serious question - why do people believe the rich don't pay their fair share when the top 10% pay almost 3/4 of the income taxes. there's no way the top 10% receive 3/4 of the services, thus they're paying proportionally more, no? I am not saying this is good or bad, just trying to understand the rhetoric.
it seems to me that rich people already pay plenty:
> there's no way the top 10% receive 3/4 of the services
Why not?
A highway between Illinois and Ohio doesn't help me. It does help say the CEO of Walmart.
When you're invested into large parts of the USA, anything the government does helps your bottom line. When you're not then majority of the services the US does doesn't help you.
I'm not sure "top 10%" is all that useful of a grouping. In the table you present, $178,611 is the income split point, defined as "the minimum AGI for tax returns to fall into each percentile". $178k does not make you rich in almost any part of the US. You're not struggling if you live in a low cost of living area, but treating these folks the same as your Pichai, Ellison, Bezos, Cook, etc. is severely misleading to me. I think that's a core problem with our current tax bracketing -- seven just isn't enough for the absolutely massive income spread of American workers.
You didn't mention them by name. You mentioned the top 10%, which naturally includes everyone I named. It also includes folks making $178k MAGI.
You said "... why do people believe the rich don't pay their fair share when the top 10% pay almost 3/4 of the taxes... "
I'm suggesting talking about the top 10% is misleading because when people talk about the rich not paying their fair share, they're not talking about the master electrician in your home town that broke $180k working overtime. You conflated the rich with the top 10%, but your grouping includes a whole lot of people that most of us wouldn't consider rich.
To answer your question about why people believe the rich don't pay their fair share, you either need to look at a different figure than the top 10% (which invalidates the 3/4 of the taxes portion) or you need to say everyone (including married couples filing jointly) making $178k MAGI is rich. I don't think people at large agree with the latter, so the rest of your question is premised on the wrong set of numbers. That may answer the question you posed initially.
my point stands even if you use top 1% or top 0.1%. no matter what you use for [income tax], the group size and revenue generated in income taxes by them will be far disproportionate. this is an inherent property of the distribution.
Yes, but it's OK for the top 0.1% to shoulder a greater than 0.1% of the burden.
Why?
Because that enormously expensive army we're maintaining is protecting mostly their stuff. Setting aside the fact that, say, poor people, have no money; why should the poor pay an equivalent share to protect the wealthy person's property?
Yes, you implicitly did, because the top 10% definitionally includes the top 1% (and the top 0.01%).
I'm not really sure what you're trying to argue for/against here. Yes, people in the top 10% of income-earners collectively pay the majority of income taxes, dollar for dollar, and yes, we've been hearing variants of what Jonathan Chait called "The Stat" for years: the highest-earning 1% of taxpayers pay 40% of all income taxes.[1] As Chait points out, "'The Stat' is literally true, but it is deeply misleading." For instance, FICA is not a progressive tax; it's a flat tax that stops being collected at around at around $150K of income. Somebody making $80K pays way, way, way more FICA as a percentage of their income as somebody making $800K does.
While I'm not suggesting we need a wealth tax, start burning down mansions, etc., etc., it's at least worth considering the possibility that America has a tax system which disproportionately favors the wealthy. That multimillionaires and billionaires pay, dollar for dollar, more taxes than the shift manager of your local Jersey Mike's does is not some kind of slam-dunk argument against said possibility.
what exactly is your point, are you suggesting the data is wrong? if the link had a 0.1% bracket it would show that the even smaller group pays an even higher percentage of the total income tax revenue relative to their size.
I'm suggesting that the dichotomy is "earns wages from labor" vs "earns income from assets". The difference of someone on the 2nd decile vs someone on the 1st decile is that the former looks at the price on the supermarket while the later doesn't need to. But the difference between someone on the top 1 percentile and the top 0.1 percentile is much starker.
> if the link had a 0.1% bracket it would show that the even smaller group pays an even higher percentage of the total income tax revenue relative to their size.
That's exactly the point: in absolute values, if you have a lot of concentration of wealth, those will come out to be most of the tax base. That doesn't mean that proportionally they are paying the same. As a matter of fact, someone that makes 100k being taxed 20% is actually more onerous than someone that makes 1M being taxed 20%. This is why most countries try to have a progressive tax system.
As you move up the ladder, more of your income is increasingly derivative of society as facilitated by the state and its spending. For example, businesses are dependent on sufficiently educated employees to run them and need a sufficiently affluent population to buy their products. Usually products are delivered via roads, the Internet, or other public infrastructure. Most businesses use electricity from a public grid even if they have a private company that they pay their bill to. Because of this, rich people may receive more than 3/4 of the benefit of the services provided by taxes.
I'm not talking about specific rich individuals (e.g. top 1000). I'm talking about rich people in general, e.g. top 10% furthermore I am only talking about income tax, which is why I gave my context link.
When people are talking about "the rich not paying their fair share", it is typically about the income class that makes most of the income not from "working", but from "owning" (capital gains, profit from owned assets). This is exacerbated by the fact that those kinds of incomes are often taxed less (percentage-wise) than peoples salaries.
The cutoff for this is probably more in the top 1 to 0.1% range.
This notion is not something that only poor communists subscribe to (out of selfinterest/delusion), see e.g.
this doesn't really make any sense. forget billionaries - look at the bottom 50% compared to the cut off to be in the top 10%. The person in the top 10% making a mere 180K pays an order of magnitude more taxes.
of course, this is how a progressive tax system works inevitably. thus, my point and question is, how are rich people not already paying their fair share? by all data available with respect to [income taxes], they already pay a ton, no?
> I say this in terms of value to society. Is having some extremely, extremely rich individuals of value to the US?
yes. restated, is it good or bad that the USA has rich people? clearly it is good. if it were bad, then there would be evidence that countries with no rich people are better, but there is no such evidence.
> yes. restated, is it good or bad that the USA has rich people? clearly it is good. if it were bad, then there would be evidence that countries with no rich people are better, but there is no such evidence.
That's not the question. Having rich people is one thing; having extremely, extremely rich people is another. We're talking about people that are worth the entire annual economic output of entire medium-sized metropolitan areas of the US and Canada, not the guy you knew from college who became director of sales at a software vendor and lives in a neighborhood with a golf course.
Obviously does not follow. It’s like saying that torrential rains that flood your home are actually a good thing, because having no rain at all would be worse. Most things are best in moderation.
A "fair" share is in my view (at least) a fixed percentage.
I'm not sure what "fairness" means to you? A fixed amount, per capita?
Would you then throw everyone not making the cut into some kind of debtors prison, or working camp?
I'd argue that income is a decent enough proxy for how much utility a person derives from tax expenditures: Just protecting that income would be pretty much exactly proportional in a full anarcho/wild-west civilisation (can see this in unstable countries, where you often have a scale between "have to regularly pay off someone" to "need a private militia" to keep your gains).
The top 10% also have somewhere around 70% of the wealth, so the tax burden isn't quite as disproportionate as it seems. Feel free to compare income numbers if you're able to find them.
That said, why should we expect a direct relationship between increased tax burden and services received? You're not paying for services like a vendor, you're paying "society" in a sense.
again, I am only talking about income taxes, which can be appraised and assessed easily. taxing wealth introduces complications beyond the scope of discussion.
there is no objective way to calculate and appraise all wealth, so such discussions are meaningless inherently, the touching of said assets would immediately change its value, which would require recalculation, which would change the value again, etc.
the only true way to do it is to tax upon realization, which is already what happens.
This is a bizarre argument. You can can throw your hands up and say it’s too hard or actually do something. Property tax, property sales tax, taxing capital gains, etc.
> there's no way the top 10% receive 10% of the services.
Depends on how you value the service of protecting that wealth. Prooperty rights enforced by the state, and the more property one has, the more one benefits from that.
I think you misunderstand. The comment your responding to was arguing against this assertion:
> no way the top 10% receive 3/4 of the services
I think the argument is that the main service USA taxes pay for is defending property and keeping order (via force and infrastructure) such that property rights are honored. The rich have disproportionate property, so they receive disproportionate service.
you keep bringing in property but that's irrelevant to begin with, as that's a wealth construct and I'm only talking about W2 income. if you make more money, you will pay more taxes regardless if whether or not you own any property, so your point is moot.
all 50 states already levy property taxes on real estate so that's already accounted for separately
Property is not just real estate and state property tax is not what is keeping the american billionaire class safe and growing richer.
If you've asked this question in good faith, perhaps isolating and over-defining "income" or "property" is limiting your understanding of the broader question we're responding to: do rich people pay more or less tax compared to the value they get from government? Most here seem to be in agreement that rich get more value from our government than poor do because they have more at stake.
When people say "the rich" they're usually referring to smaller percentiles than the top 10%. The top 10% is a cohort the size of New York, Los Angeles, and Chicago combined.
The top 10% income bracket is a household income of 234k. For a couple both making $150k each in salary, they are top 10% and paying out probably 40% of that in taxes. Elons stock probably added $200B to his net worth in the past year. He did not pay anything on it, however is able to use it as collateral to borrow against (that way he doesn’t even have to pay capital gains). The upper middle class pays most of the tax burden. And your point about services???? Elon may not take advantage of the head start program for his kids, but he sure benefited from government subsidies for electric cars (just like CEOs benefit from favorable legislation and regulation)
> however is able to use it as collateral to borrow against (that way he doesn’t even have to pay capital gains)
I really don't understand how borrowing against shares isn't counted as realizing the stocks. I mean, apart from rich people lobbying against it and such.
If I buy some stocks for $100 and sit on them until they're worth $1000, if I sell them for $1000 or take a $1000 loan against them, I've realized the $900 gain and I should pay taxes on that either way.
Because you paid taxes on something that's worthless, which is the argument against this kind of tax: the value is too dynamic and hard to determine.
If paid $1000 for the stock, then took a loan and paid interest on it, then paid taxes on the $900 gain, and now the stock is worth $0. Now all I get to take is a loss on the $100. Bad deal.
No, you also gambled that they'd keep or increase in value, potentially to get even more out of them in the future.
Again, if you didn't want to accept that risk you could have just sold the stocks instead of taking a loan.
This isn't much different from taking a loan against a house, and then due to external circumstances the house drops in value, say a landfill next door. You're not getting back the property tax you paid.
> Again, if you didn't want to accept that risk you could have just sold the stocks instead of taking a loan.
I could have reasons for not wanting to sell it. Maybe I don't want to boost up my income for the year and be subject to even more taxes or loss of benefits (i.e. ACA). Or maybe I want to keep the dividend stream.
It any case it's already overcomplicated, and I don't think we need to make it moreso by giving the govt another opportunity to take yet another slice of a transaction they had nothing to do with.
Not to mention, the lender that gave me a loan has to give the govt a slice of their income, which comes from me.
> This isn't much different from taking a loan against a house
The difference is that houses rarely lose 100% of their value. Normally they hold their value or thereabouts.
The richest people are not paying the “income tax” your link refers to. They often have trusts and things and do daily expenses from loans and other tricks.
This link is only referring to income taxed, and I am only talking about income taxed. Your wealth comments are irrelevant to my point and to the data presented.
it seems to me that rich people already pay plenty:
https://taxfoundation.org/data/all/federal/latest-federal-in...
only referring to income taxes here. not anything else.