In Case You Missed This... 'Save the Rich, Pay Your Taxes' - FailedEmpire

[WillyT]

Save the Rich, Pay Your Taxes
Posted by Andrew - FailedEmpire
April 20, 2011

<snip>

As if anyone needed it, further evidence that the system is rigged heavily in favor of the rich:

Payroll taxes (deductions for Social Security, Medicare, and unemployment insurance) are mostly paid by the bottom 90 percent of earners. When they’re factored in on top of income tax, the gap between the tax rates at the very top and everyone else shrinks even more—so much that the effective tax rate for people earning more than $370,000 is nearly the same as for those earning between $43,000 and $69,000 a year.

As Martin A. Sullivan of Tax.com recently calculated, a New York janitor making slightly more than $33,000 a year pays an effective tax rate of nearly 25%. And the effective tax rate for a resident of the Park Avenue building named after Helmsley, earning an average of $1.2 million annually? A cool 14.7%.

Bear this in mind as you witness the purely fabricated debate unfolding in Washington about our spiraling national debt and the necessity to make drastic cuts in domestic spending. All the bogus statistics you hear about the wealthy being charged a higher income tax rate – while true in a very technical sense – are grossly distorted in order to portray an element of fairness which simply doesn’t exist in the U.S. tax system. The bottom line is that working and middle class Americans pay a higher tax rate than the wealthiest individuals and corporations.

This reality needs to be at the forefront of any debate about budget cuts. The MSM, of course, will never reveal this information, preferring instead to focus on the theatrical aspects of the imaginary Republican / Democrat divide. As a result, most Americans will never realize just how corrupt the system truly is, unless we help them learn. It is our responsibility – both to ourselves and to our fellow citizens – to do everything we can to make this knowledge public, and to call the greedy elites to account.

But let’s put this into even broader perspective. Ordinary Americans pay a tax rate which effectively amounts to 20-25% of gross income. The wealthiest Americans pay a tax rate which amounts to anywhere from 0 – 20% — but generally on the lower end of that spectrum, as demonstrated by multiple sources. Corporations, while technically required to pay up to 35% in taxes, pay absolutely nothing in many cases – in some cases even less, as with GE.

So ordinary Americans are saddled with a higher tax rate, but what do we get in return? Almost nothing. Our infrastructure is crumbling, are schools are in shambles. Millions of Americans lack access to adequate health care, millions more are unemployed, while millions remain under-employed. Homelessness and poverty are at unconscionably high levels for a nation as technically wealthy as ours, and hundreds of thousands more continue to lose their homes each year.

<snip>

More: http://failedempire.wordpress.com/2011/04/20/save-the-rich-pay-your-taxes/

:kick:

[ThomWV]

1. And look where the difference is, and what we would likely do with it.

It should be point out that in the example above the Janitor is paying income tax at a rate of about 9% and the wealthy person about 13%. The difference lies in the Social Security payment. The poor person pays in his money proportionate to his income, but the rich man with 35 time the income only pays twice the amount in tax.

You want to see Social Security and the rest of the tax system fixed? Put a progressive rate on Social Security with a top rate somewhere around 25% and the bottom right where it is now and then remove the cap completely. Social security would have so much surplus we could afford to get into a war now and then if we wanted to.

[truedelphi]

3. Also, while it is no secret that health insurance costs

Have gone sky high, the average worker or self employed person has no way to recapture the amount of deductions he should be able to post on his health insurance premiums.

I knew that the "Health Care Reform" Act was a joke, when the Big SHots meeting with Rahm in the Rose Garden didn't get anything near to the adjustments tax wise that the average American needs to see.

In fact, I am not sure that any tax adjustments were made at all to the tax code.

[Sirveri]

9. Social security already has a progressive rate structure.

The payout structure is pretty simple, you get 90% on the first ~15k you put in and then 35% above that to around 65k and then 10% on everything above that to the cap (I need to double check those numbers, they're straight from memory currently). So simply raising the cap and scaling the tiers would retain the progressive structure of the program. If you really wanted to make it progressive, dump the cap and then above where the current cap is give a return of 1%, float that based on CPI and install a glass floor (minimum benefit). Social Security will be solvent until we start having negative population growth or we find a cure for old age.

[Name removed]

2. Deleted message

Sub-thread removed by moderator. Click here to review the message board rules.

[WillyT]

4. Kick !!!

:kick:

[Lugnut]

5. K&R n/t

[Duppers]

6. K & R.

nt

[Cresent City Kid]

7. Read my lips

Raise Trump's taxes.

[Enthusiast]

8. No janitor should make $33,080 a year!

It is just too much! That is why your rent is high.



















:sarcasm: :hide:

[Sirveri]

10. payroll taxes are typically used to pay for mandatory government run insurance.

The payouts for these insurance programs are tied to how much people pay into the system, and the payouts are already progressively tiered. While a shallow look at the payroll tax would tend to indicate that it is a regressive tax, because it's used as a product purchase, and that product value is scaled progressively the tax is still technically progressive. We could simply eliminate the tax cap while retaining the payout cap, which I'm not opposed to, but it's likely politically untenable. It would however cause the system to behave more like a traditional insurance system, which does wonders for increasing the wealth of the system administrators. In this case however that's a good thing, since the American public is the administrators of the program.

[freedom fighter jh]

15. I'm missing how it's "technically progressive."

From the Merriam-Webster dictionary:

progressive: increasing in rate as the base increases.

regressive: decreasing in rate as the base increases <a regressive tax>

"Product purchase" does not change the fact that up to an income of $106,000 (or whatever it is) the tax rate is flat (not progressive or regressive) and after that income it is regressive.

[Sirveri]

21. It's because of the payout structure.

The rate is flat, but the return is less, so it's basically the same thing just flipped. The other alternative is to have a flat payout and a progressive increasing tax rate, but they both work out to the same effect, while having a flat rate leads to less loop holes. Like taking the benefits early, and then repaying them at zero interest and refiling the claim for full benefits after the fact since you repaid in full.

[bobburgster]

11. Thanks for sharing this.

K&R

[mntleo2]

12. And if you become homeless you pay MORE taxes than janitor!

...That's right. According to the Institute for Taxation and Economic Policy, in EVERY state the poor pay the highest rates of taxes. Many low income folks think they don't pay taxes, but in truth they do. My state (WA) burdens the poor with the highest rates in the nation. Check out your state here: http://www.itepnet.org/state_reports/whopays.php

Hope this enlightens!

Cat in Seattle

[TheeHazelnut]

13. Too bad we don't have a president who is willing to hammer on this fact...

...instead we have one who keeps adopting GOP talking points about cutting back on the government and entitlements.

[dotymed]

18. Maybe...

Candidate Obama will actually return to Progressivism for awhile.
President Obama certainly wouldn't but Candidate Obama must be his smart twin brother....

[freedom fighter jh]

14. Thanks for making this point.

It's even worse for self-employed people like me: We pay twice as much social security (self-employment) tax as do people on payroll.

I have often wondered why there is not more screaming about this.

[SharonAnn]

16. I know it seems that way, but it's not really the case. When employed by others,

the portion paid by our employers is actually part of our labor cost and could have been paid as salary. So we give up part of our wages to FICA before they're paid to us, and then we pay a portion of FICA after our wages are paid to us.

I know it seems like we're paying more as self-employed people, but it's just that it's more visible to us because we're paying both sides of directly. As employees, we're paying one part indirectly and the other part directly.

[dotymed]

17. The way "they" present this FACT is to

show the amount of money a rich person pays and then compare that to the amount an average earner pays. They do not show you this as a percentage of income, rather a direct comparison, in amounts. Which is, at least, very disingenuous.
They have people like Forbes and most of the "Libertarians" advocate for a "flat tax", saying that this is the most fair way to tax Americans. Everyone pays 10%, instead of each contributing according to their means. So many people eat this shit up, never thinking of the actual numbers (and the inequality) it produces.
"Hey, thats fair, they pay 10% just like the disabled widow down the street. What a FAIR country we live in."
We have so many people manipulated by the the propaganda machine it sickens me. Oh to have THE FAIRNESS DOCTRINE REINSTATED......

[Capitalocracy]

20. If we said to them OK, you can have your flat tax...

but it's going to be the same percentage our janitor in the example above pays... watch them change their minds and start advocating our current overly-complicated, job-killing tax code!

[liberal N proud]

19. Marking to read later