> Among Americans with the highest incomes – a subset of upper income adults who are in the top 7% of the sample’s adjusted income distribution – about a third (34%) of those who say there’s too much economic inequality say the government should raise taxes on people like them to deal with this, while 64% say this should not be done.
This surprised me. So I'm curious, for those who are making in the top 7% and believe there is too much income inequality (over about ~$145,000/yr) -- and I do suspect there are a few of us here, you don't think that a plan to reduce income inequality involves taxation on that level of income?
That source demonstrates that it’s definitely not proportionate by income.
> the top 1 percent paid 42.3 percent of the total federal income tax in 2020 while receiving 22.2 percent of total adjusted gross income
We have a progressive taxation system on income (for good reason), which causes the high-income to pay far more than their proportional share of income.
Some will argue that they should be paying an even more disproportionate amount, which is fine and we can have that discussion, but it is an absolutely truthful claim that they are already paying a higher than proportionate share now.
> the top 1% of US tax filers pay nearly half of all US income taxes
The top 1% also own more than 50% [1], so if they would pay their "fair share" they'd still need to pay more. Much more if you think that the differences should become smaller.
> Won't this disproportionately tax the poor? - Firstly, the existing tax code already does.
I used to think this because it's often said, but learned it's not true. This sums it up:
The top 50 percent of all taxpayers paid 97 percent of all individual income taxes, while the bottom 50 percent paid the remaining 3 percent.
The top 1 percent paid a greater share of individual income taxes (38.5 percent) than the bottom 90 percent combined (29.9 percent).
The top 1 percent of taxpayers paid a 26.8 percent average individual income tax rate, which is more than six times higher than taxpayers in the bottom 50 percent (4.0 percent).
> 87% of income taxes are paid by the top 25%; 70% of income taxes are paid by the top 10%.
Do you have an reputable source of truth for this?
> The 50% to 25% income bracket, which makes up most of the middle class, has a 7% average federal income tax rate.
Any source of truth for this? I'm a sample of one but I pay at least quadruple this rate every year since I can remember and I'm not an edge case. 7% is a joke. I would love to pay that.
> The plan would increase the top tax rate on Americans earning over $435,000 from 37 percent to 39.6 percent.
Democrats have caviar dreams and a tuna fish budget. $2.9 trillion over 10 years doesn’t even cover the FY 2015 budget deficit projected forward, much less any new spending.
Biden’s promise not to raise taxes on upper middle class people (making $100k-400k) is nuts. Half of all personal income, over $5 trillion, is earned by the top 25% that’s not the top 1%: https://taxfoundation.org/summary-of-the-latest-federal-inco....
Other countries heavily tax this group. In Germany, the 42% income tax rate (just a couple of notches below the 45% max) kicks in at 56,000 euros. In Sweden and Denmark, the top income tax rates kick in around 1.5x the median income (well under six figures for us).
It should not be this hard to tax all the SV and Wall Street-adjacent upper middle class people. Most are even Democrats now. They voted for higher taxes. Just do it!
> Relative to their wealth, Rich people, effectively, do not even pay income tax. The bulk of income tax is paid by the middle class. Does that seem fair to you?
> Or that -- when asked explicitly whether the rich should pay more -- most (3/4) people, like you, say "yes", but when asked what the tax rate should be for top earners, precisely 3/4 of respondents said it should be 30% or below(2). Again, it's 43% right now.
That's comparing a question people likely answered with a total effective income tax rate with the current nominal marginal income tax rate.
> In 2018: "The top 1 percent paid a greater share of the federal tax revenue (37.3 percent) than the bottom 90 percent combined (30.5 percent)." Put another way - your local school would be in trouble if all you had were families on $40k sending 3 kids to public school, it's being funded by the family on $300k and sending their kid to a separate private school.
This kind of statistic would benefit from being balanced against the share of income and/or wealth held by the top 1%. Taking wealth, for example: the top 1% owns 35% of the wealth in the USA as of 2014. [0]
This proportion has been increasing over time, so even if governments were attempting to "bleed[] them dry" (I don't believe they are), they're not doing so very effectively.
> The top 1 percent paid a greater share of individual income taxes (37.3 percent) than the bottom 90 percent combined (30.5 percent). [1]
I believe the linked data is from before the tax cuts. However, politics/social justice/etc all aside, it makes sense to me systematically that tax cuts affect the rich more than others. Wouldn't the groups paying the most be adjusted the most when a change occurs?
> People rant about the rich “paying their fair share”, but the problem here isn’t the tax rate applied to the rich, it’s that they don’t pay anywhere near it.
Yes, but the rich nonetheless pay the lion's share of income taxes:
The share of income earned by the top 1 percent of taxpayers rose to 20.6 percent in 2014. Their share of federal individual income taxes also rose, to 39.5 percent.
> Meanwhile, the proportion of taxes paid by the top quintile earners has increased from 55% in 1980 to 70% by 2013.
Citing the amount collected from the top quintile is moving the goalposts a bit. A typical 20%er is someone like a successful dentist. Sure, they probably have a stock portfolio, but that's for funding their retirement.
It doesn't help that the statistics are always presented in misleading ways. We really need the stats to be stated in terms of tranches that exclude the higher ones (eg. top 0.01%, 0.01-0.1%, 0.1-0.5%, 0.5-1%, 1-5%, 5-10%, 10-20%, 20-40%, 40-60%, etc.). Instead, lumping the 1% in with the 1-20% just co-opts the upper-middle class into defending the interests of the 1% and above.
> But all this ignores the main fact, which is that actual rich people make most of their money not as income, but as unrealized capital gains. High marginal rates on income taxes affects high-earning professionals. Not the private jet crowd.
Of course. That's where discussion of wealth inequality (and the estate tax) takes over from income inequality.
Namely what stood out,
> Among Americans with the highest incomes – a subset of upper income adults who are in the top 7% of the sample’s adjusted income distribution – about a third (34%) of those who say there’s too much economic inequality say the government should raise taxes on people like them to deal with this, while 64% say this should not be done.
This surprised me. So I'm curious, for those who are making in the top 7% and believe there is too much income inequality (over about ~$145,000/yr) -- and I do suspect there are a few of us here, you don't think that a plan to reduce income inequality involves taxation on that level of income?
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