<p>"I eat at Subway… "</p>
<p>Yes, but do you use the coupons?</p>
<p>“Most of those in the bottom half of the top 1% lack power and global flexibility and are essentially well-compensated workhorses for the top 0.5%, just like the bottom 99%.”</p>
<p>Interesting. Should the question then be, anyone in the top 0.5%?</p>
<p>The article points out that the majority in the “top 1%” are basically hard working tax paying schmoes who keep the world turning for a small subset of the top 0.1%</p>
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<p>Yes Ohiomom, who are the top 0.1% and why do we allow them to influence legislation? Oops, can’t get political…</p>
<p>Politicians allow it and encourage it.</p>
<p>Limabeans, I like your information…but we need some context…</p>
<p>If you were asked, “what is your take home pay” and you answered, “I pay 40,000 a year in federal income tax”, the questioner would answer back, “Huh? I need a little more information.”</p>
<p>I do not know anybody that just pays federal income tax and no other federal taxes, but it seems others do. </p>
<p>So for those of us that pay other federal taxes too…and would like some context to add to your numbers…</p>
<p>Could you show us similar charts that would give us more information so we can understand things better?</p>
<p>For example,
Can we see charts of income, wealth and federal taxes too? That would really help us understand what has been happening for the last 30 years.</p>
<p>And while you are at it…</p>
<p>Besides the breakdown of the top 20%…
Can you give us the breakdown of the top 1% and top .1% too?</p>
<p>That would really help. Then we wouldn’t have to rely on those who pick and choose specific data with no context.</p>
<p>Thanks…</p>
<p>And mini…no coupons…I do like the veggie sandwich…no mayo…Just a little vinegar and salt and pepper…</p>
<p>"Do Taxes Redistribute Income?</p>
<p>It is widely believed that taxes are highly progressive and, furthermore, that the top several percent of income earners pay most of the taxes received by the federal government. Both ideas are wrong because they focus on official, rather than “effective” tax rates and ignore payroll taxes, which are mostly paid by those with incomes below $100,000 per year.</p>
<p>But what matters in terms of a power analysis is what percentage of their income people at different income levels pay to all levels of government (federal, state, and local) in taxes. If the less-well-off majority is somehow able to wield power, we would expect that the high earners would pay a bigger percentage of their income in taxes, because the majority figures the well-to-do would still have plenty left after taxes to make new investments and lead the good life. If the high earners have the most power, we’d expect them to pay about the same as everybody else, or less."</p>
<p>"The impact of “transfer payments”</p>
<p>As we’ve seen, taxes don’t have much impact on the income distribution, especially when we look at the top 1% or top 0.1%. Nor do various kinds of tax breaks and loopholes have much impact on the income distribution overall. That’s because the tax deductions that help those with lower incomes – such as the Earned Income Tax Credit (EITC), tax forgiveness for low-income earners on Social Security, and tax deductions for dependent children – are offset by the breaks for high-income earners (for example: dividends and capital gains are only taxed at a rate of 15%; there’s no tax on the interest earned from state and municipal bonds; and 20% of the tax deductions taken for dependent children actually go to people earning over $100,000 a year)."</p>
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<p>No. But targeting the hardworking doctors, lawyers and small business persons is a bad idea.</p>
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<p>What if the top 1%'s share of income is 95% and they pay 100% of federal income taxes? Is that OK? Are they really that talented?</p>
<p>Bottom of the top 1%er here hanging out eating my Subway sandwich and yes, I used a coupon. Move on, nothing to see.</p>
<p>“No. But targeting the hardworking doctors, lawyers and small business persons is a bad idea.”</p>
<p>Yes it is a bad idea, but it is a much worse idea to target those who can’t afford basic services.</p>
<p>Guilt-free 1%-er here. Grandparents were manual laborers, fathers were WWII vets who earned their degrees after service, we went to public schools and paid for college partly with loans which we paid back.</p>
<p>Due to stock market and one really good real estate investment, we are over the 1.2 million even though we never came close to the income portion oF the definition. Just yesterday, my husband received a letter that turned him down for a replacement Kohl’s credit card (his previous card was cancelled for lack of use) because they said that his spending was too high for his income. We have no debt other than credit card bills which get paid in full every month. I think I had better follow up on this to make sure our credit report has the correct information.</p>
<p>Just out of curiosity, Bay, how much did your father pay for college in order to get ahead in life? I put my husband through school when the state flagship was about 500 per semester. That same flagship is now closer to 10,000 per semester, or just under 20,000 for a year. I wonder how low income kids afford to get a college degree.</p>
<p>A lot of people want to “broaden the base”, and make taxes even more regressive than they already are. States are cutting back on funds to state schools. Many people in Congress are calling for a decrease or even doing away with Pell grants. And let’s not forget the drive to make it harder to vote if you’re a minimum wage or hourly wage earner. </p>
<p>Could your grandparents and parents have afforded 20,000 per year for college without help from the government? What about now, Bay? Can you try to imagine what it might be like to graduate with tens of thousands of dollars in college debt, and no job upon graduation? Some people might answer, you can always get a minimum wage job. But now those jobs are going to adults with families to support, who have already lost their jobs to downsizing.</p>
<p>Another guilt-free 1% here. My husband & I are savers and quite debt-adverse. His parents were both federal workers, but saved enough to put 5 kids through college in the 70s; my dad’s business went under when I was a freshman in HS in the 70s recession. </p>
<p>Having lived through seeing our family car repossesed when I was a teen and never taking a vacation other than to relatives houses, I knew I never wanted to live like that. (my mantra has been Scarlet’s line in ‘Gone with the Wind’: “As God is my witness, I will never be hungry again”). </p>
<p>I am lucky enough that my brain garnered me a enough merit aid, combined with Pell Grants and $7k of students loans to earn an accounting degree. (lived off-campus and had waitress job that paid for living expenses and recall that tuition was $5k/year 30 years ago - same school now $30k, but there are know for significant merit aid.) Husband also has accounting degree - we had starting salaries of $16k in the early 80s and were married right after graduation. We both earned Masters part-time, finananced by our employers. </p>
<p>The pitfalls I saw from my peers in their 20s is living well above their means (nice car, nice apartment, eating out many nights) and not saving. </p>
<p>What I see now are kids not focussed on student loans, seeing them as part of their FA package. No, they are loans that you will need to repay. D1 is in college and has a plan for what she wants to do. S1 is HS freshman and knows his likes/dislikes, but I’m not going to get him go to college for $50+k if he’s uncertain - that what state schools are for. </p>
<p>Completely guilt-free. I clawed my way to my current job by hard work and keeping my eye on the prize: retirement by 55! People need to re-adjust employment expectations. Take the administrative job to get your foot in the door - my company prefers to high from within and several secretaries have moved to professional positions.</p>
<p>hayden,
I don’t know how much my father paid in tuition, but I do know his father was a dirt-poor farmer and my father was a top high school student who received some academic scholarship money to attend the state public, finishing his degree after military service. A student today in his situation would be able to accomplish the same in CA at least, with the Blue and Gold plan, merit scholarships and military service.</p>
<p>Did anyone say the top 1% should feel guilty? I do not think they should feel guilty I just think that when a nations income and wealth inequality gets out of balance it is not good for that country.
On another board I post on (where we can discuss politics) there is a conservative poster- an ex Navy Seal that argues with other conservatives about the need for government services. He was a huge supporter of extended unemployment benefits for example. He very able points out that people will do anything to be able to feed their family and if you think that they are above that you have not seen what happens in the countries that allow real wealth disparity to exist. Now he is hard on slackers but the notion that the current economic distress to many is because they are slackers is so far from true that it is insulting.</p>
<p>This is from the initial link…I like this analysis…</p>
<p>"I’ve had many discussions in the last few years with clients with “only” $5M or under in assets, those in the 99th to 99.9th percentiles, as to whether they have enough money to retire or stay retired. That may sound strange to the 99% not in this group, but generally accepted “safe” retirement distribution rates for a 30 year period are in the 3-5% range, with 4% as the current industry standard. Assuming that the lower end of the top 1% has, say, $1.2M in investment assets, their retirement income will be about $50k per year plus maybe $30k-$40k from Social Security, so let’s say $90k per year pre-tax and $75-$80k post-tax if they wish to plan for 30 years of withdrawals. For those with $1.8M in retirement assets, that rises to around $120-150k pretax per year and around $100k after tax. If someone retires with $5M today, roughly the beginning rung for entry into the top 0.1%, they can reasonably expect an income of $240k pretax and around $190k post tax, including Social Security.</p>
<p>While income and lifestyle are all relative, an after-tax income between $6.6k and $8.3k per month today will hardly buy the fantasy lifestyles that Americans see on TV and would consider “rich”. In many areas in California or the East Coast, this positions one squarely in the hard working upper-middle class, and strict budgeting will be essential. An income of $190k post tax or $15.8k per month will certainly buy a nice lifestyle but is far from rich. And, for those folks who made enough to accumulate this much wealth during their working years, the reduction in income and lifestyle during retirement can be stressful. Plus, watching retirement accounts deplete over time isn’t fun, not to mention the ever-fluctuating value of these accounts and the desire of many to leave a substantial inheritance. Our poor lower half of the top 1% lives well but has some financial worries.</p>
<p>Since the majority of those in this group actually earned their money from professions and smaller businesses, they generally don’t participate in the benefits big money enjoys. Those in the 99th to 99.5th percentile lack access to power. For example, most physicians today are having their incomes reduced by HMO’s, PPO’s and cost controls from Medicare and insurance companies; the legal profession is suffering from excess capacity, declining demand and global outsourcing; successful small businesses struggle with increasing regulation and taxation. I speak daily with these relative winners in the economic hierarchy and many express frustration."</p>
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<p>Who here said the poor are slackers? The point some of us are trying to make is that the notion that the 1% are slackers who inherited their wealth or obtained it via non-traditional, undemocratic means is insulting.</p>
<p>With an average income of $50,000 how can the average American family afford to save for college, purchase health care plus save for retirement? That is the problem we face as a nation.</p>
<p>I never said the top 1% were slackers and I never said anyone called the bottom slackers. We have a national problem that we need to face.</p>