The Tax Burden of the Very Rich

[kpete]

The Tax Burden of the Very Rich
by Christopher Brauchli

................

In 2011, the only worker who will pay as low a rate as the folks described above is the worker whose taxable income is less than $34,500. Workers with taxable income between that and $69,675 will find themselves in the 25% tax bracket and from there the rates go up to 35% which is more than twice as much as the rate at which the person with $1.1 billion in dividends and capital gains is taxed. There are, of course, many adjustments made in calculating taxable income and the actual percentages vary taxpayer by taxpayer. But the long and the short of it is that the taxpayer who wants the satisfaction of paying taxes at the same rate as the really rich should keep his or her taxable income under $34,500. For many, that will not be difficult.

http://www.commondreams.org/view/2011/07/23

[indepat]

1. This obscene depravity is what our representative government has morphed into: a government

willing to borrow trillions of dollars to sprinkle as tax cuts on the uber-wealthy so their effective tax rate will be lower than those poor schmucks who earn $35,000. An obscenity so putrid it cannot to put in words for no words in English are up to that task. :patriot:

[Igel]

2. I've never paid 25% of my income in federal taxes.

There have *always* been deductions.

Last year $60k for the family, $4.5k in federal taxes. And there was some self-employment income included that, federal tax + the full amount of the payroll tax. It totaled to 7.5%.

We didn't itemize. No mortgage deduction. No nifty appliance rebates.

One year it did get up to over 20%. But that was when I had more than $55k in self-employment income and had to pay more than 15% in FICA in addition to federal income tax and my wife landed her tenure-track job mid-year. There aren't many deductions and credits against FICA taxes--just actual supplies and expenses in conducting business yanked from gross revenues, and I didn't have many of those. Narrowly missed the AMT that year. By 2k. Ugh.

You shouldn't (although, as with many, you do) assume that the marginal rates on paper really reflect what is paid.

In our case, last year, there's an abstract argument that we paid that rate, of course--on the adjusted gross income, after various standard deductions were removed, and then after calculating the tax there were unearned credits of one kind or another set against the taxes owed. Net result: a whopping, crushing tax burden on this middle class family of 7.5%. Oh, the agony of it all, half the rate at which the rich are taxed on capital gains.

Snicker.

[Scuba]

3. Thanks fo posting kpete. The capital gains rate needs to go UP. n/t