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Old 09-17-2018, 07:52 AM
 
Location: East of Seattle since 1992, originally from SF Bay Area
28,386 posts, read 50,562,503 times
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Quote:
Originally Posted by Grlzrl View Post
Wrong. Income taxes are progressive meaning the more you make, the higher percentage you pay up to 37%.
But the more you make, the more you can afford to spend on tax advisors, and find ways to shelter income from taxes. It makes sense that the highest income people "grab" the most wealth, since we all know "it takes money to make money." Even among the working people, this applies. Someone making $50,000 gets a 5% raise, that's $2,500 more a year. Someone making $150,000 with a 5% raise gets $7,500 more a year. Both can put up to $18,500 in a 401K which saves on taxes, but there is a big difference in how much they can afford to put into it.
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Old 09-17-2018, 07:55 AM
 
1,293 posts, read 288,534 times
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Quote:
Originally Posted by Hemlock140 View Post
But the more you make, the more you can afford to spend on tax advisors, and find ways to shelter income from taxes. It makes sense that the highest income people "grab" the most wealth, since we all know "it takes money to make money." Even among the working people, this applies. Someone making $50,000 gets a 5% raise, that's $2,500 more a year. Someone making $150,000 with a 5% raise gets $7,500 more a year. Both can put up to $18,500 in a 401K which saves on taxes, but there is a big difference in how much they can afford to put into it.
That's nonsense. High earners don't have all these tax shelters you talk about. People who make high $$ on earnings, options and bonuses pay sticker and there are no shelters you can do to get around that. If you don't believe me, go look at the tax distribution in this country. You can google it. And to further illustrate, google 'deduction phase outs above certain income levels.' Most of the deductions phase out if you make above a certain level of income.
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Old 09-17-2018, 07:57 AM
 
1,293 posts, read 288,534 times
Reputation: 1121
https://www.marketwatch.com/story/45...tax-2016-02-24

45% of Americans pay no federal income tax
Published: Apr 18, 2016 1:58 p.m. ET

913
77.5 million households do not pay federal individual income tax

Getty Images

By

CATEY
HILL
EDITOR

Many Americans don’t have to worry about giving Uncle Sam part of their hard-earned cash for their income taxes this year.

An estimated 45.3% of American households — roughly 77.5 million — will pay no federal individual income tax, according to data for the 2015 tax year from the Tax Policy Center, a nonpartisan Washington-based research group. (Note that this does not necessarily mean they won’t owe their states income tax.)

Also see: Americans pay more in taxes than for housing, food, clothes combined

Roughly half pay no federal income tax because they have no taxable income, and the other roughly half get enough tax breaks to erase their tax liability, explains Roberton Williams, a senior fellow at the Tax Policy Center.


Despite the fact that rich people paying little in the way of income taxes makes plenty of headlines, this is the exception to the rule: The top 1% of taxpayers pay a higher effective income-tax rate than any other group (around 23%, according to a report released by the Tax Policy Center in 2014) — nearly seven times higher than those in the bottom 50%.

Read: Compared to most countries, we’re undertaxed

On average, those in the bottom 40% of the income spectrum end up getting money from the government. Meanwhile, the richest 20% of Americans, by far, pay the most in income taxes, forking over nearly 87% of all the income tax collected by Uncle Sam.

Read: Compared to most countries, we’re undertaxed — honest

Rich people pay nearly 87% of all federal individual income tax in America

Income level Share of total federal
individual income tax paid Average income tax bill
per person
Lowest 20% -2.2% -$643
Second lowest 20% -1.7% -$621
Middle income 4.2% $1,743
Second richest 20% 12.9% $6,285
Richest 20% 86.8% $50,176
Source: Tax Policy Center

The top 1% of Americans, who have an average income of more than $2.1 million, pay 43.6% of all the federal individual income tax in the U.S.; the top 0.1% — just 115,000 households, whose average income is more than $9.4 million — pay more than 20% of it.

When it comes to all federal taxes — individual income, payroll, excise, corporate income and estate taxes — the distributions of who pays what is more spread out. This is partially because nearly everyone pays excise taxes, which includes taxes on gasoline, alcohol and cigarettes.

Rich people pay 69% of all federal taxes in America

Income level Share of total federal taxes paid
Lowest 20% 0.8%
Second lowest 20% 3.4%
Middle income 9.2%
Second richest 20% 17.5%
Richest 20% 69%
Source: Tax Policy Center
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Old 09-19-2018, 02:59 PM
 
Location: Paranoid State
12,672 posts, read 9,420,097 times
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Quote:
Originally Posted by Hemlock140 View Post
But the more you make, the more you can afford to spend on tax advisors, and find ways to shelter income from taxes.
OK... do tell... how can someone shelter income from taxes? Please state 2 legal ways to shelter income from taxes.

I triple-dog dare you.

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Old 09-19-2018, 03:07 PM
 
6,996 posts, read 6,629,325 times
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Very easy. Get into a low enough tax bracket of 15 percent or less for earned income. Then your dividend income and long-term capital gains are taxed at 0 percent. Use a pass-thru entity for the business. Some of the billionaires have openly bragged about the move, We had the real estate business set up that way. The net income flows to the individual return.
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Old 09-19-2018, 03:16 PM
 
10,265 posts, read 6,491,094 times
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Quote:
Originally Posted by Thatsright19 View Post
Yes, people with income generating and/or appreciating assets tend to do better than people that blow their actively earned income on consumption and depreciating assets.
Not blow, it costs money to pay for housing, food, etc.

the 1% are getting the money from what the 99% spend, if they get all the money there won't be any more when the 99% have no money to spend.
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Old 09-19-2018, 03:27 PM
 
4,713 posts, read 2,251,841 times
Reputation: 8704
Quote:
Originally Posted by lchoro View Post
Very easy. Get into a low enough tax bracket of 15 percent or less for earned income.
Can confirm. We live on divs and cap gains, pay approximately $0 in federal income taxes.

Only reason over $0 is minor reconciliation due to estimate versus actual annual income for ACA.
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Old 09-19-2018, 09:23 PM
 
6,996 posts, read 6,629,325 times
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Quote:
Originally Posted by LifeIsGood01 View Post
Not blow, it costs money to pay for housing, food, etc.

the 1% are getting the money from what the 99% spend, if they get all the money there won't be any more when the 99% have no money to spend.
The 90% are getting jobs from what the 10% spend. The top 10% account for 47% of all consumer expenditures. Realized income from financial assets accounts for 40% of the income for the top 10%. They would probably have a negative saving rate without the stock market gains and equity withdrawal would result in a downward spiral (which was brought up by Bernanke).
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Old 09-19-2018, 11:43 PM
 
Location: Outside US
449 posts, read 196,525 times
Reputation: 537
I assume most of us are familiar with this, but here's a short clip:


http://www.youtube.com/watch?v=uB7jdjsFErM
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Old 09-20-2018, 06:19 AM
 
1,293 posts, read 288,534 times
Reputation: 1121
Quote:
Originally Posted by newp View Post
Pretty sure this other poster doesn't even know what a "loophole" actually is.
I have forgotten more about taxes than you will ever know.
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