|

Do the wealthiest Americans pay their fair share?

In praising Congress’s huge new tax increase on the wealthiest Americans, President Obama was quoted New Year’s Day in the Wall Street Journal as saying that “millionaires and billionaires” will finally “pay their fair share.”

According to preliminary numbers from Tax Foundation Chief Economist William  McBride,

The tax plan approved this week raises the top marginal rate to 39.5 percent on those making over $400,000/$450,000 and their capital gains rate rises from 15  to 20 percent. Two other provisions also limit the value of their deductions.  Taken together, McBride estimates the top .7 percent — roughly 1.1 million of 143 million tax returns — will pay about 40 percent of all federal income  taxes.

At the other end of the wealth scale, the bottom 40% do not pay federal income tax, and in some cases, actually receive refunds from the government,

Excerpt:

“It creates huge divisions in society and breeds contempt. It’s class warfare.  It is also unsustainable because it disconnects voters. The bottom half of the population pays no income tax. That’s hugely disruptive. Those folks now have an incentive to lobby for more federal spending and it disconnects them from the cost of the federal government.”

The top .7% earn about 20% of the nation’s income, but will now pay 40% of the federal taxes – double their share of the total income, while the bottom 40% pay no federal taxes, and some even receive refunds having paid no taxes at all.

Do you think Obama agrees that the wealthy are now paying their fair share, as he stated Tuesday, or will he raise their taxes even higher at some future date to pay for his overspending?

[poll id=”1″]

Share:

34 Comments

  1. Don’t forget to include their fair share of state income tax as well.

    Here in Wisconsin the top marginal rate is 7.75%.

  2. Ted Biondo

    expdoc – At the rate Illinois is going and the debt keeps piling up, Illinois will eventually go to a progressive tax, start taxing retirement income and we will catch you faster than you can say Chicago politics!

  3. Neftali

    The article forgets to mention the new Medicare surcharge of 3.8% that starts this year for those making over $200K.

    What’s sad that even with all these tax increases, its does very little to solve the budget issues. The whole reason (if you call it that) behind all these taxes is purely perceptual.

    Politico has a good article asking if Democrats are now done raising taxes…

    http://dyn.politico.com/printstory.cfm?uuid=EC387C25-3576-471C-8B36-E9D099189283

    Of course, the answer is no. To really get the European style entitlement system they want, a European style Value Added Tax is the only answer, and so far they don’t have the guts to propose it. That’s why a balanced budget amendment is so critical. If written correctly to avoid deficit accumulation except in times of recession, it would force Democrats to either propose the mammoth tax increases on everyone, which is needed to pay for their programs….or cut spending.

    • Ted Biondo

      You are right on the money with your analysis Neftali. Yes, that 3.8% on those making over $200K and reduced deductions will add to the tax bill for those paying double their share of the total income.

  4. Of course they pay their fair share. I would look at the freeloaders that pay nothing and do nothing but take year-after-year.

    Obama has already come out and said that he wants to tax the rich even more.

  5. Obama has said we can’t cut our way to a balanced budget, which means freeloaders will always get theirs plus even more as time goes on. The pension mess will never change because libs will never make them pay in the proper amount or work past mid-age. Only people left are the 35+ year working stiffs with their 401(k)’s and personal savings/stocks which will be robbed, SS which will be robbed by raising the age, capital gains and dividends being robbed and estates being taken when they die. Sounds fair to me…LOL.

    • Ted Biondo

      Don’t save too much in that 401K, Juice. I’m sure some future president like Obama will figure out a way to tax that too, so your kids don’t get to use it to pay the bills our generation is running up on their generation.

  6. You might want to invest more in precious metals. They hold their value better than the dollar, especially after “quantitative easing”.

  7. Should have been $200,000/$250,000.

    I find it interesting that you don’t mention what percentage of wealth the top 1% has, because that is about 40%. Seems pretty fair to me to have the top 40% of wealth pay 40% of the taxes.

    Also, I like how posters above believe people who work but pay no income taxes bacuse they do not earn enough “do nothing” while people who inherit tens/hundreds of millions and just sit back and collect dividend checks are the hard -working backbone of America. Get a clue.

    • Ted Biondo

      cjr1 – The IRS collects tax on income not wealth. If wealth were taxed, Warren Buffet would change his tune fast about his secretary being taxed at a higher rate than him. He would vote Republican next time and quit making commercials for Obama!

      Sorry, it looks like Terry has already said about the same thing. So I will just be reenforcement. However, if the wealth passed to heirs is over $5M or $10M, it doesn’t matter if it has already been taxed, there will be another tax – the estate tax.

      I’ve heard this estate tax, possibly the third or fourth time the money has been taxed, was to keep the U.S. from starting their own elite class. I guess I could do the research, but maybe one of you guys already know what the origin of the Estate tax really was.

  8. JRM_CommonSense

    I don’t know about anyone else, but my 401k is already being taxed when I take any withdrawals. At least it was not taxed when I had it taken from my paycheck all those years. And it grew untaxed all those years that it wasn’t withdrawal. I also know that if I will my 401k balances to someone, they can have that transfered into a 401k program and it remains untaxed until they withdraw it.

  9. cjr1,

    When we have a wealth tax, you may have a valid point. Currently we have an INCOME tax. Also, that wealth had already been taxed back in the year it was earned or it will be taxed in the future when the gains are realized.

    JRM,

    That’s the concept of a 401K – tax DEFERRAL.

  10. NAVYFLYER10

    Isn’t it interesting that all the progressives / liberals / dems / or whatever name / rock they are hiding under scream for higher taxes but don’t take advantage of one very important IRS tax law that applies to everyone no matter what their tax bracket.

    That is the law that allows each and every taxpayer to make a “donation” to the IRS in order to help the country cover the astronomical spending habits of politicians.

    So the next time you hear someone idiotic progressive / liberal / dem — such as Cunningham — squeal like a pig for higher taxes, ask him or her if they have done their part and made a donation.

    For each one that says “yes,” let me know and I will give them $100. For each one that says “no,” ask them to send me a penny. I’ll be retired within one year.

    • Ted Biondo

      You are absolutely right, NAVYFLYER10. I have said the same thing myself. I posted a blog on Warren Buffet fighting to save some billions from being taxed. He was in his 8th or 9th year of the struggle with the IRS. Don’t do as I do, do as I say, comes to mind – the hypocrites!

  11. JRM_CommonSense

    Terry,

    I understand very well what the concept of a 401k is.

    I was responding to a comment that said “Don’t save too much in that 401K, Juice. I’m sure some future president like Obama will figure out a way to tax that too, so your kids don’t get to use it to pay the bills our generation is running up on their generation.”

  12. No, they aren’t going to TAX it, they will just CONFISCATE it.

    In February, the White House released its “Annual Report on the Middle Class” containing new regulations favored by Big Labor including a bailout of critically underfunded union pension plans through “retirement security” options.

    The radical solution most favored by Big Labor is the seizure of private 401(k) plans for government disbursement — which lets them off the hook for their collapsing retirement scheme. And, of course, the Obama administration is eager to accommodate their buddies.

    Vice President Joe Biden floated the idea, called “Guaranteed Retirement Accounts” (GRAs), in the February “Middle Class” report.

    In conjunction with the report’s release, the Obama administration jointly issued through the Departments of Labor and Treasury a “Request for Information” regarding the “annuitization” of 401(k) plans through “Lifetime Income Options” in the form of a notice to the public of proposed issuance of rules and regulations.

    Read more at: http://www.shtfplan.com/headline-news/senate-hearing-seizure-of-401k-accounts-may-be-reality-soon_10112010

    BTW, Argentina did something similar in 2008.

  13. Warren Buffet gave ~30 BILLION to the Bill and Melinda Gates foundation and a total of 85% of his fortune overall to them and 4 other foundations. I am quite sure he would welcome everyone else near his level of wealth to put up or shut up like he does, the USA and the world would be a much better place.

    I am aware the US INCOME tax taxes INCOME, thank you for that. I am saying that there is a gigantic wealth disparity and it is only getting worse in this country. You need to look at payroll taxes. Someone making minimum wage or close to it gets HAMMERED by payroll taxes, it is a huge portion of their tax burden and a sizeable chuck of would-be disposable income. Someone making 400k a year barely even feels the payroll taxes in comparison, and Social Security gets capped just over 100k a year I believe which helps them even more. They are going to have enough money for a Lexus and a trip to Paris either way.

    I am not saying that I want the rich unnecessarily punished. I think that the top 1% in wealth who earn ~40% of the income and have ~40% of the wealth paying 40% is not so unreasonable. If anything, they could pay a bit more.

  14. JRM_CommonSense

    You have always been able to convert 401k mutual fund based retirement plans to annuity based IRAs that pay a guarenteed annual income for as long as you live. Most large insurance companies offer these kinds of products. They keep your assets tax free until you start taking your annual payouts.

    And many, many companies have converted their former defined pension plans into annuities that guarenteed that the recipients would get what they had accumulated. This needs to be done with all public employee pension plans and would save the taxpayers a massive amount if money going forward. This combined with public pension plans based on Social Security and 401k plans would make any public official think twice before “confiscating” their own pension benefits.

    • Ted Biondo

      I agree with you 100%, JRM. As soon as public officials are under the same rules and regulations as the people, all our retirement systems will be much safer and better funded.

  15. JRM_CommonSense

    I read in the newspaper this morning that the “fiscal cliff” bill just passed also included the renewal of 50 temporary tax breaks saving $76 billion for businesses and trade groups that say the tax breaks help them prosper and create jobs, not to forget that they drive lobbying and campaign donations.

    This package of tax breaks expired at the end of 2011 when Congress was battling about tax issues, but have been renewed in the “fiscal cliff” package, including a provision that they are retroactive for 2012. That must mean that they will also have to be added to the deficit “retroactively” as the benificiaries can now claim them on their 2012 income taxes.

  16. BTW, there is all this talk about “paying their fair share”. What IS “their fair share”? Does it make a difference if the earner worked 80 hours a week to gain their success, or earned it by trading stocks?
    What if they inherited their money, or married into it (like John Kerry-TWICE).
    Is it “fair” if it was a politician, using “inside information” to make more money? (BTW, did you ever notice that a lot of politicians come out of office as millionaires, but went in with a lot lighter wallets?)

    Well, we really need to know-WHAT IS “FAIR”?

  17. JRM_CommonSense

    What is “FAIR” is a consumption tax as opposed to an income tax! Let’s see if it is even a topic of discussion when Congress addresses tax reform (as they say they will) over the next couple of years.

  18. A national sales tax, or consumption tax, would take money away from the bottom 50%, so it will never happen, unless subsidies are increased to compensate. I’m surprised the $2 license plate increased made it through for the same reason. I wouldn’t be surprised if Springfield somehow came up with a system to pro-rate your gas price at the pump based on your income level.

  19. I’d go along with a “consumption tax”, exempting things like basic food items, if, and only if, the 16th Amendment was overturned at the same time. Otherwise, the government could (and probably WOULD) re-instate the income tax ALONG WITH the consumption tax. I don’t trust most politicians further than I can throw the News Silo. Others share that sentiment:

    Society in every state is a blessing, but government even in its best state is but a necessary evil in its worst state an intolerable one; for when we suffer, or are exposed to the same miseries by a government, which we might expect in a country without government, our calamities is heightened by reflecting that we furnish the means by which we suffer!

    [Commenting that if we were all perfectly responsible and considerate, there would be no need for laws or a government at all] Government, like dress, is the badge of lost innocence; the palaces of kings are built on the ruins of the bowers of paradise. For were the impulses of conscience clear, uniform, and irresistibly obeyed, man would need no other lawgiver; but that not being the case, he finds it necessary to surrender up a part of his property [taxation] to furnish means for the protection of the rest; and this he is induced to do by the same prudence which in every other case advises him out of two evils to choose the least.

    Wherefore, security being the true design and end of government, it unanswerably follows that whatever form thereof appears most likely to ensure it to us, with the least expense and greatest benefit, is preferable to all others. [He’s saying the only real purpose of government funded by taxation is security]– Thomas Paine (Common Sense, 1776)

    “Government is not reason, it is not eloquence—it is a force! Like fire, it is a dangerous servant and a fearful master; never for a moment should it be left to irresponsible action.”-George Washington, First President of the United States (under the Constitution)

  20. On a related note (crooked politicians), I came across this:

    Judicial Watch Announces List of Washington’s “Ten Most Wanted Corrupt Politicians” for 2012

    http://www.judicialwatch.org/press-room/press-releases/judicial-watch-announces-list-of-washingtons-ten-most-wanted-corrupt-politicians-for-2012/

  21. One more liberal hypocrisy when it comes to taxes: AlGore just sold his Current TV Network to Al Jazerra for $500 million. He and his partners tried to close the deal before Dec 31 but failed. Why was this so important? The Bush Capital Gains Tax Rates were increased after that date. yet, you will here Gore and other libs scream for higher taxes.

    CJR1,

    You noticed that Buffet gave his wealth to a PRIVATE charity and not the federal gov’t. He knows where his money will have the most impact.

  22. BTW, Gore rejected an offer from Glenn Beck, because Beck is conservative, but Al-Jazeera’s anti-American agenda meets with his approval. That says a lot about those of “The Goreacle’s” ilk, doesn’t it?

  23. JRM_CommonSense

    What are you suggesting here? Should the government or some other entity have cantrol over who someone can sell their businesses to? Doesn’t he have a right to make a profit by selling his business? Just because people don’t like his politics doesn’t mean that what he did was somehow wrong. It is his business, he has the right to sell it to whom ever he pleases as long as there is no threat to national security.

  24. Allowing anti-U.S. propagandists access to this channel might be considered a “national security’ issue, but that wasn’t my point.

    As I understand it, Beck actually offered a higher price, and was refused, based on politics. The fact that they WOULD sell to an organization with anti-American views, at a lower price, seems to indicate serious character flaws, IMHO.

  25. JRM_CommonSense

    But don’t you consider the previous owners as individuals with anti-American views?

    Maybe the previous owners considered Beck as holding anti-American views and decided to sell at a lower price to and organization that they considered the lesser of two holders of anti-American views.

  26. That Gore and Co. would consider conservatives, who support our Constitution, a greater threat to this Country than the supporters of Islamic extremists and terrorists, would make perfect sense in their delusional Leftist minds. So, you have a point.

  27. On a related note:

    Iran’s Foreign Ministry appears to be backing President Barack Obama’s pick of former Sen. Chuck Hagel, R-Neb., as secretary of defense.

    Ministry spokesman Ramin Mehmanparast said in an interview Tuesday that he hopes the Hagel nomination will improve relations between the United States and Tehran.

    “We hope there will be practical changes in American foreign policy and that Washington becomes respectful of the rights of nations,” Mehmanparast said, according to Reuters.

    Hagel has previously criticized discussion of a military strike by either the U.S. or Israel against Iran and spoken of the influence of the “Jewish lobby” on Congress. He also has backed efforts to bring Iran to the table for talks on future peace in Afghanistan.

    “The appointment of Chuck Hagel would be a slap in the face for every American who is concerned about the safety of Israel,” said Matt Brooks, executive director of the Republican Jewish Coalition.

    Read more at: http://washington.cbslocal.com/2013/01/08/iran-hopes-hagel-nomination-will-improve-relations-between-us-tehran/

    Iran approves of Obama’s cabinet choice for Defense Secretary? That doesn’t sound like a decision that is in this Country’s best interests.

Leave a Reply

Your email address will not be published. Required fields are marked *

CAPTCHA Image

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>