<p>All the data I have seen says that 1% of the population controls 30% of the nation’s wealth. The top 20% controls 80% of the nation’s wealth and the bottom 40% has only 1% of the nation’s wealth. In other words the bottom 40% of the population has virtually zero wealth.</p>
<p>The median household has wealth equal to approximately $62,000 but the average wealth of the top 1% of the population is $12.5 million. That is a staggering difference in distribution of wealth. </p>
<p>Why shouldn’t the top 1% shoulder a greater share of the tax burden?</p>
<p>Razorsharp, every single thing the government does benefits someone more than someone else, and costs someone more or less than their share of what was paid for it. That’s government’s job.</p>
<p>Every single thing. Whining about the perception that “your” guys pay more and get less is usually based on what I call fiscal myopia - a condition which magnifies your perception of what you pay, and makes you unable to see what you get. You are aware that you only referenced one type of tax that people pay, correct? No other tax form is progressive; most are regressive to one extent or another - poor and middle class people pay a much higher share of their income in sales tax, gas tax, FICA tax and property tax than do the wealthy. If you include all taxes in your calculation the curve reverses.</p>
<p>And you also should be aware that the wealthy - and the more affluent among the middle class - amass most of their net wealth in ways that aren’t reflected in tax returns, by means of growth of value of capital assets, from the home to stock ownership and other investments held for capital gain which is untaxed, and wiped away when inherited by the next generation.</p>
<p>Razorsharp, I’m not living in any fog at all. I don’t take my opinions from anyone else; I analyzed the data myself and followed the numbers. I’ve actually reviewed governmental budgets, to see where the money actually is going. I’m not one of the people who overestimate the amount of money going to welfare programs and foreign aid by 1000%, as is common among the blog-afflicted.</p>
<p>The bottom 50% make less than $30,000 a year - that’s the top, the 50th percentile. It includes each of my kids, who are taxpayers. But 100% of the income tax in our house is paid by my wife and I. How does that work with your preconceptions?</p>
<p>The OP was about Obama raising capital gains taxes. Capital gains are a form of income and filter their way through income taxes. </p>
<p>
Depends on your definition of progressive. You define it based on percent of income. Taxes should be fair first progressive second. I think it is fair that the more you spend, the more sales taxes you should pay. I think that the more gasoline you buy, the more gasoline tax you should pay. I think that the more valuable is your real estate, the more real estate taxes you should pay. As to FICA taxes, rich and poor people are treated the same. The benefit paid depends directly on how much you pay into the system. </p>
<p>A fair income tax system would be one where if the top 1 percent of income earners earned 20 percent of all income, they should only be obligated to pay 20 percent of all taxes. If the bottom fifty percent earn 50 percent of all income, they should be paying 50 percent of the income taxes.</p>
Why? What does buying stuff have to do with the need of government to have money with which to pay for the things it does? And no, rich and poor people aren’t treated the same under FICA - the benefit is disproportianately enjoyed by those who live longer, and the wealthy live longer: [Gap</a> in life expectancy of rich, poor widens](<a href=“http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/03/23/MN02VOTS1.DTL]Gap”>http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/03/23/MN02VOTS1.DTL) Under California’s Prop 13 (imitated in other states since) the longer you own property the less you pay relative to its value. Tenants pay a huge share of their income in property tax - indirectly, and have no participation in any increase in its value. Etc. </p>
<p>Stated bluntly - by adopting the system you propose you’d be screwing everyone but the wealthy even more than happens now. All taxes, taken together, impact all economic strata about equally, except for the slight fall-off at the very top - those folds pay a smaller portion of their income in taxes than the middle class does. I used to have a link to the study which addressed this, but I’ve lost it. I’ll see if can find it for you.</p>
<p>Now, after all of the discussion of federal taxation, and showing that federal taxation itself is becoming increasingly less progressive, the graph below shows total effective tax rates by group including all forms of taxation: federal, state and local. As you can see, when all taxes are taken into consideration the tax rate for all income groups is very similar. In fact, the total tax rate for the top 40% of Americans (those receiving anywhere from $50,000 a year to $500,000,000+) is about the same.</p>
<p>1st Quintile 2nd Quintile 3rd Quintile 4th Quintile Next 15% Next 4% Top 1%
19.7% 23.3% 27.0% 29.8% 31.6% 32.2% 32.8%</p>
<p>In short: [T]hough so much is heard about how the wealthy pay a hugely disproportionate share of taxes, this simply is not the case. Virtually every time someone makes the claim that the wealthy pay a disproportionate amount of the taxes they are discussing only federal income taxes, because the federal income tax is the most progressive major tax in America. However, when all taxes are taken into consideration every group is currently paying a roughly equal share of taxes to their share of national income, and in fact the ratios of shares of income to shares of total taxes is much more equal now than it has been any time since reasonably reliable income and taxation data has been recorded, which covers about the past 60 years.</p>
<p>gbesq: Thank you for that information. Far more illuminating and balanced than the other stuff quoted here. The sentence that I find most interesting in there is:</p>
<p>'As you can see the top 1% did indeed receive the largest decrease in their tax burden. The tax burden was generally shifted to middle and upper middle income receivers by the Economic Growth and Tax Relief Reconciliation Act of 2001."</p>
<p>Perhaps this is the reason why a large number of people among the “top 10% minus the top 1%” earners are abandoning the Republican party and backing the democrats, especially Obama. The Republicans are robbing the merely affluent to pay the truly wealthy.</p>