Top 1% of Taxpayers Pay More Than Bottom 90% Combined

[Fantine]

I have explained this a number of times at CF.

Taxpayers fall into one of seven brackets, depending on their taxable income: 10%, 15%, 25%, 28%, 33%, 35% or 39.6%. Because the U.S. tax system is a progressive one, as income rises, increasingly higher taxes are imposed. But those in the highest bracket don’t pay the highest rate on all their income. For example, for 2017 taxes, single individuals pay 39.6% only on income above $418,401 (above $470,001 for married filing jointly); the lower tax rates are levied at the income brackets below that amount, as shown in the table below.

The table displays tax brackets according to filing status: single, married filing jointly or qualifying widower, head of household and married filing separately. The IRS makes inflation adjustments each year.

Federal tax brackets: 2018 tax brackets (for taxes due April 15, 2019)
Tax rate Single Head of household
10% Up to $9,525 Up to $13,600
12% $9,526 to $38,700 $13,601 to $51,800
22% $38,701 to $82,500 $51,801 to $82,500
24% $82,501 to $157,500 $82,501 to $157,500
32% $157,501 to $200,000 $157,501 to $200,000
35% $200,001 to $500,000 $200,001 to $500,000
37% $500,001 or more $500,001 or more
Tax rate Married filing jointly or qualifying widow Married filing separately
10% Up to $19,050 Up to $9,525
12% $19,051 to $77,400 $9,525 to $38,700
22% $77,401 to $165,000 $38,701 to $82,500
24% $165,001 to $315,000 $82,501 to $157,000
32% $315,001 to $400,000 $157,001 to $200,000
35% $400,001 to $600,000 $200,001 to $300,000
37% $600,001 or more $300,001 or more
Taxpayers fall into one of seven brackets, depending on their taxable income: 10%, 12%, 22%, 24%, 32%, 35% or 37%. Because the U.S. tax system is a progressive one, as income rises, increasingly higher taxes are imposed. But those in the highest bracket don’t pay the highest rate on all their income. For example, in 2018, single individuals pay 37% only on income above $500,000 (above $600,000 for married filing jointly); the lower tax rates are levied at the income brackets below that amount, as shown in the table below.

The table displays tax brackets according to filing status: single, married filing jointly or qualifying widower, head of household and married filing separately. The IRS makes inflation adjustments each year.

• In other words, everyone pays the same percentage on the first $19000 of their income--if married filing jointly--etc. It is only after one crosses the threshold of each level that the higher rate kicks in for the excess only. And so no, it's not unfair they pay more taxes. They pay exactly the same rate on the lower levels as everyone else does.

 

[Veritas]

So how much more do you feel you should be paying?

I'm in the top 50% so I think I owe enough.

 

[Veritas]

I have explained this a number of times at CF.

• In other words, everyone pays the same percentage on the first $19000 of their income--if married filing jointly--etc. It is only after one crosses the threshold of each level that the higher rate kicks in for the excess only. And so no, it's not unfair they pay more taxes. They pay exactly the same rate on the lower levels as everyone else does.

If a married couple, filing jointly earns $19,000 they don't even have to file a return.

 

[Belk]

I'm in the top 50% so I think I owe enough.

So how do you propose we lower the taxes on the rich? We are already at record deficits. Someone has to make up the slack.

 

[Andrew77]

So how do you come to the conclusion that they are sacrificing as much as, say, a working class family? And why do you define "fair share" by the gross amount that they pay?

I very, very much doubt this video will get a look but I would encourage folks to take a look at it.

Why should I pay a larger percentage of my income, than you, simply because you don't like that I earn more?

Does law and order not benefit everyone?
Does commerce from transportation, not benefit everyone?
Does defense of the country not benefit everyone?
Does Sewers and water, and basic utilities not benefit everyone?

The majority, if not all, of the fundamental functions of the government, benefit everyone.

So.... should not everyone pay equally towards the costs of providing those services?

I say yes. I say that's fair.

When a small group of people, are shouldering the burden for the vast majority of society, you eventually end up with Atlas Shrugged. Ayn Rand's relationship morals may have been crap, but her economic and social morals were dead on right.

And eventually every society that has followed this evil of stealing people's wages, from those who succeed, end up destroying their countries. There's a reason the USSR doesn't exist anymore. There's a reason Cuba went from being a 1st world country, to being an island prison. There's a reason why Venezuela lost almost 2 million people who fled the country. There's a reason North Korea has to have armed guards along the boarder, not to keep South Koreans out, but to keep North Koreans in.

This 'steal from the rich to pay for everything we want' belief system has failed for generations, and is the reason California is on the verge of a crisis. California has the absolute highest taxes in the entire country, and far from being the most wealthy, they are in fact the most poor. It hasn't resulted in the massive endless piles of tax revenue to pay for everything they want. It has resulted in them almost being bankrupt, not swimming in cash, like some seem to claim a tax hike on the rich would cause for the nation.

California owes over a trillion dollars in debt, with it's highest taxes in the country. And when you look at the pictures coming out of California, you can see money well spent on a "SnapCrap" app.

‘Snapcrap’ app asks San Francisco residents to take pictures of poop-covered streets

Your system doesn't work. It's that simple.

 

[whatbogsends]

Why should I pay a larger percentage of my income, than you, simply because you don't like that I earn more?

Does law and order not benefit everyone?
Does commerce from transportation, not benefit everyone?
Does defense of the country not benefit everyone?
Does Sewers and water, and basic utilities not benefit everyone?

The majority, if not all, of the fundamental functions of the government, benefit everyone.

So.... should not everyone pay equally towards the costs of providing those services?

I say yes. I say that's fair.

When a small group of people, are shouldering the burden for the vast majority of society, you eventually end up with Atlas Shrugged. Ayn Rand's relationship morals may have been crap, but her economic and social morals were dead on right.

And eventually every society that has followed this evil of stealing people's wages, from those who succeed, end up destroying their countries. There's a reason the USSR doesn't exist anymore. There's a reason Cuba went from being a 1st world country, to being an island prison. There's a reason why Venezuela lost almost 2 million people who fled the country. There's a reason North Korea has to have armed guards along the boarder, not to keep South Koreans out, but to keep North Koreans in.

This 'steal from the rich to pay for everything we want' belief system has failed for generations, and is the reason California is on the verge of a crisis. California has the absolute highest taxes in the entire country, and far from being the most wealthy, they are in fact the most poor. It hasn't resulted in the massive endless piles of tax revenue to pay for everything they want. It has resulted in them almost being bankrupt, not swimming in cash, like some seem to claim a tax hike on the rich would cause for the nation.

California owes over a trillion dollars in debt, with it's highest taxes in the country. And when you look at the pictures coming out of California, you can see money well spent on a "SnapCrap" app.

‘Snapcrap’ app asks San Francisco residents to take pictures of poop-covered streets

Your system doesn't work. It's that simple.

Except that the people shouldering the load aren't the rich. Atlas Shrugged was a work of fiction, and while it was an entertaining read, it's not reflective of reality. The rich leverage their wealth to exploit the workers. Those shouldering the burden are the underpaid workers, not the capitalists.

There are, certainly, innovators whose ingenuity creates wealth for all. Unfortunately, most of the time, the value created by innovators is syphoned off by those who already possess the wealth.

 

[rambot]

Why should I pay a larger percentage of my income, than you, simply because you don't like that I earn more?

1)Why do you assume I "don't like" that you earn more. I totally accept unequal wage distribution. I do not accept the current state of affairs as lined up in the video I quoted earlier.
2) Why should I have to sacrifice 1000x times more than you do simply because I earn less?

Does law and order not benefit everyone?
Does commerce from transportation, not benefit everyone?
Does defense of the country not benefit everyone?
Does Sewers and water, and basic utilities not benefit everyone?

Unequally, yes.

The majority, if not all, of the fundamental functions of the government, benefit everyone.

So.... should not everyone pay equally towards the costs of providing those services?

I believe everyone should sacrifice equally yes. But that does not mean PAY equally.

I say yes. I say that's fair.

Change the verb and I agree.

When a small group of people, are shouldering the burden for the vast majority of society, you eventually end up with Atlas Shrugged. Ayn Rand's relationship morals may have been crap, but her economic and social morals were dead on right.

"Shouldering the burden". Well perhaps if they took it off their shoulders and stored it in their ski Chalets on Chamoinix; or put it on their 150ft yacht in the West Indies; or stored it in one of their 4 multi million dollar homes, they wouldn't be so upset about the weight of supporting everyone.

And eventually every society that has followed this evil of stealing people's wages, from those who succeed, end up destroying their countries. There's a reason the USSR doesn't exist anymore. There's a reason Cuba went from being a 1st world country, to being an island prison. There's a reason why Venezuela lost almost 2 million people who fled the country.

Sigh. Trotting out the same old examples. But let's ignore all the Scandinavian countries and chunks of northern europe I guess. It went from being 1st world to being a prison because America had an ideological stick up its [bless and do not curse][bless and do not curse][bless and do not curse][bless and do not curse] and refused to trade with it. Had America continued to trade with it, you can guarantee no such thing would have happenned.

There's a reason North Korea has to have armed guards along the boarder, not to keep South Koreans out, but to keep North Koreans in.

Yes, because their leaders are insane.

This 'steal from the rich to pay for everything we want' belief system has failed for generations, and is the reason California is on the verge of a crisis. California has the absolute highest taxes in the entire country, and far from being the most wealthy, they are in fact the most poor. It hasn't resulted in the massive endless piles of tax revenue to pay for everything they want. It has resulted in them almost being bankrupt, not swimming in cash, like some seem to claim a tax hike on the rich would cause for the nation.

Your system doesn't work. It's that simple.

Watch the video on the growing economic imbalance and tell me "your" system works.

What a bunch of horse hockey.

 

[childeye 2]

The laborer is responsible for the value of his labor.

What I mean is that to invest a dollar to dig a hole and another dollar to fill it up would not accomplish anything of value.

 

[variant]

If taxes are the issue, the poor are off the hook. Not only do they not pay taxes, but they are the beneficiaries of programs funded by the taxes paid by the rich.

They are the ones without money. The system we have is massively tilted for the benefit of the already rich.

Also, very little is gained by taxing the poor, because they don't have much if any disposable income.

 

[variant]

The party doing it also promises to end abortion and make sure that gay people can't get married ... that seems to be enough to get some people to sell out their economic best interests.

I wouldn't bet on that being the real issue, maybe some of it.

Republicans (and by that I mean the ultra rich they actually represent) flourish by turning poor and middle income folks against each other with endless nonsense issues though.

 

[variant]

The laborer is responsible for the value of his labor.

You can have your labor devalued by others.

Talk to all the skilled craftsman put out of business by cheap imports.

 

[Halbhh]

Why does everyone have to attain a "high-earner position", or a "big paying job"? Why does one have to go to college to succeed financially? And if you don't have the 'schmartz' that's your burden.

That said a person can get rich on a $15/hour job. He or she just can't do or buy certain things for awhile.

Your good point reminds me of a fun thing I heard just the other day. I chanced on this in my wife's car's radio while waiting in the parking lot
The Catholic Channel -- Religion and Rock
Living with Possessions
(warning: has fun music I love like Peter Gabriel's wonderful ironic song about what's wrong with some of America -- Big Time)
Religion & Rock - 10/14/18 - Living with Possessions

(when Big Time starts, I crank it. heh heh

 

[iluvatar5150]

Why should I pay a larger percentage of my income, than you, simply because you don't like that I earn more?

Elsewhere, you stated:

I personally have never made more than $25,000 in a single year.

I don't want to be a jerk, but this thing about the rich being taxed more is entirely theoretical for you.

I can't remember ever making that little, outside of times when I was enrolled f/t in school or working as an intern. And even then, I probably made right around that. These days, I make at least 3x what you do, and my wife makes at least 2.5x what you do. Most of my relatives make around what I do, and my in-laws make *way* more. What you make in a year, my brothers in law make in a month and my FIL makes in under 3 weeks.

Basic living expenses take up a make larger portion of your earnings than they do of mine. I'm okay with shouldering more of the burden because I can afford it.

Does law and order not benefit everyone?
Does commerce from transportation, not benefit everyone?
Does defense of the country not benefit everyone?
Does Sewers and water, and basic utilities not benefit everyone?

The majority, if not all, of the fundamental functions of the government, benefit everyone.

So.... should not everyone pay equally towards the costs of providing those services?

I say yes. I say that's fair.

The answer to all of these is yes, but not necessarily to the same degree.

I have a lot more assets than you do, so this security provides greater benefit to me than it does to you. In increasing my wealth, I utilize more of these services than you do. It's okay for me to pay more for them.

When a small group of people, are shouldering the burden for the vast majority of society, you eventually end up with Atlas Shrugged. Ayn Rand's relationship morals may have been crap, but her economic and social morals were dead on right.

And eventually every society that has followed this evil of stealing people's wages, from those who succeed, end up destroying their countries. There's a reason the USSR doesn't exist anymore. There's a reason Cuba went from being a 1st world country, to being an island prison. There's a reason why Venezuela lost almost 2 million people who fled the country. There's a reason North Korea has to have armed guards along the boarder, not to keep South Koreans out, but to keep North Koreans in.

It's not because they had high taxes. It's because they had managed economies, which never work.

This 'steal from the rich to pay for everything we want' belief system has failed for generations, and is the reason California is on the verge of a crisis. California has the absolute highest taxes in the entire country, and far from being the most wealthy, they are in fact the most poor. It hasn't resulted in the massive endless piles of tax revenue to pay for everything they want. It has resulted in them almost being bankrupt, not swimming in cash, like some seem to claim a tax hike on the rich would cause for the nation.

California owes over a trillion dollars in debt, with it's highest taxes in the country.

No, CA is not bankrupt. They have a lot of debt, but they also have a massive economy. As a percentage of GDP, their combined state & local is only the 14th highest, and their state-only debt is below the national average:

State Debt Rank for 2019 - Charts

They're also not the most poor. The only poverty ranking which places them in the bottom is the one that factors house prices:
List of U.S. states and territories by poverty rate - Wikipedia

Granted, that's an important consideration, but when your housing prices are that nuts, it's going to affect other metrics. And the big reason that housing prices are so high in CA is because there are tons of good paying jobs out there and lots of people want to move there. Housing problems can be fixed, though not by lowering taxes - it gets fixed by allowing developers to build more high-density dwellings.

 

[KCfromNC]

Those poor, disenfranchised rich... Who's going to look out for them and their interests?

I mean besides their lawyers, accountants, bodyguards and wealthy friends.

Plus poor people being promised that other people they'll never meet won't be able to get married.

 

[KCfromNC]

What is their "fair share"?

At least as much as a % of their income as people making way less than them. That would be a start, and then we can start talking about the benefits for the economy of a progressive tax structure.

 

[OldWiseGuy]

You are aware that lots of money is created by central banks with zero work behind it, right?

An expanding money supply is necessary for an expanding economy. Banks create this new money. That is their 'work'.

 

[KCfromNC]

Why should I pay a larger percentage of my income, than you, simply because you don't like that I earn more?

Who said anything about tax policy revolving around who likes various income levels? I smell straw man.

So.... should not everyone pay equally towards the costs of providing those services?

We're going to have to cut spending massively for this to be possible. I say we start with corporate welfare and the military, along with all the other services which vastly benefit the rich. After all, their tax burdens are going to go down by a huge amount, no fair that they get to freeload off everyone else.

When a small group of people, are shouldering the burden for the vast majority of society, you eventually end up with Atlas Shrugged.

If they're so tired of being rich, I've offered to switch with them. So far, my inbox is strangely empty.

 

[KCfromNC]

What I mean is that to invest a dollar to dig a hole and another dollar to fill it up would not accomplish anything of value.

You have to move paper from point A to point B and back again. That generates value.

 

[Willie T]

A lesson in economics using beer

Here's another one of those spam emails that say something cute, or important, or idiotic. I enjoyed this one, it explains in simple terms the injustice of the graduated tax system. I'm sure some people will complain that it oversimplifies and that the analogy breaks down or doesn't fit, but I think its simple presentation fits VERY well. Graduated taxes penalize the successful, and that is essentially unjust. When we all get a tax reduction, it is entirely fair that those who PAID more get a bigger benefit from cuts. Those who argue otherwise are using Marxist ethics which are BANKRUPT and ethically and morally WRONG. You know, wicked, evil, bad for humanity. Really.
--------------------------

Suppose that every day, 10 men go out for beer and the bill for all 10 comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first 4 men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do. The 10 men drank in the bar every day & seemed quite happy with the arrangement, until one day, the owner threw them a curve. 'Since you are all such good customers, he said, 'I'm going to reduce the cost of your daily beer by $20. Drinks for the 10 now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first 4 men were unaffected. They would still drink for free. But what about the other 6 men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by 6 is $3.33. But if they subtracted that from everybody's share, then the fifth man & the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, & he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first 4, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now paid $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the 6 was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

'I only got a dollar out of the $20', declared the sixth man. He pointed to the tenth man,' but he got $10!'

'Yeah, that's right', exclaimed the fifth man. 'I only saved a dollar, too. It's unfair that he got 10 times more than me!'

'That's true!!' shouted the seventh man. Why should he get $10 back when I got only 2? The wealthy get all the breaks!'

'Wait a minute,' yelled the first 4 men in unison. 'We didn't get anything at all. The system exploits the poor!'

The 9 men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the 9 sat down & had beers without him. But when it came time to pay the bill they discovered something important. They didn't have enough money between all of them for even 1/2 of the bill!

That, boys & girls, journalists & college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy & they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics, University of Georgia

For those who understand, no explanation is needed.

For those who do not understand, no explanation is possible.

 

[OldWiseGuy]

What I mean is that to invest a dollar to dig a hole and another dollar to fill it up would not accomplish anything of value.

What I meant was that once paid for digging the hole the laborer is responsible for obtaining value from his wages. The boss obtains value from the hole i.e. setting a pier or post.