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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/lec

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 10y 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 10y 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 10y 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 10y 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 10y 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 10y 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 10y 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.
        ptaipale 10y ago
        Sales tax? I'm not from US but what sales taxes would individuals, particularly poor, be paying? Typically sales taxes are on businesses (where I live, we have value added tax, which is a further development of that, designed to distort the value chains less).
        nkurz 10y ago
        In the US, "sales tax" refers to an additional percentage charge added to the retail prices of goods and services. It's a terrible system, but individuals (poor or otherwise) might pay it for just about everything they buy: clothing, restaurant food, tools, repair services. It's collected by the retailer at the time of sale, who then reports it and passes the amount collected on to the state. Sometimes cities and counties have additional taxes, normally smaller than the state does. There is no federal sales tax. Depending on locality, combined state and local sales taxes are typically in the 7-10% range, and unlike a VAT are only charged by a retailer who sells to the final user of the product. Business that resell products are exempt (after filling out the proper forms) until they sell to the final consumer. Also unlike a VAT, they are almost always in addition to the posted price --- if an item is marked as $5, you will be charged $5.54 (or some such). Despite the exemptions, sales taxes are generally end up being "regressive", in that the poor tend to pay a greater percentage of their income as sales tax than the rich. Each state has it's own convoluted laws for what is taxed and what is not. Frequently, "essentials" are untaxed, while most other items are taxed at the same rate, but no two states agree on what is considered an essential. One state might never charge for food items, another might charge only for ready-to-eat food, and another only for food consumed on premises (unless it's cold, a breakfast beverage, or above a certain size). It's a mess, getting it right as a small retailer can be difficult, but the penalties for failing charge and collect the correct tax can be strict.
- CPLX 10y 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 10y 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 10y ago
  [deleted]
- dragonwriter 10y 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 10y 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 10y ago
  If we're discussing the ratio of income to taxes, the number on the numerator seems relevant.
- thatcat 10y 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 10y ago
Those numbers come from an OECD report.

yummyfajitas 10y 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 10y 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 10y 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 10y 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 10y 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 10y 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 10y 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.
        ptaipale 10y ago
        Sales tax? I'm not from US but what sales taxes would individuals, particularly poor, be paying? Typically sales taxes are on businesses (where I live, we have value added tax, which is a further development of that, designed to distort the value chains less).
        nkurz 10y ago
        In the US, "sales tax" refers to an additional percentage charge added to the retail prices of goods and services. It's a terrible system, but individuals (poor or otherwise) might pay it for just about everything they buy: clothing, restaurant food, tools, repair services. It's collected by the retailer at the time of sale, who then reports it and passes the amount collected on to the state. Sometimes cities and counties have additional taxes, normally smaller than the state does. There is no federal sales tax. Depending on locality, combined state and local sales taxes are typically in the 7-10% range, and unlike a VAT are only charged by a retailer who sells to the final user of the product. Business that resell products are exempt (after filling out the proper forms) until they sell to the final consumer. Also unlike a VAT, they are almost always in addition to the posted price --- if an item is marked as $5, you will be charged $5.54 (or some such). Despite the exemptions, sales taxes are generally end up being "regressive", in that the poor tend to pay a greater percentage of their income as sales tax than the rich. Each state has it's own convoluted laws for what is taxed and what is not. Frequently, "essentials" are untaxed, while most other items are taxed at the same rate, but no two states agree on what is considered an essential. One state might never charge for food items, another might charge only for ready-to-eat food, and another only for food consumed on premises (unless it's cold, a breakfast beverage, or above a certain size). It's a mess, getting it right as a small retailer can be difficult, but the penalties for failing charge and collect the correct tax can be strict.
CPLX 10y 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 10y 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 10y ago
[deleted]
dragonwriter 10y 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 10y 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 10y ago
If we're discussing the ratio of income to taxes, the number on the numerator seems relevant.
thatcat 10y 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 10y ago

Those numbers come from an OECD report.