> From: NSURIT@xxxxxxx
>
> The top 10% of those paying federal income tax, pay approximately
> 65% of all
> personal income tax paid. The bottom 50% of those earning income,
> pay less
> than 5% of all personal income taxes paid. That leaves about 30%
> of all
> personal income taxes to be paid by the remaining 40% of income
> earners.
Can't you see how disingenuous this is, Bill? I'm not saying YOU'RE
disingenuous, just this argument, which I'll assume you did not make
up by yourself.
The fallacy of this argument is that you are comparing proportions of
all taxes paid, rather than taxes paid as a percentage of income.
If Joe makes $1 and gets taxed 30% (15% marginal rate, plus 15% for
Social Security), he pays 30 cents. Let's say there are 2,000 people
like Joe (20%); they pay $60 combined.
If Fred makes $1,000 and gets taxed 42% (28% marginal, plus 15%
Social Security), he pays $420. There's LOTS of Freds out there,
about 7,900 in all (<80%), paying over $3.3 million.
If Bradford makes $1,000,000 and gets taxed 15% (15% capital gains
tax -- Bradford's income is mostly unearned investment income, and
thus 0% Social Security -- not even on the first $97,500), he pays a
whopping $150,000 in tax. But there are only 100 Bradfords in this
mythical example (1%), so they're paying just $15 million in total.
Now make a histogram. The nasty bottom freeloaders are only paying
0.00002% of taxes! The nerve! While the noble, public-spirited
Bradfords are suffering the terrible burden of paying nearly 82% of
all taxes paid! The indignity of it all!
Of course, life is much more complicated than this simple example. In
fact, it's probably worse, because the Joes just pay their dear 30
cents, the Freds have huge mortgages and other deductions that knock
them down to maybe $380, and the Bradfords have munis and tax
shelters that mean they can get away with NO taxes, if they hire the
right accountants and lawyers.
It's GROSSLY unfair to compare absolute proportions of all taxes
paid, in a country where the earning ratio between the janitor who
cleans the toilets and the CEO who often drives the company into ruin
is 1:10,000 or greater!
The US is probably the best country in the world to be rich in. It is
arguably one of the worst countries in the industrialized world to be
poor in. And the gap keeps increasing. Tensions like that don't last.
Something will give, sooner or later. The US may see insurrection
when gas gets up around $10 a gallon, while lower-class salaries
haven't budged at all.
I hope you don't take this as a personal attack, Bill. I have a great
deal of respect for many things you say -- I just don't think this
particular argument does your point-of-view justice.
:::: Of course I don't have all the answers -- I don't even have all
the questions! ::::
:::: Jan Steinman http://www.VeggieVanGogh.com ::::
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