One Post wrote:
denisdman wrote:
One Post wrote:
denisdman wrote:
As for who pays taxes, I linked the most recent IRS data below. The richest slice files 22,112 returns out of over 157 million returns. They paid 10.6% of all tax. The over $1 million in income crowd pays 30.2% of all federal income taxes. But the bulk of our taxes are paid by the 19.0% of returns for people that make between $100,000 to $1,000,000 in income crowd that pays 53.4% of all federal income taxes.
https://www.irs.gov/pub/irs-soi/18in11si.xlsSo yeah there are a few dozen Americans who have all their wealth tied up in appreciated stock. But for most wealthy and upper middle class folk, out income is heavily taxed because we have wage income. Our blended federal rate is typically between 25-35% of our adjusted gross income.
The above doesn't address inequity within the tax system. Sure the richest 22,112 of filers pay 10% of the tax, but it doesn't say anything of their ETR.
If you've got a situation where people earning large sums of income are paying very low ETRs compared to those that are earning a lot less, there is obvious unfairness in the situation. Ostensibly you'd want to justify that, but I'm not sure what the justification is that Denis pays a higher ETR than Warren Buffett.
The effective tax rate is in one of the columns, 28% for the highest slice. That is because a large portion of their earnings are cap gains and dividends. My slice is closer to 30%….
We are asking the why question here. Why, or what is the justification that a billionaire pays a lower ETR than you do?
I mean I can understand why a single mom waitress plays a lower ETR than I do, that is an easy justification. Not sure why Buffett pays less than you though...
Because we have different types of income. The government is correct to tax qualified dividends and capital gains differently than wage income. Wage income is only taxed once. Dividends from c corps are paid after the corporate income tax has been applied, so they are double taxed. Capital gains are earned from stock price appreciation, and the purchase of stock or investment in a company is made with money that has already been taxed.
Look, these are the rules. Countries like Japan tax unrealized gains. Some countries apply a wealth tax, but most have repealed it because it is way too complicated.
Our tax code is messed up on many levels. But forgive me for not having much sympathy when the folks complaining the loudest are generally from income slices that are taxed at very low marginal rates. Anytime you really want to raise revenue and broaden the base, I am all for a flat tax with no deductions. If you took all of Buffet’s and Bezos’, it would merely be a rounding error in reducing the 2021 federal deficit.
Nearly 40% of my income is taken by income taxes, and yet the state of Illinois wanted to double my tax rate (thanks voters for saying no), and leftist federal politicians still want more to fund their wild spending. You want more from Bezos, and I really do not care. But when 22k in returns out of 157M is paying over 10% of all taxes, I think most of those people are paying their fair share.
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