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It is fair that those who earn more pay a higher overall percentage in taxes.
My view is a flat income tax rate (perhaps at 17%) with personal exemptions (perhaps $8,000 per person) achieves this very goal, without being punitive in discouraging risk and achievement.
This question appears to be one that sparks a very distinct reaction from everyone, in every field and at all ranges and levels of the political, business, and social spectrum. It shows up in our fundamental sense of fairness, our political aspirations and our livelihoods as taxpayers, business owners and employees.
Is it fair that the top 5-10% pay the majority of taxes?
Jps revision - "Is it fair that the top 5 - 10% of the earners pay a higher percentage of their income in taxes than everybody else does?"
Income tax alone does not give the whole picture. I think the entire tax burden should be looked at - including sales taxes, payroll taxes, etc, to compute the total tax rate. I have never been able to find a good data source that supplies this. If anyone knows one, please let me know.
"The taxation system has tilted toward the rich and away from the middle class in the last 10 years. It's dramatic and I don't think it's appreciated. And I think it should be addressed."
As one of the middle class, I can tell you for certain it is NOT appreciated. That's just it GloryB! I'm sorry if the likes of Paris Hilton have to give up one vacation home or not spend $5,000 on a purse... the average worker is the BACKBONE of the US and has been abused for far too long.
This question appears to be one that sparks a very distinct reaction from everyone, in every field and at all ranges and levels of the political, business, and social spectrum. It shows up in our fundamental sense of fairness, our political aspirations and our livelihoods as taxpayers, business owners and employees.
Is it fair that the top 5-10% pay the majority of taxes?
Jps revision - "Is it fair that the top 5 - 10% of the earners pay a higher percentage of their income in taxes than everybody else does?"
Well.. the top earners who are paying more in taxes than the lower earners (middle class).. let me ask this..
How is their lifestyles impacted by this higher tax?
I see the top earners in my area doing several things that a middle class earner can only DREAM of .. despite their paying more in taxes. I live on LI.. and most of these that I talk about are not "celebrity" rich.. but are upper middle to upper class in neighborhoods where the houses start at $550K for a small starter home.
a) Living in a large house in some of the best neighborhoods
b) driving a mercedes, Lexus and BMW.. each spouse has one.. and then of course they purchase them for their children. I have yet to see a kid from the prominent areas of LI driving a Chevy!
c) They have boats..lots of extra toys.
d) take vacations to Greece, Italy... lots of places in Europe, cruises etc. ( I know people who take vacations like this all the time)
Please do not get me wrong. .this is NOT class envy. But.. it makes me scratch my head when on top of the taxes they say they are paying unfairly their "lifestyles" are not severely impacted.
Whereas a middle income family may work just as hard, just not have a career that brings in so much, and doesn't have a lot of these things and can only dream of winning the lottery or suddenly striking it rich to have these things.
I'm sure if you asked anyone in the lower tax brackets if they'd mind paying extra taxes to be in that upper tax bracket and enjoying that lifestyle the resounding answer would be "no I wouldn't mind at all!!"
Again.. i do NOT envy what they have.. I'm NOT a materialistic person. I do get irked when those that have those material things then want to complain about paying more in taxes.. It's like what did you have to give up to pay that tax? They manage to pay those taxes yet remaiin comfortable.
This is why those that are in the lower brackets, while paying less in taxes, bears more of the tax burden.
You really don't know the situation when seeing all those people living in expensive houses and driving nice cars. Some have huge savings, some will be living paycheck to paycheck and some will be in debt up to their eyeballs.
Of those that are living paycheck to paycheck and in debt up to their eyeballs from college loans....ect....They are now being called rich.
You really don't know the situation when seeing all those people living in expensive houses and driving nice cars. Some have huge savings, some will be living paycheck to paycheck and some will be in debt up to their eyeballs.
Of those that are living paycheck to paycheck and in debt up to their eyeballs from college loans....ect....They are now being called rich.
I might be incline to say.. yeah you're right about that..
However, having sold many homes in those neighborhoods and I can tell you this. Not one home I sold was purchased with less than 20% down. Those homes were a min of say $500K which means that they had atleast $100K in cash to put down . Not one was bought with any of thoe hybrid mortgages.. so they weren't buying more house than they could afford...
in the upper middle neighborhoods.. or the upper tax bracket neighborhoods, if you even thought abuot putting less than 20% down you wouldn't get the house.. because there were 2 buyers behind you that wanted it that could put down the 20%.
This tells me that they are not people that were living paycheck to paycheck.. and yes they were probably very smart about their money. So, they drove nice cars, had nice downpayments and obviously had good jobs to afford all that.. and yes, they pay more in taxes than a middle income or lower income family does, but it doesn't seem to hurt their financial standing or lifestyle.
They are also the class of people that have more money to "play" with in investments..some of which are tax free . Middle income families and lower income families do not have expendable income in which to grow into even more wealth.... They do not have expendable income that helps them purchase things that can be considered tax shelter to shelter their income from being taxed.
So while those paying the most money in taxes also legally have more loopholes in which to shelter their income, grow their money into even more wealth etc.
Look at it this way.. if the tax burden of those paying more in taxes brought their 'take home" pay to the same number that a middle income person takes home after they pay their taxes, then I could certainly agree with that statement and would call it unjust and unfair.. however, the fact of the matter is that despite the taxes those in the upper bracket pay they still have a lot of expendable income and are still better off financially then their piers in lower tax brackets.
If you want a flat tax rate then you would need to shut down all of the loopholes that the top 5% use to avoid paying taxes. In addition, require businesses to use all American workers instead of exporting jobs overseas. Then maybe the rest of the demographics can afford to pay their "fair share."
Oh, and if we're all going to pay the same tax rate, then maybe we should make education taxes universal, too. Make sure that all public schools are equally funded.
Something to think about for those of you who think that wealthier among us shouldn't be paying more taxes percentage-wise: we're all in this together.
If you think that the wealthy shouldn't have to help those who are in need (after al, your hard-earned money was earned fairly and should only go to support your own needs and wants), or take a bigger burden in proping up the economy (after all you pay sales tax on luxeries) . . . think of how you feel the next time you have to walk through urban squalor or is accosted by a pan-handler or live in fear of being mugged. Think of how much you pay to secure your car, your home, your children, against those who are less fortunate who then choose to prey on you. Think of how long your commute has to be because only in the subburbs will you feel secure enough about your neighbors (the inner city where you work being not a place you would want to raise a family).
The point I'm trying to make is that -far from asking the wealthy to act altruistically- these proportionately higher taxes go to support the structures that the wealthy would like to have - which can not happen if they don't supply a bigger portion.
In the end, the higher taxes on the wealthy is a way for the wealthy to get the comforts and security that they want (and can afford) in the first place. In the end, the wealthy are going to pay for it anyway - whether it be in higher costs in keeping their family secure, in not being able to move around freely through certain parts of the city, through higher costs in education or having to deal with the uneducated, etc. So why not just pay the higher taxes and work to ensure that those taxes go to support the structures that in the end benefit you?
Income tax alone does not give the whole picture. I think the entire tax burden should be looked at - including sales taxes, payroll taxes, etc, to compute the total tax rate. I have never been able to find a good data source that supplies this. If anyone knows one, please let me know.
CBO produces regular reports summarizing total federal tax burden by income quintile, plus top 10%, 5%, and 1%. Their 2007 update for 2005 data is here. An overall idea of the implications of these data can be gleaned from this graph.
Comprehensive data including the effects of state and local taxes are much harder to come by on account of there being so many dfferent state and local tax regimes to account for, not just once, but on an ongoing basis. There are some good state and regional analyses that are done, but such national analyses as one is likely to come across are so thoroughly flawed by methodological compromise as to be generally useless.
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