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But you are missing the most critical thing: much of the wealth belonging to the richest people is not classed as income, and thus is subject to much lower rates of taxation than the wealth of the working and middle class.
If that's true, why do the rich pay a much higher effective federal income tax rate than the working and middle class?
IRS Data on actual effective federal income tax rates:
Top 0.1%: 22.84%
Top 1%: 23.39%
Top 5%: 20.64%
And then a HUGE effective tax rate drop-off below the top 5%...
Top 5-10%: 11.98%
Top 10-25%: 8.70%
Top 25-50%: 6.01% (middle class)
Bottom 50%: 2.37% IRS Latest Federal Income Tax Data
This says that the top 40% of wage earners pay 106% of income taxes.
You only need to earn $32,000 a year to be in the top 40% of income earners in the United States. Heck, only 25% of people in this country have incomes of more than $50,000/year. Does CNBC and OP seriously consider a $15/hour wage "wealthy?"
This has got to be one of the most ridiculous things I've read all week. And wow, the comments section on CNBC makes the posters around here seem like geniuses.
You think the top 40% of Americans earn $32,000 a year? I've read that the official median income rate in the US is $51,000.
If you believe the top 40% only earn $32,000 a year, how do you propose we change that, thru government redistribution of wealth? Well, we cannot ask the top 40% to pay more in taxes because the folks in that group have people only earning $32k, so who do we go to for this money grabbing redistribution scheme, the top 25%?
But my friends who make around $100,000 are paying 30%+ federal tax rates.
But you republicans are not satisfied with the above tax rates. Republicans want 0% tax rates on capital gains (so billionaires and millionaires will get 0% federal tax rates.) The following 50 second Youtube link shows republican politicians trying to get 0% tax rates for millionaires and billionaires
The idea of a progressive income tax I think comes from Teddy Roosevelt and others.
The first progressive tax came during the Civil War at 10%. It was appealed in 1872. In 1894, Congress passed a 2% tax on the top 2%. It was subsequently deemed unconstitutional. 20 years later an amendment made progressive taxation constitutional.
Teddy Roosevelt and Herbert Hoover ( both Republicans) took it to another level. Hoover raised the top tax rate from 24% to 64%. Teddy Roosevelt intended to raise the tax rate to 90% on that portion of earned income > $100,000. Reportedly, he said, " why not". That did not go over too well. Then Teddy issued an Executive Order taxing all incomes > $25,000 at 100%. He made his point and the 90% on incomes > $100K became law.
$100,000 expressed in 2013 USD would be about $1.3MM.
What seems to have changed the most is that rates for the highest income earners have substantially declined over time while the income brackets have collapsed. Those earning more than $400K today are in the same bracket as those earning $40 million.
You think the top 40% of Americans earn $32,000 a year? I've read that the official median income rate in the US is $51,000.
I don't think it. But in case you think I'm just making that up. Income Distribution in the US
Also, median is just telling you what the split is between the top and bottom 50%s. And that number for individual incomes is closer to $29,000. $51,000 is the median for households. Either way, the median is not the same as a percentage.
Quote:
If you believe the top 40% only earn $32,000 a year, how do you propose we change that, thru government redistribution of wealth? Well, we cannot ask the top 40% to pay more in taxes because the folks in that group have people only earning $32k, so who do we go to for this money grabbing redistribution scheme, the top 25%?
Well, I'd say taxing capital gains and investment income at the same level as earned income on a flattened progressive scale would be a good start.
Taxes are a tool to spur investment and hiring, and right now our tax rates on non-earned income is so low that there's no incentive to do anything other than sit on that money or plow it back into trading. The benefit of investing it in goods and people (and thereby reducing taxes) just isn't there.
All of this "the rich pay all the taxes" stuff comes from Fox news and Rush radio. Scientists call Fox news and Rush radio corporate propaganda groups. The only purpose of Fox news and Rush radio is to make CEO's and large corporations more money.
Fox news and Rush radio want corporate deregulation (so corporations will make more money.)
They want supply side tax cuts (these are tax cuts for large corporations and the rich.)
They want 0% tax rates on capital gains (so CEO's will get 0% federal tax rates.)
They say "global warming is a hoax", because if we combat global warming large corporations will loose money.
Fox news and Rush radio also hate high min wage laws and unions (because they cause corporations to make less profits.)
ex.ex. x 100.
The republicans in the Youtube link in my last post say "if we give the rich 0% tax rates it will create jobs." But Americas rich CEO's use their tax cuts to build US factories in Asia so they can get cheaper labor and increase their profits.
And tax cuts for the rich do not create new jobs, rather new customers and new high demand products create new jobs.
And before any of you fall into the Fox news worship the rich cult, you should watch the following Austrian documentary. The CEO's who run Fox news manipulate Americas republicans as if they were retarded sheep.
Who has been doing QE? That's the Obama administration, rather than working to fix the problem they would rather do QE and disguise the problem. The rich are obviously educated to what is going on and understand and positioned themselves to benefit.
QE began under the Bush Admin. Bernake transcended two administrations. FRB does not answer to the President, any president.
What should the Obama admin have done to fix the problem?
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