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Sep 16 - No, the Richest One Percent Don’t Pay 40 Percent of the Taxes



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Sep 16 - No, the Richest One Percent Don’t Pay 40 Percent of the Taxes
 

 
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One of the sad constants of American political debate is that, anytime the tax rate on the rich is to be either raised or lowered, Republicans will repeat a certain statistic. To wit, “The Stat” is that the highest-earning one percent of taxpayers pay 40 percent of all income taxes. Conservatives consider this fact a dispositive justification either against any proposal to increase taxes on the rich, or in favor of any plan to reduce it. Over just the past day, I have seen it circulating — here, here, here, everywhere.

It is a figure that has been repeated a million times on Fox News diatribes and in College Republican lectures sponsored by aging billionaires. It is one of the handful of debate-enders, like “Ronald Reagan defeated communism” or “gun controls don’t stop crime,” that any good Republican apparatchik has at his fingertips.

The Stat is literally true. But it is deeply misleading — so misleading, in fact, that it routinely fools even the people who are citing it into thinking it indicates something other than what it actually means.

The first problem with The Stat is that it makes no reference to the proportion of income the rich earn. The juxtaposition between one percent and 40 percent is meant to convey the idea that a small number of people are carrying a gigantic and disproportionate burden, but the figure lacks any context when it omits how much money they earn in the first place.

Indeed, it turns the fact that rich people account for a massive share of the income pool into a reason to see them as mistreated. One common move for polemicists brandishing this figure is to note that the share of taxes paid by the rich is “up sharply” over the past couple decades — which it is, on account of rich people claiming a larger share of the national income. The logic implied by The Stat is that the bigger the proportion of income earned by the richest one percent, the more imperative it is to reduce their tax rates, so that they don’t pay too high a share of the tax burden.


Second, and worse still, The Stat ignores the fact that income taxes are just one component of the federal tax system, and federal taxes are just one component of the total tax system. The federal tax system is far more progressive than state and local taxes, which rely heavily on regressive burdens like sales taxes. (It’s harder to impose progressives taxes at the state or local level, since rich people moving to a different town or state is relatively easy, while leaving the country is more burdensome.)

What’s more, even within the federal tax system, income taxes are just one, relatively progressive, component. For most workers, the biggest tax they pay isn’t income tax but payroll tax, the line marked “FICA” on your pay stub, which finances Social Security and most of Medicare. That tax is regressive and only applies to the first $137,000 of income.

The trick of describing only the share of income taxes paid by the richest one percent is to make people think it means all taxes. Even professional movement conservatives make this mistake. Here’s Jay Nordlinger:


Another right-wing column published the other day makes the same error, first using the “income tax” qualifier, then slipping out of it to a*sert, falsely, “the top 1% paid more in taxes in 2018 than the bottom 90%” — an extremely common error by conservatives.


Republican politicians, including George W. Bush, have made the same error. The Stat is technically limited to income taxes for a reason — it’s describing a narrow category of taxation that is especially progressive. But it only works because it makes the listener believe it describes all taxes. The trick works so well it fools the people repeating the stat.

The actual truth about the American tax system is that it is slightly progressive. The richest one percent earn about 21 percent of the income and pay 24 percent of the taxes:
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THE NATIONAL INTEREST 7:00 A.M.
No, the Richest One Percent Don’t Pay 40 Percent of the Taxes.
By Jonathan Chait

Photo: GraphicaArtis/Getty Images
One of the sad constants of American political debate is that, anytime the tax rate on the rich is to be either raised or lowered, Republicans will repeat a certain statistic. To wit, “The Stat” is that the highest-earning one percent of taxpayers pay 40 percent of all income taxes. Conservatives consider this fact a dispositive justification either against any proposal to increase taxes on the rich, or in favor of any plan to reduce it. Over just the past day, I have seen it circulating — here, here, here, everywhere.

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It is a figure that has been repeated a million times on Fox News diatribes and in College Republican lectures sponsored by aging billionaires. It is one of the handful of debate-enders, like “Ronald Reagan defeated communism” or “gun controls don’t stop crime,” that any good Republican apparatchik has at his fingertips.

The Stat is literally true. But it is deeply misleading — so misleading, in fact, that it routinely fools even the people who are citing it into thinking it indicates something other than what it actually means.

The first problem with The Stat is that it makes no reference to the proportion of income the rich earn. The juxtaposition between one percent and 40 percent is meant to convey the idea that a small number of people are carrying a gigantic and disproportionate burden, but the figure lacks any context when it omits how much money they earn in the first place.

Indeed, it turns the fact that rich people account for a massive share of the income pool into a reason to see them as mistreated. One common move for polemicists brandishing this figure is to note that the share of taxes paid by the rich is “up sharply” over the past couple decades — which it is, on account of rich people claiming a larger share of the national income. The logic implied by The Stat is that the bigger the proportion of income earned by the richest one percent, the more imperative it is to reduce their tax rates, so that they don’t pay too high a share of the tax burden.

Second, and worse still, The Stat ignores the fact that income taxes are just one component of the federal tax system, and federal taxes are just one component of the total tax system. The federal tax system is far more progressive than state and local taxes, which rely heavily on regressive burdens like sales taxes. (It’s harder to impose progressives taxes at the state or local level, since rich people moving to a different town or state is relatively easy, while leaving the country is more burdensome.)

What’s more, even within the federal tax system, income taxes are just one, relatively progressive, component. For most workers, the biggest tax they pay isn’t income tax but payroll tax, the line marked “FICA” on your pay stub, which finances Social Security and most of Medicare. That tax is regressive and only applies to the first $137,000 of income.

The trick of describing only the share of income taxes paid by the richest one percent is to make people think it means all taxes. Even professional movement conservatives make this mistake. Here’s Jay Nordlinger:


Another right-wing column published the other day makes the same error, first using the “income tax” qualifier, then slipping out of it to a*sert, falsely, “the top 1% paid more in taxes in 2018 than the bottom 90%” — an extremely common error by conservatives.

Republican politicians, including George W. Bush, have made the same error. The Stat is technically limited to income taxes for a reason — it’s describing a narrow category of taxation that is especially progressive. But it only works because it makes the listener believe it describes all taxes. The trick works so well it fools the people repeating the stat.

The actual truth about the American tax system is that it is slightly progressive. The richest one percent earn about 21 percent of the income and pay 24 percent of the taxes:


Nordlinger helpfully summarizes the conservative notion that the rich are taxed to the limit and cannot pay any more. Of course, we have plenty of recent experience with taxing rich people at higher levels. Restoring the Clinton-era top tax rate of 39.6 percent obviously did not stop the rapid growth seen under Clinton. The Trump tax cuts for business owners and heirs to large fortunes were supposed to encourage more business investment but clearly failed to do so. There are gaping loopholes in the tax code for the wealthy that allow massive fortunes to escape any taxation at all.

A great deal of evidence supports the notion that the tax system could increase the burden on the very rich with little or no economic drag. That idea also happens to be extremely popular. Because it is popular, conservatives feel special urgency to insist it cannot be done. But it can.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Excerpts from OP:
Even this article fails to look at the big picture. By far wage earners pay more taxes than people earning revenues off investments and interest. And by far the 1% earns more than wage earners through non wage income. That's why Zuckerberg gets a $1 salary, because income taxes are way worse than capital gains. The measurement of top 1% is for wage earners, and by this measure Zuckerberg is the bottom 1% along with the poorest of the country.

Edit: This comment is specifically addressing wage earners in terms of the top and bottom percents. Don't confuse wage earners with earners of all incomes.

The Words of Lincoln

On Labor and Capital

Abraham Lincoln

[A message to the U.S. Congress, 3 December 1861.
Reprinted from Land and Freedom, September-0ctober 1937]


"It is not needed, nor fitting here, that a general argument should be made in favor of popular institutions; but there is one point, with its connections, not so hackneyed as most others to which I ask a brief attention. It is the effect to place capital on an equal footing with, if not above, labor, in the structure of government.

It is a*sumed that labor is available only in connection with capital; that nobody labors unless somebody else, owning capital, somehow by the use of it induces him to labor. This a*sumed, it is next considered whether it is best that capital shall hire laborers, and thus induce them to work by their own consent, or buy them, and drive them to it without their consent. Having proceeded thus far, it is naturally concluded that all laborers are either hired laborers or what we call slaves. And further, it is a*sumed that whoever is once a hired laborer is fixed in that condition for life.

Now, there is no such relation between capital and labor as a*sumed, nor is there any such thing as a free man being fixed for life in the condition of a hired laborer. Both these a*sumptions are false, and all inferences from them are groundless.

Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration. Capital has its rights, which are as worthy of protection as any other rights."

Also::
visit this link John Adams's grandson Charles Francis Adams - who was the U.S. Ambassador to the UK during Lincoln's Presidency - relayed a letter from Marx to Lincoln and Lincoln's reply back to Marx, too.

Source: visit this link https://nymag.com/intelli .. the-taxes.html
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26 comments
 

 1 month ago '06        #2
imthatinfamous  topics gone triple plat - Number 1 spot x1
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don't read this liberal biased trash. Even the tax policy center, nonpartisan research group, acknowledges that 95% of all federal taxes are paid by those making $98K or more.
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 1 month ago '09        #3
Flyboy88 
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even in that graphic you see that top 20 % earners pay more taxes than everybody else

 1 month ago '15        #4
Lockwind 
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But let’s keep sucking their d*ck saying they “work hard”
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 1 month ago '18        #5
CurryDaGoat  topics gone triple plat - Number 1 spot x12
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 Flyboy88 said
even in that graphic you see that top 20 % earners pay more taxes than everybody else
you mean people who have more money, pay more taxes? Who wouldve thunk it .
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 1 month ago '09        #6
Flyboy88 
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 CurryDaGoat said
you mean people who have more money, pay more taxes? Who wouldve thunk it .
top 20% pay more even proportionally to their income



The richest one percent earn about 21 percent of the income and pay 24 percent of the taxes
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 1 month ago '17        #7
Naga Sadow  topics gone triple plat - Number 1 spot x20
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Imagine thinking that those who earn 70-90% of the money paying more than 40% is a bad thing.
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 1 month ago '04        #8
ItAlY2BkLyN 
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if the article wasn't so apparently biased and slanted, it may garner more merit. But

The 3rd paragraph literally says
The Stat is literally true.
Then proceeds to go on about perceived interpretation of it aren't considering all the factors.

Newsflash: You can't tax the rich enough to end poverty
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 1 month ago '15        #9
majorpain1963 
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 ItAlY2BkLyN said
if the article wasn't so apparently biased and slanted, it may garner more merit. But

The 3rd paragraph literally says

Then proceeds to go on about perceived interpretation of it aren't considering all the factors.

Newsflash: You can't tax the rich enough to end poverty
Have you tried it?
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 1 month ago '18        #10
CurryDaGoat  topics gone triple plat - Number 1 spot x12
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 Flyboy88 said
top 20% pay more even proportionally to their income


This is wrong and your graphic no way show they pay more based on their income, you clearly don’t understand how taxes work. When you combine all taxes middle earners pay more of it based on their income.

https://www.nytimes.com/interactive/2019/10/06/opinion/income-tax-rate-wealthy.html?rref=collection%2Fbyline%2Fdavid-leonhardt&action=click&contentCollection=undefined &region=stream&module=stream_unit&version=latest&c ontentPlacement=8&pgtype=collection
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 1 month ago '17        #11
Drewsmit 
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Get the vaccine help everyone…. Billionaires first

 1 month ago '11        #12
Suppafresh 
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 imthatinfamous said
don't read this liberal biased trash. Even the tax policy center, nonpartisan research group, acknowledges that 95% of all federal taxes are paid by those making $98K or more.
You to dump to understand that he talking about the 1%. Not the middle class.
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 1 month ago '11        #13
Suppafresh 
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Listen. That graph is show you what they would pay if they paid taxes to which they don’t. So no the top 1% don’t even pay a dime in taxes. They use tax shelters and everything thing they own is in either a company, trust or charity they own name. They never take an actual Salary. If you ever notice their charities donate the exact amount they would receive as a salary. Once you factor in donation, operation cost and other things then the whole salary they receive is written off. So if they actual paid taxes it would be significant but they actually don’t pay taxes cause they never receive a dime of actual pay. They just funnel it through all their orgs and it comes back to them.

I promise if you look up most of their a*sets it’s not in their name it’s in a company they may own or charity. Rich folks got it down to a science bro.
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 1 month ago '07        #14
Damagegadget  topics gone triple plat - Number 1 spot x1
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Gawd forbid saying anything about paying living wages tho
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 1 month ago '07        #15
Damagegadget  topics gone triple plat - Number 1 spot x1
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 Suppafresh said
You to dump to understand that he talking about the 1%. Not the middle class.
Even worse this broke kcuf is defending super rich people who bonus more than he has seen in 10yrs
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 1 month ago '07        #16
yola  topics gone triple plat - Number 1 spot x59
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the thing people don't realize is that if all of the inherently useless and worthless people in the 1% and their money disappeared tomorrow, society doesn't skip a beat, at all, and that's the problem

these people hoard their gambling winnings and society never sees any of the money but worships them for being wealthy

the purpose of capitalism and the role of the wealthy is to prevent money from circulating to people who need it while telling everyone to work harder so they can work less

Monopoly might be a board game, but the principles and structure is very real


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 1 month ago '05        #17
projectd06 
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 imthatinfamous said
don't read this liberal biased trash. Even the tax policy center, nonpartisan research group, acknowledges that 95% of all federal taxes are paid by those making $98K or more.
My guy it says richest 1% in the title, you didnt even read that much?
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 1 month ago '11        #18
Silencer  topics gone triple plat - Number 1 spot x1
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Call me crazy or feel free to disagree but I actually believe that you should be eligible for a tax break as an individual if you make it to the 1 percent bracket on some reward type sh*t, but tax the business.

I also think our gov should do more for its own country.

Everything is taxed
Look at your pay check theyre taking damn near 30 percent from you, plus whatever you spend the rest on in the stores is also subject to be taxed.

But theres no real kickback for the citizens.

 1 month ago '21        #19
GoldenKnight 
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Now I don't know if this is true or not but Bill Maher the other night said that the 65,000 richest people in NYC (population 8 million) Pay 51% of the taxes.

 4 weeks ago '04        #20
ItAlY2BkLyN 
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 majorpain1963 said
Have you tried it?
I haven't tried taxing anybody, have you?
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 4 weeks ago '15        #21
majorpain1963 
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 ItAlY2BkLyN said
I haven't tried taxing anybody, have you?
Yeah actually I have. But you wouldn't understand.

Back to the topic though. You could always take a look at historical tax rates too see how your presumptive idea that "it won't work" just might be wrong.
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 4 weeks ago '05        #22
lilwheezy 
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Stopped reading here: "The Stat is literally true"
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 4 weeks ago '04        #23
ItAlY2BkLyN 
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 majorpain1963 said
Yeah actually I have. But you wouldn't understand.

Back to the topic though. You could always take a look at historical tax rates too see how your presumptive idea that "it won't work" just might be wrong.
you're missing the point. Just because you give people money, doesn't mean they're going to turn their life around. You'll never be able to tax the upper class enough to end poverty.

A standard tax rate across the board would be better than what we have now. But you act like just because Bezos pays another billion in taxes, that it will end up benefiting your life which is not the case.

Corporate tax > income tax
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 4 weeks ago '15        #24
majorpain1963 
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 ItAlY2BkLyN said
you're missing the point. Just because you give people money, doesn't mean they're going to turn their life around. You'll never be able to tax the upper class enough to end poverty.

A standard tax rate across the board would be better than what we have now. But you act like just because Bezos pays another billion in taxes, that it will end up benefiting your life which is not the case.

Corporate tax > income tax
I didn't act like anything. You just made a bunch of a*sumptions that are all wrong. I pay a LOT in taxes pimp. This isn't about me personally it's about the greater good of people in this country.

Corporate tax rates historically have been much higher than they are now. So yeah that's one part of it. Especially since that is where a big portion of wealth is sheltered.

Try making sure you understand someone's position before creating their mindset.
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 4 weeks ago '04        #25
ItAlY2BkLyN 
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 majorpain1963 said
I didn't act like anything. You just made a bunch of a*sumptions that are all wrong. I pay a LOT in taxes pimp. This isn't about me personally it's about the greater good of people in this country.

Corporate tax rates historically have been much higher than they are now. So yeah that's one part of it. Especially since that is where a big portion of wealth is sheltered.

Try making sure you understand someone's position before creating their mindset.


My bad. I didn't mean your life as in you personally. I meant it arbitrarily. It was a comment about the misuse of tax dollars and the fact that just because we take in more income tax dollars from wealthy individuals, that it would probably go to some bullsh*t like war. Not improving schools or creating meaningful change for regular people arguing on the internet like us


Last edited by ItAlY2BkLyN; 09-19-2021 at 09:48 PM..



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