for taxable income above $379,150.

Oh, and those under $30,000? They do not pay anything on average, they get earned-income credit, and other subsidies paid for by the rest who actually pay income taxes.

The Tax Policy Center estimates that 46 percent of low and medium income households will pay no federal income taxes this year.

FACT CHECK: Are rich taxed less than secretaries?

Oh, my.

Odd, that; how truth makes the demagogues bigger liars than they already seemed.

jw

you have to understand they are speaking on a % basis, right ?

the capital gains tax is 15%. if you are making 65k a year, you pay like 30%

get it now ?

Originally posted by OnceReturned
...Warren buffet paid 17.7% in taxes on ~$46 million (mostly capital gains) while is secretary paid 30% on ~$60 thousand (conventional income). Seventeen percent of 46 million is a lot more thirty percent of 60k, no matter how you slice it. His secretary would have to pay 13,000% in taxes in order to pay the same amount in dollars as he paid.

It is telling that in order for Obama's argument to be compelling, he has to be deceptive in this way.

Talk about deceptive. Your argument actually proves what some people are saying, but you turn right around and try to double-talk your way out of it.

Yes, he paid more in total dollars than probably 1,000 regular wage earners, but as a percentage of his income he paid far less.

Why is that so difficult for you people to understand? It's really pretty simple.

And, sorry, but the argument above about the corporate earnings simply doesn't fly. it is just a smokescreen to try to validate an invalid point.

yeah joesph gobbels had a few things to say about classwelfare er i meant warfare.

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”

“The most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly - it must confine itself to a few points and repeat them over and over”

the rich arent paying there fair share which has time and time been proven to be false

no no free american not listening to the real deal act your role as the slave to ignorance

because ignorance is bliss for the simple fact every dollar you take out of their pocket is one out of yours.

and another thing this is a constitutional republic where the minority and property rights are protected from the mob mentality.

out of 310 million people in this country less than 10 million are millionaires and billionaires who can pick up and leave any time they want and then who are they going to come for?

that first target first strike buffer zone is no longer around an then are you really going to sit there and say "oh crap oh crap who can we tax next" ?

look in the mirror american slave to propaganda that revenge doesnt look so inviting now does it.

reply to post by centurion1211

The true effective rate for multimillionaires is actually far lower than that indicated by official government statistics. That's because those figures fail to include the additional income that's generated by many sophisticated tax-avoidance strategies. Several of those techniques involve some variation of complicated borrowings that never get repaid, netting the beneficiaries hundreds of millions in tax-free cash. From 2003 to 2008, for example, Los Angeles Dodgers owner and real estate developer Frank H. McCourt Jr. paid no federal or state regular income taxes, as stated in court records dug up by the Los Angeles Times. Developers such as McCourt, according to a declaration in his divorce proceeding, "typically fund their lifestyle through lines of credit and loan proceeds secured by their assets while paying little or no personal income taxes." A spokesman for McCourt said he availed himself of a tax code provision at the time that permitted purchasers of sports franchises to defer income taxes.

Eleven shelters, dodges, and rolls—all perfectly legal—used by America's wealthiest people

FYI:

Capital Gains Tax is not 'fixed'.

There are 2 capital gains tax rate systems. Short term, held for less than 1 year, and long term, held for more than one year.

For short term capital gains, rates match income tax rates, literally. 10%-35%.

For long term capital gains, there are 2 rates: 0% (under $34,500) and 15% (over $34,500).

reply to post by N3k9Ni

The discrepency for most people is this:

In absolute terms the wealthy pay more than every one else.

In proportional terms (percentages) they pay far less.

I think what most people would like to see is the wealthy, at least, paying the same amount proportionally.

No one likes or wants to pay taxes.
What do most think of a flat rate tax with no exemptions ?
I don't see either party talking about it, so it would never happen anyway.
What would be a fair % rate for all ?