Wealth distribution in the US

[Pete Zicato]

This graph is telling. The rich? I think maybe they're rich enough.


From this article.

[xoxoxoBruce]

I got a kick out of Ben Stein whining about the expiring tax cuts, on Sunday Morning. Whining about how after he pays his agent and taxes, he ends up with only 31% of his earnings.

1- the agent is a tax deduction.
2- much of the taxes he is paying, are property taxes on numerous multi-million dollar properties he owns.

No wonder he was a Nixon speech writer.

[TheMercenary]

Zero Liability Voters will always support income redistribution. As long as someone else is paying your way why should anyone care. The slate article only reinforces wealth envy and supports wealth redistribution.

[Pete Zicato]

Yeah, because it would be unfair to ask 20% of the population to pay 80% of the taxes just because they have 80% of the money. Riiiiight.

[classicman]

How old is that? Its comparing Bush and Kerry voters.

[xoxoxoBruce]

It doesn't matter how old, it only gets worse from there on.

[Griff]

Fresh Air today. Robert Reich same subject...

[tw]

Originally Posted by Pete Zicato

Yeah, because it would be unfair to ask 20% of the population to pay 80% of the taxes just because they have 80% of the money. Riiiiight.

With so many extremists hyping myths, it becomes difficult to learn reality.

Taxes as a percentage of income increases as annual incomes increase to $250,000. Then something strange happens. As incoming increase further, the taxes drop dramatically.

Warren Buffet was quite blunt about this. He paid less taxes than his receptionist. And said so repeatedly including to Ted Koppel, live on Nightline. If you are a politician bought and paid for by certain people, then will say anything to avoid that reality.

Economies that have serious fundamental problems have most of their wealth in among the 2%. In America, such destructive wealth distribution has only existed once previously - just before the 1929 stock market crash. So much wealth among so few results in realties such as less job creation. Welcome to an economy advocated and achieved over the past decade. A problem that, ironically, America's richest people (Gates, Buffet, Turner, Soros, etc) have spoken out strongly against. Why would the richest of the rich speak about things against their own interests? Because this unequal wealth distribution is a serious part of America's problem - and is a source of massive campaign contributions to the most wacko extremists in government today.

Same people who wanted corporations to buy elections. Same people who took liberties with the Constitution to subvert American power to that advantage of the richest - at the expense of all others. Ironic. Those who complain about liberal judges are the same wacko extremist conservation who promoted liberal interpretation of the Constitution - to increase this unhealthy wealth distribution.

[classicman]

Originally Posted by Tax code

If taxable income is over--
But not over-- The tax is: $0 $7,825 10% of the amount over $0 $7,825 $31,850 $782.50 plus 15% of the amount over 7,825 $31,850 $77,100 $4,386.25 plus 25% of the amount over 31,850 $77,100 $160,850 $15,698.75 plus 28% of the amount over 77,100 $160,850 $349,700 $39,148.75 plus 33% of the amount over 160,850 $349,700 no limit $101,469.25 plus 35% of the amount over 349,700

Also some good discussion here

[spudcon]

Originally Posted by xoxoxoBruce

I got a kick out of Ben Stein whining about the expiring tax cuts, on Sunday Morning. Whining about how after he pays his agent and taxes, he ends up with only 31% of his earnings.

1- the agent is a tax deduction.
2- much of the taxes he is paying, are property taxes on numerous multi-million dollar properties he owns.

No wonder he was a Nixon speech writer.

Who should get the other 69% that he earned, and what did they do to earn it?

[HungLikeJesus]

It's just a simple Pareto distribution.

Those are found all the time in nature.

They're organic.

[xoxoxoBruce]

Originally Posted by spudcon

Who should get the other 69% that he earned, and what did they do to earn it?

I should, but that ain't happening.
The various government entities he pays it to should, and do, get it.
I would guess 36%(after deductions, loopholes, and all the other taxes are deducted), plus SS, to the feds
Whatever the CA income tax is to the state.
10/15/20%? to his agent, which is deductible.
The rest to the communities where his real estate holdings are, just like you and myself.

[Spexxvet]

Originally Posted by classicman

Also some good discussion here

As I've said before, wealthier people pay less than their share of taxes. From class's link

But here's the weird part: Everybody above the HENRYs in the income distribution faces a lower effective tax rate too. Somewhere in the top 1% (those making more than $410,000 in adjusted gross income as of 2007) things start to turn regressive. So if you make $20 million a year, you probably pay out a smaller percentage of your income in taxes than if you make $500,000. For a full, if somewhat dated, rundown of effective federal tax rates at the top end of the income distribution, check out this December 2008 report from the Congressional Budget Office (pdf!) A less complete but more up-to-date accounting is available from the Tax Foundation. State and local taxes have the effect of shifting the inflection point somewhat lower down the income scale — right into the heart of HENRYland.

One reason for this turn to the regressive is that the top federal income tax bracket of 35% kicks in at an adjusted gross income of $373,650, which is a lot of money but much farther down the income scale than the top brackets of decades past. There's been talk in Democratic circles of changing this and adding a new millionaires' tax bracket, but no evidence so far that the idea is really going anywhere.

Another oft-mentioned explanation for the fact that the rich pay lower taxes is that they can afford expensive tax lawyers, while a lot of the HENRYs use Turbotax. The biggest reason, though, is that as you get up into the dizzying heights of America's income distribution, you start encountering lots of people whose income comes mainly from investments. And investment income — dividends and capital gains — is taxed at lower rates than earned income.

There are some perfectly valid reasons for this: 1) dividend and capital gains taxes often amount to double taxation of the same income (taxed first as corporate income, then as shareholder income), 2) inflation erodes the real value of capital gains, 3) capital is mobile, so taxing it too much will send it scurrying abroad and 4) according to neoclassical economic theory (which is not infallible, but definitely worth paying some attention to), taxing capital retards economic growth.

The flip sides are that, 5) when capital tax rates are much lower than regular income tax rates, people in the highest tax brackets will find ways to transform their regular income into capital income (hi, all you private equity guys!) and 6) you get a tax system where people making $20 million a year shoulder less of the burden of financing government (relative to their incomes) than those making $500,000 a year.

[Nirvana]

Originally Posted by xoxoxoBruce

I got a kick out of Ben Stein whining about the expiring tax cuts, on Sunday Morning. Whining about how after he pays his agent and taxes, he ends up with only 31% of his earnings.

1- the agent is a tax deduction.
2- much of the taxes he is paying, are property taxes on numerous multi-million dollar properties he owns.

No wonder he was a Nixon speech writer.

I saw that too and all I could think was welcome to the country that made it possible for you to earn that much money.

[DanaC]

Originally Posted by TheMercenary

Zero Liability Voters will always support income redistribution. As long as someone else is paying your way why should anyone care. The slate article only reinforces wealth envy and supports wealth redistribution.

Yup. And wealthy fucks will always support their right to pay an insignificant drop from their ocean of wealth as taxes. As long as the rest of us are prepared to pay substantial chunks of our meagre earnings to keep the country running why would they care?

The slate article 'reinforces' wealth envy, but that envy is alreayd there to begin with, and frankly, I think that envy is justified. The obscene extremes of wealth and privelege that provoke that envy in the first place: that's unjustifiable.