Please help settle a work/political dispute

[stanwyck]

A co-worker asked me to ask you wonderful people to help him settle an argument with his officemate. (one liberal and one conservative). Co-worker A contends that many of the wealthy pay no taxes or few taxes. Co-worker B contends that the wealthy are no longer able to avoid paying taxes and, in fact, pay the majority of taxes in our country. Who is correct? I don't even know where to begin to get this info and I promised I'd try to help. Any links available? Thanks in advance.

[HydroAddict]

1. My general argument on taxes...

Yes, the top 10% pay 75% of taxes. BUT (the part pugs conveniently leave out), that same 10% earns 90% of the money. So in that perspective, NO, the wealthy DO NOT pay their fair share.

(Note: figures are just estimates, but you get the gist.)

Hope this helps.

[snippy]

2. They both are correct.

The top 1% of taxpayers pay around 29% of their adjusted gross income in federal income tax, but that income does not include interest from municipal bonds. They pay no taxes on such interest income. It is not uncommon for the wealthy to have 50% of their investment assets in such bonds. When Ross Perot released his income tax returns they showed that he paid millions of dollars in income tax. but his tax rate on his gross income was around 7%. In 2000, around $54 billion in tax exempt interest was reported on about 4.7 million tax returns. http://www.irs.ustreas.gov/pub/irs-soi/00in14ar.xls

In 2001 the top 10% of taxpayers by adjusted gross income paid 64.89% of the federal income taxes paid. Those taxpayers had 43.11% of the adjusted gross income. Their average tax rate was 21.41%. http://www.irs.ustreas.gov/pub/irs-soi/01in01ts.xls

If you are interested in digging out all the numbers, links to much of the information can be found here. http://www.irs.ustreas.gov/taxstats/article/0,,id=96981,00.html

[TreasonousBastard]

4. And, don't forget the Social Security and...

Medicare taxes, along with a few withholdings that hit us po' boys worse than the fat cats.

A while back I was watching Warren Buffet and Bill Gates' father talking about taxes on some show. Maybe it was Moyers.

Anyway, Buffett said it was unconscionable that, after all is said and done, he pays exactly the same tax rate on his millions of annual income that his secretary pays on her thousands.

And, there is a world of difference between wealth building and income. The big guys have ways of sheltering and increasing income to build wealth that we don't have. At a certain point, your wealth can grow and you're lightly taxed, or not taxed at all, on it.

[snippy]

6. All true.

[SOteric]

3. You might also care to note that contratry to popular belief,

the wealthy utilise more of the taxpayer-supported government infrastructure than do those at lower income brackets. Including the court system and the SEC.

The Welfare and Medicaid systems of the U.S. aren't nearly as bloated and out of control in excess spending as are courts, but no one talks about trimming back on jusitice, and it's likely the poor who will take it in the shorts if they do.

[TreasonousBastard]

5. We get the subway...

and they get the airports, seaports and the Intracoastal Waterway.

And they're trying to take the subway away from us.

(Yeah, yeah... I know... The Intracoastal Waterway, along with such other gummint projects, ultimately benefit us all.)

[radwriter0555]

7. Base the reality on PERCENTAGES. there are very few millionaires

in the USA, in a relative parity to the general population of the USA.

Therefore, MOST of the tax burden in the USA is paid by middle and lower socio-economic taxpayers, by sheer volume and how they outnumber the so-called 'rich people'.

AND the 'rich people' get allllllllllll the tax breaks. That's how it's always been designed.

For every house on a hill in a grand estate, you have 50,000 people living in the middle of the city in an 800 square foot apartment, making $28,000 a year and paying far more in taxes across the board, by simply not having access to tax breaks and write offs.

[stanwyck]

8. Thank you all very much

I very much appreciate each one of you taking the time to respond. This board is such a wonderful group of people as a resource and as a reassurance that there are many knowledgeable, caring Americans out there in cyberspace.

[bearfan454]

9. The top earners do NOT pay the same PERCENTAGE as us.

They have shitloads of loopholes. They pay more money overall, but it is not the same percentage as us.