Tax bills for rich families approach 30 year high
Source: AP
WASHINGTON (AP) -- The poor rich.
With Washington gridlocked again over whether to raise their taxes, it turns out wealthy families already are paying some of their biggest federal tax bills in decades even as the rest of the population continues to pay at historically low rates.
President Barack Obama and Democratic leaders in Congress say the wealthy must pay their fair share if the federal government is ever going to fix its finances and reduce the budget deficit to a manageable level.
A new analysis, however, shows that average tax bills for high-income families rarely have been higher since the Congressional Budget Office began tracking the data in 1979. It's middle- and low-income families who aren't paying as much as they used to.
For 2013, families with incomes in the top 20 percent of the nation will pay an average of 27.2 percent of their income in federal taxes, according to projections by the Tax Policy Center, a research organization based in Washington. The top 1 percent of households, those with incomes averaging $1.4 million, will pay an average of 35.5 percent.
Read more: http://hosted.ap.org/dynamic/stories/U/US_TAXING_THE_RICH?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-03-03-08-20-36
Oh, the horror. A shout out to the President and Congressional Democrats for their roles in this achievement.
leveymg
(36,418 posts)This piece particularly stinks. The effective tax rate for the wealthiest is lower than their secretaries. Just ask Mitt.
Warren Buffet is the one who pointed out that lilttle tidbit.
Faygo Kid
(21,478 posts)Can smell this from miles away. What garbage; reporter is bought and paid for.
truth2power
(8,219 posts)of the population was 91%.
AP should stop lying for the benefit of the top 1%.
Yes, this piece does stink. Phew!
MannyGoldstein
(34,589 posts)Eisenhower. And both houses of Congress were controlled by Republicans.
Sgent
(5,857 posts)was much, much lower.
The tax laws pre '86 are hard to compare to today's, because they had so many more loopholes than the ones that exist today. For those people whose income come from salary or closely held business income, most of the big tax breaks are gone. I can no longer buy a Mercedes as a company car and write if off in my family business (well I can write off about $3500 a year, but not the full cost), nor can I buy a vacation home in the islands and get the same level of deductions I could pre '86.
The really big tax breaks today exist in three areas:
1) Favorable treatment of capital gains and certain income which is based on capital gains (stock options and straddles / options)
2) Municipal bond income
3) Business tax preferences -- which usually do not filter down to individuals since they are usually limited by the AMT.
For *most* "regular" wealthy individuals I know, such as doctors, businessmen, etc., which are not wall street types, they pay more on average in taxes than their fathers and grandfathers did.
Now, there are some major exceptions for certain industries, but in general the tax rates today are lower, but the taxed income is much higher.
Igel
(35,317 posts)The marginal tax rate Romney paid was less than that paid by his secretary.
His top marginal rate on most of his income was far lower than my top marginal rate. Yet last year my effective rate was on the order of 6%.
It's easy to mistake that 91% marginal rate the the actual effective tax rate. It's even a seductive mistake, since it confirms what we already positively know is and must be true.
Easy mistakes are still mistakes, doubly so when they feed our confirmation bias.
truth2power
(8,219 posts)The recent claim that the wealthy have had their taxes increased is a joke. From 35% to a little over 39%? Put it back to 91% (marginal) and let them start chipping away from that amount. Loopholes or not.
The only reason I can think of for Romney paying less in taxes than his secretary is that probably 99.9999% of his wealth is based on investments and not on wages. i'm surprised he pays any taxes at all, since most of his wealth is sitting in the Cayman Islands.
Which is another thing....the wealthy are able to skate on capital gains and various other investment-related income. And how about a small financial transactions tax?
JDPriestly
(57,936 posts)It all depends on how you define "income." If you don't include much of the capital gains or bonuses at the straight rate, then the taxes paid by the rich look like they are higher. But if you count all the money coming into a person or a household -- real gross income, the rich are doing extremely well.
Wages are taxed at higher rates than the Wall Street bonuses or carried interest on capital gains income.
Besides, the reason that so many of us don't pay much if anything in taxes is because the rich take all the profits for their income. Most members of the middle class or working people are earning either less or no more than they did quite a number of years ago. Many of us barely earn enough to cover our very basic costs. We are not the ones buying new cars, etc.
The income tax was never supposed to tax the money people need for basic living costs. If you are earning around or slightly above the poverty level, the income taxes are not supposed to affect you.
When the tax was first introduced in 1913, single people had to earn $3,000 per year, the equivalent now of $66,000 per year and a couple had to have an income of $4,000 or now $88,100 per year in order to pay taxes. Wikipedia claims that only about 1% of the population paid income taxes when they were first imposed. I don't know how accurate that is. There is no source given for that information.
http://en.wikipedia.org/wiki/Revenue_Act_of_1913
My opinion: The income tax was intended to permit us to reduce tariffs. It was never intended to permit us to pretty much do away with them. It was never intended to impose a tax on those of us who do not make more than we really need to live at the standard of living expected as a minimum in our time.
What would the rich gain if they taxed the middle class and poor to the extent that the middle class and poor could not afford to pay for running water, electricity or heat? What would they gain if the middle class and poor could not afford to pay for transportation to work? That is where they are going with these complaints about the people who don't pay taxes. The rich messed up the economy, and they don't want to take responsibility.
Gradually, we have lowered our tariffs and import taxes more and more and raised income taxes on everyone. The lower tariffs and import taxes allow the rich to profit from cheap labor overseas and inflated prices here at home. Americans here can buy certain products more cheaply now than we could some years ago, but the quality is deplorable and our incomes have gone down. Our incomes are headed toward the level of those in underdeveloped countries. The rich profit from that difference -- between the low wages at which they can produce good and the high prices they can demand here for those goods. If we want to do something about tax rates, we need to bring back tariffs and other taxes on imports.
love_katz
(2,579 posts)24601
(3,962 posts)invests, the income earned from her at risk investments are taxed at the lower rate.
Warpy
(111,267 posts)which means they've stripmined 20% from the other three quintiles, money they could ill afford to send to the richest.
And still people like this oaf carry water for them. It's disgusting.
greymattermom
(5,754 posts)that need to be highlighted. Maybe the Dems can turn the contributing rich against the rich "takers" by focusing on carried interest.
BVictor1
(229 posts)They'd been getting away with bloody murder for decades.
Time to close some of those loopholes as well.
What? It's not like they can't afford it.
The income gap between the rich and the not have greatly expanded over this time frame as well.
Angry Dragon
(36,693 posts)hobbit709
(41,694 posts)MannyGoldstein
(34,589 posts)Those figures don't include taxes on capital gains, which accounts for the vast bulk of income that the wealthiest receive. These are still at an almost-historic-low of 20%, or half of what they were before the Bush tax cuts.
The true average tax rate on the wealthiest is likely to be 25% or so, after accounting for capital gains. Even less after accounting for money hidden offshore.
Scuba
(53,475 posts)JHB
(37,160 posts)...but not the 0.1% or 0.01%, letting robber barons hide behind surgeons and the like.
MillennialDem
(2,367 posts)Marrah_G
(28,581 posts)Squinch
(50,950 posts)Repeat after me: capital gains taxes.
Now, check your math.
OKNancy
(41,832 posts)For example, the Internal Revenue Service tracks tax returns for the 400 highest-paid filers each year. Those taxpayers made an average of $202 million in 2009, the latest year available. Their average federal income tax rate: 19.9 percent.
LiberalFighter
(50,942 posts)formercia
(18,479 posts)They're making more MONEY.
..and we should feel sorry for them?
Feh!!
paleotn
(17,920 posts)...despite effective and top nominal tax rates being at historic lows, these people are making so much money (i.e. economically exploiting all others, worldwide) that their tax bills are still huge.
And no, ye of limited abilities to comprehend statistical data or any data for that matter, better known as right wing moronic, nut jobs, their increased income is NOT due to lower tax rates. It is due to our government allowing these people to economically pillage pretty much as they please. It's caused by the "left pocket, right pocket, profit in the middle" game on Wall$treet, which produces nothing and benefits no one but the already super rich. That is until their house of cards crashes and we all get crushed.
dothemath
(345 posts)LiberalFighter
(50,942 posts)PSPS
(13,599 posts)Very careful use of language and references are the key to this propaganda piece. Reagan alone cut taxes on the rich by 2/3 in the early 80's. And, as usual, the FICA tax isn't included at all and it's the biggest tax burden on the poor and middle class -- 16% by itself. There's a lot more to pick apart in this phony "analysis" with its "rarely" and "approach" nonsense, including its omission of the trillions hidden in tax-avoidance schemes.
Let's say my tax rate goes from 70% to 28% 30 years ago and then bounces around to 29%, 37%, 32%, and ends up at 36%. OH MY God!!1! It is HUGH!!1!! My rate has "rarely been higher!" "In decades!!11!!" It's "approaching a 30-year high!!11!"
Mass
(27,315 posts)normal?
From the article
Average after-tax incomes for the top 1 percent of households more than doubled from 1979 to 2009, increasing by 155 percent, according to the CBO. Average incomes for those in the middle increased by just 32 percent during the same period while those at the bottom saw their incomes go up by 45 perc
This does not strike me as rich people being more and more burdened.
AnnieK401
(541 posts)When you are talking the higher income earners higher taxes might impact their ability to horde more and more money and/or buy luxury items. When you are talking lower income families you are talking about impacting their ability to own and maintain a modest home or shelter and transportation, possibly even feed their families.
Andy823
(11,495 posts)It's amazing the media paints things these days. When someone can buy anything they want it's not a problem to pay more in taxes versus a family that can't make ends meet because they don't earn enough money.
Articles like this make me sick, and I really doubt that anyone is going to feel sorry for the rich, who are making more and more every year while the "little" people suffer just trying to put food on the table and pay the rent!
onehandle
(51,122 posts)L0oniX
(31,493 posts)hedda_foil
(16,375 posts)The number of folks who earn that kind of money have attorneys and accountants who shelter great swatches of their income in off shore tax havens and family trusts ala Mittens and Queen Ann. The 35.5% tax rate is paid on what's left over. Who funds this tax policy center,anyway?
grammiepammie
(59 posts)Please, 35.5% is the starting point. Show me one person making over $1 million that does not have tax write-offs to bring the 35.5% down. Shame on the Associated Press.
freshwest
(53,661 posts)DallasNE
(7,403 posts)And can be dismissed out of hand. Not all of the Bush tax cuts expired -- in fact some were made permanent. None of the Bush tax loopholes were eliminated. None. So, how can anybody with a straight face claim taxes for the highest earners are at their highest in 30 years. If that were the case we would already have a budget surplus so where do these people come up with such garbage "reporting".
Did you notice that when calculating the tax rate for the wealthy they included payroll taxes and for the middle class they only used income taxes to calculate the rate. Apples and oranges. Also, the statement fell flat on its face when comparing the wealthiest 400 -- a group with the largest increase in income who saw their rates drop. This piece should be classed as an opinion piece since most of their numbers came from a think tank with conservative backing. Not sure why DU posted this garbage.
L0oniX
(31,493 posts)liberal N proud
(60,335 posts)But they are claiming taxes are up for EVERYONE!
JEFF9K
(1,935 posts)Thirty years is the Reaganomics era, during which taxes on the rich have been extremely LOW. So the HIGHEST OF THE LOW doesn't mean much at all. Except that conservatives will pick up on this and run with it.
L0oniX
(31,493 posts)Dustlawyer
(10,495 posts)L0oniX
(31,493 posts)judesedit
(4,438 posts)Historical Rates
39.6 percent: Top tax rate in 2000
31 percent: Top tax rate in 1991
50 percent: Top tax rate in 1986
70 percent: Top tax rate in 1980
91 percent: Top tax rate in 1963
84.4 percent: Top tax rate in 1950
94 percent: Top tax rate in 1945
79 percent: Top tax rate in 1939
63 percent: Top tax rate in 1935
25 percent: Top tax rate in 1931
46 percent: Top tax rate in 1924
73 percent: Top tax rate in 1921
7 percent: Top tax rate in 1915
John2
(2,730 posts)correct, the Tax Policy Center is lying. Who would you believe the IRS, or some private corporation? According to them Reagan and Bush didn't cut taxes for the Top percent. They cut them for everybodyelse. Everyoneelse should be doing well. Prices have went up for consumer goods on everybody because those at the top raise them. They are accumulating enormous profits off services and consumer goods while wages at the bottom has stagnated. Healthcare costs and gas prices have risen through the roof. The rest of the population is taxed through services and consumer goods. The government does not fix prices in the private sector. The wealthy make up for higher taxes through services and consumer goods in the private sector. How much has wages risen at the top level compared to the lower two levels? CEOS of large companies get paid in the millions compared to 1979. The people at the bottom is being squeezed. They have to work overtime or two or three jobs just to keep up with inflation or stay out of poverty. And everytime people have to work overtime or two and three jobs, it keeps other people from a job and labor costs low.
Cal Carpenter
(4,959 posts)and then maybe we'd be getting somewhere.
DBoon
(22,366 posts)their share of the national income has grown even more, at the expense of everyone else.
Of course middle and lower income households are paying less - ever try getting blood from a turnip?
Our income and wealth inequality is so staggering that even minimal taxes on the wealthy generate large revenues.
John2
(2,730 posts)Last edited Sun Mar 3, 2013, 06:50 PM - Edit history (1)
What period did the rates go up? 1979, Jimmy Carter was President. Didn't Ronald Reagan cut taxes? He was a two term President also. The National Debt increased also. George Bush increased taxes in the last two years of his term and President Clinton increased them on everybody in his first term. We had a surplus after Clinton left office. George W. Bush cut taxes. President Obama didn't raise any taxes but cut them in his first Term on top of the Bush taxcuts.
In this Fiscal Cliff negotiation, taxes were not raised to the limits of the Clinton years. The Payroll tax also increased. Capital gains and tax credits for the wealthy were not touched at all. Revenue going to the Federal Government has decreased and not increased. That is why we have a Deficit. So the contention of the reporter is the wealthy is getting squeezed while the middle class and poor are profiting? What alternate universe does this reporter live in? And there is another bit of information to throw in the mix. How many Billionaires and millionaires are in the U.S. compared to 1979? That should tell you how well the top percent is faring since 1979 in this country.
GoneFishin
(5,217 posts)Bull crap propanda!
Progressive dog
(6,904 posts)Like whack a mole with this RW garbage. If you want to believe that this is true, be my guest. How do you and your sources explain the total take of the federal govt. is near historic lows at the same time that the top 20% are paying more and taking the largest share of GDP since before the Great Depression? You can't, so at least look for more reliable sources before posting.
They_Live
(3,233 posts)Look for it to be referenced there.
kestrel91316
(51,666 posts)were under Eisenhower.
blkmusclmachine
(16,149 posts)blkmusclmachine
(16,149 posts)So of course it's crap.
Sunlei
(22,651 posts)leftynyc
(26,060 posts)I'm nowhere near the 1% in wage earners. They can cry me a fucking river because when they get done taking advantage of all the loopholes, they'll be paying less than 1/2 than what I am. Fuck them.
LiberalFighter
(50,942 posts)Here is how it would breakdown on a family of 4 that includes exemptions and a standard deduction.
For a family with $1.4 million
On the first $17,850 of taxable income the tax is $1,785
On the next $54,650 of taxable income the tax is $8,197.50
On the next $73,900 of taxable income the tax is $18,475.00
On the next $76,650 of taxable income the tax is $21,462
On the next $175,300 of taxable income the tax is $57,849
On the next $51,650 of taxable income the tax is $18,077.50
On the remaining $950,000 of taxable income the tax is $365,191.20
Grand total of $383,268.70 and a net effective tax of 27.38%. Not the 35.5% reported in the article.
For a family of 4 and using only the standard deduction the minimum tax exempt income would be $27,800.
To pay at the effective tax rate of 35.5% the gross income would have to be at least $4,222,200.
The highest effective tax rate for someone making no more than $450,000 would not be more than 15.89%.