Does it ever bother you that the rich don't pay as high a tax rate as you probably do? Are you even aware that this inequity exists? I'm not talking about the high-powered lawyers and many tax breaks the rich take advantage of (although those need to be addressed). I'm talking about the capital gains tax, which covers most of the income of the truly rich in this country.
If you make between $30,650 and $74,200 (which covers most working people in the U.S.), then you pay a tax rate of 25% on your income. If you're doing a little better and make between $74,200 and $154,800, you pay a tax rate of 28%. Guess what the tax rate is for the filthy rich -- 15%.
That's because the really rich folks don't earn most of their money through a salary. They get their income through stocks, bonds and other investments. This kind of income is not taxed at the same rate as your hard labor is -- it is taxed through something called the capital gains tax, and the tax rate for capital gains is 15% (thanks to the Republicans).
So the real effect of this is that not only must the working and middle classes work harder for their money, they must also pay a larger percentage of it in taxes than the rich do. That really sounds fair doesn't it?
The original idea for making the capital gains tax rate lower was that this investment by the rich resulted in more jobs and growth for the American economy. But that is an archaic idea. When was the last time you saw any decent jobs being created in this country? The only jobs I see being created in the U.S. nowdays are minimum wage service jobs. The jobs that might pay a decent wage are being shipped overseas so the corporations can exploit the cheap wages in other countries.
A lot of this money is not even left in a company long enough to create anything. Many people buy and sell on the market and quickly take their profits and move on to do the same with other stocks. It is nothing more than a short-term money game to them, and one of the advantages is the super-low tax rate.
Also, did you ever wonder why many corporate executives take the lion's share of their income in stock options rather than salary? It's simple. They know that if they can manipulate the company's stock and make it rise (usually on the backs of the workers), then they can buy huge amounts of stock at reduced prices and make millions, which will be taxed as a capital gain and not as income. How's that for a sweet deal?
Frankly, because of the short-term money games being played by the rich and the corporations, the capital gains tax does very little for our country as a whole. All it does is let the rich get away with paying a lower tax rate than other Americans.
That's why I say it is time to eliminate the capital gains tax. ALL income, regardless of it's source should be taxed at the IRS rate for labor income. It's time to take the burden off the working and middle classes, and make the rich pay their fair share.
"So the real effect of this is that not only must the working and middle classes work harder for their money, they must also pay a larger percentage of it in taxes than the rich do."
ReplyDeleteThat is either an outright lie or you are just uninformed. I hope the latter.
Unfortunately for your propagand efforts, unintentional or otherwise, the Congressional Budget Office disagrees with you.
See table 2, page 19 of the PDF, 11 of the report, "Share of Individual income Tax Liablities". What does it say the Highest Quintile, AKA the top 1/5 of income earners in America, aka the richest people, make up in a percentage of individual income taxes? 82.5%! Combine that with the next fourth quintile which I am sure you will agree comprises of the richest people in America and what percentage if individual income taxes do these people pay? 96.8% of all individual income taxes are paid by the richest Americans.
Note that this is under Bush's tax laws. There is another table in the pdf, table 3, Clinton's tax law, and the richest people in America pay less in individual income taxes than they do under Bush's tax law.
I am not saying the capital gains tax is fair, you make some decent points about that, but the fact remains the richest people in America pay the most in income taxes.
I should add, the numbers I provided were for 2001.
ReplyDeleteObviously, I was talking about a larger percentage of their own income.
ReplyDeleteObviously, I was talking about a larger percentage of their own income
ReplyDeleteFair enough, sorry for the confusion.
I don't see how this could've been unclear to bodacious. In "pay a larger percentage of it" the "it" -- grammatically -- can only refer to "their money"
ReplyDeleteI personally feel that dramatically reducing the size and scope of government would be better for the bottom line than fiddling around with the already-labyrinthine tax laws.
My statements were more in reference to: " It's time to take the burden off the working and middle classes, and make the rich pay their fair share."
ReplyDeleteI probably should have quoted that.
On a macro level the rich pay a great deal more than their fair share.
That's nonsense.
ReplyDeleteIf you think fact is nonsense then I guess it is.
ReplyDeleteI gave you the proof, its a simple pdf. You can easily verify the facts for yourself. If you choose to ignor facts I guess you have the right to.
The day that the rich start paying as least as high a percentage of their income as the working and middle classes do, then they will be paying their fair share (and 15% ain't doing it). Until then, your assertion is nonsense.
ReplyDelete