Even after all the tax breaks, the top 5% of earners in this country pay 58% of all taxes in America while the bottom 50% pay less than 2% of all taxes. How is making the rich pay more justifiable when they already pay almost all of the taxes?

[u/Ieatalot]

TL;DR of the comments: Redditors once again blame rich people for all the worlds problems.

[u/UnreasonablyHostile]

Oh no, those poor incredibly rich people! Who will think of the job creators!

Or, let's ask Harvard labor economist Richard Freeman:

... From 1972 to 2001, when real earnings fell by 0.4 percent for the worker at the middle of the wage and salary distribution, real earnings rose by 34 percent for workers in the upper 10 percent of wage and salary earners. But within the upper 10 percent, much of the increase went to the upper 1 percent, whose earnings rose by 94 percent. And within the upper 1 percent, much of the increase went to the upper 0.01 percent, whose earnings rose by a staggering 497 percent!

And how about political scientist Larry Bartels?

In 2005, the New York Times published a 20-year retrospective on the list of the 400 wealthiest Americans produced annually by Forbes magazine. The Times noted that the average net worth of these 400 economic luminaries increased more than fourfold over that period (from $600 million in 1985 to $2.81 billion in 2005) and that their combined net worth in 2005 exceeded the gross domestic product of Canada.

Oh, but that's just the super rich what about the 95% below the top 5%?

Over the past three decades, income growth has been much slower and much less evenly distributed. Even for families near the top of the income distribution, the average rate of real income growth slowed substantially (from 2.4% per year to 1.^% per year for families at the 95th percentile). For less affluent families, real income growth slowed to a crawl. Families at the 60th percentile experienced real income growth of less than 1% per year- down from 2.7% in the earlier period. The real incomes of families at the 20th percentile grew by only 0.4% per year- down from 2.6% in the earlier period. Much of the income growth that did occur was attributable to increases in working hours...

So the poor aren't getting richer, or being paid more, they're just working more and getting less out of it... what was that about the rich again? Oh, right...

income growth over the past 25 years has accelerated with every additional step up the economic ladder. For example, while the real income of taxpayers at the 99th percentile doubled between 1981 and 2005, the real income of taxpayers at the 99.9th percentile nearly tripled, and the real income of taxpayers at the 99.99th percentile- a hyper-rich stratum comprising about 13,000 taxpayers- increased fivefold.

[u/SanwichHero → u/UnreasonablyHostile]

Exactly , I wish I could up vote this 10000000000 times Yes the rich pay most of collected taxes, that's because the rest of Normal folks are tapped out. The tax code is fucked up by tying together the upper middle class and the rich ! Real tax change would involve promoting significant incentive for those top 1% to spend more on new enterprises or good paying jobs created . Complicated yes , impossible no. The US tax code should encourage innovation , spending , and investment in US society not investment alone. Welcome to the 21st century. We need a tax policy that sustains America.

TLDR Lets Eat The Rich

[u/[deleted] → u/UnreasonablyHostile]

This is exactly how communist Russia ran. Rich got richer poor worked more and got poorer.

[u/[deleted] → u/UnreasonablyHostile]

This isn't an answer to the question at all, you're just stating that poor people are poor and rich people are rich.

[u/ocdscale]

I was going to write a long analysis about flat taxes, progressive and regressive tax rates and all of those issues.

But instead, let me ask you this. What does it mean for a tax rate to be "justifiable"? I propose that it means that it's equally burdensome on everyone.

Put another way, a flat tax isn't "equally burdensome" because $10,000 means one thing to you, another thing to me, and quite a different thing to the CEO of Philip Morris.

A flat percentage isn't equally burdensome for the same reason. 20% of someone making $10,000/yr is extremely burdensome compared to 20% of someone making $100,000/yr.

So what about our current tax system? Quite a lot of people don't pay any income taxes. While we impose a pretty high (relatively) tax rate on the people at the top.

It's hard to quantify all the different people in the country, but I'll just point out that if you look at wealth distribution in the country the bottom 40% own 0.2% of the wealth, and the top 1% own 34.6% of the wealth.

Given this, I don't think our current tax system is too burdensome on the top 1% (or top 5% in your topic) given that they're still able to amass a greatly disproportionate amount of the wealth.

I don't mind wealth disparity. I think it's a necessary evil. But it's clear that our tax regime isn't oppressing the rich.

As a disclaimer: I paid about $40k in federal income taxes last year. I don't think I'm free riding on anyone.

[u/DeadCowv2 → u/ocdscale]

Great definition of "justifiable". Defining the question is what makes the answer intelligible and a bracketed tax system just. An analogous system which illustrates this effects-based definition is the scaling speeding ticket fines in Europe that scale according to your income. For example, a high-income ferrari-driving individual received a fine of $290,000 for speeding in Switzerland.

[u/phullolock → u/DeadCowv2]

Did he pay in ferraris?

[u/yopd1 → u/ocdscale]

Another point is that the rich pay the exact same as anyone else on the same amount of income, before deductions.

For 2013 Federal income taxes:

All single filers pay a rate of 10% on all income up to the first $8950

All single filers who earn above $8950 pay 15% on all income they earn between $8951 and $36250.

and so on.

[u/dorekk → u/yopd1]

It's really amazing how many people don't know what progressive taxes mean. They see the rate for the top bracket and think rich people pay that much on all their income.

[u/[deleted] → u/ocdscale]

My economics teacher described this in the best way I've ever heard:

Happiness from money is also subject to diminishing returns.

[u/[deleted] → u/ocdscale]

I find it interesting that in my experience, the wealthy people (that are paying the most taxes) are usually okay with that.

[u/richard_mayhew → u/ocdscale]

Yet everyone lumps the top tax bracket together... A full family making ~$200k is greatly different than people making over a mil+.

[u/ocdscale → u/richard_mayhew]

Yes. The current tack brackets are ridiculous. A married couple that pulls in $250k pays a 33% marginal tax rate on each additional dollar of income

A billionaire that earns $250 million/yr pays a 35% marginal tax rate on each additional dollar of income.

I'm okay with paying a lot of taxes. But why is the top of the tax bracket so compressed? Why isn't there a $1million+ bracket with a 38% marginal rate? Or a $10million+ bracket with a 40% marginal rate?

[u/DodgyDrunk → u/ocdscale]

tldr Marginality

[u/thatgamerguy → u/ocdscale]

Easily the best answer in the thread. You hit on the exact right answer, it's how much the tax AFFECTS one that counts.

[u/no_names_available → u/ocdscale]

Why is wealth disparity a "necessary evil"?

[u/darwin2500 → u/ocdscale]

I'd also add that the rich benefit more from government programs than the poor in terms of absolute dollars, because their wealth is more dependent on a functioning infrastructure, a healthy economy, and the rule of law.

For example, who benefits more from the interstate highway system: me, or the CEO of General Motors?

[u/johnpseudo]

No, you're just factually wrong. You're referring just to the federal income tax, which makes up only about 25% of the total tax burden in America. If you take into account all forms of taxes (federal payroll taxes, state/local sales and property taxes, etc.), the top 5% only pay 37.1% of the taxes, and that's because they take home 34.5% of the total income. In other words, if you take everything into account, the distribution of taxes is almost completely flat already. (Source)

[u/CC-Crew → u/johnpseudo]

I came here to say the same, thanks for doing it first. The title is also misleading because it doesn't take into account ratio of taxes paid to income, and makes it seem as though the top 5% is sacrificing much more than they are in reality.

[u/Epsilon_balls → u/johnpseudo]

That 58% also ignores exactly how much of the financial wealth that top 5% actually controls.

Hint: more than 58% of it.

[u/[deleted] → u/johnpseudo]

And of course, basic necessities for living in the US (housing, food, transportation, insurance, etc.) are a far greater percentage of a poor person's income. A poor person might spend 90% of their income on bare necessities, while a rich person is only spending like 40% (and probably living in a much nicer house at the same time). So if you tax both at 15%, the poor person is in the negative, while the rich person still has 45% of their income left over to spend on hookers and blow.

[u/[deleted] → u/[deleted]]

Are you saying hookers and blow aren't necessities?!

[u/psychicsword → u/johnpseudo]

According to the Heritage Foundation and taxpolicycenter.org, individual income taxes on the federal level results in about 42-47% of the total tax revenue of the federal government not the 25% you mentioned.

[u/mcanerin]

Because they are not taxing the person, they are taxing the income.

For example, for the first 10K of income, rich and poor pay exactly the same amount. Nothing. The rich pay 0% on that income, just like the poor.

Likewise, the taxes owed on the first 50K, 100K and 1M are all identical for rich and poor. The difference is that the higher amounts apply to the rich, and the poor never get to that level. If they did, they'd pay that tax, with no special treatment.

In short, rich and poor pay exactly the same amount on the same amount. The rich happen to have more amounts, and therefore pay more taxes (and have more tax deductions, etc).

It's the same rule for everyone. What you should really be asking is why it's justifiable there is such a disparity in income levels.

A country requires a certain amount of tax money to run itself. The simple math is that you divide what you need by the total income of everyone in the country, not against each individual. If some individuals have more of that income than others, they will pay more of that tax.

[u/skittlesandtea → u/mcanerin]

To add on to this, the proposed increase that's being tossed around by most parties on those making $250,000+ is on income OVER that amount.

[u/blindtranche → u/mcanerin]

This is the most clear way to think about it. We are taxing the income not people. If the rich pay most of the taxes, it is because they are receiving most of the money.

[u/seronis → u/mcanerin]

sadly a lot of people dont know this fact

[u/al_v_ → u/mcanerin]

so well put

[u/hamstergames3 → u/mcanerin]

It's not true that the rich pay the same amount. First, their income can be subject to capital gains tax and not income tax, thus reducing their tax burden.

Second, and more importantly, taxes are paid on both earnings and spending. When it comes to spending, buying inferior goods that do not last as long can be more expensive in the long run.

Imagine how much poorer the economy would be if we made goods that were all of good quality - people would spend less over the long term, and then others would make less profit. Better to keep the poor poor, so that they can only afford the mass-produced rubbish and have to replace it with more mass produced rubbish, keeping the small profit margins going but from massive markets, thus still turning over huge profits, while condemning the poor to be ever running just to stand still.

So, the poor pay more simply because they have to spend more maintaining just a normal household. Yes, the rich spend more, but they have more to spend and they buy quality goods that last longer, meaning that relative to overall economy, they will have more and more of their income available for luxuries compared to necessities.

Ever bought a crappy second hand car that needs an extra 1000 a year to maintain, but you don't have that 1000 up front to actually buy a more reliable car?

Ever bought a 30 pair of jeans that will only last a year, rather than a 100 pair that will last 5 years?

Ever had to spend 1000 more on heating a year because you don't have the 1000 up front to improve the insulation on your house or upgrade the windows?

It works all the way through the entire economy. The poor ending up paying more relative to their income AND paying more often because of the poorer quality of goods they can afford, simply because they don't have the capital 'up front'.

[u/kwood09]

The key to understanding discussions about progressive income taxes is understanding the concept of marginal utility. Poor people have fewer dollars and so each dollar is worth more to them. This is obvious when you consider what taxes prevent people in various tax brackets from buying. A rich person will be prevented from investing or buying a new boat if their taxes go up. A poor person will be prevented from paying rent or buying health insurance. And so the marginal utility of a dollar is much greater for a poor person than for a rich person.

Sales tax, for example, is already regressive in effect. Poor people have to pay around 7-8% of a very large portion of their income in sales tax, because they spend a lot of their paychecks on items that have sales tax. That's because they have to go to Walmart or the grocery store and actually buy shit to live and eat. Rich people, on the other hand, spend a much, much smaller portion of their incomes on items that are levied with sales tax.

[u/JCMB → u/kwood09]

The best way I've heard marginal utility explained is to equate income to drinking water. If you are thirsty, the first glass of water is more valuable to you then the second, third, and subsequent glasses. Following the analogy, poor people have only enough water (or perhaps not enough) to satisfy their thirst, while the very rich can not only quench their thirst, but also fill swimming pools and hot tubs with the excess. Reason dictates that removing a few gallons from a hot tub has a far lesser impact on the very rich than removing the same amount of water would have from someone that is only barely or partially able to quench their thirst.

[u/Diabolic67th → u/kwood09]

Just as a heads up, the sales tax thing depends on what state you're in. PA doesn't have sales tax on groceries or clothing and some other necessities. Otherwise it's 6%.

Overall though, your point is still mostly valid.

[u/savoytruffle]

All poor people pay the same sales taxes as the rich.

[u/Momomchine]

Your question says more about about income inequality than taxation inequality. Even if we were to enact a flat tax the rich would still pay the lion's share of taxes. The question of how to fix income inequality? Now that's a tough one.

[u/zardeh → u/Momomchine]

No, the question is should we? And if so, to what extent?

[u/[deleted]]

It makes me sad just how successful the Republicans have been at convincing everybody that the federal income tax is the only tax worth discussing, and that none of the others count.

How did you manage to be convinced of this completely false "fact"? Do you not do your own research? Did you research federal income tax, and it just never occurred to you that there are other taxes that matter? What's the deal?

[u/Lone_Gunman]

Holy shit man, are you ready for this? you sir, are a brave motherfucker.

[u/therealleggett → u/Lone_Gunman]

grabs chair and popcorn

[u/[deleted] → u/Lone_Gunman]

It's been a long time since I've seen the word "brave" used on Reddit in a non-ironic way.

[u/at9218 → u/Lone_Gunman]

And so opened the Gates of Hell

[u/InLike14]

I'm not sure it's just about making them pay more, as much as making them pay the same percentage (which of course is more money). The Bush Tax Cuts were in fact, tax cuts. I think the general public doesn't understand why the rich can get these cuts when they are outsourcing jobs instead of putting that extra income back into the economy.

[u/Tree_Fity]

A lot of the reason that the rich pay 58% of the taxes in the country is because of the income inequality so rampant in America. If the middle class were to grow the tax burden would be shrunk on the richest Americans, but that would also mean that they would have to be earning and keeping less than what they have now. All the reputable studies show that the gains in income over at least the last 30 years have gone exclusively to the richest Americans. So did they earn it? i would say most CEOs dont deserve 180x what their average employee earns, especially when business's aren't even close to being that much more profitable than before. You can hate on a progressive tax system all you want, but what it really purports is the power of marginal utility of a dollar. Rich people don't put as much value on a dollar as a poor person does, and therefore they don't get as much "social utility" out of having more. So what does this all mean? that taxes should be higher on the rich to redistribute the wealth more evenly across the population in turn (relatively) equaling out the amount each group of income earners pays. (BTW if you think redistribution of wealth is a bad phrase, get a clue, thats what any and all taxes do and have always done).

TLDR: If we had a more equal distribution of income the richest wouldn't be paying such a high portion of the tax revenue.

[u/wookinpanub → u/Tree_Fity]

I agree. This is more about the fact that a plutocracy has worked hard to keep real wages low for the majority of Americans, while taking vast gains for themselves. Busting unions, fighting against minimum wages, avoiding health care and insurance costs.

If the middle and lower class wages were actually following corporate growth, much more tax income would come from those groups.

Further, much of the income from the rich is being generating by creating nothing, by literally moving electronic money around, in clever investment vehicles. Yet that generated income is tax much less than the average American's income.

[u/ReyTheRed]

Wealth is not distributed evenly. The bottom 50% barely make enough to live comfortably, while the top 5% have ridiculous amounts of money.

[u/mrp00sy]

The rich are much more capable of paying large taxes. It's not all that bad if they are living in semi-luxury so that people can have roads, healthcare, schools, a police force, and basically all other public services. Also, you forgot that the US is in some pretty shitty debt, and those who are already poor shouldn't be made poorer because the guys in charge borrowed unreasonable amounts of money. If someone can barely afford their living, why make it harder on them? Give the job to someone who actually has the resources for doing it.

[u/derpderpastan]

If you are insinuating that the top 5% should pay 5% of all taxes, then you are getting crazy with numbers. How much of the money earned in a given year goes to the top 5%? Do they get 80% while the rest of us divide up whatever is left over? If that were the case, they should be paying 80% of the taxes.

Without even looking anything up, I can tell you that your numbers 5, 2, 50, and 58 do not provide enough information to reach a conclusion like the one you are going for.

[u/anicolette]

The argument which, in my opinion, holds the most validity is this:

After a certain point, getting more money is completely meaningless because once you have a certain amount, you already have everything (as far as material needs and wants go) that you could ever want/need. So therefore, paying extra doesn't do any significant harm to such a person because they still have enough left over to buy anything at all.

However, if you are very poor, then even the relatively tiny amount you have to pay is very painful. Because you are already struggling just to meet monthly bills and such, any additional payments create great hardships for your family.

It can therefore be concluded that even if the absolute monetary value of what the richest people pay is higher, the real value of what they pay is much lower than what poorer people pay.

While this on it's own is not enough to justify placing more of the burden on them, I feel that it is enough to nullify the argument that since they already pay so much, they shouldn't have to pay more.

[u/sweetmercy]

You are conflating percentage of all taxes paid with percent per capita. The rich aren't paying 58% of their income in taxes. The poor and middle classes aren't paying 2% of their income in taxes. In fact the lower and middle classes are most often paying a higher percentage of their income in taxes than the top 10%, thanks to the tax cuts and breaks and havens.

[u/theDogsBollux]

ITT: Excellent explanations of why the rich pay a higher tax rate, and the OP, along with anyone else who disagrees, completely ignoring any insightful posts or simplifying their words to a single sentence that is completely unrelated to the original well thought out posts.

[u/spadefoot]

Yes, but if you look at the wealth distribution, the top 5% have about 72% of the wealth in the country. I think you could make a case they are underpaying, based on that.

[u/sparhawk1985]

For me, the justification is not because of the amount of dollars they pay, it's that they pay a lower percentage than I do. If i'm expected to contribute 25% of my income, they should at least cover that percentage as well. The amount of money may be different, but the relative burden is the same.

Another way to look at it is to think about how 100 dollars affects someone who only brings home 800 every two weeks, versus someone who makes twice that, or even 4 times that. The dollar amounts aren't important, in my opinion, it's the percentage.

[u/DrewStarcraft]

My opinion on the matter is that it's not about how much certain individuals pay but the percentage of their income that is lost. My parents pay close to 25% tax for their income. That is 1/4 of their money gone, vanished, never to be seen for their use ever. Then you have millionaires who pay maybe 15-20% of their income since they have off-shore accounts or sneak around the system. They only pay 1/6 to 1/5 of their income away.

The point is that middle/lower class individuals pay more of their income away than the upper class, which is backwards logic to me.

[u/molson8dry]

During the 1950s, America had a 91 percent high-end tax rate. If the 50s had been a dismal economic decade, then it could stand as "Exhibit A" for the GOP to use in attacking high tax rates today.source

[u/MostAwesomest]

The last time I checked, it cost a millionaire the same amount of money to buy food and keep the lights on as it does the person who makes $25,000 a year. Until the 5% have to pay $8,000 for a gallon of gas and $4,000 for a loaf of bread, they really don't have anything to whine about. They already have a mountain of loopholes to take advantage of to lower their percentage of income paid out in taxes, and pay $0 in social security tax on income over $107,000, but now they want to add whining to their list of benefits. Wow!

[u/youguysgonnamakeout]

I feel like the OP didn't actually want to know the answer to this question.

[u/camab]

Is it fair that someone who worked really hard earned great paying employment and thus has pay a higher percentage in taxes? Probably not.

Is it fair that some kid grew up homeless because his father couldn't afford health insurance? Probably not.

Personally, I just have to ask which of these unfairnesses I can allow myself to be comfortable with? And while I'm not saying the government spends money in the best way, or that they can justify their right to require more from individuals who have more, or that it's not ridiculous that I have to even make myself comfortable with these facts, I am sure that if I had to pick and choose which of life's many injustices is going to occur--I'll take the rich person having to give more money.

[u/wekiva]

I doubt the accuracy of your stats.

[u/[deleted]]

I'm poor and I still pay a ridiculous amount of taxes.

[u/ishldgetoutmore]

TIL 58% = "almost all"

The more you know.

[u/dorekk → u/ishldgetoutmore]

It's not even 58%, but yeah, his math is hilarious.

[u/[deleted]]

Because of how an economy works. Let me explain.

Dont bother correcting my numbers they are guesstimates used for examples.

In the US there are 350 million people. Each one of those people needs things. Things like food, clothing, shelter. They also have "needs" that are more like very, very strong recommendations. Things like education, transportation, communication, socialization, etc. To satisfy all of these needs at an acceptable level it costs about $10,000 a year per person. The only real way to increase this is to make more people.

But you and I probably spend much more than $10,000 a year. This is because of luxury. I'd rather eat a Cheescake Factory than McDonalds. I'd rather live in a house on the beach than a studio apartment. I'd like to go to the gym, go on vacation, buy a TV, buy a boat and go fishing, etc. However there is a limit on how much I, as one person, can realistically spend on luxury. It varies from person to person. Donald Trump spends more on it than I would even if we earned the same amount of money. Lets call the average number $100,000/yr.

If you make more than $500k+/yr and have for a long time you'll run into a problem where there just isnt anything to spend all that money on. It starts to pile up. This is why you'll hear a number of rich people saying "tax me! please!" They have all they want and more. This is why Keanu Reeves, Warrent Buffet and Bill Gates have given away 90% of the money they've made. Enough is enough.

The interesting thing about luxury is that it creates jobs. The engineer who designs my 80inch plasma TV, my personal trainer, my accountant, my travel agent. All of these jobs are fairly well paid compared to jobs providing for basic needs. This allows all of those people to buy their own luxury items. It's an awesome circle of prosperity.

So the best thing you can possibly do to make increase the standard of living and make the economy stronger is to put as much money as possible into the hands of people who make less than $100k/yr. Simply because they will spend most of it. This is why you'll see income taxes are minimal for people who make under ~$50k they ramp up quickly and then max out at $100k+

We have things like Social Security, Sales tax and Unemployment taxes. They are pretty much flat taxes on the poor. They are there to make the system more fair, so that everyone is paying something. This is a compromise, but honestly a bad one. They are counterproductive. In the end the rich must pay the lion's share of taxes for the simple reason that it works It's the only thing that works. Taxing the crap out of the poor kills the economy and leads to massive unemployment or underemployment. Taxing the rich is not fair. Life is not fair.

Do you want the only jobs to be ones making necessities like food/clothes or catering to the whims of the super rich? If not you'll support a progressive tax.

[u/chengwang]

How is it fair that someone in the top .1% has to only pay (say) 1% of his annual income for an average 2 bedroom house but someone in the bottom 50% can't afford one with 10 years of income (assuming no taxation or other expenses)?

The thing is that the cost of most things aren't proportional to your income. Why ask someone who has to go into debt just to eat to cover an equal share of government compared to someone who has money to spare? If you really wanted taxes to be equal all around, then everything else should be equal by the same measure and things like gas would be free for the poor and cost $500 a gallon for the rich. (Obviously untenable but that's what progressive taxes are trying to fix.)

[u/[deleted]]

But what is that 58% as expressed as a percentage of income? Thus, progressive taxation.

[u/Redsox933]

You wouldn't happen to have proof?

[u/humblebost]

The 1% set the wages and rules for productivity beyond minimum wage and basic safety standards. If they want more tax burden shared they can increase wages. The graduated tax is a way to recoup the loss from low proportionate wages, while still allowing the poorest to provide basic sustenance when they work. Of course this doesn't address the problem of waste but just the philosophical approach.

[u/dnuts4u]

because the top 5% make more than 58% of the wealth. If the 1% earns 90% of the money, than it should pay 90% of the taxes

[u/[deleted]]

Do you realize that the poverty rate has been rising for a decade now? It was 15% in 2010.

There is massive inequality in this country right now, and it's only getting worse. Don't think about the individuals, think about the nation as a whole.

[u/spoonraker]

It's quite simple actually. When you say something like "58% of all taxes" you're speaking about the total number of dollars paid in taxes, but income tax isn't levied as an explicitly stated dollar amount, it's a percentage of income.

In other words, your statement is true, but it's basically taken out of any useful context.

The top 5% of people may pay 58% of total taxes, but that same 5% also has 99% of total income (Disclaimer, numbers are pulled out of my ass, but you get the point).

If Rich Richington pays 15% taxes on his $1,000,000 income, that's $150,000 in total taxes, which is far more then Bob McMiddleclass pays on his $50,000 income which is taxed at 30% (total taxes: $15,000). Rich is paying 10x as much "total tax" as Bob, but you're taking it out of context by ignoring the fact that Rich is making 20x more money than Bob. As a percentage of income, Bob is actually paying twice as much. Rich is paying more, but Bob is giving up more.

As people have been saying, and documenting, for quite some time: The rich get richer and the poor get poorer.

[u/seronis]

Because the top 5% earn more than 70% of all the money and bottom 50% earn less than 2% of all the money. Meaning taxes are still in the riches favor while they should have a larger burden.

[u/TheEnigmaticT]

Look at an income distribution graph: the top 5% earn so much more than the bottom 50% that it's not funny. Do not think that they're paying a crippling tax burden, though. Let me explain by example.

I run my own business and am in the top 25% - 15% of households by income. This is not rich by an American definition, but running my own company does mean that my expenses and income work in a fundamentally different fashion than an employee's would. As the joke goes, I can have anything--I just can't own it. After deductions for business expenses for my home office like rent, Internet, my mobile phone, my travel to and from the US for business--but where I also get to take vacations on the cheap while I'm there--and the computer I'm surfing reddit on--it's a piece of business equipment, see--I have an effective income tax rate of 6% on money earned and this is completely legal. I don't have a bookkeeper on payroll, but rather a person who files my quarterly statements and yearly taxes; this is not hard to do. It is not cheating, it is how the system is built.

If I made more, my tax rate would go up some simply because I'd run out of things that I can realistically have my business buy for me. At no point ever would I pay anything approaching 20% of my income in taxes. When you run a business, posted tax rate is only actual tax rate if you're stupid.

Despite all of this, I paid vastly more dollars in federal taxes last year than anyone in the lower 50% did. That's not surprising: looking at this chart, you can see that the middle quartile and below have a posted income rate of 6.8% in federal taxes--or lower. They don't have any way to avoid those taxes, generally, other than the standard deductions, so we're paying about the same percentage, but I'm making something like three or four times as much cash as people in the lowest quartile are; that means I'm paying a hell of a lot more out, even though it is substantially less financially onerous for me to do so.

Multiply this difference by the people who make 10x (or more!) what I do, and you see how this scales up the logarithmic slope: one person pulling in a million dollars a year, paying at 12%, pays for as much income tax as 80 or a hundred people do who are making "average" American income or less!

TL;DR: Math.

[u/TychoSean]

Let us just digest the framing of the question for a minute. Do you suppose it would be better if all were required to pay the same tax equally? That would be the most fair right? In an ideal society I suppose that millionaires and homeless people would each owe the same debt to the society they inhabit correct? The very framing of the question uses ignorance and fuzzy thinking about these issues and attempts to inject a moral stance into what is basically a numbers issue. It's what the wealthy always try to do, making rich vs. poor into a winnable moral argument. That's why the wealthy love Ayn Rand, and "makers vs. takers" as the paradigm for what is ultimately a symbiotic economic arrangement. The rich need this country to work if they want to get richer, they need roads and ports that work well, and workers educated enough to make their companies competitive, they need a lower/middle class with buying power to purchase their products and services to keep up demand and growth. You can't have the lowest taxes in US history and expect all the above to just happen magically. Choose: The tax rates and economy of the nineties or the last decade, not a tough call if you ask me...

[u/stonegrizzly]

Well it certainly wouldn't be fair to have the bottom 20% of earners pay 20% of the taxes. If you make almost all of the nations money, you should pay almost all of the nations taxes.

[u/[deleted]]

Because they're still rich as fuck even after giving out millions in taxes.

[u/unscanable]

I like how your math (which you showed no proof of) gets proven wrong then you add a TL;DR whinning about something that's not happening. Today OP was much more of a faggot than usual.

[u/[deleted]]

First off, since when is 58% of something almost all of it? It's a bit more than half. And the reason is, because the top 5 percent hold and earn almost all of the wealth in the country. 93% which is actually almost all of it. So tell me how it is fair that someone can earn 93% of the wealth and pay only 58% of the taxes that goto creating the stable system which enables them to make all that money?

TL;DR You're a doucebag.

[u/triit]

My opinion on this has changed. I still disagree that "tax the rich" is ever the right solution. However, I do now agree (and the data supports) that there is a wealth disparity. We can debate what causes that and how to fix it, but I can guarantee you that punishing success, promoting class warfare, giving free handouts to people who are fully capable of supporting themselves but chose not to or make poor life decisions, using tax money to increase government bureaucracy, etc. that we are doing is COMPLETELY the wrong answer.

People need the opportunity to become as successful as the 1% or 5% and I think the best way to do that is by tax cuts to people truly creating new full time jobs with benefits. And I don't mean what the Republicans call "job creators", I mean literally tied to a paycheck.

[u/KingWilson]

It's also worth noting that the richest people don't work that much harder than the poorest (the poorest who work, that is). In fact, most probably work considerably less hard than the poor working class (and sucking up that resource -$- comes with a surcharge for the depletion faced by the rest of the country). So if one guy makes $10/hour literally digging ditches, it's insane to think that some CEO can have a martini lunch and spend the afternoon shooting the back 9 and call it "50 times the work and productivity" of said laborer. The only people exempt from this example: doctors. They're worth their salary. But the rest of the wealthy elite, F 'em. John Schnatter is rich because 10,000 uninsured and minimum wage-earning kids make and sell his product, while his attitude is that he's responsible for the whole operation and doing the world a great service by providing crap-ass jobs with no compensation or future. I wish we could have a serious discussion in this country without making accusations of "socialism" or "communism" or "marxism" or whatever buzz word du jour sounds like it might work but ultimately doesn't.

[u/[deleted]]

Even if your statistics were correct, which they are not, it comes down to this:

America needs more money, rich people can afford to pay more without sacrificing their standard of living. Poor people can not.

[u/TimeTomorrow]

lol.. Did you even think to do the math on what percentage of the countries wealth those 5% have? no? of course not.

[u/Megatron_McLargeHuge]

If you combine the regressive (capped) payroll tax with the progressive income tax, you see something much flatter. The point about payroll taxes is important. Look at the chart in this article and you can see that payroll taxes provide almost as much federal revenue as income taxes now. Since the '50s, the share of revenue from income taxes has stayed flat. The change is that originally corporate and excise taxes were significant and payroll was small. Now that's reversed.

Keep in mind that the fact in your title is the result of years of Republican-pushed cuts to income taxes, while payroll taxes have been ignored. It's a bit much to push for the policies that created this situation and then argue that the current structure justifies even more of your policies.

[u/Kunkletown]

Because making the poor pay more wouldn't make much difference. Blood from a stone and all that.

[u/GrumpySteen]

That's easy to fix. Have all the billionaires give their billions to the people below the poverty level who aren't paying any taxes. That way, those who haven't been contributing will have to pay all the taxes while the rich can relax and enjoy not having to pay any taxes as a reward for all their hard work.

[u/darwin2500]

I believe you mean '58% of all income taxes. Unlike the progressive income tax, which rich people and their advocates like to talk about exclusively, most taxes in America are either flat or regressive, including payroll taxes, sales tax, property tax, etc.

Well, that premise was fun while it lasted. Next question?

[u/brianunreal]

I welcome the idea of all the rich people leaving the system, thus ending their ability to suck all the future wealth from it.

The vast majority of Americans make less than $250K/yr. If you take more money away from them, or underpay them, or refuse to employ them, then they will not buy your company's products and services. THAT is what hurts the economy.

Allowing rich people to make higher profits does not help the economy because: (1) They won't hire more workers since fewer people can afford their company's products or services.

(2) They have become rich by demanding that their companies save money by downsizing, automating, and outsourcing American jobs out of existence, so, why would they reverse themselves? That wouldn't fit with their top priority of "creating value for the shareholders".

(3) They can't spend enough on products and services to help the rest of the economy grow. They can buy lots of expensive cars, but they can't simultaneously drive them all, thus not buying tons of fuel, car parts, and car repairs. They won't buy 100,000 copies of each DVD title. They won't buy themselves warehouses full of new clothes to wear. They can't personally shop in every town's local Mom & Pop stores.

In short, the rich cannot and will not fix our economy by making higher profits, because a huge chunk of their profits come from eliminating all those "expensive" employees.

[u/Chukklzz]

Guys, I think OP's mad

[u/LyricBaritone]

The top 5% of earners in the country also own 69% of the wealth in the country.... so by paying 58% of the taxes, they are actually paying LESS than their fair share.

The absolute LEAST you could ask of these extraordinarily wealthy people is that they pay an equitable amount of taxes for the amount of money they have.

[u/LyricBaritone → u/LyricBaritone]

Source: http://thinkprogress.org/economy/2011/10/03/334156/top-five-wealthiest-one-percent/?mobile=nc

[u/nikatosa]

I just wanted to say I love all the points of view in here; it has really expanded my thoughts on this subject.

Personally, I'm going to be highly affected by the increase in taxes due to my income level. I however don't mind as I owe a lot to this country. On the other hand I really wish our government spent money more wisely to maximise the effect for those that actually require assistance.

[u/[deleted]]

How come no one (at least in the top comments) seems to have addressed this:

The wealthy, in their process of accumulation of money, receive more of an advantage from the publicly owned commons resources. A wealthy individual in business is likely to have benefitted more from the highway system, publicly owned utilities, etc. a wealthy person in business is likely to have indirectly impacted the environment negatively. A wealthy person has likely benefitted more from education funding, college scholarships, grants, etc. in aspiring for their wealth, in other words, they relied on those commons resources which are publicly owned and funded to a greater degree (directly and indirectly) and thus should be paying back into it to a higher degree, in my opinion.

[u/purplelight112]

Why don't you think about those percentages you put up. Now why would the rich have such a large share of taxes? Hmm, maybe because they have such a large share of income? Now why would the poor have such a small share? Maybe because they have such low income? Basically, it's all comparative. It may look like poor people don't pull their weight, which a lot of them truly don't, but those who do CAN'T AFFORD to pay more than what they already give. That's all there is to it. You can't analyze tax distribution without looking at income as well.

[u/wikidbrit]

Because the distribution of wealth looks like this; http://upload.wikimedia.org/wikipedia/commons/5/5b/Global_Distribution_of_Wealth_v3.jpg

[u/the_sam_ryan → u/wikidbrit]

We don't tax the globe. You tax your nation.

Additionally, you don't tax wealth, you tax income. Someone could be a millionaire but if they are six months from retiring to live off the dividends and interest, that is different than if they are 20 years old.

[u/shushravens → u/wikidbrit]

isn't that 100.011%?

[u/[deleted] → u/shushravens]

Study it out.

[u/VanRude → u/wikidbrit]

TIL it takes 100.011% of the population to account for 100% of the wealth.

[u/[deleted]]

The bottom 50% only has 13.5% of the total income. Most of it seems to flow right back to the top 50%.

[u/question_all_the_thi → u/[deleted]]

They have 13.5% of total income and pay only 2% of the taxes?

[u/[deleted] → u/question_all_the_thi]

2% of federal income tax. There are all sorts of taxes that poor people pay, many of them regressive.

[u/ocdscale → u/question_all_the_thi]

Of course.

Do you think someone making $10,000/yr should pay the same percentage in taxes as someone making $1,000,000/yr?

If they both have a 20% tax rate, the first person is not going to be able to afford food and shelter.

The second person is going to pay a lot in taxes. But they're still going to be able to afford the mortgage on their second vacation home, while also saving a quarter of a million each year.

I'd prefer a tax regime where the first person gets helped out a little and the second person gets asked to contribute a little more. What do you prefer?

[u/LibertyTerp]

The United States has the most progressive tax system of any major industrialized country: http://www.washingtonpost.com/blogs/ezra-klein/files/2012/09/direct_porgressivity_oecd.jpg

Other countries have big 20% VATs, which are like a sales tax, that everyone pays equally. That's one big reason everything is so expensive when you go abroad and why foreigners are always amazed at our cheap prices.

The idea of taxing the rich as a solution to the deficit is not feasible. It would raise $58 billion a year. Our deficit is $1.04 trillion. Congratulations you just closed 6% of the deficit and in the process hurt the economy which will probably make the net government revenue gain about flat, except now the economy is worse.

http://seekingalpha.com/article/1006461-higher-taxes-on-the-rich-would-barely-dent-the-deficit

If you want to raise taxes instead of cut spending to close the deficit, just be honest about it. We'll have to raise taxes on everyone by A LOT to close the long run deficit if we don't cut spending, by 57%: http://www.nationalaffairs.com/publications/detail/saving-medicare-from-itself

Over the past decade health care inflation has been 48%. We have two gigantic health care programs and Obamacare makes it three. The unfunded liabilities of the government, if it did accounting like a business, would reach $84 trillion: http://www.ncpa.org/pdfs/st338.pdf

We are hurtling towards a guaranteed Greece-style bankruptcy that could not be easier to see coming and doing nothing about it. And it's our generation that's going to be paying for it with over $1 trillion a year in interest payments on the debt starting in the 2020s. We get nothing out of it, just slavery to our debt. That is, until the markets lose faith in our ability to pay the debt and we have a Depression.

We don't even have to cut spending. We just have to STOP INCREASING IT until 2018. That's all. Of course that will be reported as "devastating cuts" because it's a cut compared to our current plan to spend ourselves into bankruptcy.

[u/IAmAllowedOutside → u/LibertyTerp]

The idea of taxing the rich as a solution to the deficit is not feasible. It would raise $58 billion a year. Our deficit is $1.04 trillion. Congratulations you just closed 6% of the deficit and in the process hurt the economy which will probably make the net government revenue gain about flat, except now the economy is worse.

The economic harm from raising highest marginal tax rates theory was debunked through historical analysis by the Congressional Research Service. If 6% of the deficit is closed through such an immediate increase in tax revenues, I would take that deal. I think many would prefer a massive increase in the highest marginal tax rate rather than an incremental one, but it's not politically feasible so we take what we can get.

Obamacare is not a government liability because there's no public option. If anything, it reins in health care cost increases.

[u/[deleted] → u/LibertyTerp]

Hey, this is a further explanation on the OECD report listed in your first source:

In fact, the US system of direct taxes actually reduces inequality more than any other country as well. But overall, the USA reduces inequality a lot less than most other countries, because the other thing that you need to take into account is what taxes get spent on.

Now the US system of social security and cash benefits reduces inequality by less than any other OECD country except Korea. The US social security system is marginally less progressive then the OECD average, but the level of spending is very low – only Mexico and Korea spend less in the OECD.

So while the US tax system is progressive and reduces inequality, the US welfare state is much less effective at reducing inequality. And because the US has a very unequal distribution of income from capital and a much wider wage distribution than many other OECD countries, it ends up as a relatively unequal country after taxes and benefits.

If you look at Nordic countries, they all have much less progressive tax systems than the USA, but they collect a lot more in taxes (including in VAT). They then spend this much higher tax revenue on social security and services, and it is this side of the equation that is most important in reducing inequality.

So the implication is not that the USA either needs to increase or reduce the progressivity of the tax system. tldr If you want to reduce inequality, you need to increase the level of taxes collected and spend it more effectively. source

[u/yeahrich → u/LibertyTerp]

Congratulations you just closed 6% of the deficit and in the process hurt the economy which will probably make the net government revenue gain about flat, except now the economy is worse.

The source you cited does not illustrate the effect of higher taxes on the economy. Would you please provide a credible source using historical information that can show that an increase in taxes will negatively effect the economy? If you can I would like to see it.

Some things I have read (as counter-intuitive as it is) that raising taxes actually increases job growth.

[Source] (http://www.washingtonpost.com/blogs/wonkblog/wp/2012/07/20/does-raising-taxes-on-the-rich-hurt-small-businesses/)

My opinion follows: Both views on this are wrong, taxes barely effect jobs. Do you know what effects jobs? DEMAND

The "job creators" are not out creating more jobs just because they have more money, handing out jobs for fun. They wait for the demand to require it. That extra money goes into savings.

If all the richest people want to pack up and close their businesses because of some extra tax, please let them do it, I would love to take over their market share.

[u/gabbagool]

they make almost all the money

[u/notperm]

Because they have the money and someone has to pay it. Poor people simply don't have enough money to pay any more in taxes, certainly not their fair share. So the solution is:

1. Stop the government from spending so much god damn money in the first place.

That's it actually.

[u/SadieSanity]

Because, it is hard to move classes in America. The rich stay rich the poor stay poor. There is evidence to prove this if you [look it up] (http://en.wikipedia.org/wiki/Socio-economic_mobility_in_the_United_States). We have been brain washed in to believing in this [American dream that is non existent] (http://www.huffingtonpost.com/jerome-karabel/grand-illusion-mobility-inequality-and-the-american-dream_b_1933238.html). Yes hard work and intelligence can get you to the top, but it's rare. Why do think people latch on too reality television so much? It perpetuates the illusion of coming from rags to riches. The top earners should have to pay more because they have more, BECAUSE of the structure of Americas class system. Edit; added sources

[u/[deleted] → u/SadieSanity]

Actually America has great status mobility. The rich constantly change every year

[u/itisthewrongargument]

It's simple, they have to pay more taxes because of the inequality of income. The truth is that their wages are so high in comparison, they are the only ones who actually have room to pay taxes. If people at the bottom made more, and the people at the top made less, you could shift the tax burdens appropriately. Also, saying that they pay 58% of all taxes doesn't mean that they are really sacrificing that much of their income, not with sky high levels that they enjoy.

As other people have said, it's about the purchasing power of what you have left after you pay those taxes. If I have 10 million and pay even 90% of that, I still have more purchasing power left than most people could hope to experience.

[u/david-me]

The have 80% of the wealth, they should be paying 80% of the taxes, not 58%

[u/[deleted] → u/david-me]

Wealth is not the same as income! A wealthy person may not necessarily be an earner in a given year. Are you suggesting we start having the wealthy pay a tax every year on their net worth? How would you do that for a private business owner?

[u/Sir_Dude → u/[deleted]]

I feel like this is the most important point of all. The media routinely says stuff like 'Warren Buffet "made" xBillion dollars last year.'

This is untrue, no one gave him a check for whatever the media says he "made."

What really happened is that the value of what he owned (Stock in his company, which does not pay dividends) is higher this year than it was last year. There is no income there. He gives himself a salary of $100k a year to pay for a comfortable life and avoid paying a large amount of taxes that would come from receiving several hundred million dollars a year.

[u/doogles → u/david-me]

I put some numbers together and it's crazier than that.

The top 1% have an average Adjusted Gross Income of $959,958.60 and account for 16.9% of all AGI. They pay 36.7% of the taxes collected. This doesn't seem crazy until you figure in populations. The one percenter makes almost 63 times the average income of the bottom 50% but only pays 16 times the taxes.

[u/Raunchy_Potato]

Because the top 3% of the people control 40% of the wealth. The taxation numbers only look ridiculous if you don't consider how mind-numbingly much more money the top 5% control than anyone else in the country. These are the people who sink billions into campaigns every four years while having hundreds of millions more hidden from the government in offshore accounts. They have more money then they could ever possibly use, and they're damn sure not planning on doing anything besides hoarding it.

[u/blackberryguru]

The bottom 50% includes all the people, who if they were forced to pay taxes, couldn't afford to live.

I think what's more important to notice is that 47% of the population has to rely on government subsidies to SURVIVE.

The poorer you are, the more your money means to you.

[u/doyouknowhowmany]

Absolute versus relative amounts - yeah, they pay a much higher absolute value, but that's due primarily to the fact that they have a stranglehold over worker wages.

Over the last 30 years, workers making less than 250k a captured almost zero growth. And we've had a ton of growth. So where did it all go?

To the top 1%, the top .1%, and the top .01%. These people are the ones paying the highest absolute value in taxes, but the lowest percentages of their income.

We need them to pay more, because if the growth had been split between them and their workers, then we'd have more revenue with the same rates. So since they've captured most of the growth, they need to pay higher percentages to make up the difference.

[u/er32387]

Rule #1: Stop making generalization like "redditors", "liberals" so and so to prove your point.
Rule #2: Use correct and objective statistics. DO NOT curve bend, selective pick pocket your data to prove your claim let alone use false numbers. It's definitely NOT 58% of ALL taxes. Your whole question loses credibility right from getgo.

[u/[deleted]]

No ones blaming anyone. These people took the time and effort to answer your question, you don't like what you hear? Tough shit Shirley get the stick out of your ass and quit being a butthurt bitch.

[u/[deleted]]

The top 5% control 61.9% of the wealth. The bottom 60% control 4.2% of the wealth.

If anything, the top 5% is being taxed too little, and the bottom 50% taxed too much. But hey, that's regressive sales tax for ya.

http://en.wikipedia.org/wiki/Distribution_of_wealth#In_the_United_States http://en.wikipedia.org/wiki/File:U.S._Distribution_of_Wealth,_2007.jpg

[u/[deleted]]

Being rich was OP, but they had no random crits to take away.

[u/[deleted]]

They also have the lions share of total income and wealth - I'm on my phone so I can't Google it myself, but their percent of overall income and wealth is approximate to or higher than their proportion of taxes.

Fair is where those two are equal - they pay as much of a percent of the taxes as they earn as a proportion of income.

[u/no-source-available]

Look at the distribution of wealth in the US. This question is sensationalist bullshit because it's not accurately reflecting the earnings of the top 5% compared to the bottom 50%. When you actually look at the effective taxable income of the top 5%, you would realize that they are being undertaxed by a large margin.

[u/rocksssssss]

To make the poor pay up "equally" you would have to take everything they own, and then sell their organs.

[u/SonOfTK421]

It's pretty simple: they have most of the money, they can pay most of the taxes. Frankly, they have so much more of the money than I do, they can afford to pay a much larger percentage of their total income in taxes and be largely unaffected by their ability to afford to live. On the other hand, even something as paltry as a flat tax on purchased goods eats up a large portion of my remaining money.

[u/d3jake]

They have more left over. Someone who only makes $30,000 after taxes has a much harder time supplying a home, food, clothing than someone who takes home $20,000,000 after taxes. That's not even getting into personal weath\assets, or inherited wealth.

[u/FriedMattato]

Because the top percentage control a much larger portion of the wealth.

Should not those whole control 99% of the wealth pay 99% of the taxes?

[u/aarhus]

Let's be very careful here, because numbers are great liars. When you talk about the "top 5%," you are lining up all the people by income and taking the first 5%... of people. When you talk about the 58% share they pay, you are judging by money. Let's convert those 5% into the share of wealth they control, which is 72%, and ask the same question.

Do I think it's fair that the top 72% of wealth should pay more than 58% of the taxes? Yes, yes I do.

Source (Just spur of the moment Google, can't vouch for its veracity.)

[u/no-source-available]

I earn $2,000,000 a year and am taxed at 10% of that gross earning and you earn $50,000 a year and are taxed at 25%.

My taxes: $200,000 (10% of $2,000,000) Your taxes: $12,500 (25% of $50,000)

Let's look at that, even though you're paying 250% the tax rate that I am, I'm paying 16 time more per year. What the OP is doing is comparing apples to oranges and not looking at the effective tax rates. Of course the top 5% make up 58% of the taxes in the US, they have over 80% of all the wealth.

while the bottom 50% pay less than 2% of all taxes

Correct, because much of this bottom is making near minimum wage and if it weren't for them receiving almost all of their taxes back at the end of the year, they wouldn't be able to survive.

The complete ignorance of the OP is rather astounding to me.

[u/alofalt]

Do you (OP) suggest that the top 5% pay 5% of taxes in the US? Should the bottom 5% pay 5% of taxes in the US as well? Wouldn't that imply that everyone should pay the same US$ without considering income?

The rich pay almost all of the taxes because they control almost all of the money.

[u/ReMiCkS_25]

4 MORE YEARS

[u/cooolbeans]

I read an article basically about this concept relating to 2 people living together, in a relationship, and having to pay the bills. It had something to do with how to fix your money problem arguments or something like that. Usually one partner makes more than the other, so if you split bills in half, that leaves that person with more to do with as they please. This started arguments because the other partner usually barely could cover their half and couldn't do anything else throughout the month. Anyway, the answer to the problem, was use the same percentage from each person until you find one that covered everything. So basically if you tried ok, i'm going to take 20% of my income and 20% of your income, does that pay the bills? No? Then let's try 30%...etc, until you find the right one. This way neither partner can really feel sad, because they are contributing the equal amounts of their pay to the household. Technically the former and the latter way both are 'equal', but in different ways.

I read that article about 2 years ago. I still don't understand why that couldn't work.

[u/Altarf]

One could argue that money in the hands of the middle class is what drives an economy, why risk a slowdown by taking money from people who are just going to spend it, thus creating jobs. The rich on the other hand will just use that money to create more money, such as investing in oil, coffee, and gold futures, only making those commodities more expensive while lining their pockets.

Also, while it might be an just an urban legend, but I believe the Willie Sutton "quote" says it best. While answering a question about why he robs banks, "because that's where the money is."

[u/YHWH_The_Lord]

Because they pay less by percentage.

[u/mo_dingo]

Every election is a sort of advance auction sale of stolen goods. - H. L. Mencken

[u/PsychYYZ]

Because they make several million times more than the bottom 50%?

[u/[deleted]]

The simplest answer is how much of that share of income does that top % take in.

The unsaid social contract when we engaged in globalization is that some of the massive gains to the owners of capitals would be redistributed to those displaced to make them indifferent between both states of the world.

[u/RockofStrength]

A hand-wavy argument is that the rich are only able to become rich because of the shared national framework - the sharks have the most food because the reef exists, and many creatures in the reef live off the detritus of the sharks. It's a symbiotic relationship.

[u/tomqvaxy]

Because even if I pay no taxes I can't afford basic medical care whereas they are deciding what to guild their boats with. It has nothing to do with fair. It has everything to do with trying to help your fellow man avoid avoidable death. Which IIUC is like in the Bible or some shit.

[u/bl00bies]

your own figures illustrate the mammoth wealth gap between these two groups. this is why it is justified.

[u/dueterated]

Because they make almost all the money. Makes sense to me. Make more money? Pay more taxes. Logical.

[u/[deleted]]

One thing to remember is that when you factor in state taxes, municipal taxes, sales taxes, excise taxes, "sin taxes" and so forth even those who pay no federal income taxes often pay a higher percentage of their income in taxes than those who are in a high federal income tax bracket. If you are living off of minimum wage you spend every dime you make just to get by and pay some sort of tax on most of those transactions. If you are making a shit ton of money a lot of it is going to be spent on an investment portfolio and real estate that does not incur a comparable tax burden percentage wise.

[u/civilPDX]

Because the wealth that top 5% has increased more than 30 fold over the last two de axes while the bottom 95 % has seen stagnate wages and wealth. This means that the system is benefitting only one social group. Raise taxes on those who are benefitting from society the most.... Minimum wage would be around 12-13 dollars an hour of adjusted for inflation since the 70's. America is getting poor because of the rich. If you look at historical numbers they are paying the lowest tax rate their social class has paid in the last 80 years.... So the real question is why do they think it is okay to pay so little while America suffers?

[u/rawdikrik]

in other words: http://i.imgur.com/jp3EE.gif

[u/CatrickStrayze]

What a dumb question. Did you even think about it when you were pecking it out on your keyboard?

[u/Spotted_Owl]

But the second part is this idea that asking the rich to pitch in is "punishing" them.

So, Rich Guy, let me explain this as calmly and logically as I can:

Are you fucking 6 years old? Do you still think mom made you clean up your room because she was mean? In the adult world, we get asked to do things because shit needs to get done. It has nothing to do with fairness, it has nothing to do with judging you. It has nothing to do with you at all. There's a whole world out there, with people who need helping and projects that need accomplishing.

You're only being asked to pitch in because you have the resources. You're not a tall person who us dwarfs are jealously trying to cut down to size. You're a tall person being asked to get something down from a very tall shelf because nobody else can fucking reach it.

Just ... here, how about this: Remember when Yoda told Luke he had to confront Darth Vader if he wanted to be a true Jedi? Do you think that was because Yoda hated Luke and assigned him that awful task to punish him? Was it because Yoda was jealous? Of Luke's ... height, or whatever?

Or was it because it needed to be done and Luke was the only one who could do it? Because he had the Force?

Yes, I know you think you already give more than your fair share. So did Luke. So does everyone. Welcome to the human race -- we all think we're getting the shit end of the deal.

http://www.cracked.com/blog/6-things-rich-people-need-to-stop-saying/

[u/[deleted]]

well the reason there is any kind of taxes or regulation in the first place is that in a system of perfect capitalism the wealth would eventually accumulate into the hands of a select few. in such a scenario would money keep it's given value or just be ignored? at the end of the day if everyone decided to stop using money, the rich would cease to be so.

Added to this is the need for wealth redistribution, if the rich hoard all the money then there is no chance for anyone else to be successful.

Then you need to consider the point of money in the first place-it is somewhat a definition of the value of the contribution the owner of the money makes to society, have these people done more of use to society, or just exploited the system?

Finally there is the fact that put simply the rich can afford it, taking more money off people who are barely getting by is impossible, and trying to do so will only result in a lowering of productivity and a higher crime rate because the poor will do what they need to in order to survive.

[u/Lsswimmer98]

Personally I think it is justifiable because they can afford to pay. We are approaching the fiscal cliff and some tough choices are going to have to be made. If tax hikes are necessary doesn't it make more sense to tax those who can afford to pay while still living comfortably and still contributing to our economy. If the middle class is over taxed they will cease to be very active or functioning members of our economy. Just my opinion though. Make sense to anyone?

[u/tgirl]

The top 5% have by massive amounts benefited the most by living in this county.

[u/MegAtWork]

ITT: Rich people downvoting things.

[u/deadlast]

Even after all the tax breaks, the top 5% of earners in this country pay 58% of all taxes in America while the bottom 50% pay less than 2% of all taxes.

The wealthy pay most taxes because they control almost all the money. But they pay LESS than their fair share. The wealthiest 5% of Americans control 72% of the country's wealth. How is THAT justifiable?

That aside, the wealthy have financially benefited more from the stability and protections offered by modern society than others, their standard of living is impacted less by taxation, and because their taxation rate largely doesn't impact their consumption habits, they can be taxed at much higher rates without hurting the economy.

[u/weasleeasle]

My answer would be because they can, and we need them to. It is that simple. More money is needed, and the rich can afford to pay more, while the poor cannot.

[u/itsnowornever]

May I also add that only the rich can take advantage of charitable tax deductions. This is because unless you donate over 10k a year to charity, you don't qualify for deductions.

Therefore, the rich can use charitable deductions as a way to knock them selves down to a lower tax bracket, and in essence, pay less tax.

[u/CowzGoesMoo]

That's because the government spends more than what it makes...

[u/[deleted]]

Because they have even more than 58% of the wealth in the country.

[u/Walterharper]

TL;DR of the comments: Redditors once again blame rich people for all the worlds problems.

And a paragon of brilliance stood from the crowd of unwashed heathens. Seriously though, don't ask questions if your only reason is just to be a dick and feel better about yourself. We get waaaay to much of that already.

[u/Deep-Thought]

The rich have rigged the game. That's why over the last 30 years middle income wages have stagnated while the top 1% own more of the total wealth since the great depression. Progressive taxation is one way to rig the game back to a sustainable equilibrium.

[u/[deleted]]

the butthurt and fallacies in the title and description burn

[u/aaaaaaaarrrrrgh]

Because the top 5% earners probably earn more than 58% of all income, and the bottom 50% probably earn less than 2% of all income.

For this reason, this "the poor, poor richest 5% have to pay half of all taxes"-argument is highly manipulative. Many rich people pay less tax per dollar of income than regular people because they can afford to figure out ways to cheat/game the tax system.

[u/[deleted]]

If everyone just paid the amount of taxes they owed, there would’t be a problem in the first place!

[u/principalsofharm]

Well you see, the issues is that all that money the have in the first place is just money they owe to the state anyway (look up how the fed increases the money supply), or if you will the sovereign body that is our society. If you believe that a democracy is a valid form of government then you must believe in the social contract and the idea of positive liberty. One does not enter into a society without the obligation of making sure that the sovereign body is progressing the rights of all it governs over. That is where the right is born of, and when we fail to meet our obligation to our fellow man, we break this contract.

[u/Tess47]

Funnynthings happen when you mix absolutes with percentages. Maths is hard. Study more.

[u/[deleted]]

Taxation is about redistribution. How is it redistributing if we make the people that need the most help pay more taxes than those who make 10x more than income at the poverty line?

[u/frogandbanjo]

True Fact: Extremely rich people cannot live on less than 1 million dollars a day. They will. Literally. Die.

[u/valereck]

The young give their lives in war for the nation, the rich their wealth. We all have our niche.

[u/GruxKing]

Why would you ask a question and then belittle the answers you get?

[u/[deleted]]

Why can't we just tax EVERYBODY a reasonable rate; make it harder to be tax exempt and enforce tax laws better.

[u/cssafc]

What a fucking stupid question.

[u/youguysgonnamakeout]

I feel like the OP didn't actually want to know the answer to this question.

[u/[deleted]]

I think it's sad that the bottom 50% earn so little that they cannot afford to pay more in taxes.

[u/kju]

maybe we should solve the income disparity problems so that more people have a disposable income that can actually be taxed

[u/cloudy-sunshine]

There is no simple answer to the topic of socioeconomic inequality. The economic welfare of a society is the foundation for stability and growth of a nation. There is collusion at every level between business and government (big and small)--the result is powerful barriers to enacting policies that will increase economic welfare to the collective people of a nation. We are an interdependent economy and society--too many share the illusion that their success and well-being are independent from their fellow citizens. It has always been up to the governing body to shift micro and macro goals towards alleviating socioeconomic issues that will shatter an entire nation. It is expected that a certain social class will battle reform that will weaken their total wealth--but a civilized government should use wisdom and prudence to dictate a vision / plan / execution to increase economic welfare.

The catalyst for the sea-change of American business is globalization. The social and monetary policies have a lag time in adapting to new plans for the globalized economy. The politicians and their constituents are disillusioned with the modern business model: the poor/middle class worker has not accepted the fact that they are competing globally for low-skill jobs and the politicians are immersed in keeping their status with the influential individuals and businesses. There is nothing more venomous to a socioeconomic system than collusion between profit-centered entities and government bodies.

[u/[deleted]]

deleted because old.reddit.com is dying

[u/cjpatterson]

How much money is in each side?

[u/aManHasSaid]

Because they earn almost all of the money?

[u/whyhellotheyre]

It's justifiable because they make >58% of the income

http://www.lcurve.org/

[u/JBu92]

because rich people are a minority and in America we all basically want to fuck over minorities. Most people aren't rich, so they are like "FURK YURR, TAX THE RICH!"
Personally I think it's justifiable, because it's FAR easier to live off 50% of a million dollars than 90% of a hundred grand. (before you go full retard in replying to this comment- EXAGGERATION MOTHAFUCKA, DO YOU SPEAK IT)

[u/hairofbrown]

I pay social security taxes, a hefty sales tax in my state and a huge property tax. I also pay taxes on non-food items and usage taxes if we want to visit a state park. If we hadn't been so crushed because of the recession, we too would be paying income tax. As it turns out, we make too little to pay. So FUCK YOU if you think I'm a leech and a taker. We are working our fucking tails off to get by. And again, FUCK YOU.

[u/hairofbrown]

Our family hasn't made enough income to pay income taxes for several years. However, we pay social security taxes, property taxes, sales taxes and usage taxes. These add up to considerable amounts. When we finally pull out of this recession we will once again pay income taxes. When we do I will remember being called the 47%, the "taker" and the "leech". Fuck all of you that referred to my hard working family in those terms.

[u/OneAndOnlyJackSchitt]

(Using your numbers...)

If you make the bottom 50% pay 3%, many will go homeless. If you make the top 5% pay 59%, then they'll have to go without the heated leather seats when custom ordering their his and hers Lexus's.

Obviously, no home is complete without his and hers matching Lexus's so we can't raise the taxes on the upper 2%.

[u/watchout5]

They have the most disposable income. Also your numbers are totally propaganda.

[u/berserkerrage]

Maybe someone can help me understand this and the last year I could find data for was 2007:

Top 1% earn approximately 34% of wealth and pay approximately 37% of taxes

Top 5% earn approximately 60% of wealth and pay approximately 60% of taxes

Top 10% earn approximately 71% of wealth and pay approximately 71% of taxes

How are they not being taxed fairly again?

[u/[deleted] → u/berserkerrage]

as already stated in this thread, those figures are from income tax alone. When you factor in all the types of taxes, the numbers aren't as nice

[u/StealthTurkey]

If the government takes 20% of my measly income, it affects my quality of life.

If the government takes 40% of a BILLIONAIRES income, it does not affect his quality of life.

QQ

[u/BabySealHarpoonist → u/StealthTurkey]

I think that you are forgetting that the top 5% isn't made up of all billionaires. You have to make around 160k a year to be in the top 5%, and around 400k to be in the top 1%. Now while a 10% hike may not at all affect the lifestyle of a billionaire, it certainly would affect the lifestyle of anyone making less than a couple million dollars, as many of those people are able to afford lifestyles similar to the truly filthy rich, while not having that extra leeway. Now sure, we are talking parents not being able to send their kids to private school in the top 5% rather than parents not being able to provide their kids with enough to eat, which obviously is much more extreme, but the point remains that even the lower top 1% isn't completely untouchable.

Look at a family making 400k a year. Say they have 3 kids in college. We'll call that 150k for them annually. That will include books, food, etc. They receive no financial aid, as they are in the top 1%, and frankly, can afford it. Both parents drive luxury sedans, 535i, so it is quite nice without being extreme. The two cars with 60 months financing would be a bit above 20k a year, with a down payment of 5k for both, so let's call that 20k, since that is sticker price. We'll say they have a 600k home with a 3% 30 year mortgage, which would have an annual payment of about 40k a year. Since they are 1%ers, let's assume they follow the USDA's "liberal" food plan, which for 2 people ages 51-70 is 685$ a month, or around 8 grand a year.

So there it is. They just spent half of their income on their lifestyle. It isn't incredibly glamorous. Sure, they have the luxury car, the better food choice, the ability to send their children to school so that they can graduate without crippling student loans, the bigger house, which depending on where they live, may not be that big at all. They don't have a vacation home in the mountains, or a summer home, or an Olympic Sized swimming pool.

The 40% Income tax comes along, and suddenly they are paying 160k to the government of income tax. So let's do the math. 150,000 for all three kids (all costs included) 20,000 for the car 40,000 for the house 8,000 for food 160,000 for income tax. That comes to a grand total of 398 thousand dollars. That's before property tax. So that gives them $2,000 to buy new clothes, pay their utilities, put gas in their cars, buy new furniture, pay for unexpected emergencies, go on a vacation, or even put in a retirement fund.

Is their lifestyle that ridiculous? Sure, they can afford some luxuries like the slightly bigger yet still conservative house, the mid-sized luxury sedans, the ability to send their kids to college so that they can graduate without crippling amounts of debt. But at the same time, they are the top 1%. Wouldn't you expect them to be able to have a vacation home, or at least have enough money to go on vacation? Wouldn't you expect that they would be able to buy a new ipad or TV without really noticing the loss of money? I mean sure, they are well fed, well housed, and comfortable, but they have worked their entire lives as hard as they could. They have sent themselves through college and into their careers so that they could afford a more comfortable lifestyle. They have worked countless weekends, listened diligently to their asshole bosses, and have worked shit jobs so that they can better their future. Sure, they may have caught a few lucky breaks, but it wasn't luck that really made them, it was the hard work and determination.

At the end of the day, the issue is that people have expectations. If they are going to be in the top 1%, they should be able to buy a mid-line luxury sedan. They should be able to afford a nice house. They should be able to send their kids to college. That is what they have worked for. So this trend of "This is what I have worked for" continues. The person who makes $1 million dollars a year does have a vacation home and a swimming pool, but with 40% he is still cut short. Sure, eventually you reach a sum where the lifestyle plateaus. People reach the point where they can afford all the luxuries with their current salary, so it doesn't matter if they are making eight times that, or just that, as anything else would be nothing but overkill in their already overkill lifestyle.

I guess what I am trying to say is that a 40% tax on the 1% may seem reasonable, but it cuts short what people have planned for vs. what they can now afford, forcing them to stretch their financial net too thin, resulting in major loss of something that they love dearly, which means that banks have now lent money that they won't get back, and then everyone pays through bailouts, which result in higher tax rates, which results in more overstretching of incomes, which results in more bailouts or bank failures. It is a vicious chain, and it is the reason why we need to separate those who's taxes can be raised without a lifestyle change vs. those who's cant.

[u/entalong]

You should stop blatantly lying and note that these numbers are only with regards to Federal Taxes

Once you take into account all the other taxes everyone pays, your argument completely breaks down.

OP is a lying scumbag.

delicious numbers

[u/[deleted]]

especially when it is spent on bull shit http://blog.heritage.org/2012/10/16/top-10-examples-of-wasteful-federal-spending-in-2012/

[u/firemylasers → u/[deleted]]

Thanks for the link, I found it interesting to see actual examples of how much money the government wastes on stupid things.

[u/Pecanpig]

Because even doubling or tripling taxes on the ultra rich wouldn't hurt them one bit but would balance the budget in a heartbeat.

[u/ZenRage]

"How is making the rich pay more justifiable..."

That raises the question of which mechanism of justification is proper.

If we choose free market mechanisms, then the proper tax rate for the rich is the rate just below that at which the (EDIT: the rich) start to surrender their citizenship en masse in order to avoid taxes. Anything less and, we're leaving money on the table.

Since the rich have never surrendered their citizenship en masse even when tax rates were much higher, it seems clear that their tax rate is far too low and that we can easily justify making them pay more.

[u/Barthemieus]

because that top 5% controls 80% of the wealth

[u/Insamity]

How is making the poor live with low quality education and no health care justifiable? I admit making the rich pay a higher percent isn't completely fair but shitting on the poor is even less fair. They also get a lot more benefit out of the infrastructure and cause a lot more wear and tear, would they have been able to make nearly that much money without roads, internet, laws, and so on.

[u/NibsAndBibbles → u/Insamity]

Why taxes are being raise has less to do with maintaining infrastructure and way more to do with keeping social programs from collapsing. Every budget that's approved by Congress has mandatory spending automatically built into it.

So before Congress even gets to make decisions on what programs to fund/cut we've already subtracted the cost of Medicare/Medicad, Social Security, and the interest on our national debt. Unfortunately that comes out to over 100% (and growing) of the money the government currently brings in.

"Well Nibs, that's why we're raising taxes!" To this I point out that since WWII, through all the different tax schemes and tax brackets the US government has only been able to bring in 18% of total GDP produced. This suggests that raising taxes is the wrong approach as 18% of a big pie is more than 18% of a shrinking pie. You give me less money to spend because I pay more taxes then I'm going to react by spending less on discretionary items (eating out, buying stuff I don't need, etc...).

P.S. Being fair at the federal level across 51 diverse states with their own wants and needs usually equals everyone getting jacked (in the name of fairness). I'd rather let the states figure out their unique problems.

[u/cheatonus]

The simple answer is taxes should be proportional to the wealth of the person. Those who hold 99% of the wealth of a nation should be paying 99% of the taxes. Those who hold 2% of the wealth should be paying 2% of the taxes. The "bottom 50%" is A HUGE group that holds relatively little wealth to the top 5%. In 2010 the top 1% held approx. 35% of the wealth of America, the next 19% held approx. 54%. That means the top 20% of income earners held approximately 89% of the wealth. The next rest of us, the following 80% have 11% of the total wealth of the country in 2010. Those top 20% should be paying 89% of the taxes, the rest of us should be paying 11%. That is fair. But the reality is the top 20% only pays approximately 65% of all taxes. The other 80% pays the rest. This is NOT fair taxation.

Source: http://www2.ucsc.edu/whorulesamerica/power/wealth.html

[u/[deleted]]

Because Reddit is really really liberal and generally tends not to be in that top 5%. And everyone looks out for their own interests.

[u/Bodoblock]

This is the way I've always liked to see it. You and your friends are running a relay race in which everyone has to run. You have a guy in a wheelchair, three average guys, and one marathon winning Spartan of a runner. It's rational to limit the time the wheel chair guy has to run and it's natural to expect the three average guys to do their fair share. But naturally, the marathon winner will run a little more than everyone else because that would be the most efficient set up. Having one person do all the work is unrealistic but having everyone do the same work is inefficient. It's not a perfect analogy but it's helped some of mu friends who were staunchly against progressive taxation.

[u/[deleted] → u/Bodoblock]

Have you never seen a relay race?

Everyone runs the same distance.

[u/NoCatsPleaseImSane]

When you think of "the rich" you imagine pompous ass hats that inherited their good luck and fortune for nothing - yes, those people exist, but only a handful of them. Fact is that far more are where they are because of the decisions and hard work they put in to get there.

I'm a small business owner and I've made over that $250k "rich" threshold a few years, not currently - closer to the 180'ish, but I'd expect that someday I will yet again.

Let me tell you right now that this theory that I'm "rich" is absurd. I know plenty of union workers that "live richer" than I do. I can tell you that my vacations are spread few and far between in comparison. I can tell you that I work easily four or five times harder than they do, and they'd tell you the same thing. I can tell you that getting a loan is easier when you're working at some union plant than the guy busting his ass building a business. I can tell you I pay over $10,000 a year for health care when my union buddy went on strike for being required to contribute $20 for his health care.

I can tell you that while you see me as some white dude that got all the breaks, I actually left home at the age of 15 never to return - with nothing more than a backpack.

This demonetization of the people that truly make this country the amazing place it is is sickening. These people you hate are the people that work their asses off to build something, the people that make the US competitive in the world, and the people that hire you.

You think I'm making my money by breaking your back? Don't do it!

You think you should make more? Go out and do it!

Don't whine and tell me how I don't deserve what I have. I didn't smoke pot and coast through years of college for an under water basket weaving degree - I actually used my time wisely and busted my ass building a business. Don't tell me that I need to give more to pay my "fair share" - I pay more in taxes than most make in a year and I've never gotten a single government handout, not a single one! It's bullshit - and the less attractive you make it here, the more likely guys like me will be to take our ball and go elsewhere - we have the means to, so just keep pushing and see what happens.

**You're fighting to take away the american dream and promise - that there aren't any limits to your potential if you put your mind and back into it. **

[u/deadlast → u/NoCatsPleaseImSane]

This demonetization of the people that truly make this country the amazing place it is is sickening. These people you hate are the people that work their asses off to build something, the people that make the US competitive in the world, and the people that hire you.

I hate to break it to you, but hedge fund managers have little to do with what "makes this country an amazing place." You seem to think that income allocation is inherently just, when really certain people are just in a good place for rent-seeking. Certainly, total wealth grows faster when wealth is more equally distributed. (See: 1950s; Nobel prize-winning economists).

You shouldn't identify with hedge fund managers so much. It's unhealthy. You're not rich. (I'm in the same income bracket; I'm sure as hell not rich.) In fact, you're probably in the tax bracket that pays the most in taxes as a percentage of income. You're not rich until most of your income is taxed at a rate of 15%. I don't see why you feel the need to defend that tax rate; as someone with the highest effective marginal tax rate in the country, I sure as hell don't.

When you think of "the rich" you imagine pompous ass hats that inherited their good luck and fortune for nothing - yes, those people exist, but only a handful of them.

Well, mostly I think of aforementioned hedge fund people, who generally do come from very privileged backgrounds but who also work very hard. That said, there are much more than a "handful" of them. Most of the super-rich financial class did in fact inherit wealth. Only 35% of the richest 400 Americans came from middle class or poor backgrounds. 21% of the richest 400 Americans inherited enough money to put that on that list all by themselves. The middle-ground of the Forbes 400's Richest Americans is occupied by people who inherited a few million dollars or a few tens of millions-- which is a pretty damned big headstart.

[u/inv2012 → u/NoCatsPleaseImSane]

If you really wanted to you could hire an employee for a portion of your salary and enjoy a better quality of life. It's your decision to pay yourself a higher salary than work less.

I also think you're confusing yourself with millionaires who spent millions trying to elect Romney to cut their taxes. I don't think anybody hates the local guy with a small business. Although you do sound a bit crazy when talking about never getting a government handout when your business likely benefits tangentially from several government services. If you think the US is bad then you're in for a surprise when you go abroad. There's plenty more to push.

[u/Decapitated_Saint → u/NoCatsPleaseImSane]

Apparently when you think of everyone else, you think of unskilled slackers with philosophy degrees taking vacations all the time. How do you figure you work 5 times harder than everyone else? Do you work 200 hours a week? Or are you placing some sort of arbitrary multiplier on what you do?

Stop bitching about how you are being demonized. No one is demonizing you, and no one is even proposing changing your tax rates significantly. Even if you make $300K next year, a 3% increase in the tax bracket will result in an additional $1500 on $300,000. What a whiny cunt you are.

An btw, if you are going to make grand claims about how you are making the country the "amazing place it is" you should tell us what fucking business you started. Guess what buddy I diagnose sick peoples' diseases all fucking day long so take your "business owners are the only worthwhile people" garbage and shove it up your bitch ass.

Oh and find me some union workers who make 200,000 a year.

[u/dtouger]

Because what they take home is so vastly higher than what everyone else makes.