6 ms·
The problem is, if you make all your income from investing, via dividends and capital gains, you pay 15% tax on it. The 'wedge' on the first dollar earned by a
by RockyMcNuts 11y ago
The problem is, if you make all your income from investing, via dividends and capital gains, you pay 15% tax on it.
The 'wedge' on the first dollar earned by a minimum wage worker is 15.3%.
And then don't get me started on the deductions, Mitt Romney's IRA etc. that mean those guys can don't even pay the 15%.
I don't think your math adds up...in NYC a huge cash bonus gets taxed at > 50% combined Fed, state and local. The CEO will always take something that's structured as future capital gain, not in 1 year, but whenever he decides to cash out.
The tax system and rent seeking in this country is a disgrace.
- deleted 11y ago[deleted]
- encoderer 11y agoMinimum wage workers aren't paying any taxes after standard deduction and exemption. Capital gains is now 20%.
- RockyMcNuts 11y agofair enough, the top bracket (over $400,000) now pays 20% on long-term capital gains and dividends. http://www.fool.com/retirement/general/2015/12/14/long-term-capital-gains-tax-rates-in-2016.aspx http://www.fool.com/retirement/general/2015/12/14/long-term-... the idea that minimum wage earners aren't paying taxes is a nonsensical talking point with no basis in reality. It only works if you disregard FICA, which is economically unjustifiable and not done in other contexts (like quantifying big government's size and tax bite). The bottom line is there is a 15.3% wedge between what the minimum wage employer pays and what the employee receives, and that's what has economic impact. The EITC offsets a part of the wedge, but only a part of it.