What income level is "rich," and what should their tax rate be?

[Commendatori]

This is our water cooler discussion today (and yes, we actually have these talks around the water cooler).

The question is this: what amount of yearly income constitutes "rich," and what should their tax rate be? Going one further, what should Bill Gates be paying on HIS income?

Here's my take, but with a disclaimer: I'm a Democrat more for social issues than economic. I'm still way to the left of talk radio goobers on economic issues, but I'm not willing to accept "well, other countries have rates of 70-90%, so no one here making millions should mind that." After all, other countries have other polcies that make my stomach churn, too.

I'm not sure about "rich," because $200K (the figure Kerry often uses in tax discussions) goes a lot further in Kansas than it would in San Francisco. I do believe that even if I were to decide that $200K is the cutoff for "rich," I wouldn't think that someone making that should be taxed at the same rate as someone who makes $200 million.

As for tax rate, the highest I could stomach is 50%, even for Gates. I know I'll get some answers higher than that, but when the federal government takes more than half of what someone makes, he is working more for the government than for himself. It's a matter of principle, nothing more - over half simply gives me the creeps, no matter how much someone makes. People have tried to talk me out of that, but with no success (and no success here is possible).

Today, as for tax rates, I've actually heard 90% from someone way left of me economically, and the predictable 10% from the Freeper contingent ("if it's good enough for God..." - you know the drivel). As for "rich," I've heard suggestions as absurdly low as $75,000 per year and as laughably high as $50 million (seriously - $49 million isn't rich to this asshole because "taxes take out so much.")

I just want educated opinions, and I'm not getting them here in the office. What do you guys and gals think?

[bluestateguy]

1. Rich

For most people I would say an income of $100,000 for an individual and $175,000 for a married couple. I would up those numbers for people living in New York City, LA, San Francisco, and a few other places. More than 2 kids I would say up the number by ad additional $ 25,000 per kid. Tax rates should be at Clinton Administration levels with no bullshit loopholes.

[serryjw]

5. I dont know where you live BUT

In major cities $200,000/annually you are middle class and struggling if you have kids. Remember a mortgage for a decent size house in a good neighborhood is easily $500,000.

[voice of reason]

9. agree

$100k isn't rich in Seattle

Maybe $250k+ is

[Langis]

18. Well, in Arizona 200,000 is rich, kids or not

[Moonbeam_Starlight]

24. Ay-yi-yi

$100,000 ain't hurting, to be sure, but it ain't **rich**, either.

Just my two cents.

[serryjw]

2. Lets divide in to TWO groups

$200,000 to a $1 million is investment class
Over $1 million is RICH..Even in NY you can live well on $1 million annually.

Remember it is NOT what you make but what you KEEP....over $1million you are working seriously on passive income and can live off the INTEREST on your investments.

BTW I made 6 cents on my savings account last month!

[Blue Wally]

3. 91% Was the Maximum Rate

Before the JFK tax cuts of 1963 dropped it to 70%. It applied to all income over $250,000.

Highest rate under Clinton was 39.6%.

We need to make sure that brackets are indexed for inflation. The consensus for a progressive income tax came unglued in the 70s as inflation drove the middle class into tax brackets originally conceived for the filthy rich.

Amazingly enough, Tom Delay had some pretty good ideas several years ago on tax simplification.

[TahitiNut]

14. 94% was the top marginal rate in 1944-45 ...

... when a "keen sense of the obvious" prevailed. It was pretty clear that wartime always results in profiteering - so the tax rates reflected this. The Gross Federal Debt coming out of WW2 was addressed by continued high tax rates on those with very high incomes. As the Debt declined, those high marginal rates were seen as less necessary.

It wasn't JFK who lowered the tax rates, but LBJ - after the assassination of JFK. (Yes, it was a JFK initiative, but not realized until LBJ took over.)

This marginal rate history, however, is only a part of the story. It applies mostly to 'earned' income during the 90 or so years we've had an income tax. 'Unearned' income (income from ownership: the labor of others) has typcially (no always) been taxed at a lower rate, but never as much lower as today.

[rinsd]

27. I am curious....

As to what that 94% rate was applied to and what the percentage of taxpayers was paying it.

[TahitiNut]

35. As far as I've been able to research and recall ...

... it was ordinary income - I don't recall what level. The history of federal income taxation is very convoluted and difficult to assemble. The plethora of definitions, exceptions, and changing preferences seems almost intended to stymie any simple description.

[Blue Wally]

29. No

"It wasn't JFK who lowered the tax rates, but LBJ - after the assassination of JFK. (Yes, it was a JFK initiative, but not realized until LBJ took over.)"

No, the tax cut was one of the few items of legislation that JFK was able to get passed. It didn't take effect till Dec 63 (after the assasination) but it was passed around Jun 63.

[Paranoid_Portlander]

69. I am curious about the withholding...

... on the paycheck. Was that at about the same rate as the actual 91% or 94%
(for those who had to pay that rate)?

[prodigal_green]

4. Check out this website.

http://www.responsiblewealth.org

Bill Gate's father is one of the founding members.

From the site:

Who We Are
We are leaders in business, community, government, philanthropy, academia and finance. We are among the wealthiest 5% of Americans, the primary beneficiaries of the robust growth of the American economy. We are united by our common concern that despite a booming economy, many are not sharing in the prosperity.
Founded in 1997, Responsible Wealth is affiliated with United for a Fair Economy (UFE), a national non-profit devoted to putting a spotlight on the dangers of excessive inequality of income and wealth in the United States.

Our work is focused on four areas:

We advocate fair taxes.
We support a living wage for all.
We call for greater corporate accountability.
We promote broadened asset ownership for all Americans.
We hope you'll join us in our work!

[donco6]

20. Wow.

I can say, that for all the bitching about Gates, he's given our district almost $1,000,000 to help us with our small schools implementation - and our district is only 6,000 total - so that's a lot of money.

Cost of living varies so wildly around the country, it's impossible to put a dollar amount on such a vague term - "rich."

[prodigal_green]

25. Well, it's his dad, not him.

I think after the anti-trust suits during the Clinton era that he is a republican supporter.

[donco6]

26. Yes, I know.

I saw the "Sr." by his name.

My only point was that, as a family, I see them putting some money back into the community, unlike, say, the Waltons, who only put money into whacko RW think tanks.

[prodigal_green]

58. Agreed

The Gates foundation is doing a lot of good. Particularly in AIDS/Tuberculosis/Malaria in the developing world.

[THUNDER HANDS]

6. I'd say rich is

over $330,000 a year.

But I'd have more than 4 tiers of the tax system.

I'd have a low-rich ($300,000-$600,000) rate of 37%

I'd have a middle-rich ($600,000-$1 million) rate of 40%

I'd have a upper-rich ($1M - $3M) rate of 43%

I'd have a super-rich ($5M +) rate of 49%

I'd also heavily tax investments.

[TahitiNut]

8. You mean $319,100, right?

:eyes: That's the beginning of the top marginal FIT bracket for 2004, with the marginal rate of 35% (earned income only).

[TahitiNut]

7. See ...

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=104x1995915

[LiberalTechie1337]

10. I think it should be based on the local Standard of Living

I think that if we are going to define rich, we should base it on their percentage of the SOL. I am not an expert, so I really don't feel qualified to give an exact number, I will throw out some as examples. Instead of saying that $250k/yr is rich, say that 10x the SOL is rich.

[sandnsea]

11. $200,000 = top 2%

And don't forget, that's after deductions, shelters, etc. It isn't a question of how much is rich, it's a reality that 98% of Americans aren't anywhere near it. They paid 90% tax rates during WWII, I don't know what they're bitching about.

[2Design]

12. so at what income level should you not pay taxes at all....

everyone is talking about 100,000, 200,000 and up as middle class or rich....

so anyone making less than 50,000 should not have to pay taxes..yet they pay the most taxes...because they don't have a home to own and write off on taxes.....they have nothing to write off....they pay the most... where as those in the 500,000 and above have a gazillion write offs and pay less taxes than those under 50,000.

[TahitiNut]

17. 2,000 times the minimum wage.

Anyone working for minimum wage already pays 15% (or so) in payroll taxes. It's obscene to assess an income tax on top of that when a wealthy inheritor of a million dollars pays nothing.

[Redhead488]

43. I assume you are speaking of a percentage basis?

Because I guarantee I paid a LOT more in taxes than someone making $50,000 last year. And I feel EVERY American ought to pay some tax (if even a token amount) to be a full particpant in this country.

[TahitiNut]

52. OASDI/HI ... aka Social Security.

Effectively a 15% tax on the first dollar earned ... not paid on earnings over $90K and not paid on unearned income.

In many states, you pay a sales tax when you buy food to feed your family or a house to shelter your family but pay no sales taxes when you buy stock (supposedly just another asset).

"full particpant"??? Why is it people use that phrase on the liability side and not the benefit side? This Vietnam Vet would love to know.

[Redhead488]

53. Social Security is technically NOT a tax

It is insurance. That is a whole different issue that needs to be addressed.

This Panama, Gulf War, Kosovo, Afghanistan vet has been a "full participant."

[mermaid]

62. You're Right

It is, technically, a premium for services yet to be delivered. Not a tax. But since most cannot opt out of it, it has the effect of a tax. And where's the guarantee to us thirty-somethings who have been paying into it our whole lives that we will not just be left hanging out to dry when our turn to collect comes around?
WE WERE PROMISED!!
We based our retirement strategies on the idea that Social Security would be there for us. After all, it is what was PROMISED when we started paying into the system.

And if we never DO get anything back, how is it any different than having paid a tax all those years, and getting shafted on the back end, and lied to, and left hanging out to dry when we are old?

Us thirty-somethings oughta be demanding answers from our government NOW!! I dunno about the rest of thirty-somethings out there, but I, for one, AM PISSED AS HELL at the notion that Social Security, which I have unwillingly paid into for my whole life...will not be there, as promised, when I am ready to retire...and I will end up having to work myself into a grave, never to know the golden years of retirement. They will use me for all they can get out of me, and then take me to the curb in a Glad Bag once I am no longer useful (read: no one else can make any more money off MY friggin' labor!)

[K-W]

13. We should tax wealth more heavily than earnings.

Let people bring home most of thier wages. Tax the heck out of inheritance. Families do not have a right to accumulate wealth through generations, there are few things more anti-capitalist and anti democratic than allowing the wealthy to turn thier children into a non-working aristocracy.

Tax foriegn investments. Encourage countries to invest in the United States by making foriegn investments a more expensive proposition. If a company wants to pull money out of our economy, they need to give something back.

The major issue isnt taxing the earnings of upper middle class people. It is taxing the wealth of the super rich, and taxing corporations.

[Norquist Nemesis]

15. I'd say the top 2%

would be fair though the actual dollar amount would vary depending on the average.

But while we're asking the definition of what is rich, let's also ask what is a "living wage". What do "the rich" consider the level of a living wage to be?

[bain_sidhe]

16. Maybe this will help

a table from Citizens for Tax Justice showing the average income for the various "quintiles" (fifths, for us normal people), with the last fifth broken down further to show the difference between the first 15% and the last 5%, and the difference between the first 4% and the last 1% of that last 5%:

Lowest 20% $ 10,400
Second 20% 21,200
Middle 20% 34,500
Fourth 20% 56,300
Next 15% 96,700
Next 4% 201,000
Top 1% 978,000

Note though, that this is an average and not a median, so a couple of high earners can throw it off. That table (pdf format, sorry) is at http://www.ctj.org/pdf/fsl2004.pdf

What may be more to the point of high taxes on wage income on high earners is that they pay so much less on their investment income - as an attempt to equalize the burden a bit without increasing taxes on investment income. These graphics from CTJ show how much:





graphics copied from (sorry, also pdf) http://www.ctj.org/pdf/earnpr.pdf

[bain_sidhe]

21. and one more graphic, just for ha-ha's

**edited to add source: (once again, pdf) http://www.ctj.org/pdf/earnpr.pdf **

[donco6]

23. The primary reason why the rich get richer.

They have money to invest.

[recidivist]

55. Correct, and it is a problem we can easily fix.

One important reason to shift Social Security from a pay-as-you-go system to a fully funded system is to allow people of low and moderate income to accumulate estates. An investment-based system would, of course, also generate higher pension benefits due to compounded earnings over the 40-plus years of a person's working life. That's the #1 reason to switch.

But over a couple of generations, a fully funded Social Security System would also lead to significant wealth accumulations among lower income families. When I was young, I had difficulty thinking in such terms. But now that I'm in my 50's, I realize that 30 years is not really very long. Start small and let it build. Soon enough, we could have a country in which everyone had at least a little working capital.

P.S. On edit: I should not have referred to your statement about the rich getting richer as "a problem." The problem is the maldistribution of wealth and, specifically, the fact that roughly half the population has yet to enter the investor class. It is easy to forget that IRA's and 401(k)'s are relatively new. We are, in fact, still in the first generation of wealth accumulation under the "new" rules which, for the first time, give middle class folks a tax deferred investment vehicle. The results have been revolutionary but are still not universally enjoyed. A fully funded Social Security System would deal everyone into the game. I would like a system in which even the minimum wage guy has the opportunity to build a nest egg.

I don't object to the rich getting richer as long as everyone else has the same opportunity.

[donco6]

59. Agreed, too.

I am wondering about the taxing of estates. If the rich can accumulate *aggregate* wealth, with little or no loss from one generation to the next, are we creating another "noble" class? It seems that there's a threshhold beyond which the taxation of wealth just doesn't pose a problem, whereas with the rest of us, the setback due to taxation is quite a hit.

[chicagojoe]

19. I'm not an economist, but tell me if this could fly.

Every dollar earned as income in this country gets taxed at 10-15 %.
Would this be enough to run the country ? I know that I'm rather naive in economic matters, but it's just a thought. I have no political motivation behind this; it's just an idea.

[donco6]

22. Flat tax.

This then penalizes the lower income person, because a loss of 10% hurts him/her more than the loss of 10% hurts me. That would actually be a significant decrease in my taxes.

[mememe]

28. The question as posed is flawed

I'd like to interject a small bit of priggishness to the discussion by insisting on the proper usage of terms.

"Rich" refers not to income but to accumulated wealth. Income and wealth are not the same thing. I have an aunt who is certainly "rich" in that she has accumulated assets nearing $2 million. However her actual income is rather small since most of her assets are in money market funds which pay a very low return. On the other side of the scale Mike Tyson is destitute despite having several years where his income was in the tens of millions of dollars. He did not hang onto any of that income and therefore he is not rich.

It's fine to want to structure a system which taxes income or one which taxes wealth or a hybrid of the two but please do not talk about categories such as "rich" or "poor" when talking about income. It demonstrates either a lack of intellectual rigor by not knowing the difference or a desire to obfuscate the difference due to a lack of intellectual honesty.

[Commendatori]

33. If so...

...then the speeches of most political leaders, including the ones we're rooting for, are often eqally flawed. As such, I kid of resent your hints at intellectual rigor or dishonesty. You were free to redefine it, as people before you had done. It's just a question, and I don't need to be insulted or told how to post.

The question is based on a progessive income tax, which is what we currently have. As soon as the income tax is scrapped and we start taxing wealth only, I'll start following your lead.

[mememe]

41. Sorry if I offended

I apologize if I offended.

I agree that "the speeches of most political leaders ... are often equally flawed." That is exactly my point. We have in this instance allowed politicians to redefine, over time, the common perception that people have of words like "rich". This redefinition suits the interests of politicians because it allows them to treat words as malleable things with no fixed, certain meaning. Thus they are able to say one thing while running for office and later claim that they were just misunderstood when they renege on their promises. "After all when I said X I meant ......" It is in the publics interest that words of plain meaning not get distorted out of all recognition. Thus income is what one gets, wealth is what one accumulates. Similarly what we did in Korea was a "war" not a "police action". What we did in Iraq was "invade", not some other euphemism.

As I admitted in my prior post I'll confess to a certain amount of priggishness. I did not intend to insult you. I'm just a stickler for precise language.

[Commendatori]

48. Fair enough...

...in that case, try this: "If wealth were determined by annual income, as so many of our politicians seem to think it is, then where do you draw the line on 'wealth' and at what rate should it be taxed under our current income tax code?

Better? :)

[Tracer]

30. Read "Perfectly Legal" ...

... by David Cay Johnson for a really good overview of the taxation system in the U.S.

[durutti]

31. Top rate should be 100%.

No reason it should be otherwise that I can see.

[One_Life_To_Give]

54. Send the rich to Monte Carlo? n/t

[BillZBubb]

32. I would index the title "rich" to the local minimum wage.

Actually rich refers more to overall assets, not income. So I'd call them high wage earners instead.

I would consider someone very high income who had an income in excess of about 15 times the minimum wage. At the current US minimum wage, that would be around $150K annual income.

High cost cities could raise their minimum wage locally to help their citizens get better tax treatment. There is no reason SF couldn't pass a living wage law, that would bring the tax bite on it's citizens into line with lower cost areas.

I think a top marginal rate of 49% on ALL income over 15 x Minimum wage (earned, unearned, capital gains, etc) is more than adequate.

[mermaid]

34. OK, Here's MY Tax Tables...

Total Household Income

Under 30K - 0%
30K to 60K - 15%
60k - 100K - 25%
100K - 200K - 40%
200K - 1M - 50%
Over 1M - 70%

And you get 5% off your rate for each qualified child dependent. nothing for just a spouse, since spouses now work for the most part, as well.

Furthermore, dammit, my dog ought to qualify as a dependent! Why can't I claim her???

Not that it matters, because if my tax table were adopted, I'd be at 0% since I make less than 30K annually. and that's the way it oughta be. the working poor should not be paying taxes, period. The rich find a way to pass off their tax burdens onto poor people as it is!

Face it...property tax...I'm an apartment dweller. So I don't write a check annually to my county tax assessor for property tax. Do you really think that I therefore do not pay property tax?!?!? B.S.!!!

It's figured into my monthly rent! I can guarantee you my landlord sure as hell isn't biting the bullet and paying the damn tax! Maybe he's the one who physically writes the check...but he's collected all the money for it from the poor tenats! So why the hell should we have our paltry income taxed as well?

[Redhead488]

46. Why should you get anything for a child?

End ALL deductions...go to a flat tax based on income levels.

5% up to $50K
10% up to $100K
15% up to $150K
20% up to $200K
25% up to $300K
30% up to $350K
35% up to $400K
40% on anything over that

Not sure what the percentages would actually have to be, but you get the idea.

NO deductions for ANYTHING. You want to be part of America, pay for the goods and services you get for living here.

[mermaid]

61. I See Your Point...However...

my proposed rates are higher than yours...and the fact is, raising a child properly IS expensive. So give 'em a break. and in my tax tables, gay couples who adopted a child would also be eligible for the 5%. Notice I said ANY eligible child dependent.

And again, notice that my brackets were higher than yours at the top end. Nothing wrong with that, either...those who benefit the most FROM the system we have OUGHT to pay more, willingly, to sustain said system. Those who reap jack shit from our current system (the working poor) shouldn't oughta have to pay jack shit to sustain that system, either.

[welshTerrier2]

36. "Buying" the Government

We should not allow anyone to accumulate an amount of wealth that allows them to exert a disproportionate amount of influence over government policy ...

Under current laws, our government is for sale to the highest bidder ... I do not believe this can be effectively controlled by changing the laws that pertain to lobbyist nor can it be adequately controlled by changing campaign finance laws ... great wealth will always find a way to exploit the political process ...

"Excessive" wealth must be restricted by a 100% tax rate ... it's not an exact science and the cut-off point may vary from year to year ...

I would probably set an amount of roughly $1 million as a cut-off point ... but I really don't know the exact amount without a much more thorough analysis ...

Our democracy cannot be for sale ...

[dumpster_baby]

40. My "biggest baby bird in the nest" theory

What is happening is what happens in some bird nests when one of the baby birds gets more food than its siblings--it gets a lot bigger than its siblings. And when it does, it sometimes pushes the other baby birds out of the nest, to smash onto the ground below.

And when corps get big, or when people get big, they can dominate govt and politics and media and have their way with the rest of us.

This animalistic neoliberal "free market" economics is not going to end until we punish some of our leaders who have let this wacked-out economics theory get a chokehold on the world.

[TahitiNut]

42. Yes, it's cuckoo all right.

:shrug:

[dumpster_baby]

45. what is cuckoo about it?

Can you please elaborate?

[TahitiNut]

50. (sigh)

"The female Cuckoo will lay up to 20 eggs but each one is laid in a different nest, and each nest belongs to another type of bird entirely.

The Cuckoo always lays the eggs in a nest belonging to insect-eating songbird.

When the Cuckoo egg hatches, the tiny hatchling Cuckoo pushes all of the other eggs out of the nest. These unfortunate eggs drop to the ground and perish. The adult songbirds then feed and care for the Cuckoo chick, not realising what has happened."

http://www.naturegrid.org.uk/biodiversity/birds/cuckoo.htm

:eyes:

[Monte Carlo]

37. For this, I think you'd need to talk about on what this money is spent.

Cash flows in a society are a lot like water flows. The Republicans' official position is that water flows upstream. That's not the way it works.

Cash also flows in closed loops - there are no beginnings and no ends. Everybody gets their money from somebody else. If we intend to move together as a society, tax incomes and payouts must be sufficient in order to move us all at comparable rates, in the same direction. If that means taxing the uber-rich at 90%, then so be it. If we could get away with around 30%, then that would be better. It's all about balance.

[dumpster_baby]

38. my proposed brackets

This includes payroll tax, which is about 8% now. The payroll tax is an egregious hardship upon the working poor and should be sharply reduced, or better yet, just eliminated.

<15K --> 0%
15-20K-->3%
20-25-->6%
25-30-->8%
30-35-->10%
35-40-->12%
40-45-->14%
45-50-->17%
50-55-->20%
55-60-->22%
60-65-->24%
65-70-->26%
70-75-->28%
75-80-->30%
...
100-105-->38%

....
150-155-->50%
...
200-250-->60%

...

500-1M-->70%

>1M-->75%

Something like that...

[Kathy in Cambridge]

39. We should tax unearned income-investments-more than payroll

most rich people earn money off their investments, not a paycheck.

[ikojo]

67. True, I have a friend who does not have to work....

she lives primarily off the interest earned from investments made by her DADDY. It is not money SHE earned....NOOOOOO....her DADDY earned it and throughout her life has given her and her siblings "gifts" each year. They get money and he got tax breaks because he didn't have to pay taxes on the money he gave his kids.

To let you know how clueless she is about what things cost here is a story.....the rate for the monthly bus pass went up to $50 here and when I told her she was surprised. I then said, it's cheaper than a car payment. In all seriousness she said, "you couldn't get a car for $50 a month?" I laughed and said, "not one that runs." I then went on to explain to her that a low car payment would be around $200 per month.

See when she buys a new car she pays cash...again cash her DADDY earned.

Me, as a working class American, I pay taxes on every penny I earn. Note the word EARN....meaning I WORKED for it. So that those of the investment class get more money on their investments.

[Cats Against Frist]

44. There are all kinds of taxes

there's no universal tax rate.

What I would try to do, however, is make all tax rates as flat as possible, and offer all breaks in the form of credits. On the personal income levels I would give credits for children, poverty, child care, student loan interest, low-income housing credits, health savings accounts, retirement accounts, etc. -- but you would only gain access to these credits based on your income.

Same with the higher levels of small business income, corporate income and investment income. As flat as possible, and offer all breaks in the form of credits.

The flat rate could be debatable, but I'm thinking 28 percent.

This might sound crazy, but the idea here would be that disposable income would be taxed at a higher rate than that which is used for operational expense -- on both the home and business level.

I think it might dump some of the ire of the anti-tax obsessives, and if government were streamlined, I would prefer to return a lot of this taxing power back to the states.

Who are the people against taxes? Anti-tax ideologues and rich people. Taxes don't "squeeze" anyone but right-wing authoritarian types in their imaginations. Right?

So it's sort of a compromise. We get a flat tax. We streamline the government and the military, cut out A LOT of pork and return as much as we can to the state level.

I didn't address property taxes, but I think since land is a simultaneous partnership between you and the nation on which your land sits, that your property tax should be the tax that fluctuates in times of necessary tax increases.

Okay -- so maybe my whole system would come crashing down. But it's my dream world.

[DS1]

47. I think if you pull in $20,000+ a month after taxes, you're loaded.

After social security is thoroughly killed-off by the GOP, you'll need to save a lot more, IMO.

[leftyandproud]

49. a single person earning more than 40k is rich in my book

I'd say all income above that level should be taxed at 40%
50k, 50%...60k, 60%...and so on...stop around 95%

[napi21]

51. The real problem isn't the tax rate, it's the loopholes!

But you have to start somewhere! I'd almost be inclined to support a flat rate, if we could scrap ALL exemptions except the personal deduction, and have the taxable income begin at, maybe $35,000.

I don't remember, but I have heard the highest rate used to be +75%, and I agree, that's wrong! But what has happened is that sooo many exceptions, and protections have been established, that those earning over $200M don't ever pay 35% of their earnings, but 35% of the "adjusted Gross".

Under Kerry's current proposal, I would think starting with 38% to 40% would be a good start, but reinstating the Inheritance Tax for extates in excess of $10 million and letting the Bush reductions should be coupled with it.

[dumpster_baby]

57. I strongly disagree! 75% is a good top tax rate!

Heck, maybe it should be higher. If someone makes 100 Million, I think they can get by with $25 million....just FINE!

[mermaid]

63. Thanks For This Link!!

Unfortunately, I, as a Socialist...long ago recognize the very things stated in this note of appreciation from the rich. but for so stating such things, I was painted as "bleeding heart" "pinko" "commie" "un-American" you name it...because I dared to take the big, fat, rich pricks to task for the very unfairness of the current system. And because I dared to expose what they do not want Joe Sixpack to know.

[leesa]

56. What difference does their tax rate make if they never pay taxes?

Rich people pay very little in tax money due to a wide variety of evasions the rest of us do not have.

[jmags]

60. I think we should have a tax bracket for the ultra rich

by that I mean that 1% that own 30% of the wealth (something along those lines, I don't feel like finding the exact statistics). The next highest tax bracket should be at 250,000 and then one at 125,000.

I remember there was a report a while back that showed people who made around the 250 to 700,000 range actually paid a much higher percentage of taxes than those ni the 25 to 70 million range.

[yvr girl]

64. Here's some Canadian numbers for you...

Our combined federal/provincial tax burden is anywhere from (on the low end) 22.05% to 32% on incomes from $0 - $36,155 (highest low-income bracket)

Our top tax rates are anywhere from 39% to 48.64%. This rate kicks in anywhere from $55,281 to $113,808. Our Federal rate is from 16% to 29%.

Many Canadians feel that our top rates kick in pretty early. However, we do get a pretty good deal on health care, maternity leave and higher education.

Here's a link to the full chart on the Canadian rates. You can also get info on corporate taxes.

http://www.kpmg.ca/en/services/tax/taxrates.html

[CaTeacher]

65. Everyone should get a set amount of money no matter what

their job is (and free social services like health care). Beyond that amount, whatever a person has should be taxed heavily.

If the government subsidized the basics, food, housing and health care-and education-all a person would need to live well would be a small amount. I think perhaps 18 to 20K a year for a single person, maybe another 5 K per year for each additional family member.

Anything earned in excess of the amount need should be taxed HEAVILY-perhaps in the neighborhood of 90 to 95%.

[yvr girl]

66. that's ridiculous

First, you can't set a base amount that is going to work across the board. It might provide your basic needs in one location, but would be woefully inadequate in others.

Second, 90-95% is too much. What incentive would there be to work. You'd have to bring in an extra $100,000 to see $5-10 thousand. It is better to tax capital gains etc.

Don't get me wrong, I'm Canadian - I believe in a social safety net, but I'm also a capitalist. Wealth generation is what supports the safety net.

I don't resent the wealthy their money. I just don't respect a wealthy person without a heart.

[Geo55]

68. Screw the personnal tax rate....

Get the Corporate rate back up to reasonable levels AND NO LOOP HOLES!!....everybody wins...rich/middle/poor
'course we might see less Viagra ads and such...bummer

[notbush]

70. Corporations don't pay taxes....their customers, and employee's do!

[Cleita]

71. Maybe not so educated but from experience.

The so-called rich who pay huge tax percentages in liberal (we tax the rich societies) really get great tax loopholes, so even those with honest tax accountant usually never pay more than 25%. Those with Republican tax accountants pay much less (so flame me all you CPA's).

I really don't find that you can pin an actual $$ number on anything, more than a year, but you can work with percentages. So percentage-wise you have to figure out who is rich and who isn't. Then percentage-wise you figure out what they should pay.

[UdoKier]

72. It varies by region...

But if your house is paid off, you've got 2 paid off cars and can afford to take an overseas vacation every year, you're rich in my book.

The rich should pay about 35% on income over $150K

Income over $1 mil should be taxed at 50%.

:)

[UdoKier]

73. I live in San Fran on only $30K/year...

So anyone could live here comfortably on $200K. You may not be able to get a 2000 sq. ft. house with a big yard, but that doesn't make you poor. Living here, or in NYC is a luxury. These cities have a lot to offer, so I get annoyed at people whining "Wah, my 2 br. fixer-upper cost $700K". So who forced you to buy it? You own a house. 90% of SF bay area residents cannot afford to buy in this market. Thank your lucky stars. If you sell while the insane housing bubble is still going strong, you'll be rolling in equity.


I'd rather live on $50K/year here than $200K in Kansas, but that's just me. Quality of life and culture are more important to me than square footage and the quantity of plastic crap I can afford from Wal-Mart.

[lukasahero]

74. I finally figured out

what has bugged me about this whole topic. The question is "what level is rich and what should "their" tax rate be?" The assumption being that anyone who answers (or even reads) the question is poor and anyone considered rich couldn't possibly be willing to give their fair share in taxes.

If "rich" is defined only by income, then by almost every definition in this thread, I am rich - way rich. I'm getting married in a couple of months at which point I will border on a previous poster's definition of "ultra-rich". We "own" a house (with a mortgage paid ahead), have 2 cars that are paid in full and haven't taken a vacation since 2001 not because we can't afford to but because it's not a priority for us - paying off our debt is. Oh, and we have no children nor will be having any so I suppose that bumps us up another notch in the "rich" scale.

That said I supported Wes Clark's Families First tax initiative where families making under $50,000 would pay NO TAX. Families of 4 making under $100,000 would get a tax cut from current levels, people making over $1 mil would increase their current tax by 5% and everybody else would revert to the tax % they were at before DumbYa's cuts.

I support the child tax credit and I know how expensive it is to raise a child. Because I believe that healthy well-educated children are the most important asset of this country, I support paying a higher percent of my income to taxes to give those who aren't earning as much a chance to make ends meet and get ahead. I support getting rid of almost (if not) all tax loopholes. Funny, to the RW, I'm a "bleeding heart, pinko, commie un-American" liberal and to the LL I'm a "big, fat, rich prick".

[timdoodle]

75. National Sales tax

I think we should have a national sales tax, and then you pay tax on what you spend, and not what you earn. In order to not be regressive, the poor pay sales tax at time of purchase, but receive a rebate monthly from the government based on the sales tax percentage multiplied by the previous years monthly earnings (same period).

It has been proven, and I don't have time to search for the site, but I think it is a Congressional Research Service bulletin, that the tax rate would be around 15%, with corporate tax eliminated. The steadfast national sales tax pundits believe capital gains taxes should be eliminated as well, but I would continue to tax them at a 15% rate. This system would actually increase government revenue over 2003 levels, and has a diminimous impact on total cost of goods sold.

Just an idea, but then again, when it comes to taxes, I guess you could call me a moderate.

[dumpster_baby]

77. sales taxes are unfair to the lower income brackets (that is MOST of us!)

See, if a person make 20K a year (and 1/3 of ALL American workers DO make less than 20K), then you do not have much money left over. If the only taxes were sales taxes, then the rich make out like bandits. THey have so much more money left over.

[Paranoid_Portlander]

76. Kick. n/t

.