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The Millionaires Who Pay the Highest Tax Rate

j-mac

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Warren Buffett and Mitt Romney have managed to create one of the enduring myths of our tax debate: that the rich pay a lower rate than the rest of America.
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Mike Kemp | Getty Images


This may be individually true. Buffett pays a lower rate than his secretary and Romney pays a lower rate than most of us who make our living from salaries.But nationally, the tax code is still broadly progressive. The more your make, the more taxes you pay as a percentage of your income.
According to new data from the IRS, people who make $1 million or more had an average tax rate of 20.4 percent in 2010. Tax filers who earned $30,000 to $50,000 paid an average rate of 4.8 percent, while those who made between $50,000 and $100,000 paid 7.7 percent. Those making under $30,000 had a negative effective rate, meaning they paid no federal income taxes after deductions and credits.
Put another way, millionaires pay a rate that’s more than four times that of the middle class.
One caveat: Rates go up as income goes up — but only to a point. Once you hit a certain magic number among super-high earners, your tax rates start to fall slightly.
According to the IRS, average tax rates increase as income increases — until you get to around $1.5 million in annual income. Once you make $2 million, average tax rates start to decrease. The average tax rate peaks at 25.1 percent for those making between $1.5 million and $2 million.
After that it starts to go down, and falls to 20.7 percent for those making $10 million or more.
So the millionaires who pay the highest average tax rates in America are those who make between $1.5 million and $2 million. That $2 million could be called the “Top Turning Point” on the income ladder, where rates reverse. (Related: Where the 1 Percent Live)
The reasons for this aren’t complicated. Once you get above $2 million, your share of income from investments increases. Investments are generally taxed at the 15 percent capital-gains rate, compared with the top ordinary-income rate of 35 percent.

The Millionaires Who Pay the Highest Tax Rate - U.S. Business News - CNBC

We must not just accept the propaganda, and rhetoric that is dominating the conversation today.

Although Obama and his fellow Democrats repeatedly call on wealthier Americans to pay their "fair share," they never specify what percentage of the nation's tax burden the wealthy would have to bear. As matters stand, the top 1 percent of American households paid 39 percent of income taxes in 2009, according to the most recent data compiled by the Congressional Budget Office, and the top 5 percent of taxpayers paid 64 percent.

But income taxes, taken in isolation, do not tell the whole story, because lower-income Americans do pay payroll taxes. But even taking into account all forms of taxation, the top 1 percent still paid 22 percent of federal taxes while earning just 13.4 percent of household income. The top 5 percent paid 40 percent of all federal taxes, despite earning only 26 percent of all income. No matter how you slice the numbers, it's hard to understand why anyone would think the wealthy aren't already shouldering a burden commensurate with their blessings.

Examiner Editorial: If top 5% paid 40% of taxes, what is their 'fair' share? | WashingtonExaminer.com

It is reported that the increase we have been hearing Obama repeat since Jan 20th, 2009 about "fair share" and "taxing families over $250K per year" would be around $80 billion. That is a drop in the bucket in terms of doing anything concerning Obama's run away spending vision. So what gives? Is this just a 'get even' measure? though up by progressives that are jealous that they didn't become successful? or is it a pillar of communism?

Communist Manifesto 10 Planks

It is a sad time in history we are seeing here folks, hopefully we can endure, and fix what this progressive shift to the planks of Marx is attempting.
 
probably the best solution is to exempt capital gains to a certain level and then tax it as income above that level. there's no reason that someone at one million a year should pay the top rate, but someone making ten times that much shouldn't.
 
probably the best solution is to exempt capital gains to a certain level and then tax it as income above that level. there's no reason that someone at one million a year should pay the top rate, but someone making ten times that much shouldn't.


Why should capital gains be taxed at all? Hasn't the money being invested already been taxed at the normal rates?

Who owns my labor?
 
At 'Marx', it seemed clear that this in itself is propaganda by your standard of propaganda. Measuring the wealth of the rich by their household incomes is not taking into account their wealth in other assets.
 
Why should capital gains be taxed at all? Hasn't the money being invested already been taxed at the normal rates?

Who owns my labor?

the money that pays salaries has already been taxed, also. our revenue model largely relies on income taxes. if we taxed capital gains as income above a certain level, my guess is that the top marginal rate could remain at a lower level, and it's likely that we could drop the rate below that level significantly. perhaps we could even address our corporate tax rate, which is less than competitive when compared to other first world nations. the key would be figuring out where to put the ceiling.
 
Why should capital gains be taxed at all? Hasn't the money being invested already been taxed at the normal rates?

Who owns my labor?

Shouldn't we tax capital gains more since they're not working for it? Shouldn't we be rewarding hard work?
 
Pick up a history book or two. You might find that Ike, JFK, Reagan and Clinton were flaming commies as well. Or you could develop a sense of nuance in lieu of reactionary caterwauling.
 
Why should capital gains be taxed at all? Hasn't the money being invested already been taxed at the normal rates?

Who owns my labor?

Every form of income is "already taxed." My income is taxed. My income comes from other people paying for my service. They paid that with their income, which was taxed. Their income came from other peoples' incomes, which was taxed....

Capital gains is still income. Why should it have special treatment?

The money being invested has been taxed. The money earned from that investment has not. Failing to tax capital gains leaves a scenario where the richest of the rich pay no taxes at all. Someone who makes enough to live off investments could make any amount of money and never be taxed again

Who owns your labor? Whoever you sold it to, I guess. I'm not sure I understand the question.
 
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Every form of income is "already taxed." My income is taxed. My income comes from other people paying for my service. They paid that with their income, which was taxed. Their income came from other peoples' incomes, which was taxed....


Absolutely, so when you take that which has already been taxed many times over, and tax it again because you think that any gain made from the risk of investing that money is due the government, then you effectively tamp down levels of investment.

Capital gains is still income. Why should it have special treatment?

Social Security payments above age 67 are also income for those people, should they be taxed?

The money being invested has been taxed. The money earned from that investment has not. Failing to tax capital gains leaves a scenario where the richest of the rich pay no taxes at all. Someone who makes enough to live off investments could make any amount of money and never be taxed again

Wow, fantastic! Wouldn't that spur investment? Why do you think that government has a claim on that money? What did they do to lay that claim?

Who owns your labor? Whoever you sold it to, I guess. I'm not sure I understand the question.

No, I own my labor. Period. When I sell that labor, and make money from it, I own that too, not the government.
 
The thought that another 4.6% in taxes over and above current historically low rates is somehow devastating to the millionaires doesn't really seem logical.

Why pay taxes at all? Why not just print what we need - we seem to do that to a great degree anyway.

Taxes are about revenue, not fairness.
 
What? are you joking here? work til you die eh?

Here's a perfect example of what the right is always talking about - our system and government do not reward work. What you're basically advocating is for people to sit on their ass and live off of their investments tax free. The government should incentivize hard work for the poor, but not if you're rich?
 
Here's a perfect example of what the right is always talking about - our system and government do not reward work. What you're basically advocating is for people to sit on their ass and live off of their investments tax free. The government should incentivize hard work for the poor, but not if you're rich?

Considering the money invested came from work there doesn't appear to be any sort of problem.
 
Who owns your labor? Whoever you sold it to, I guess. I'm not sure I understand the question.

The question is who owns the fruits of ones labor and the answer is the person that did the labor.
 
Shouldn't we tax capital gains more since they're not working for it? Shouldn't we be rewarding hard work?

why should you be taxed higher rates because you make more? even with a flat tax the wealthy pay far more than others yet don't receive any additional benefits
 
Every form of income is "already taxed." My income is taxed. My income comes from other people paying for my service. They paid that with their income, which was taxed. Their income came from other peoples' incomes, which was taxed....

Capital gains is still income. Why should it have special treatment?

The money being invested has been taxed. The money earned from that investment has not. Failing to tax capital gains leaves a scenario where the richest of the rich pay no taxes at all. Someone who makes enough to live off investments could make any amount of money and never be taxed again

Who owns your labor? Whoever you sold it to, I guess. I'm not sure I understand the question.

your position is based on an assumption that the rates on Earned income is proper.
 
Here's a perfect example of what the right is always talking about - our system and government do not reward work. What you're basically advocating is for people to sit on their ass and live off of their investments tax free. The government should incentivize hard work for the poor, but not if you're rich?


You are incorrect. MOst of us who have investments have saved and worked hard to have money to invest.
 
Absolutely, so when you take that which has already been taxed many times over, and tax it again because you think that any gain made from the risk of investing that money is due the government, then you effectively tamp down levels of investment.



Social Security payments above age 67 are also income for those people, should they be taxed?



Wow, fantastic! Wouldn't that spur investment? Why do you think that government has a claim on that money? What did they do to lay that claim?



No, I own my labor. Period. When I sell that labor, and make money from it, I own that too, not the government.

Are you trying to make an argument that the government has no right to levy any tax on you?

You don't own something you sell. The person you sell it to does. (and you, in turn, own whatever they gave you in exchange)
 
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You are incorrect. MOst of us who have investments have saved and worked hard to have money to invest.

When the government decides I should have to pay the same tax rate on investment income as I do on earned income then I'll have to work till I die.
 
Μολὼν λαβέ;1061182843 said:
When the government decides I should have to pay the same tax rate on investment income as I do on earned income then I'll have to work till I die.

Here in cincinnati, many people work their lives with Proctor and Gamble and retire on P&G stock the parasites want those people to suffer huge tax increases on dividends.
 
At 'Marx', it seemed clear that this in itself is propaganda by your standard of propaganda. Measuring the wealth of the rich by their household incomes is not taking into account their wealth in other assets.
Indeed. If they have off shore accounts, you may never know.
 
Here in cincinnati, many people work their lives with Proctor and Gamble and retire on P&G stock the parasites want those people to suffer huge tax increases on dividends.

I would say the parasites at P&G want to enjoy the benefits of America's government but never pay taxes for it. I guess they're just too good to chip in for national defense.

I like how you guys will argue that it's just not FAIR that those filthy poors pay no income taxes and then turn around and argue that investors shouldn't pay any income taxes :lamo
 
I would say the parasites at P&G want to enjoy the benefits of America's government but never pay taxes for it. I guess they're just too good to chip in for national defense.

one of the more idiotic claims from the far left is that those of us who are tired of progressive income tax schemes is that we oppose paying taxes

that is not true-what we are tired of is paying for the benefits of others whose only thanks is to demand we pay even more
 
The thought that another 4.6% in taxes over and above current historically low rates is somehow devastating to the millionaires doesn't really seem logical.

Why pay taxes at all? Why not just print what we need - we seem to do that to a great degree anyway.

Taxes are about revenue, not fairness.

Again and again and again.....the additional taxes won't cover spending. In fact, if we took 100% of the income of everyone who made more than $200k and added it to the rest of the tax revenue we would still be more than $1 Trillion short so raising the taxes doesn't solve the deficit. Now, if we could cut spending to just $2 Trillion per year then raising taxes makes sense so that we can start paying down debt but until we get that spending cut raising taxes is pure redistribution for the sake of redistribution.
 
The thought that another 4.6% in taxes over and above current historically low rates is somehow devastating to the millionaires doesn't really seem logical.

Why pay taxes at all? Why not just print what we need - we seem to do that to a great degree anyway.

Taxes are about revenue, not fairness.

Great, so let's just make it a straight 10% on all income no limit....I could do my taxes on a post card....That would be wonderful.
 
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