It's better now than it was. In the 50s the top tax bracket was well north of 75%.
Originally Posted by UnderConstruction
Yes, indeed! In fact, the top-bracket rate was 91% for an extended period back in those days. However, it was completely farcical -- virtually no one paid an effective tax rate more than a fraction of the statutory rate. The reason is that before the 1986 tax reform, it was ridiculously easy for affluent taxpayers to shelter large portions of their income, and in many cases virtually all of it, by utilizing such means as accelerated depreciation on highly leveraged assets.
That's why the AMT (alternative minimum tax) legislation was passed about 45 years ago. Policymakers wanted to at least raise
some tax revenue from very high-income earners, even if no one suffered under the delusion that affluent individuals would be likely to pay, for instance, an
effective rate higher than that typical of the present time.
You say 90% of your income is earned income. What about those CEO's (Mark Zuckerburg, Larry Elison and a million others) who make a $1 in "earned income" for a year. Do you think they are rationing out that 1 dollar to cover their Ferrari insurance? No. They are making bank of off capital gains and dividend income while gaming our tax system. It is a FACT that Romney paid a 14% tax rate during the year prior to his presidential campaign run. So did Warren Buffet. Do you think that is fair? while the rest of the country men (like you) pay almost 40% of their income, people with BILLIONS pay only about 15% of what they actually made?
Thank George "idiot" Bush for his capital gains tax rates right? This is exactly why we have such a huge disparity in income equality currently.
Originally Posted by shanm
The capital gains tax cuts of both the Bush and Clinton eras actually contributed very little to the increasing income disparity of the last few decades, which is primarily due to megatrends that began decades ago involving free-trade globalism and rapid advances in technology. And, if you wish to continue looking for other significant contributors to income and wealth inequality, a good place to begin your search would be the halls of the Marriner Eccles building in Washington, D.C.
I don't recall whether Romney released much in the way of detailed information concerning his returns, but do remember that it was widely reported that he paid an approximately 14% effective rate. As a private equity manager, it's likely that most (or even virtually all) of his income is carried interest, which is taxed at the capital gains rate, which was 15% at the time. (That rate was, of course, increased to 23.8% two years ago.)
Warren Buffett avails himself of an even sweeter deal. He has been able to shelter much of the dividend income on which he otherwise would have had to pay tax -- while accumulating his vast wealth -- by utilizing a maneuver referred to as a holding company dividend corporate tax exclusion.
Full explanation @
http://www.eccie.net/showpost.php?p=...&postcount=156
So, as you can easily see, if Buffett really wanted to pay something closer to what he seems to consider his "fair share," all he would have to do is own a much larger portion of his aggregate stock holdings outside Berkshire Hathaway. This is why I think it's so humorous to see him go around prattling all the time about how rich people like him ought to pay more.
This guy hit the nail on the head. I work as a tax accountant. There are so many ways to avoid paying "your fair share" that the rich usually never pay what's allocated to them. Our system is riddled with loopholes that you could drive semis through. Its just that most people don't know about them.
All while the wealthy can hire people like me to 'game' the system for them. The poor are left fighting each other to pay the majority of our tax burden.
Originally Posted by warriorforlife
Huh??
In what way, pray tell, do you think the poor pay anything remotely resembling the "majority" of the nation's tax burden? Please check out the graph and associated commentary by economist Casey Mulligan that I linked in the opening post.
Lower income groups in the U.S. pay a far lower percentage of the total tax burden than in virtually every other wealthy nation. Although income tax rates for the non-affluent are generally lower than in other nations, that's largely because we do not have a VAT, or consumption tax. The VAT rate in many European countries is in the 20-25% range. A consumption tax is, of course, highly regressive, sacking a far higher percentage of the incomes of low- to middle-income taxpayers than those of higher income households.
The capital gains tax is always a favorite tool of demagoguery for progressives, but the rhetoric connected with attempts to push it to historically high levels is all about base-pleasing politics; not sound economics.
That should come as a surprise to no one who participates in this forum, and who presumably follows the policy debate.
