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Well the government is really hurting the middle class(ObamaCare is going to nail the middle class hard), technology is the big driver in eliminating the middle class. However, the middle class is also responsible for some of their decisions as well.
I never got this argument when looking at the 2010 stats:
The top 40% paid 106.2% of the federal incomes taxes, while the bottom 40% came away with a return (they got back more than they paid in) basically of 9.1% in federal income taxes. http://www.cbo.gov/sites/default/fil...geTaxRates.pdf
TOTALLY missing the point......
how is it fair that I pay, oh say, 22% of my income in federal taxes, whilst Oprah and Bill and the Koch Brothers pay only 9-10% of THEIR income.....
amounts don't matter.... it is the percentage of income paid......
22% of my income is a LOT more painful for me than it would be for Oprah and Bill and the Koch Brothers....
The "middle class" is being pulled apart in the tug of war between the greedy rich and the greedy poor - each of whom have huge entitlement mentalities.
Not so sure about that. According to the CBO, the richest 20% earns 50% of the wealth in this country but pays 70% of the taxes. And over the past few years, it has been the lower 19% of that richest 20% who have watched their tax burden increase.
What's more, those people are not exactly plutocrats lighting cigars with $100 bills. They are not guys doing arbitrage on Wall Street. They are business owners, doctors, lawyers, and other professionals who pay taxes on their business income whether they actually get paid or not. Let me repeat that. Those people are taxed on the profits of their enterprise, whether or not they actually see the money go into their own bank accounts, so the revenue that ascribed to them is often never actually realized.
I'll give you a perfect example. I built a business up to more than $3 million in annual top-line revenue in the 90s. It took working weekends, pulling all-nighters, and some pretty terrifying days when I wasn't sure where my next dollar was coming from. Before I sold, I had 12 employees. I operated on a 5-7% net margin, which was roughly $150,000-$210,000 profit at the end of the year. Pretty good right? I'm the kind of guy the government would want to reward with some kind of enlightened tax policy, right? After all, I created jobs, paid employees well, and generally added value to the economy. Except, no.
Let's work with $200,000 as a nice round number. Now, I suppose I could have cut myself a dividend check for $200,000. But it also means that I would have had no capital reserve with which to pay my employees, upgrade equipment, etc., during the traditionally slow first quarter of the following year. It also meant that I would have to shell out 1/3rd of that profit to the government, say $66,666, that I couldn't use to pay employees, upgrade equipment, etc. So already, I'm down to $133,334 to get through 1Q of the next year. If I'm lucky and have contracts coming through I might have been able to bring home a dividend of $50,000 on that $200,000 in profit. Now, mind you, I'm a guy who paid his employees well, paid profit sharing, and bought top-shelf benefits packages so that they could feel good about where they worked. Hell, I even gave them off between Christmas and New Year if things were slow. So while I was a 2-percenter on paper I wasn't exactly a greedy capitalist pig diving into a swimming pool filled with dimes. Yet that $200,000 was considered to be my income whether or not I saw a penny of it. And I had a great accountant, too.
That means when you talk about jacking up the taxes on the top earners in this country, realize that you're really talking about jacking up the taxes on the economic backbone of the country. You know, the guys who do the large majority of the hiring in this country. And given that almost all of them operate under a corporate structure such as an LLC or a subchapter S, you're asking them to pay corporate taxes roughly 50% higher than even a statist country such as Sweden. Only Japan comes even close, and their economy is so riddled with cronyism that only chumps over there pay full boat. Now when people ask me if I want to be a partner in an existing business, I simply tell them 'No.' The regulatory and taxation environment is too hostile. I make fine money consulting. I have no expenses except my telephone, my laptop, my home office and my company car and I bring home more money than I ever thought of when I had that $3,000,000 company.
What's more, the "Used To Have" article cited in the HuffPo is fascinating for the author's lack of self-awareness. She lives in Massachusetts where she gets free health care along with a lot of other entitlements but can't understand where all the jobs have gone. Well, they've gone to places like Texas or North Carolina or North Dakota where the government philosophy on such things is much leaner. Heck, in today's news, Remington announced it's building a firearms plant in Alabama, creating 2,000 jobs in the process. That means a company that has been in New York since 1823 is about to pull up stakes and move south where it's essentially easier to actually do business. VW's workers in Chattanooga just spurned UAW membership. The reason, they had seen what the UAW did in Detroit and wanted no part of it. If the author of that article really was interested in a job, she could have packed the car and moved to those states where workers of all kinds are in short supply. But she'd rather sit in her apartment in Boston and complain. I mean, Okies left the Dust Bowl in droves and went to California when their corner of the country faced economic catastrophe. Why can't she head to North Dakota or Nebraska or Texas where jobs are going begging?
So excuse the heck out of me if I'm a little annoyed when people call guys such as me greedy. Especially some writer who works for the New York Times and has never worked outside the insular bubble of a newsroom in his entire life.
how is it fair that I pay, oh say, 22% of my income in federal taxes, whilst Oprah and Bill and the Koch Brothers pay only 9-10% of THEIR income.....
amounts don't matter.... it is the percentage of income paid......
22% of my income is a LOT more painful for me than it would be for Oprah and Bill and the Koch Brothers....
Well, is it really fair that the top 40% carry the load, while the bottom 40% not only not pay, but get more back than they put in?
Because you're being taxed as income, not capital gains tax. Capital gains taxes are available to you, and at a lower rate (like income taxes, they are progressive as well). Municipal bonds are tax-free.
4. The rich who pay a far, far smaller percentage of their income in taxes than ordinary people do. (As in the famous example of the CEO who pays a lower percentage of taxes than his secretary.)
That's Warren Buffett. Even his secretary is a 1%er, by the numbers he gave when he said that.
Well, is it really fair that the top 40% carry the load, while the bottom 40% not only not pay, but get more back than they put in?
Because you're being taxed as income, not capital gains tax. Capital gains taxes are available to you, and at a lower rate (like income taxes, they are progressive as well). Municipal bonds are tax-free.
so, because someone has more income and assets than I do, they should pay a smaller percentage of that income in taxes?? even though the AMOUNT they pay exceeds the amount I pay??
so, because someone has more income and assets than I do, they should pay a smaller percentage of that income in taxes?? even though the AMOUNT they pay exceeds the amount I pay??
You can invest your money and be taxed at the same rate as them...it's not a tax system that is exclusive to them. Anyone can do it. If you start a business with little money, and sell it for x million dollars 10 years later, you will be taxed at that rate. The idea of the capital gains tax rate is to spur investment and entrepreneurship (the people who pay your "safe" income) and the risk associated with these things.
In fact, here's another set of facts and figures that put paid to the "wealth addict" meme, perpetuated by people who do not own businesses or understand money:
so, because someone has more income and assets than I do, they should pay a smaller percentage of that income in taxes?? even though the AMOUNT they pay exceeds the amount I pay??
They don't pay a smaller percentage because they have more income and assets than you. They pay because they have a different kind of income than you.
You are more than welcome to set yourself up to pay the same sort of taxes that they do. But most Americans choose wages, which carry little risk and therefore lower reward, and are taxes as income. There are others that choose to invest their money, which carries greater risk and therefore greater reward. That is taxed as capital gains. You are free to invest your money.
They don't pay a smaller percentage because they have more income and assets than you. They pay because they have a different kind of income than you.
You are more than welcome to set yourself up to pay the same sort of taxes that they do. But most Americans choose wages, which carry little risk and therefore lower reward, and are taxes as income. There are others that choose to invest their money, which carries greater risk and therefore greater reward. That is taxed as capital gains. You are free to invest your money.
Exactly! And not only that, but very few people have the patience to invest a small portion of their savings into stable slow-but-firmly-growing common stock in the earlier years of their working life. $500 invested in McDonald's in 1981, grew into $20,000 by 1997, and made the down payment on my house (part of which I rent out), and the capital gain provisions of the tax code are what made it possible.
I suppose this makes me just another "rich exploiter" to the barstool crowd.
Not so sure about that. According to the CBO, the richest 20% earns 50% of the wealth in this country but pays 70% of the taxes. And over the past few years, it has been the lower 19% of that richest 20% who have watched their tax burden increase.
What's more, those people are not exactly plutocrats lighting cigars with $100 bills. They are not guys doing arbitrage on Wall Street. They are business owners, doctors, lawyers, and other professionals who pay taxes on their business income whether they actually get paid or not. Let me repeat that. Those people are taxed on the profits of their enterprise, whether or not they actually see the money go into their own bank accounts, so the revenue that ascribed to them is often never actually realized.
I'll give you a perfect example. I built a business up to more than $3 million in annual top-line revenue in the 90s. It took working weekends, pulling all-nighters, and some pretty terrifying days when I wasn't sure where my next dollar was coming from. Before I sold, I had 12 employees. I operated on a 5-7% net margin, which was roughly $150,000-$210,000 profit at the end of the year. Pretty good right? I'm the kind of guy the government would want to reward with some kind of enlightened tax policy, right? After all, I created jobs, paid employees well, and generally added value to the economy. Except, no.
Let's work with $200,000 as a nice round number. Now, I suppose I could have cut myself a dividend check for $200,000. But it also means that I would have had no capital reserve with which to pay my employees, upgrade equipment, etc., during the traditionally slow first quarter of the following year. It also meant that I would have to shell out 1/3rd of that profit to the government, say $66,666, that I couldn't use to pay employees, upgrade equipment, etc. So already, I'm down to $133,334 to get through 1Q of the next year. If I'm lucky and have contracts coming through I might have been able to bring home a dividend of $50,000 on that $200,000 in profit. Now, mind you, I'm a guy who paid his employees well, paid profit sharing, and bought top-shelf benefits packages so that they could feel good about where they worked. Hell, I even gave them off between Christmas and New Year if things were slow. So while I was a 2-percenter on paper I wasn't exactly a greedy capitalist pig diving into a swimming pool filled with dimes. Yet that $200,000 was considered to be my income whether or not I saw a penny of it. And I had a great accountant, too.
That means when you talk about jacking up the taxes on the top earners in this country, realize that you're really talking about jacking up the taxes on the economic backbone of the country. You know, the guys who do the large majority of the hiring in this country. And given that almost all of them operate under a corporate structure such as an LLC or a subchapter S, you're asking them to pay corporate taxes roughly 50% higher than even a statist country such as Sweden. Only Japan comes even close, and their economy is so riddled with cronyism that only chumps over there pay full boat. Now when people ask me if I want to be a partner in an existing business, I simply tell them 'No.' The regulatory and taxation environment is too hostile. I make fine money consulting. I have no expenses except my telephone, my laptop, my home office and my company car and I bring home more money than I ever thought of when I had that $3,000,000 company.
What's more, the "Used To Have" article cited in the HuffPo is fascinating for the author's lack of self-awareness. She lives in Massachusetts where she gets free health care along with a lot of other entitlements but can't understand where all the jobs have gone. Well, they've gone to places like Texas or North Carolina or North Dakota where the government philosophy on such things is much leaner. Heck, in today's news, Remington announced it's building a firearms plant in Alabama, creating 2,000 jobs in the process. That means a company that has been in New York since 1823 is about to pull up stakes and move south where it's essentially easier to actually do business. VW's workers in Chattanooga just spurned UAW membership. The reason, they had seen what the UAW did in Detroit and wanted no part of it. If the author of that article really was interested in a job, she could have packed the car and moved to those states where workers of all kinds are in short supply. But she'd rather sit in her apartment in Boston and complain. I mean, Okies left the Dust Bowl in droves and went to California when their corner of the country faced economic catastrophe. Why can't she head to North Dakota or Nebraska or Texas where jobs are going begging?
So excuse the heck out of me if I'm a little annoyed when people call guys such as me greedy. Especially some writer who works for the New York Times and has never worked outside the insular bubble of a newsroom in his entire life.
My dear friend, if the shoe doesn't fit please don't try to wear it
I did not say, nor would I, that all rich folks are "greedy". Neither are all poor folks.
It's just that there is a real problem with entitlement mentalities among some folks in those income extremes.
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