Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Actually it is not what I want to do, it is how the IRS does it, I would love to get a breakdown between passive and active income.
No, this is not what the IRS does you are taking a number that includes both passive and active income and calling it "earned income".
Quote:
Originally Posted by hilgi
Since you seem to discount the majority of the S-Corp/Partnership income, please let me know how much of the $271 Billion you would deem as “earned” as opposed to wrongfully extracted from the economy?
There is no easy way to determine this, but obviously a good deal of it is passive income and not "earned income".
Quote:
Originally Posted by hilgi
The same goes with the $368 billion in W-2 wage income?
To some degree yes, though this is more safely "earned income" than the other category.
The figues are from the IRS website, how am I taking the numbers that way? They are provided that way, please feel free to show me other numbers.
Yawn.... You categorized the income as "earned income", the IRS did not do this rather they categorized it as "Partnership and S-Corp". This number is from Schedule E part II.
As far as I know the IRS does not report the details of Schedule E, so there is no way to know the exact percentages. But if you look at the asset allocation of the wealth, its mostly real estate, bonds, stocks, etc.
Although income is an imperfect proxy for wealth, I have no idea why you believe that there are a large number of people making $1+ million plus in income (remember talking about income taxes) as a one time thing. How exactly does one make this sort of money just temporarily? The sale of real estate, business, etc would be taxed as capital gains.
Yawn.... You categorized the income as "earned income", the IRS did not do this rather they categorized it as "Partnership and S-Corp". This number is from Schedule E part II. .
Yes, if you have any facts that can show that there is not "earned income" as in someone making an effort, please provide it.
Quote:
Originally Posted by user_id
As far as I know the IRS does not report the details of Schedule E, so there is no way to know the exact percentages. But if you look at the asset allocation of the wealth, its mostly real estate, bonds, stocks, etc. .
I would love to see some reliable facts regarding the asset allocation of the wealthy, please provide it. But again, we are talking rich as in high income and wealthy as in Buffett and Trump.
Quote:
Originally Posted by user_id
Although income is an imperfect proxy for wealth, I have no idea why you believe that there are a large number of people making $1+ million plus in income (remember talking about income taxes) as a one time thing. How exactly does one make this sort of money just temporarily? The sale of real estate, business, etc would be taxed as capital gains.
Stock options are categorized as wage income. A lot of people in sales, especially in real estate over the last 10 years had some great years and them very poor years. Even if the transient rich account for only 25% of the returns (including capital gains sales) considering we are talking about a trillion or so in revenue, a $250 billion drop could be huge.
Again, look into 1999-2002 in California; they had over 45,000 people file returns with million dollar plus incomes in 2000. This brought in billions in revenue, so of course they increased all of their budgets and created new spending. Then over the next two years the number of millionaire returns dropped to about 11,000 and they fell billions behind in their budget. Had we not relied on a tax system that assumed that "the rich" are the same people year after year, we would not had that problem.
Yes, if you have any facts that can show that there is not "earned income" as in someone making an effort, please provide it.
I never claimed that none of it was earned-income, rather I was pointing out that categorizing it as all "earned-income" is not accurate. Where did you provide data that shows that its all earned-income or anything close to that? Oh yeah...you didn't. My comments here were in response to your claims.
Quote:
Originally Posted by hilgi
I would love to see some reliable facts regarding the asset allocation of the wealthy, please provide it.
Great, so go to the IRS' website and look them up.
Quote:
Originally Posted by hilgi
Even if the transient rich account for only 25% of the returns (including capital gains sales) considering we are talking about a trillion or so in revenue, a $250 billion drop could be huge.
Feel free to show data that shows that the "transient rich" represent anything close to 25% of the $1 million+ returns.
Quote:
Originally Posted by hilgi
Again, look into 1999-2002 in California; they had over 45,000 people file returns with million dollar plus incomes in 2000. This brought in billions in revenue, so of course they increased all of their budgets and created new spending.
The incomes of the "actual rich" are going to go up and down with the business cycle so this does not support your claims.
Ironically the information you are citing supports what I'm saying. Since the "actual rich" are deriving most of their income from rents you'd expect to see it move up and down with the business cycle. Where as if it was "earned income" it would not be as volatile.
Regardless, I find your notion of "transient rich" meaningless to the issue of high marginal tax rates. The important question is not whether they are "transient rich" or not but rather if their income is "earned income" or not. With the exception of CEOs of major corporation few people have wages of $1+ million and when they do its not just for a couple of years.
The gap between the rich and poor always cycles, we are at a peak now. Much of the increase in the mega wealthy is due to the tech revolution, just as the prior peak (1929) was due to the auto giants and other "tech" giants of the day, wealth concentrates in the hands of the entertainers of a new tech cycle.
No, there are no "cycles". The Gini index has been growing for 80 years now, and there is no end in sight.
It peaked in 1929 dropped until 1968 and the started growing again.
According to other stats the bottom was in the early 70's. It cycles with innovation cycles. The current wealthy made their money from Tech, as more time goes by their wealth as a percentage will shrink, until the next innovation cycle.
I never claimed that none of it was earned-income, rather I was pointing out that categorizing it as all "earned-income" is not accurate. Where did you provide data that shows that its all earned-income or anything close to that? Oh yeah...you didn't. My comments here were in response to your claims. .
I did not included income from the sale of assets, dividends, or interest. The rest (excluding the unknown passive income) was from activities that require participation, hence EARNED. Do whatever mental master*ation you want to justify your views.
Quote:
Originally Posted by user_id
Great, so go to the IRS' website and look them up.
[/font][/color] .
You made the claim, show the facts.
Quote:
Originally Posted by user_id
Feel free to show data that shows that the "transient rich" represent anything close to 25% of the $1 million+ returns.
The incomes of the "actual rich" are going to go up and down with the business cycle so this does not support your claims. .
Ironically the information you are citing supports what I'm saying. Since the "actual rich" are deriving most of their income from rents you'd expect to see it move up and down with the business cycle. Where as if it was "earned income" it would not be as volatile.
Regardless, I find your notion of "transient rich" meaningless to the issue of high marginal tax rates. The important question is not whether they are "transient rich" or not but rather if their income is "earned income" or not. With the exception of CEOs of major corporation few people have wages of $1+ million and when they do its not just for a couple of years.
Please look back at the data, rents are not the majority.
What is important is being able to derive enough revenue to fund our government. As you say the business cycle goes up and down, relying on a constant revenue stream from a volatile source does not make sense.
Go ahead and deny stock option sales, one time property and stock sales, large bonuses for a year or two and other onetime events all you want.
I prefer to promote efficiency.
Disparity in income causes economic depressions. When the money is all concentrated at the top of the food chain, the working class does not have enough spending power to support the economy. Typically before the economy collapses it is supported by debt because the middle class must borrow in order to consume. When they can no longer service their debts, the economy must collapse and cannot begin to grow again until asset values fall back in line with working income.
The rest (excluding the unknown passive income) was from activities that require participation, hence EARNED.
This is real simple, you tried to pass off a number that incomes both passive and active income as "earned income". Yet, you accuse me of trying to "politicize" matters. If you don't believe me that this number includes both just look at Schedule E part II.
Quote:
Originally Posted by hilgi
So seeing California’s million dollar returns drop by 70% isn't proof enough?
Why would that be proof? The "actual rich" income will shift with the business cycle as well.
Quote:
Originally Posted by hilgi
Please look back at the data, rents are not the majority.
What you posted looks at those with income of $200k+, the vast majority of which are going to be upper-middle class folks. It is not until you get into the $400~$500k income range that people start deriving most of their income from rents (i.e., investments).
Quote:
Originally Posted by hilgi
As you say the business cycle goes up and down, relying on a constant revenue stream from a volatile source does not make sense.
Its really not that difficult to smooth out the revenue. State/local governments can build rainy day funds and if necessary sell bonds to during a recession. The federal government can deficit-spend during recessions and pay down the deficit when the economy is healthy.
Regardless as I've said before, I'd prefer another type of tax but that is not going to happen.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
