Fact Check: Are rich taxed less than secretaries?

reply to post by centurion1211


I will fulfill my obligation to pay taxes in so much as I am legally required. No more no less

Originally posted by syrinx high priest
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%

Or not.

Those making $50,000 to $60,000 paid an average of 6.3 percent.

www.irs.gov...

Do you have a source for "30?"

jw

Originally posted by peck420
reply to post by N3k9Ni

 

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.

Sorry, on average, the wealthy pay more in absolute terms as well as proportionately. See above itemizations.

jw

reply to post by jdub297


Can you link directly to document please.

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.

Thank you for saying this. I was trying to think of the words to tell the OP his article missed the point of what Obama and Buffet have stated. The article is indeed slanted against Obama in this regard.

reply to post by Ghost375


You are just jealous? Do you work? Do you own a business? Or are you just repeating what the Obama administration is saying?

Originally posted by jdub297

Originally posted by syrinx high priest
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%

Or not.

Those making $50,000 to $60,000 paid an average of 6.3 percent.

www.irs.gov...

Do you have a source for "30?"

jw

ask buffet

reply to post by peck420


I would like to see everyone pay the same percentage of taxes, rich, middle class and poor. No more earned income credits, no child care credits, etc. If you earn it, you pay it.

reply to post by DragonTattooz


My argument isn't deceptive. The highest earners pay the vast majority of the government's bills. It's very straightforward. If you look at where the government's money comes from, it's a minority of wealthy people. We measure money in dollars, and in dollars Buffet pays hundreds of times more in taxes than someone earning average income in this country. Getting hung up on what percentage that is of what he makes is only an issue if you care about how much he gets to keep relative to what he pays; it's not enough that he pays the government millions of dollars, it's the amount he gets to keep that bothers you? The contribution to federal taxes made by average earners and below in this country is essentially negligible when you account for the value of services provided by the government to those same people. When you want to think about whether or not the wealthy pay their fair share, ask yourself who pays for everything the government does, and you'll have your answer.

As far as capital gains tax, it's not a smoke screen. Capital gains are the amount by which something you own increases in value. Why, when I own something and it becomes more valuable, should the government draw income from that? It amounts to leeching value from the market based purely on an increase in demand for something that I own. How can this be justified? The government will use the money to pay for goods and services that are totally disconnected from whatever assets I have that gained value. Isn't it enough that we all agree to pay the government some of what we earn at work? You think we should also pay when the stuff we own goes up in price? Capital gains tax is a tax on investment; it makes it more expensive to invest, and therefore it's a deterrent. Does that sound like a good idea? We want people to invest - every economy in the world depends on it. When people want to start or grow businesses, they often need investors. It's a system that works to the benefit of everyone involved, and it's hard to imagine how you can justify the government making the process more expensive and less appealing. There can be little doubt that the economy benefits far more from Buffet growing the successful businesses that he owns a portion of than it does from the government's capital gains tax income on those same transaction. You're arguing for more of the latter, which means less of the former. It's a terrible idea.

Originally posted by OLD HIPPY DUDE
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 ?

I've had that thought. A flat tax of.. say 15%.. no exemptions, no adjustments and no refunds. It would include private individuals, small businesses and corporations. I suppose there would also need to be a minimum taxable income level. Again, there would be no exemptions or adjustments. Just "how much did you make?".

There should be no direct federal or state income tax on individuals. Each individual, corporation, and business would pay 15% to the town/city they reside in. The ones outside city limits would pay to the county. Counties would pay 15% of that to the state and states would pay 15% to the fed. Revenue from licenses, fines, etc. would remain within the county or state.

Most of the money would remain locally. Infrastructure maintenance and social programs would be handled on the state/county/city level. A lot of bureaucracy at the federal level could be eliminated.

This is just a rough draft idea. I'm sure there are some things I'm overlooking.

As a tax lawyer who has seen tax returns of wealthy, poor, and middle class people I can say that many (not all) rich people pay less in taxes than middle class people.

Besides having access to aggressive tax planning, wealthy people are for the most part not wage earners. They make most of their money selling capital assets. Thus, their income tax rate is near 15% if they are not in any tax shelter or do not take aggressive tax positions. If they have aggressive tax plans, they may pay far less. I know of individuals who make well over a million dollars a year in revenue, withhold nothing, and actually get money back from the government!

Middle class people often pay 20-25% of their income in taxes. Their income comes mostly from wages, which can be taxed at a higher rate than capital gains. Middle class people also do not have aggressive tax plans.

reply to post by N3k9Ni


That is more or less how the income tax code originally started. People began to game the system, so all sorts of provisions had to be put in place to prevent abuses. Congress also has used the tax code to reward cronies, which also creates all sorts of additional provisions.

Originally posted by hotpinkurinalmint
As a tax lawyer who has seen tax returns of wealthy, poor, and middle class people I can say that many (not all) rich people pay less in taxes than middle class people.

Besides having access to aggressive tax planning, wealthy people are for the most part not wage earners. They make most of their money selling capital assets. Thus, their income tax rate is near 15% if they are not in any tax shelter or do not take aggressive tax positions. If they have aggressive tax plans, they may pay far less. I know of individuals who make well over a million dollars a year in revenue, withhold nothing, and actually get money back from the government!

Middle class people often pay 20-25% of their income in taxes. Their income comes mostly from wages, which can be taxed at a higher rate than capital gains. Middle class people also do not have aggressive tax plans.

Exactly, class warfare is actually occurring, just not like the talking-point morons say it is. Somehow the term "class warfare" has become a war cry of those looking to wage "class warfare." Hopefully these tax inequalities will lead to currency-destroying deficits; life is getting too boring.

reply to post by OnceReturned


Hedge funds are mechanisms by which people convert "work" into capital gains. Many wealthy people convert their "salaries" that would be taxed at over 35% into capital gains which are taxed at 15% by using hedge funds. Your argument that the government is somehow "punishing" wealthy people by taxing their capital gains which are not really income derived from work is flawed.

The tax rate paid on investments held for a certain period of time is about 15%

The tax rate on income(when you're working a straight job) can be over 30%.

The rich do pay most of the taxes.

Obama wants them to pay more.

You just can't get money from poor people and the middle class doesn't have much left over at the end of the month so if you want more money, you have to go after someone who has it.

Most people on this site don't seem to know much about money.

reply to post by centurion1211


I absolutely loathe Obama but I also loathe misleading statements like the OP suggested. the last sentence does not prove Obama's rhetoric to be false at all. Obama's point was about the percentage. if you think about it logically if those top 10% make 90% or whatever the actual number is(I'm sure its more than 70%) of the total wages then paying 70% of the total tax PROVES HIS POINT. that would leave 10% of the total wages responsible for 30% of the tax. is that so hard to understand?

Originally posted by diatribe
reply to post by centurion1211

 

I will fulfill my obligation to pay taxes in so much as I am legally required. No more no less

But do you think you are undertaxed? If so, kindly increase your payments to the IRA.

If you are not willing to do that - kind of reminds me of all those "I support the troops" liberals who never really lift a finger.

Originally posted by slimmerpickens
reply to post by centurion1211

 

I absolutely loathe Obama but I also loathe misleading statements like the OP suggested. the last sentence does not prove Obama's rhetoric to be false at all. Obama's point was about the percentage. if you think about it logically if those top 10% make 90% or whatever the actual number is(I'm sure its more than 70%) of the total wages then paying 70% of the total tax PROVES HIS POINT. that would leave 10% of the total wages responsible for 30% of the tax. is that so hard to understand?

How are you sure the percentage is different than is being reported?

What is your basis for saying that?

If it's just your feelings, refer to my signature ...

Originally posted by hotpinkurinalmint
reply to post by OnceReturned

 

Hedge funds are mechanisms by which people convert "work" into capital gains. Many wealthy people convert their "salaries" that would be taxed at over 35% into capital gains which are taxed at 15% by using hedge funds. Your argument that the government is somehow "punishing" wealthy people by taxing their capital gains which are not really income derived from work is flawed.

That's not a very accurate description of hedge funds and capital gains. Capital gains are the amount by which an asset of yours increased in value since you bought it. You have to buy into hedge funds, just like you have to buy any assets you own. In order to purchase assets, you have to have capital. In almost all cases, this capital came from traditional income, which was already taxed at income tax rates. After you receive the income and pay the taxes on it, you can do what you want with it. If you choose to invest in hedge funds or gold or any other assets, you buy in with money that you've already paid taxes on. Then, when the value of your investment increases, you pay taxes on it again because it qualifies as a capital gain - you pay capital gains taxes on the increase in value.

When you say people convert their salaries into capital gains via hedge funds in order to pay lower taxes, are you referring to people who are compensated in stock options and such as opposed to cash? I don't see what hedge funds have to do with that, but it is a common practice and it does allow a portion of compensation to be taxed as capital gains instead of as conventional income. However, the practice makes sense. Being compensated in stock is not the same thing as being compensated in cash, and it follows that the two should not be taxed in the same way. Stock options are still an investment and they include a risk. Cash isn't an investment and it doesn't include a risk. Therefore the value of stock options is not the same as the value of cash and it doesn't make sense for the government to expect the same cut regardless of the type of compensation. If stock options were treated by the IRS as direct conventional income and were taxed as such, no one would take them; they would be just as expensive in terms of taxes as cash compensation but they would include a degree of risk that cash doesn't have. Again, it's of vital importance to the economy that people invest, and stock options are an investment. Making them more expensive and less desirable reduces the incentive to invest in this way, which is bad for the economy. The bottom line is that capital gains represent investment, and investment is good for everyone. Therefore, it makes sense to tax investments at a lower rate than traditional income, because we want people to invest and because there are risks associated with investment that aren't associated with cash. Giving people an incentive - tax or otherwise - to invest is a great idea.

Argument: The rich pay more taxes than everyone else.
Truth: They pay more because they make more.

Example: I make $100 and pay 10% tax or $10. You make $25 and pay 20% tax or $5. To say I'm taxed too much because I'm paying a larger amount is stupid because I still have $90 leftover while you only have $20.

Argument: If you want to be taxed more, then pay more!
Truth: If you're over taxed you get money back from the government.

Example: I paid an additional $1,200 two years ago(I actually did this). Come tax time I received an addtional $1,200 back from the government for overpayment!

When the argument to tax the rich more is made, it's not because they pay too little...it's because they pay too little of their share. The rich often have a lower effective tax rate than those who make far less than they do. You defend them because you believe, one day, you'll be rich and you don't want to pay more money if you earn more money.