<p>After reading your post, it is dawned to me that in our country (US), the family of most well-to-do families tend to have fewer children, while less well-to-do families (majority of them are minority) tend to have fewer children. This implies that the resources for educating/bringing up a child in this society are more heavily consumed by selected few of the population.</p>
<p>Since this is CC, an analogy is that: one ivy league student consumes an order of magnitude of the resources than a student who attends, say, a community college.</p>
<p>I heard of a saying like this before: By the way that the elite college evaluates the applicants, they do not need to worry about the possibility that they may end up admitting too many students who rely too much on school’s need-based financial aids, even though it is a true need-blind FA policy. (except for some students who are recruited for diversity purpose intentionally, of course.)</p>
<p>Oops…I have side-tracked by responding to the post. Back to taxation (and social justice/woe which is where the fun is?)</p>
<p>^ I think you are right as there are many poor whites.</p>
<p>What I meant to say was that, quite a high percentage of minority (e.g., African Americans, Hispanic Americans) are relatively poor.</p>
<p>In absolute numbers, there are likely more whites who are poor.</p>
<p>In my city at least, there are fewer African Americans and Hispanic Americans in the “good” (property rich) school district. The city is still quite segregated by the financial resources of the families. But I think it is not the case out of the city/suburbans.</p>
<p>20 percent of the population owns 89 percent of the wealth.</p>
<p>The top 1 percent pays taxes at a lower rate than the next 9 percent. Does that make sense? </p>
<p>Income taxes are just one tax among many. Taxes should be looked at in its entirety. When we look at taxes as a whole, our total tax system is not that progressive.</p>
<p>Most of the income from those at the top is not from working, and taxes on unearned income is lower than earned income.</p>
<p>" We could argue they should take a bigger burden, maybe increase their share to 40-45% instead of 37%. 37% is not nothing. Besides, we should blame our government. They are the ones who write tax laws.
They are charged with looking out for our well being."</p>
<p>That is what we are arguing. The proposals out there are not going to
raise taxes more than what you wrote. My proposals, whatever they are,
aren’t either. So you aren’t really arguing with me, are you?</p>
<p>Raising the top two tax rates and raising the cap gains tax back to 20 percent is not going to raise the burden of those at the top beyind your numbers.</p>
<p>Dividends at least are already taxed at the corporate level.</p>
<p>I saw an analysis somewhere that showed that Mitt Romney “paid” about 10% of his income in corporate taxes from his dividend income. Add that to his reported 15% rate or whatever, and now he is at 25%.</p>
<p>If dividends are going to be taxed at full marginal rates, corporations should not have to pay taxes on them, IMO.</p>
<p>I have read this analysis about dividends before. I am not sold on the idea you are stating notrichenough. </p>
<p>I am not totally against it either, but I am leaning against it. </p>
<p>I find it intereesting that it is just assumed that any corporate tax savings should go to dividend owners. And dividend owners bear the brunt of taxes.</p>
<p>My real life experience says that some of the tax savings you mention should go to labor. I never hear anything about labor. Labor isn’t treated very well in this country. People aren’t too high in labor on this board
even though most of you are workers. You are wage
slaves. Maybe some of you are well paid, but you are wage slaves.</p>
<p>Anyway, the company I just worked with had labor costs as 30 percent of the total costs and in addition, bonuses were 30 percent or more of profits, so if corporations are taxed too high, why doesn’t labor get more preferable tax treatment?</p>
<p>I understand the double tax treatment argument, which is the dividend tax argument, but labor is taxed multiple times too.</p>
<p>dstark, Thank you for the link. I love thorough data. The disparity is shocking. I am afraid we lost the opportunity to tilt the balance to the middle in 2008. The crash was horrible but it would have been a rare opportunity to rebalance, too.</p>
<p>I heard a segment on the radio this morning about MLPs - they don’t pay corporate taxes because they pay most everything out in dividends. Interesting concept - the rules were set up in the late 1980s. I have traded MLPs but didn’t know this aspect about them.</p>
<p>BTW, they also said that they were in the frothy area now - they’ve had huge runups the last two years.</p>
<p>MLPs don’t pay taxes because they are partnerships, and all of the tax attributes flow through to the individuals who own them.</p>
<p>They historically appeal to individual investors who often mis-value them, thinking that the “yield” is sustainable, when in fact it is not. They can be interesting vehicles, since they avoid the double taxation, but generally, companies with decent growth prospects don’t organize themselves that way. The form of organization makes most sense for declining companies or wasting assets, but it is hard to tell sometimes if the valuation is proper. </p>
<p>They’ve been around since 1980. Apache Corporation organized the first one as a consolidation of its oil and gas drilling partnerships. Later, the MLP entity was acquired by Apache for stock.</p>
<p>You know, I guess I’m a 1 percenter in terms of income but certainly not in terms of wealth. And I suppose the litmus test of my world view on all of this is whether I’d be for or against hugely taxing “the rich” based on wealth, not income. And the answer is . . . no. </p>
<p>I have a real problem with confiscation of personal property, including money, by the government to any huge degree. </p>
<p>And fundamentally, I really don’t believe more tax revenue will matter a bit in getting us out of the mess we’re in.</p>
<p>And finally, I’m uncomfortable with all the rhetoric about “the rich” and “fair share” and “playing by the rules”. It feels like rhetoric that is intended to incite anger and resentment. I don’t think those are the emotions that we need in this society. I think we need to fixate more on building, creating, risking and less on making sure the other guy pays more. It’s kind of crude, actually. I’m amazed it’s working.</p>
It is not always very clear about what constitutes “confiscation of personal property, including money.”</p>
<p>A reality is that, most time in history, whoever owned the land (by force, by being frugal, or any other means) could sit on the land and there were no lack of labors (peasants) who would keep making money for him. Nowadays, money (or investment like stock) is like the land in the past: whoever owns the money has a much better chance to keep making money easily without working at all (and often with less risk than those who have much less money.)</p>
<p>I think nobody here will agree that it is OK for the government to take away your property unless you obtained the property in a questionable way. What is controversal is that, to what extent should the person who owns the wealth (asset) be allowed to have the upper hand of more easily grabbing additional wealth just because he has already had significant weatlth. That is, the rich (in wealth/asset) becomes richer easily.</p>
<p>People generally do not have a problem with somebody who has higher income because of their own merits, talents, or just working hard for long hours. They have more problems with those with great assets who have the (arguably) unfair access to the “making money using money” machine while not working at all.</p>
<p>I am fully aware the often cited argument that it is only when the rich invests, more people could have a job; the rich may choose to move elsewhere if the government is not “nice” to them – let every cities, state, and country has a “bidding war” to recruit the rich so that the rich could always have the best deal these bidders could offer.</p>
<p>sadly, there are far to many people nowadays that are jealous of the wealthy opposed to striving to become wealthy themselves…and people should realize that it usually takes drive and intelligence to become wealthy. Some have drive but lack the intelligence, some have intelligence and lack the drive…some have neither. We are not robots, we are not all the same as some like to think.</p>
<p>Geeps20, if we taxed all income the same, we wouldn’t have these tax the wealthy arguments.</p>
<p>We don’t though. We tax the wealthy’s income at lower rates than everybody else’s. And some people get a small piece of this benefit, so they don’t have a problem with this. As long as I get my little piece, I don’t care if the wealthy are treated better.</p>
<p>Eliminate cap gains tax preferential treatment and a lot of the arguing will go away.</p>
<p>I do agree with some of your sentiments in your post number 333. However, the tax alternatives mentioned don’t stop the wealthy from being wealthy. The wealthy will still be wealthy. The poor will still be poor. The world will not be turned upside down. Warren Buffett will still be free.</p>
<p>It is true that people who have the drive and intelligence will more likely become wealthy, and there is nothing unfair about this.</p>
<p>But it is also likely true is that what you (or your parents/grandparents) have accumulated in assets could enable you to become even wealthier. One could argue it is still fair because either you or your ancesstors had the drive and intelligence and worked hard to get there. But is it really good for the society as a whole if the people who have accumulated great wealth have much more power to increase their assets and income? I am not very sure about this.</p>
<p>In many countries in the world, it is also true that those who have the wealth have more power to “bend the rule, even legally” to favor themselves. (Those who have other power, e.g., political power, also have more opportunity to get their hands on the wealth, even legally.)</p>
<p>I’m A-okay with lowering the estate limit for inheritance taxes, even if it impacts me and potentially my children. We mostly all had the drive and intelligence to become wealthy by our own work if we wished. How many generations should benefit from parents, grandparents, great or great-great grandparents drive and intelligence and, frequently, very good luck? Even the lower estate limit should still keep the kids who may not have any drive from becoming homeless. Of course, some people will blow through an inheritance regardless.</p>
<p>I agree with having exceptions for small family farms and businesses, though as I understand it this has never really been that great a problem.</p>
<p>adding: from hundreds of miles away, I’m pretty sure I just heard all the greats turning over in the family cemetery.</p>
<p>alh, I don’t agree! I think if you severely limit what parents can leave to their children you essentially destroy a great big chunk of all incentive to invest, work hard, create, take risks, be disciplined in savings. I really don’t think a lot of “the rich” got to be “rich” in order to throw money around and live large so much as to leave something to protect and cushion their kids and heirs. </p>
<p>I suppose a lot of our views on this stuff are grounded in our views of government. Mine was shaped in large part by working at nonprofits and for a state government agency. Changed me.</p>
<p>And my views were changed when I started working in the financial industry. I have no idea why the financial industry needs so many handouts and tax breaks. Well, I do know, and it has nothing to do with merit.</p>
<p>I think estate taxes should be taxed at the same rate as capital gains, but the capital gains tax rate should be 20 to 30 percent. The rate depends on the rest of our tax
structure.
But the loop holes in the estate tax should be eliminated.</p>
<p>A friend of mine is going to shift 7 million around to lower his taxes.
Another friend is using a lawyer to set up trusts and there is going to be generation skipping. Generation shkipping means somebody inherits assets and whatever he makes on those assets is tax free for life. That’s
sweet. </p>
<p>A friend is going to buy assets from his dad in a trust for .60 on the
dollar, and he is
going to borrow from his dad to pay for the assets. Cash flow from the properties pays the borrowing costs. My friend doesn’t really pay anything for the properties. It’s a tax dodge for the wealthy.</p>
<p>There is an exemption from paying the estate tax. For everybody. If you are married and have a net worth of 10 to 15 million, as things stand
now, their is not going to be an inheritance tax. Even if you are worth
30 million, you get the exemption.</p>
<p>Fewer than 1 percent of estates have an inheritance tax. Most of the wealth in these estates have never been taxed. Not once. Ok, maybe a
few have paid property taxes. And labor is taxed how many times?</p>
<p>Sewhappy, you are married and you said your wealth is not in the top 1 percent. So, right now, there is not going to be an inheritance tax for your estate.</p>
Maybe some of you are well paid, but you are wage slaves.</p>