Isn't it Rich, Being Rich? (Cavuto)

FOX News ^ | 10/14/03 | Neil Cavuto

[Looking for Diogenes]

But its not 10% its 35%.

Don't forget that that is the marginal rate. For the first $6,000, the rate is 10%. For the additional income up to $28,000, the rate is 15%. For the additional income up to $68,000, the rate is 27%. For the additional income up to $141,000 the rate is 30%. Beyond that it is 35%.

In other words, someone who makes $150,000 a year will only pay the 35% rate on the last $9,000 earned. The first $60,000 is taxed at about 20% overall.

http://taxes.yahoo.com/rates.html

[eeman]

But can your niece afford one of those large screen plasma screen Televisions? If not, she probably considers herself "poor." ;-)

[BushisTheMan]

Did you see Cavuto blast the guest who was saying that Rush was a hypocrite. To her, the other Hollywood druggies got the public's sympathy for their drug problems because the Hollywood types don't tell people how to live their lives.

In his very soft spoken manner and style, Cavuto asked her: "Well, you don't like Rush very much, do you?" But she tried to get back to Rush being a hypocrite. Then Cavuto, waited, only interrupting her whenever she made an incorrect statement by correcting her. Then, at the end of the segment, he repeated the question again: "It is obvious to me that you don't like Rush, do you?" This time she actually admitted that she didn't. Cavuto made her look like the fool she was. I wish more commentators would do this. Call the lying pigs everytime they spew forth a lie.

[ThinkDifferent]

As several other poster have pointed out, the top rate is about 36 percent. So the "rich" are paying are paying higher tax rate.

In fairness, this is partially balanced by other taxes, such as the regressive payroll tax. (But just watch the liberals scream if anyone tried to do away with that; they have to maintain the lie that it's an "investement" into your Social Security "account").

[tortoise]

When I have my taxes done each year, I end up paying far less as a percentage of my income than people with fewer deductions than I have. But I am paying more in taxes than someone with no deductions, obviously.

Apparently you haven't discovered that a lot of deductions are phased out if you make more than a certain amount of money. And then there are the taxes that most people never heard of that don't really kick in unless you make a lot of money.

My effective tax rate has always increased with income. Of course, the way you learn to get around this is to stop collecting income and start collecting long-term equity investments that you can ladder at a steep discount. The government still takes far more than they should, but not as much as if I simply had "income". Not as convenient as income either, but treated much more favorably from a taxation standpoint, particularly if you are an investing rather than spending type. My general policy is to draw an upper-middle class "income" and convert the rest of my earning potential into capital investments with a favorable tax profile without running it through the oppressive "income tax" filter.

[Atlas Sneezed]

Of course, the rich pay more in dollar amount. I don't know that they pay more as a percentage.

---

You may not know, but they surely do.

Here is a handy source for the IRS data"
http://www.rushlimbaugh.com/home/menu/irsfigures.guest.html

The key data:

Average tax rate (percentage):
Year: Top 1%.....Top 5%.......Top 10%....Top 25%....Top 50%
2000: 27.45......24.42......22.34......19.09......16.86

[Looking for Diogenes]

Of course, the rich pay more in dollar amount. I don't know that they pay more as a percentage. When I have my taxes done each year, I end up paying far less as a percentage of my income than people with fewer deductions than I have.

Good point. Leaving aside the complicate Alternative Minimum Tax, consider two single taxpayers. Taxpayer Bob earns eans $60,000 a year and rents his home. Bob has no other deductions and he pays a little over $12,000, or about 20%. Taxpayer John earns three times as much $180,000, and has a nice house with a $5,000 per month mortgage, which is fully deductible. John also has $60,000 annual income from Treasury Bills, which is not taxed at all. After these deductions he pays a little over $12,000 or about 7%.

[Atlas Sneezed]

In fairness, this is partially balanced by other taxes, such as the regressive payroll tax.

---

Hardly regressive, as the rate remains constant for SS up to ~$90k, and up to infinity for Medicare taxes. The higher earners pay more, which is "regressive" only under the most hostile class warfare leftist definition.

[littleleaguemom]

Treasury bills are exempt from state tax, not Federal tax. Perhaps you meant municipal bonds? These are free of all tax except AMT but pay a correspondingly lower interest rate.

[Looking for Diogenes]

Hardly regressive, as the rate remains constant for SS up to ~$90k, and up to infinity for Medicare taxes. The higher earners pay more, which is "regressive" only under the most hostile class warfare leftist definition.

$90k barely qualifies as rich these days.

Someone earning up to $87,000 pays 15.3%, $13,311, 12.4% into Social Security, and 2.9% for Medicare. Someone earning twice that, or $174k, pays just $2523 more, $15,834, which comes out to 5.5%.

http://www.ssa.gov/cola/colafacts2003.htm

So the overall payroll tax rate drops by almost two-thirds between $87k and $174k. You don't think that's regressive?

[Looking for Diogenes]

Perhaps you meant municipal bonds?

Yes, my mistake. Thanks for the correction.

[Atlas Sneezed]

Someone earning up to $87,000 pays 15.3%, $13,311, 12.4% into Social Security, and 2.9% for Medicare. Someone earning twice that, or $174k, pays just $2523 more, $15,834, which comes out to 5.5%.

So the overall payroll tax rate drops by almost two-thirds between $87k and $174k. You don't think that's regressive?

---

The tax paid per citizen is higher the more you earn. Regressive means the opposite. (But thanks for helping out the leftists with your adoption of their loaded terminology.)

And keep in mind that SS isn't a "tax" but an investment of your own funds for your own retirement (ha-ha!)

[MonroeDNA]

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[eeman]

I agree that the payroll tax is regressive. As you alluded to however, the payroll tax is an "investment" in social security. Even though all our payroll tax goes in to general revenue and there is no "lockbox," I doubt that SS will ever go away but it will be means tested.

If and when it is means tested, I will most likely be disqualified where as someone with a lower wage will not be. Therefore , even though that lower wage worker suffers more from the regressive nature of the payroll tax than I do, he/she will most likely derive more benefit from it.

Of course we can elect Howard Dean who wants to remove the income ceiling off payroll taxes--similar to the medicare tax

[ThinkDifferent]

The tax paid per citizen is higher the more you earn. Regressive means the opposite.

I've always heard those terms used relating to percentage of income paid in taxes, not absolute dollars. And I think that's a reasonable definition; otherwise a tax system where someone who earns $10k pays $1000 and someone who earns $100k pays $1500 would be "progressive".

And keep in mind that SS isn't a "tax" but an investment of your own funds for your own retirement (ha-ha!)

I'm not quite sure what the parenthetical means, but just to be clear, that's absolutely false. Legally, it's just another tax, and it conveys no rights to any benefits whatsoever. There are Supreme Court rulings on this. Democrats (and too many Republicans) go along with the lie that SS taxes are "investments" in order to obscure the fact that SS is an unsustainable Ponzi scheme.

[MissAmericanPie]

Joe Liberlip is toast anyway. He couldn't get elected to a postition as poop scooper outside of his liberal enclave.

[PA Engineer]

"Leaving aside the complicate Alternative Minimum Tax, consider two single taxpayers.

With AMT your arguments fall apart. How about a little honesty? The "rich" you are envious of lose their deductions "progressively" with AMT. I would argue that your hypothetical tax payers could only be found in the realm of liberal fiction and not the real world.

[Looking for Diogenes]

With AMT your arguments fall apart.

Which is why the AMT is there in the first place. Depending on how the deductions work and where the income is derived from, there are real world scenarios in which a person with higher income ('rich' or not) would pay a lower rate then a person of lower income. Yes, it's enough to keep a legion of tax accountants and attorneys at work. All the more reason for a simplified tax system.

[Looking for Diogenes]

The tax paid per citizen is higher the more you earn. Regressive means the opposite.

I never said that the tax itself is regressive. I showed that the tax rate is regressive.

[Flying Circus]

Putting aside the AMT and using an example where a person earns $180000/year is disingenueous to say the least.
$60000 from Tbills? Must be nice to tuck that much away... makes me wonder what ol'John had to pay in taxes on the capital that went into that investment prior to the time of your example.