US billionaires paid lower tax rate than working class in 2018

essentialsaltes

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A new book-length study on the tax burden of the ultrarich begins with a startling finding: In 2018, for the first time in history, America’s richest billionaires paid a lower effective tax rate than the working class.

But the tipping point came in 2017, with the passage of the Tax Cuts and Jobs Act. That bill, championed by President Trump and then-House Speaker Paul D. Ryan, was a windfall for the wealthy: It lowered the top income tax bracket and slashed the corporate tax rate.

By 2018, according to Saez and Zucman, the rich were already enjoying the fruits of that legislation: The average effective tax rate paid by the top 0.1 percent of households dropped by 2.5 percentage points. The benefits the bill’s supporters promised — higher rates of growth and business investment and a shrinking deficit — have largely failed to materialize.
 

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Not surprising. Taxes on the rich had been trending down for decades according to the graph, so it was just a matter of time. The uptick in taxes for the rest is likely because of higher earnings.
 
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timewerx

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The benefits the bill’s supporters promised — higher rates of growth and business investment and a shrinking deficit — have largely failed to materialize.

Other countries, like some in Europe does the opposite.

Less tax for the working class. Which allows the lower classes to spend more to contribute to economic growth.

Same goal of achieving economic growth but the Euro version also helps the poor, reduces wealth gap between working classes.

The wealth gap has strong correlation with crime rates. Some countries in Europe has the lowest wealth gap rates and also have the lowest crime rates (per population sample of 100,000)

On the otherhand, very high wealth gap rates not only induce high crime rates but also injustice and depravity like drug and human trafficking, and prostitution.
 
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essentialsaltes

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Not surprising. Taxes on the rich had been trending down for decades

It's not a trend, as though this were some natural phenomenon unfolding. It's the effect of tax cuts on the rich since Reagan's era.

The uptick in taxes for the rest is likely because of higher earnings.

What uptick? The rate for the bottom 50% has been remarkably stable over the past 50 years, while the billionaire's rate has been cut in half. It's easy to see who has received 'tax relief' under all these plans.
 
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OldWiseGuy

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It's not a trend, as though this were some natural phenomenon unfolding. It's the effect of tax cuts on the rich since Reagan's era.



What uptick? The rate for the bottom 50% has been remarkably stable over the past 50 years, while the billionaire's rate has been cut in half. It's easy to see who has received 'tax relief' under all these plans.

And yet the wealthy still pay most of the taxes.

It usually takes several generations of work and sacrifice to build family wealth and privilege, so those who wish to do so should start now.
 
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FenderTL5

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Gee, those with the most money pay the most taxes. What a horrible concept! Something must be done!
Trump and the GOP are already working on that.
 
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OldWiseGuy

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Yes, taking a smaller fraction of a humongous number still produces a prodigiously large number.

The poor will never defeat the rich regardless of who they elect. Better to join them. The middle class already has the tools to become rich, and the working poor aren't far behind them.
 
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OldWiseGuy

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Gee, those with the most money pay the most taxes. What a horrible concept! Something must be done!

Vote for Sanders or Warren, they'll fix it so everyone pays 50 percent.
 
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Speedwell

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The poor will never defeat the rich regardless of who they elect. Better to join them. The middle class already has the tools to become rich, and the working poor aren't far behind them.

Defeat the rich? What the poor want is just a bigger slice of the pie they all helped make.
 
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OldWiseGuy

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Defeat the rich? What the poor want is just a bigger slice of the pie they all helped make.

Perhaps the poor should study the rich instead of criticizing them.
 
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Speedwell

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Perhaps the poor should study the rich instead of criticizing them.
They have. They know better than to believe that wealth is an indication of superior moral virtue, hard work and clean living.
 
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wing2000

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And yet the wealthy still pay most of the taxes.

It usually takes several generations of work and sacrifice to build family wealth and privilege, so those who wish to do so should start now.

Well of course they do. The question is, why should I be paying a greater share of my income than someone making 5 million a year?
 
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They have. They know better than to believe that wealth is an indication of superior moral virtue, hard work and clean living.

They might want to rethink that.

Have they considered how much they benefit from taxes paid by the rich?
 
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OldWiseGuy

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Well of course they do. The question is, why should I be paying a greater share of my income than someone making 5 million a year?

The rich pay less taxes because of the tax incentives given investors (read 'risk takers'). The poor don't invest, thus they don't get those tax breaks. Those incentives help drive economic growth that everyone benefits from.

I want the company that I work for to be very profitable, even if the owners make many times more than I do and are taxed at a lower rate. I can build my own wealth on the security and pay that such a company provides.
 
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Speedwell

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The rich pay less taxes because of the tax incentives given investors (read 'risk takers'). The poor don't invest, thus they don't get those tax breaks. Those incentives help drive economic growth that everyone benefits from.
Which mostly the rich benefit from. That's what the numbers tell us.
They might want to rethink that.

Have they considered how much they benefit from taxes paid by the rich?
I think they would rather have higher wages.
 
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OldWiseGuy

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Which mostly the rich benefit from. That's what the numbers tell us.
I think they would rather have higher wages.

Is the "us" you refer to a national organization of poor people who believe they are being treated unfairly? How are you doing personally?
 
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Is the "us" you refer to a national organization of poor people who believe they are being treated unfairly? How are you doing personally?
By "us" I mean everybody who can read and do simple math. The share of the country's wealth owned by the richest is increasing. Whether that is "fair" or not is a separate question.

GINI Index for the United States
 
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