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How is it weird the top 20% of income tax payers pay the most? Is that by definition what makes the top 20% of income tax payers the top 20%? The very rich can
by landemva 5y ago
How is it weird the top 20% of income tax payers pay the most? Is that by definition what makes the top 20% of income tax payers the top 20%?
The very rich can structure affairs to have capital gains, minimize income, and therefore not be in the top 20% of income tax payers.
Poor and middle-class wage slaves have income (per IRS definition) and generally don't escape income tax beyond the standard deduction which applies to everyone who files.
The rich understand these phrases: "capital gains", "everyone who files". Those with minimal wage income may not even need to file.
- maxerickson 5y agoThe poor basically only pay payroll taxes. Capital gains are taxed using a different rate schedule, but they are still taxed as income (they are literally included in AGI).
- landemva 5y ago>>> The poor basically only pay payroll taxes. And sales tax and use tax. Capital gains are assessed when recognized, not like a yearly schedule so rich can defer this and choose when to recognize it. Will certainly take many fun 'business' trips that year to offset. Remove payroll taxes (which support collection of income tax) and employee take-home pay increases. Employers can stop hassles of the withholding accounting. Employees can stop hassles of yearly income tax filing to IRS. There would be a temporary increase of unemployed payroll tax bookkeepers and storefront tax prep people. Hopefully they will find something more productive to do.