So which tax breaks are you envious of ? Keep in mind that you actually need to pay taxes in order to receive a break. That disqualifies roughly 1/2 of the population.
Again I reference this summary of income and taxes that shows the bottom 90% earned 47.4% of the AGI while paying 24% of the income taxes…while the top 1% earn roughly 26% of the AGI while paying 46% of the income taxes. This seems to contradict a lot of the politically charged narrative…
I’m not an economist or tax accountant, but it seems to me that only looking at percentages doesn’t tell the entire story.
For example, the bottom 50% of tax payers pay 3.3% of all taxes. Unfair you say!
But the bottom 50% of taxpayers earn less than $46,637
The top 1% pays a tax rate of 25.9%, which is 8 times the bottom half.
But – they earn far, far more than 8 times the bottom half — $46.637 (max) x 8 = $373,000 and that is not anywhere near the top 1%
And something the report can’t account for is that the very wealthy have all kinds of sheltered assets and tax-avoidance/reduction strategies that aren’t available to regular folks. What do the top 1% pay tax on? It’s not mostly wage income. They probably get more of the capital gains benefit than regular folks do, who might get some but don’t have lots of investments.
Again I’m not a tax expert at all, but just looking at percentages and declaring it unfair doesn’t reflect the reality.
Here’s another percentage I noticed (Table 1), and I’m still thinking on it:
The bottom 50% of taxpayers are 10.4% of the Total AGI
The top 1% of taxpayers are 26.3% of the Total AGI
Yes, the bottom 50% of taxpayers pay a smaller % of their (mostly wage) income in taxes, but THEY DON’T HAVE MUCH MONEY COMPARED TO THE TOP 1% who have a large % of the country’s wealth (here, as measured by % of Total AGI). The bottom 50% earn less than $46,000.
Again, I’m still pondering on this to figure it out for myself.
Good comments Nancy, but I would take this: “And something the report can’t account for is that the very wealthy have all kinds of sheltered assets and tax-avoidance/reduction strategies that aren’t available to regular folks.”
And comment that yes we do. This is why the feds want to hire 87k agents and have banks report silly level of transactions. We just need to teach the common folk about business. Go into business for yourself, and suddenly huge tax write-offs are available. But I’ll tell you a secret, you’re going to work HARD but you earn the rewards. The feds don’t want anyone to know this.
We all need to stop whining about the rich. We want to learn from them and emulate them.
Which is why any tax break will not benefit them. You can’t pay lower than $0 in taxes.
Think about your own household budget. If you have mounting debt, what would you do? You could go out and try to make more money, but that approach is not practical for most families. Your other option is to cut back on spending. You put more money into paying off your debt and less money on things you could do without. This is simple and basic economics. Apparently, the people in Washington don’t understand it.
So everyone becomes a business owner and nobody should be a wage-earner?
I don’t understand how things will get done, since businesses need workers.
Please explain!
You also seem to put the blame on regular working people for not being as knowledgeable as business owners and rich people. But maybe the problem is that corporations and the wealthy have influenced/rigged the system against wage-earners and kept wages low over recent decades.
I don’t understand what an economy would look like if everyone was a business owner or a rich person, nor do I think it’s right to blame people for not thinking like wealthy business owners (who, by the way, seem to want to eliminate public education…)
I agree. The 2 major parties in the past seem to have extreme opposite ideas about budget spend/cut philosophies, rather than trying to realistically find a compromise. And the Rs in recent years have actually added significantly to the national debt, so their “fiscal responsibility” mantra is a not a real thing anymore. It’s all talk, no action, except to punish regular/poor people.
I always sided with the R idea of “fiscal responsibility”, and still do. But the current R party only mouths the words, and their only fix is to cut taxes on the wealthy, cut programs for the non-wealthy, and cut departments so that businesses can have free reign to destroy the environment and resources in the name of profit.
I think we need a sensible approach that involved consensus and even compromise on both sides. Sensible cuts to spending. Sensible tax policy and enforcement – and yes, there should be enforcement – I don’t care that 150 years ago this didn’t happen, it’s a new world today.
But consensus and compromise today? Let’s see how that works. The recent immigration bill in Congress gave the Rs what they said they wanted. Biden would sign the bill. But the R grand poobah nixed the bill because he didn’t want to actually solve the problem!
We need some sensible problem-solvers in Congress, not trolls, obstructionists, or anarchists who want to dismantle everything.
So in other words…we need to remove career politicians. Agreed.
Again, it’s this all-or-nothing thinking. Not all politicians are terrible, though many are.
If a politician knows the workings of government and tries to solve problems by building consensus, that’s not a bad thing.
The politicians who are not leaders but merely follow their weird extreme constituents, who constantly instigate chaos, who don’t actually try to solve actual problems – those politicians need to go.
But apparently, a certain segment of the population wants the drama of a “fighter” rather than the non-drama of a problem-solver.
And, a blanket “get rid of politicians” then begs the question: “well then, who?” There is this assumption that business people (who are usually men) or very wealthy people would be good in government. But not everything the government does is a ‘business’.
I would not assume that a business person is any better at governing than anyone else. and I’d certainly be less likely to trust them!
sorry for the delay, but sort of…
Please don’t put words in my mouth 
But I probably was not specific in my description. Before I started working for myself, I had no idea of the absolute crap small business has to go through to try and start a business. Every year I have to file 8 something tax forms, some are for really stupid crap.
When my business pays me payroll, I typically send north of 5 grand a month to the feds and the state. Miss payment by one day, and they have automated systems to ding you for more. But wait, it gets better. Suppose as running my C Corp I want to pay myself a vacation. I’m an employee of the corp, but think of yourself. When you get your paycheck, you see on your stub how many vacation hours you have, right?
Well corporations have to be prepared to cover that expense. So, if my fiscal year ends on 7/31 (for a corp it’s arbitrary, you could make it 12/31), if the corp leaves the vacation funds in the checkbook, that gets taxed as profit, and it magically is reduced to 75% of the balance.
In September when I want to go on vacation, I now have 75 cents on the dollar. But wait, it gets better. The employee does not see the hack (I do because I see both sides). So, in September, I pay myself taxable funds that get hacked AGAIN for fed, state and SSA.
Governments will take as much as you allow them to give. Depending on who wins the next election, I may cash out.
Even the Greeks understood it. When people discover they can vote themselves goodies from the public treasury, the game is up. Everybody wants more, but they want other people to pay for it. Humans have a never-ending list of desires. Give them shoes one day, and next week they will want free socks as well. One politician is even ready to promise in-vitro fertilization paid for by taxpayers. That sure won’t come cheaply.
Today’s welfare state is tomorrow’s police state. No way around it. The producers get tired of being milked like cows and find legal and illegal ways to circumvent tax laws. It takes an Argentine style crisis for citizens to realize they cannot endlessly live at the expense of other people. We will have to wait for such a crisis here before we come to our senses about spending. But I am not optimistic. The desire to get things for nothing is just too appealing.
That is patently false. It codified that current high level of illegal immigration.
It was a sham just like the so-called “Inflation Reduction Act” which authorized spending even more money!
Absolutely agree. You can just look at some of the comments here that just boggle the mind. There is no free lunch.