4 ms·

Rayiner's stats explicitly show that the wealthy pay more, on a percentage basis, than the non-wealthy. If the wealthy pay 45% of taxes while earning only 33.5%

Rayiner's stats explicitly show that the wealthy pay more, on a percentage basis, than the non-wealthy. If the wealthy pay 45% of taxes while earning only 33.5% of income (ratio = 1.34), then simple arithmetic shows that the non-wealthy pay 55% of taxes while earning 66.5% of income (ratio = 0.82). So no, you don't pay more on a percentage basis. You pay a lot less.

thrownaway2424 11y ago
Rayiner's post has numbers that are made up. Here are actual numbers from University of California economist Emmanuel Saez: https://eml.berkeley.edu/~saez/lecture_saez_chicago14.pdf https://eml.berkeley.edu/~saez/lecture_saez_chicago14.pdf The top 10% have 50% of the income, and the top 1% have 22% of it.
- yummyfajitas 11y ago
  Rayiners numbers come directly from income tax returns, which you'd know if you read his source. Where do Saez' numbers come from? He's certainly doing something nonstandard. From his slides: Caveats: Income concept used is narrower than National Income and focus is solely on pre-tax, pre-transfer income I'm guessing Rayiner's numbers include taxable wealth transfers while Saez excludes them, but I'm not really sure.
  - thrownaway2424 11y ago
    The article conveniently decides to draw the line at 10%, which is well below where income inequality really starts to hockey-stick. People in the 90th percentile have not seen their share of incomes grow in the last 30 years. Indeed, even the 99th percentile hasn't done all that amazing of a job increasing their income share. It is the top 10% of top 1% who have more than doubled their share in the last 30 years.
    - yummyfajitas 11y ago
      Actually drawing the line at 10% undermines their case - it's an extremely inconvenient place to draw the line. The US tax system is even more progressive for high earners. Top 0.1% pay an effective tax rate of 35.7%. The 10th-5th percentile pay 20.3%. The bottom 10% pay 3.1%. http://www.pgpf.org/budget-basics/how-much-do-americans-pay-in-federal-taxes http://www.pgpf.org/budget-basics/how-much-do-americans-pay-... Based on the graphs herein, the convenient place to draw the graph would have been at about 1%.
      - thrownaway2424 11y ago
        I don't know if you intentionally sabotage your own argument by posting links to those sites, or if you really aren't aware of the self-interest behind their reports.
        yummyfajitas 11y ago
        I don't know what argument you are trying to make. You dislike the Brookings Institute (the original source of those #s), therefore the numbers I cited are wrong?
        thrownaway2424 11y ago
        These numbers are picked over to distort the conclusion. They include in total tax burden the estate tax but not the sales tax. That's funny in a "haha I dropped my monocle in my brandy again" sort of way but not in a way that's useful for evaluating tax policy.
        yummyfajitas 11y ago
        Unless you believe the poor are paying 32.6% of their income in sales taxes it won't change the conclusion. (Google suggests the highest sales tax is 9.45% in TN.) You must be so happy to have discovered that the USA really is as progressive as you always wanted it to be.
  - CPLX 11y ago
    > Rayiners numbers come directly from income tax returns Yes, which is a ridiculous argument in a discussion of people lying on their tax returns.
    - thrownaway2424 11y ago
      Indeed. The entire argument rests on what you define as income. If you work for a living that's indisputably income and you are going to pay a lot of taxes on it, especially if you are a moderately prosperous professional making something like $200k/year. On the other hand of you are Mitt Romney you don't have "income" you just have fungible assets that mysteriously increase in value and on which you are not taxed.
  - deleted 11y ago
    [deleted]
  - dragonwriter 11y ago
    Coming from income tax returns is a problem, since the income on income tax forms is distorted by tax policy, and the tax on income tax forms is just the income tax, not total taxation (or even total federal taxation), so both the income and, even moreso, the tax shares derived from that source are inaccurate to make claims about the overall progressivity of taxation in the US compared to other countries.
- maaku 11y ago
  > The top 10% have 50% of the income, and the top 1% have 22% of it. So? That's about income inequality. That's not the discussion here. The relevant question is: do that 10% or 1% pay a lower, higher, or equal effective tax rate?
  - thrownaway2424 11y ago
    If we're discussing the ratio of income to taxes, the number on the numerator seems relevant.
  - thatcat 11y ago
    The divide is between those who live off investments and those who work. So since capital gains are taxed at a lower rate than labor, there is some tax rate bias against labored work. Although it is progressive, the capital requirements for entry are high so it is unlikely for low earners be able to benefit from this. from capital gains wiki: The tax rate on long-term gains was reduced in 1997 via the Taxpayer Relief Act of 1997 from 28% to 20% and again in 2003, via the Jobs and Growth Tax Relief Reconciliation Act of 2003, from 20% to 15% for individuals whose highest tax bracket is 15% or more, or from 10% to 5% for individuals in the lowest two income tax brackets
- rayiner 11y ago
  Those numbers come from an OECD report.
pm24601 11y ago
You are also ignoring WEALTH and capital growth that does not generate income. For example, wealthy people can do 1031 property exchanges - which is non taxable way to sell and buy a replacement property. A wealthy person can construct corporations that generate lots of tax "losses". For example, Amazon does not make very little in terms of taxable profit. If Jeff Bezos wants to buy a house, he can use his Amazon shares as collateral against a loan that Amazon makes to Jeff to buy the house. Completely legal so long as it is disclosed. The wealthy make things that are after tax expenses to you and I - a before tax business deduction. Lunch? business deduction. Fancy car? Lease it for a business deduction - better yet have the company lease it. House? Host board meetings and company wine and cheese events in the house - leasing the house to the company at a very generous cost.

thrownaway2424 11y ago

Rayiner's post has numbers that are made up. Here are actual numbers from University of California economist Emmanuel Saez: https://eml.berkeley.edu/~saez/lecture_saez_chicago14.pdf https://eml.berkeley.edu/~saez/lecture_saez_chicago14.pdf The top 10% have 50% of the income, and the top 1% have 22% of it.

yummyfajitas 11y ago
Rayiners numbers come directly from income tax returns, which you'd know if you read his source. Where do Saez' numbers come from? He's certainly doing something nonstandard. From his slides: Caveats: Income concept used is narrower than National Income and focus is solely on pre-tax, pre-transfer income I'm guessing Rayiner's numbers include taxable wealth transfers while Saez excludes them, but I'm not really sure.
- thrownaway2424 11y ago
  The article conveniently decides to draw the line at 10%, which is well below where income inequality really starts to hockey-stick. People in the 90th percentile have not seen their share of incomes grow in the last 30 years. Indeed, even the 99th percentile hasn't done all that amazing of a job increasing their income share. It is the top 10% of top 1% who have more than doubled their share in the last 30 years.
  - yummyfajitas 11y ago
    Actually drawing the line at 10% undermines their case - it's an extremely inconvenient place to draw the line. The US tax system is even more progressive for high earners. Top 0.1% pay an effective tax rate of 35.7%. The 10th-5th percentile pay 20.3%. The bottom 10% pay 3.1%. http://www.pgpf.org/budget-basics/how-much-do-americans-pay-in-federal-taxes http://www.pgpf.org/budget-basics/how-much-do-americans-pay-... Based on the graphs herein, the convenient place to draw the graph would have been at about 1%.
    - thrownaway2424 11y ago
      I don't know if you intentionally sabotage your own argument by posting links to those sites, or if you really aren't aware of the self-interest behind their reports.
      - yummyfajitas 11y ago
        I don't know what argument you are trying to make. You dislike the Brookings Institute (the original source of those #s), therefore the numbers I cited are wrong?
        thrownaway2424 11y ago
        These numbers are picked over to distort the conclusion. They include in total tax burden the estate tax but not the sales tax. That's funny in a "haha I dropped my monocle in my brandy again" sort of way but not in a way that's useful for evaluating tax policy.
        yummyfajitas 11y ago
        Unless you believe the poor are paying 32.6% of their income in sales taxes it won't change the conclusion. (Google suggests the highest sales tax is 9.45% in TN.) You must be so happy to have discovered that the USA really is as progressive as you always wanted it to be.
- CPLX 11y ago
  > Rayiners numbers come directly from income tax returns Yes, which is a ridiculous argument in a discussion of people lying on their tax returns.
  - thrownaway2424 11y ago
    Indeed. The entire argument rests on what you define as income. If you work for a living that's indisputably income and you are going to pay a lot of taxes on it, especially if you are a moderately prosperous professional making something like $200k/year. On the other hand of you are Mitt Romney you don't have "income" you just have fungible assets that mysteriously increase in value and on which you are not taxed.
- deleted 11y ago
  [deleted]
- dragonwriter 11y ago
  Coming from income tax returns is a problem, since the income on income tax forms is distorted by tax policy, and the tax on income tax forms is just the income tax, not total taxation (or even total federal taxation), so both the income and, even moreso, the tax shares derived from that source are inaccurate to make claims about the overall progressivity of taxation in the US compared to other countries.
maaku 11y ago
> The top 10% have 50% of the income, and the top 1% have 22% of it. So? That's about income inequality. That's not the discussion here. The relevant question is: do that 10% or 1% pay a lower, higher, or equal effective tax rate?
- thrownaway2424 11y ago
  If we're discussing the ratio of income to taxes, the number on the numerator seems relevant.
- thatcat 11y ago
  The divide is between those who live off investments and those who work. So since capital gains are taxed at a lower rate than labor, there is some tax rate bias against labored work. Although it is progressive, the capital requirements for entry are high so it is unlikely for low earners be able to benefit from this. from capital gains wiki: The tax rate on long-term gains was reduced in 1997 via the Taxpayer Relief Act of 1997 from 28% to 20% and again in 2003, via the Jobs and Growth Tax Relief Reconciliation Act of 2003, from 20% to 15% for individuals whose highest tax bracket is 15% or more, or from 10% to 5% for individuals in the lowest two income tax brackets
rayiner 11y ago
Those numbers come from an OECD report.

pm24601 11y ago

You are also ignoring WEALTH and capital growth that does not generate income. For example, wealthy people can do 1031 property exchanges - which is non taxable way to sell and buy a replacement property. A wealthy person can construct corporations that generate lots of tax "losses". For example, Amazon does not make very little in terms of taxable profit. If Jeff Bezos wants to buy a house, he can use his Amazon shares as collateral against a loan that Amazon makes to Jeff to buy the house. Completely legal so long as it is disclosed. The wealthy make things that are after tax expenses to you and I - a before tax business deduction. Lunch? business deduction. Fancy car? Lease it for a business deduction - better yet have the company lease it. House? Host board meetings and company wine and cheese events in the house - leasing the house to the company at a very generous cost.