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> Won't this disproportionately tax the poor? - Firstly, the existing tax code already does. I used to think this because it's often said, but learned it's not

> Won't this disproportionately tax the poor? - Firstly, the existing tax code already does. I used to think this because it's often said, but learned it's not true. This sums it up: The top 50 percent of all taxpayers paid 97 percent of all individual income taxes, while the bottom 50 percent paid the remaining 3 percent. The top 1 percent paid a greater share of individual income taxes (38.5 percent) than the bottom 90 percent combined (29.9 percent). The top 1 percent of taxpayers paid a 26.8 percent average individual income tax rate, which is more than six times higher than taxpayers in the bottom 50 percent (4.0 percent). https://taxfoundation.org/summary-of-the-latest-federal-income-tax-data-2020-update/ https://taxfoundation.org/summary-of-the-latest-federal-inco...

cmeacham98 6y ago
How do any of those statistics refute that statement without supplementary data on income/wealth (or whatever else you're using to measure the proportionality of tax)?
- deleted 6y ago
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- xyzelement 6y ago
  I don't understand your question about proportionality of tax, because there are two ways to think about proportionality and the stats I cite cover both. Take another look at the last point I cite, I THINK it goes to what you're asking: the richest 1% paid 26.8% of they income in taxes. The poorest 50% paid only 4% of their income in taxes. Let me know if your question is something different.
  - cmeacham98 6y ago
    Sorry, I must have completely blanked and missed that statement. Regardless, it is compared to AGI, which is possibly one of the worst possible metrics to use. Firstly, AGI is post-deductions, so people who play games with their taxes show up as paying more. Secondarily, and more importantly, income is a trash metric anyways. Poor does not mean low income, it means low wealth. In your data somebody who inherits a ton of money but has 0 income counts as "bottom 50%". Rich people have a disproportionally lower income vs wealth.
  - cgio 6y ago
    I am not sure these percentages include indirect taxes or are just direct. Regardless, the top 1% wealthiest accumulate wealth which is not declared as income and therefore that percentage is on their declared income and not on wealth. For poor people their income is their wealth. Finally, for the 1% even basic things that would require income for the majority of the population, such as travel, food, accommodation are routinely not funded by income, making the comparison even worse as they have extremely more flexibility in optimising their income vs investments and their exposure to indirect taxes even if they are immaterial to them.
    - cgio 6y ago
      Also something I thought based on the statement above. Poor people have at best a converging to 100% tax on their wealth, assuming that taxes collected would be savings. If they were to be consumed it’s even worse as taxes eat into their survival. Edited to make it converging with the assumption they might still be saving a little.
deleted 6y ago
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FabHK 6y ago
Counterpoint (note that this is tax relative to wealth, not income): > The big picture: The very richest Americans pay much less tax, as a proportion of their total net worth, than the rest of us. > By the numbers: The bottom 99% of Americans pay about 7.2% of their net worth every year in taxes, per Warren. The top 0.1%, by contrast, pay about 3.2%. Source: Section 3 here: https://www.axios.com/newsletters/axios-capital-d213524e-b2f7-45ff-9109-158289a0e586.html https://www.axios.com/newsletters/axios-capital-d213524e-b2f...
- xyzelement 6y ago
  Agree - there are different ways to slice this, but at the end of the day, should we? Let's say you and I start off with zero wealth, but we both graduate with a good degree, both get high-paying jobs and both make the same amount of money. We also pay the same amount of taxes - which sounds fair, right? Lets say we both make 150K a year, but I spend it all on my living expenses/fun while you are able to live on 50K and save 100K every year. In 10 years, you will have over a million dollars in savings/investments while I lets say managed to save 10K. We still make the same salary and pay the same tax but our wealth is grossly unequal. I pay 100X tax-per-wealth than you do. That sounds horrible but in the above example is totally reasonable. Obviously the Warren Buffet example is a bit different than that but - he pays a ton of absolute $$$s compared to you, me, and anyone else, why is his total wealth an absolute necessity to look at?
  - Aeolun 6y ago
    > Why is his total wealth an absolute necessity to look at Because money needs to move. Having it sit somewhere in a bank account is not something you want to encourage (as a government).
    - xyzelement 6y ago
      His wealth doesn't sit in a bank account, it's invested in his companies.
    - manigandham 6y ago

cmeacham98 6y ago

How do any of those statistics refute that statement without supplementary data on income/wealth (or whatever else you're using to measure the proportionality of tax)?

deleted 6y ago
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xyzelement 6y ago
I don't understand your question about proportionality of tax, because there are two ways to think about proportionality and the stats I cite cover both. Take another look at the last point I cite, I THINK it goes to what you're asking: the richest 1% paid 26.8% of they income in taxes. The poorest 50% paid only 4% of their income in taxes. Let me know if your question is something different.
- cmeacham98 6y ago
  Sorry, I must have completely blanked and missed that statement. Regardless, it is compared to AGI, which is possibly one of the worst possible metrics to use. Firstly, AGI is post-deductions, so people who play games with their taxes show up as paying more. Secondarily, and more importantly, income is a trash metric anyways. Poor does not mean low income, it means low wealth. In your data somebody who inherits a ton of money but has 0 income counts as "bottom 50%". Rich people have a disproportionally lower income vs wealth.
- cgio 6y ago
  I am not sure these percentages include indirect taxes or are just direct. Regardless, the top 1% wealthiest accumulate wealth which is not declared as income and therefore that percentage is on their declared income and not on wealth. For poor people their income is their wealth. Finally, for the 1% even basic things that would require income for the majority of the population, such as travel, food, accommodation are routinely not funded by income, making the comparison even worse as they have extremely more flexibility in optimising their income vs investments and their exposure to indirect taxes even if they are immaterial to them.
  - cgio 6y ago
    Also something I thought based on the statement above. Poor people have at best a converging to 100% tax on their wealth, assuming that taxes collected would be savings. If they were to be consumed it’s even worse as taxes eat into their survival. Edited to make it converging with the assumption they might still be saving a little.

deleted 6y ago

[deleted]

FabHK 6y ago

Counterpoint (note that this is tax relative to wealth, not income): > The big picture: The very richest Americans pay much less tax, as a proportion of their total net worth, than the rest of us. > By the numbers: The bottom 99% of Americans pay about 7.2% of their net worth every year in taxes, per Warren. The top 0.1%, by contrast, pay about 3.2%. Source: Section 3 here: https://www.axios.com/newsletters/axios-capital-d213524e-b2f7-45ff-9109-158289a0e586.html https://www.axios.com/newsletters/axios-capital-d213524e-b2f...

xyzelement 6y ago
Agree - there are different ways to slice this, but at the end of the day, should we? Let's say you and I start off with zero wealth, but we both graduate with a good degree, both get high-paying jobs and both make the same amount of money. We also pay the same amount of taxes - which sounds fair, right? Lets say we both make 150K a year, but I spend it all on my living expenses/fun while you are able to live on 50K and save 100K every year. In 10 years, you will have over a million dollars in savings/investments while I lets say managed to save 10K. We still make the same salary and pay the same tax but our wealth is grossly unequal. I pay 100X tax-per-wealth than you do. That sounds horrible but in the above example is totally reasonable. Obviously the Warren Buffet example is a bit different than that but - he pays a ton of absolute $$$s compared to you, me, and anyone else, why is his total wealth an absolute necessity to look at?
- Aeolun 6y ago
  > Why is his total wealth an absolute necessity to look at Because money needs to move. Having it sit somewhere in a bank account is not something you want to encourage (as a government).
  - xyzelement 6y ago
    His wealth doesn't sit in a bank account, it's invested in his companies.
  - manigandham 6y ago