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Thread: The Millionaires Who Pay the Highest Tax Rate

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    The Millionaires Who Pay the Highest Tax Rate

    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.
    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.
    Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom.

    Alexis de Tocqueville

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    Re: The Millionaires Who Pay the Highest Tax Rate

    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.

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    Re: The Millionaires Who Pay the Highest Tax Rate

    Quote Originally Posted by Helix View Post
    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?

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    Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom.

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    Re: The Millionaires Who Pay the Highest Tax Rate

    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.

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    Re: The Millionaires Who Pay the Highest Tax Rate

    Quote Originally Posted by j-mac View Post
    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.

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    Re: The Millionaires Who Pay the Highest Tax Rate

    Quote Originally Posted by j-mac View Post
    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?


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    This issue has been plowed more times than Paris Hilton.
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    Re: The Millionaires Who Pay the Highest Tax Rate

    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.

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    Re: The Millionaires Who Pay the Highest Tax Rate

    Quote Originally Posted by j-mac View Post
    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.
    Last edited by Deuce; 11-25-12 at 06:05 PM.
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    Re: The Millionaires Who Pay the Highest Tax Rate

    Quote Originally Posted by Deuce View Post
    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.
    Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom.

    Alexis de Tocqueville

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    Re: The Millionaires Who Pay the Highest Tax Rate

    Quote Originally Posted by rocket88 View Post
    Shouldn't we tax capital gains more since they're not working for it? Shouldn't we be rewarding hard work?
    What? are you joking here? work til you die eh?
    Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom.

    Alexis de Tocqueville

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