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Who the REAL Taxpayers Are & Why Income Inequality Isn't Nearly As Much of a Problem As Critics Claim
I'm sick & tired of
politicians, pundits, and "average joe's" invoking the term "Taxpayer"
in their mostly uninformed rhetoric. You know what I'm talking about:
"The Taxpayers are angry about bank bailouts," or better, things like
"The Banksters are getting rich at the expense of The Taxpayers."
First of all, 40% of Americans pay ZERO Federal Income Tax (some even
get net subsidies!), so right off the bat, almost half of Americans
need to seriously shut their traps & do a little research before
whining about fairness of U.S. Tax (etc) policy. The half and
mis-truths propagated by The Ignorati don't stop there, though. Not
even close...
The top 25% of earners pay almost 87% of Federal Income Tax! And
that was in 2007, I doubt that number has gotten any smaller in
subsequent years. Put this another way, the lower 75% of earners only
pay less than 14% of Federal Income Taxes even though they account for
~31% of income. Those in the top 1%, by comparison, earn ~23% of
income but pay over 40% of Federal Income Taxes, an increase in the tax
burden on the top 1% of 57% over the past 20 years.
The top 0.1% accounts for half of the money earned by the top 1%,
i.e. the VERY rich are and have been getting richer faster than the
merely wealthy, who themselves are getting more wealthy, faster, than
those in the top 10 and 25%'s. Income's at the top are increasing
faster than those on lower income rungs of the income ladder(and this
is just looking at the top 25%!) This is not necessarily a surprise,
though, considering the shifts in the U.S. Economy and labor force
adjustments (or lack thereof).
Is it "fair" that the top 0.1% of earners pay over 20% of the
taxes? Is it fair that the 75% of filers making less than $32,095 (the
lowest income in the top 25% in 2007) a year only pay 14% of taxes, yet
are disproportionally the recipients of Government aid programs? I
think the answer to both is probably far closer to "no" rather than
"yes."
For example, wouldn't it make more sense to decreases taxes on "the
poor" so they would be able to keep more of their $ rather than giving
it to the Government to waste on a grossly-inefficient bureaucracy with
a questionable (if not downright poor) track-record of allocating
capital efficiently?
Unless you think the majority of people in the lower 75% are worse
at allocating their money than the Government, I think one would be
hard-pressed to advocate against such a plan (and if you think that,
then you are an even bigger cynical bastard than your humble yet
cynical author, which would be truly sad).
Sure, $32,000/year doesn't go very far in Manhattan or wealthy
suburbs, but I just checked online, and you can get a 2,000+ sqft
3bed/2+bath pretty new construction home in Henderson, NV (right next
to Las Vegas) for less than $200,000, which works out to a monthly
payment of under $1,000, below the "spend less than 50% of your
post-tax income on housing rule." Not a bad way to live without
breaking the bank (assuming conservative other spending, no Partridge
sized family, etc) even on such a low income, eh? People in 2nd/3rd
world countries would seriously KILL to live like that!
$30,000/year may seem like an absolute pittance, especially when
compared to the incomes of those in the top 1% & higher, but unless
you insist on living in Manhattan, Miami Beach, Beverly Hills, etc, you
can still live better than 99.99% of the World's population. The
Bottom half in China lives in a 500 sqft piece of crap shanty where
they're lucky if they have a 20-year old TV let alone a new 42"
flatscreen LCD you got on super-saver-sale from Wal-Mart on Black
Friday. Sure, you can't live in a 5th Ave Penthouse or on the Beach in
Malibu on $30,000/year, but please, unless you have 30 kids and spend
all your money on crap you don't need, you are hardly destitute (and if
you do, that's your own damned fault!).
Moving on...
Our tax code/policy is disgustingly over-complicated and wrought
with all manner of perverse incentive. Should those who make alot of
money be expected to help the plight of those who make very little?
Sure, to a point, but as it stands now, I think the subsidies from the
"rich" to the "poor" are both too many and too much. Of course, we
could similarly criticize the subsidies "the rich" (and businesses) are
granted in the form of generous and plentiful tax deductions, but
that's a much longer discussion for another time.
Here's what's certain: Over the past 20 years (well,
'86-'07), GDP has increased 3.02%/year and has been positive for every
year except once, in 1991, and even then, it was only -0.23%.
Meanwhile, average tax rates for the top 1%, 10%, and 25% have gone
down on average 1.64%, 0.79%, and 0.67% respectively over this period.
Chew on that: When we cut taxes, we experienced significant economic growth, +87% GDP from 1986-2007.
Many have argued that this # would be even higher if "The Rich"
(usually arbitrarily defined as those who make more than $200,000 or
$250,000) were taxed more heavily based on comparisons to prior periods
when taxes and GDP growth were higher. Most of these comparisons are
false, in that they ignore fundamental shifts in reality. Our economy,
population, and relative standing in the world today (to say nothing
of any # of other variables) is NOTHING like it was generations ago, so
any fair comparison would have to somehow adjust for this, and I'm not
entirely sure that's even possible (or how one would go about doing so
if it were).
Are tax rates at their optimal point to maximize economic growth?
I'm not sure, nor am I'm sure anyone else knows what that optimal tax
rates would be. Unfortunately, even economists (who should know better
than to let their politics inform their analysis) not to mention
pundits and politicians are really just political ideologues
sputtering-forth nonsense that's seldom anywhere close to well-informed.
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I'm not supporting the article, but I think you need to reconsider your company tax objections. Companies don't pay tax; people do.
To illustrate, say company 'A' makes $1,000,000 profit one year, while company 'B' makes $500,000,000. Should company 'A' pay lower taxes than 'B'?
Most people would say: yes, of course, company 'B' made 1000 x the profit, it should pay higher taxes! But what if company 'A' has two shareholders, and company 'B' has ten thousand shareholders? ie, the shareholders in 'A' get $500,000 each, whereas the shareholders in 'B' get $10,000 each? Still think the latter should pay higher taxes?
It seems to me that company tax rates distort the tax system. It would be more equitable if there were NO company taxes, and shareholders were charged income tax rates on dividends.
And when the top 1% in this country have 95% of the wealth they will pay dispassionately even more taxes relative to aggregate taxes collected, what is your point?
Further, is there any mention of the shift from Fed-to-state with regards to taxes? Property taxes are exploding exponentially as education costs are cut from fed level. Property taxes in my state on a 200k house would come in around 5300 a year and with mil rates set to explode more to make up in lost tax base i can only imagine whats coming
Seriously?..... 32k gross buying a 200k house? Have you been living under a rock or miss the housing collapse that helped create the Great Recession. What the hell Debt-to-income ratio are you using, did you say 50%?
While not sh*ting on your whole tax thesis here, you can blow holes though almost every paragraph you wrote. Stone Street......keep stretching figures and manipulating data, and you too can be a banker or politician, LOL.
For more recent data:
http://www.taxfoundation.org/news/show/250.html
I've read that, and it doesn't materially change anything, as it only adds 1 more year to the data, but at least you're one of the few whose made a reasonable comment, so for that, we thank you!
But "we" think your statistics are crap, therefore your conclusions are fatuous.
Oh right... before I go.
Dear Stone Street Advisers,
All you have to do is show these people you know what you are talking about by being consistently right enough (or close enough to it!) to be able to make them money.
Tax policy articles generally do not make phones ring and emails flow...
Best of luck, and a 9 out of 10 score for sheer Balls!
Calm down guys, Tyler is just throwing chum to the sharks on Sunday night. I am confidant if the author of this drivel puts down the crack pipe and stays off the internet for a few weeks he will still be a completely delusional neanderfuck.
Your a crap load of chicken shit,... stonestreetadvisors,... I went to look at your name to see what your mindless name was to memorialize for the Revolution, but you haven't even got the balls to put your name on your own blog,... just a hired, hairless, ball-less, lacky lap dog of the sociopathic klepto elite. Enjoy your 30 pieces of silver you Judas's, & cheers, here's to your burning in HELL.
Ya... been meaning to talk to you about all that... you know... 'revolution' stuff and all...
I have definite tendencies towards the non-violent 'passivist' side of things. So if your talking revolution... Egyptian style would be best for me.
Not that your askin' :)
Ok you ignorant fucking dumbshit, all this redistribution by the FRB to the 2B2Fails, Bails, and Jails is going to the top fucking 1% but only 60% of American's have a right to raise holy hell according to your bullshit argument, right? According to you then, we are to believe then that the rest of America has no right to beef about this Klepto Ruling Elite that is preventing any natural cleansing of the economy to occur which is ruining all of America. But we're suppose to listen to syncopatic enablers like yourself support the continued thievery by Wall Street and Washington that keep digging into our pockets in order to bring us all down.
Well I've got a C. Lo Green moment for you scum bag,... FUCK YOU, & FUCK YOU... ain't this the shit. I guess you won't mind if we remember your name to put on the list of co-conspirators included in the RICO charges to be brought against hard core Wall Street and Washington. Your a bunch of fucking traitors and the best you can expect is some quality time behind bars while your wife gets tired of waiting for your lubed ass and takes up with a real man.
I never write like this, but your such an extrodinary piece of shit I just want to be fucking crystal clear what a scum sucking lap dog you are you rascalian gravey sucking future prison joy boy. Fuck you,... and fuck you, too.
You and I are going to become great friends...
And I just love the fact that you are even more enraged and potty mouthed than I.
Thanks for taking the heat off my whiskers NR... having to behave civilly sometimes sucks! :)
This is the lamest post I've ever seen on ZeroHedge. Income inequality is a huge issue (as many researchers have explained with very valid and data-backed arguments) and the information here does nothing to refute that. GDP is a meaningless statistic since it's not adjusted for inflation and includes government spending of borrowed funds. The current system has allowed a small group of elites to extract most of the country's wealth, Mubarak-style. For every rich man who earned his wealth through innovation (Steve Jobs) there are a dozen who stole their way to the top (Lloyd Blankfein). I'm amazed Tyler let this one through.
In fairness to Tyler - he did tag this one "CRAP"
Ya the "reality" tag must be some kind of inside joke too.
You are right about how the elites are extracting wealth, but they are using the welfare state as cover! You can't pass a Make Big Ag Rich Bill, sponsored by a money grubbing tool of the rich who doesn't care about people starving, but you can sure pass a Feed the Poorest of teh Poor Bill sponsored by caring, compassionate and big hearted Democrats who are willing to share, and guess what, you have done the same thing!
It does not matter what people in other countries would do for things here in the US. What is relevant is what people in the US would do for things in the US.
But don't let that rain on your "austerity for thee, but not for me" parade.
"The top 25% of earners pay almost 87% of Federal Income Tax!"
Prove it. You don't audit the fed. You don't double check the fed.
You need to stop parroting whatever stupid shit they put out as "truth".
Because you haven't checked yourself.
they trot this shit out everytime anyone mentions the increasing stratification of society.
Oh, well the rich pay the most taxes...WTF...SHOCKER. No shit huh?
the problem IS that the rich are paying ALL THE TAXES because they earn ALL THE INCOME.
This tax inequality is NOT evidence that there is nothing unfair going on; it is a SYMPTOM of the unfairness itself!
The rich have gotten richer as everyone at middle class and below have stagnated for 40 years.
the notion that nobody who pays no federal taxes has no right to complain about having no income is ABSURD in the extreme.
Whining about paying too much in taxes is better than having no income with which to pay any taxes at all.
The data is from the IRS, BEA, BLS dumbass. I'd delete your comment but it's more amusing to let it stand, as proof that you and most other critics of our work have no idea, not even close, as to what you're talking about. Thanks for playing, though!
IRS, BEA, BLS
You just named the biggest lying ass fuckers this planet has EVER seen.
If these top 1 and top 10 percenters are paying all the taxes then why do they even BOTHER with raising cigarette tax, property tax. It's a drop in the bucket. Means nothing.
WHY BOTHER?
I'll tell you why because the bottom 70 percent carry the ENTIRE frickin planet.
Now call the goddamn IRS and ask for a dowload of all tax records from 2009 and 2010. Betya don't get it. Nobody checks them as well. It's called centralized economy. The more centralized the more manufactured it becomes. They always know expectations, they always meet expectations or are very close because they are always printing exactly what they want to print.
The IRS isn't going to tell you that people are evading taxes en masse. The irs isn't going to tell you who evades and who doesn't.
Now roll your we need the rich meme up and shove it right up your statistical ass. If I want to know who is really carrying the load. I'll wait for chinese or russian hackers to finally spill the beans. Fuck your stonestreet steinstreet.
Stein. Usage: German, Jewish Extra: Statistics. From the Old High German word stein meaning "stone". It is common in German-Jewish names like Bernstein
stein buy stein mugs, tshirts and magnets Verb, meaning to screw someone out of something; noun as "stein" or "steiner" as one who steins.Similar to jew and possibly due to the common suffix of -stein in Jewish names. This donut only has 2 sprinkles! That guy steined me on the sprinkles!
You steiners better come up with that 20 bucks you owe me.
I get my information from what leaks in and out of peoples brains. And the flow is becoming very muddy. I'm going to find out what is going on between the jew and the german. If I have to I'll cracker jack your psyches to do it I will. I needs me some orpheus goo.
http://www.youtube.com/watch?v=amUowhHVBM4
If I'm so clueless then why am I able to spot you as the fucking strawman you are nearly instantly.
Don't break your tungsten carbide chisel bitch. Things are getting rocky as all hell up in here.
Tyler, tell me this douchebag does not have the ability to do that.
So you're quoting complete bullshit stats from the government and acting like your critics are the dumbasses? Nice work!
How about subtracting the REAL inflation rate from the GDP figures you quote, rather than the completely FICTIONAL CPI. Suddenly, the productivity increase disappear into a miasma of inflation instead of growth.
Bad news, Stoners: the Kool-Aid you're drinking has been pissed in by most of the kitchen staff.
The Fed doesn't collect taxes. Alas, auditing them would do nothing as far as tax collection statistics go.
Hey there Hephy... Cat got your tongue? :)
So then what he is saying is that all we need to get this shitmobile gutshot economy going again is another round of Reaganomics?
'Hair of the Dog' if you will...
Wow. Sounds good to me!
And I tell you I sure feel a shitload beter knowing that 87% of Goldmans $50 billion dollar publicly funded bailout (and $14 million dollar tax bill) was paid for by the top 25% of the countries wage earners.
http://www.theglobeopinion.com/article/50-billion-vs-14-million
So if you don't mind me asking Stoned Street Advisers... just when do you think we can get all of our money back again?
Dear Stoned Street Advisors
Even IF one was to believe the numbers you present, the effective Federal Tax Rate is 12%. So, Holy Fuck, how is a guy to survive on $880 million net. I mean, like its fucking impossible.
Ya know what I mean ?
Those ungrateful poor people that "saved" the Banking Criminals get stiff-armed as usual.
So.... cry me a fucking river.
P.S. I collect taxes fer the fucking govment at the point of a gun.
PPS you are a fucking troll.
PPPS- The foundation of your bullshit argument is the top 1% steals (yes, steals most of their disproportionate share of the wealth, so they ought to pay far more.) Good to have that Roledex right to the whore house in Washington. You are a piece of shit.
PPPPS - Tyler/Marla- now you don't be doing a Greek woman whoring job on us now.
Dear Stone Street Advisors.
Do you really believe this shit you just posted?
Jump!
You Fuckers!
I really don't get the progressive war on the rich, if you got there honestly... I don't see the issue. It's just biting the hand that feeds you.
That is maybe because of the feeling that the rich have declared a war on the poor. It is hard not to be at war when another side has declared it on you.
How many people do you think become super-wealthy by playing by the rules?
"The hand that feeds you"? ...it's more like the dick that screws you.
When wealth is concentrated in the hands of just a few, as it is in the US presently, the end result is always social instability.
Perhaps people find it wrong to have to worship them and give them undue preference over all others, just so they can find work.
Dear Stone:
You are why I remind (and being a lawyer) comfort myself on a daily basis that when the over 3.9 million people that just completely rolled off unemployment forever, have no prospects and nothing left to lose (and that's just those who are counted, never mind the unwashed masses who aren't) finally completely lose it all I have to do is run slightly faster than you. (Zombieland Rule No. 1)
Although the hapless Marie Antoinette didn't actually say "let them eat cake", your article, which is rather analogous to that saying, totally misses the real point: you can't complain about how rich you are and how much taxes you pay if the unwashed masses are intent on invading your gated community and eating your stupid head.
There is undoubtedly an inverse relationship between the numbers rolling off unemployment, the disenfrachised, the effects of QE2,inflation, and articles like this (which incidentally is a massive cliche that has been done over and over again).
I can only hope this is one of the Hamy like sarcasm contributions. If not, if nothing but your own self interest, consider the following:
Massive Compassion FAIL.
Beautifully fuckin stated!
I think the problem is that a large proportion of the top 1% didn't 'earn' it honestly - they got the money because they were at or near the top of central banking monetary expansion schemes.
Frankly, the tax rate for such people should be nearer 100%, in my opinion.
Introduce sound money, however, and the problem goes away.
many of the top 1% got the money because they were born in the top 1%.
@The_Anal_yst
http://www.zerohedge.com/article/entitlement-america-head-household-making-minimum-wage-has-more-disposable-income-family-mak
What are these stoned advisors on?
What load of baloney!
They mention that the 0.1% of top earners now pay more. Duh! You should post how much they pay in taxes as percentage of overall taxation compared to the 1950-1970's.
For all those who want a truer assesment of this issue, I would direct you to "Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich--and Cheat Everybody Else" by David Cay Johnston. It has been a well received book. In fact, the CEO of the Vanguard Group gave it an excellent review.
The book shows how the very uber rich make the upper middle class to the lower middle classes pay for their massive illicit wealth. David Cay Johnston's other book, and the title says it all, "Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and StickYou with the Bill)" has all the data and all the facts that will make these stoned advisors appear high on crack.
LOL, this article is a load of bull. Of course the rich are paying the most taxes. They have almost ALL the money. The rest of America has no money. This shows that there IS a huge problem with income distribution.
Problem with that type of approach: it undercuts the mass of people who like to provide a stream of data to show obvious facts.
That is also the misery of contemporary propagandists. Their propaganda is so worn out, a two sentences rebuttal is enough to negate a thousands word long article.
People need to work. Economists like the others.
Aint a law that selects articles on the number of words they include so they bring money?
Word.
Assholes like this make me sick.
When you figure in every way the gov't (state/fed/local) takes your money and rightly call it a TAX (not a fee, surcharge, tarrif, ticket, fine, usage fee, etc., not to mention state income and sales taxes), the average joe is paying a FUCKING WHOLE LOT MORE OF HIS INCOME AS A PERCENTAGE IN TAXES than some rich POS (I'm talking multi-millionaire here, not some middle class guy).
Maybe this anal-yst thinks we really ARE that stupid. Fucking asshole.
If people will leave us middle class guys out of the socialist ranting then we might support this line of reasoning a bit. When you include people who are not in the top 0.5 percent in your analysis then we have to fight you and vote with the plutocrats. Be smart and quit calling people like me oppressors or "rich" or whatever label poor people like to call the upper middle class.
+1
Regressive sales tax, license fees, hidden taxes on everything from gasoline to garbage collection really hurt the average person as they are constantly going up at a stealthy rate.
People seem to forget that when this country was at it's peak, the wealthy were paying a whole lot more... (and unions were strong too).
oh let's keep it rolling: warren buffet famously said his secretary paid a higher income tax rate than he did. also hedge fund managers pay 15% bogus "capital gains tax" on what is clearly fee income. also unrealized capital gains at death are wiped out tax free and new tax bases are established at date of death. also municipal bond income is not federally taxed. gifts of money are never taxed to the gift receiver and only to the giver to the extent of the estate tax which is getting less and less (and getting a new name: death tax). and social security benefits to early retirees are taxable only if other income is earned by actually working. interest, rent, dividends, capital gains are exempt. who do you think wrote these laws? hint: it wasn't the average wage earner whose real income peaked in 1971.
You want proof:
Here you go. But remember, when your stoned, your memory is crappy, so please Stoned Street Advisors please keep playing replay!
Currently, Hedge Funds like SAC get taxed only a 15% rate, and yet they make millions and billions a year! WTF. Their payed off con-gressmen justify this saying that the low 15% rate is necessary because Hedge Funds are small businessmen. BS! My dad was a small businessman and his tax rate was 30-38%!
The hypocrisy!
http://www.youtube.com/watch?v=X1S37ixRoK4
I would appreciate a response to the above youtube video Stone Street or any of their apologists.
tweaking this part of the tax code is relatively non controversial and even the upper middle class would agree that carried interest or whatever they call it should be taxed the same as income. In fact there is no real reason to advantage non work over work in the income tax code. Small changes such as this would get you broad agreement. Going after the top ten percent as most socialists do just needlessly creates more allies for the bankers. I don't want to run with the banking plutocrats, but if you socialist whiners (not the author) continue to lump me and my class in with plutocrats then we have to vote with the plutocrats to protect our own interests.
And let's not forget another, more covert tax -- inflation -- which hurts the average person far more than the wealthy, whom it barely touches since they invest in commodities, art, etc. The Fed is merely carrying out the policies for the wealthy at everyone else's expense.
and since when does the observation that the banksters are stealing from the taxpayers have anything to do with income inequality? income injustice certainly: that the top ten or so financial groups are backstopped endlessly while those below are put into receivership where they all belonged in the first place is a start.
I am not backstopped? Why are you including people other than the top 0.5 percent in your rhetoric?