Who pays taxes?

money2.jpgFrom Verum Serum:

The bottom 50% of earners pay $0 in Federal Income Taxes.  ZERO.

The top 1% of earners pay 40.5% of taxes.  Got that?  Those evil rich people that make up 1% of the country pay for 40% of everything — national defense, entitlements, etc.

The top 5% pay 60.6% of taxes.

The top 10% pay 71.2% of taxes.

And so on.

The top 10% of earners in this country should get thank-you cards from everyone else, not disdain from the liberal politicians and media.

And let’s not forget how greedy our current leaders are when it comes to charitable giving.  They market themselves as champions of the poor but they profit by keeping the poor down, and they don’t give out of their own pockets.

0 thoughts on “Who pays taxes?”

  1. Yes, we should send them thank you notes. How many of us have jobs because someone is rich? I know I put myself through seminary working for a rich man. There were also about 45 other employees as well. Our goal: work hard so that he got even richer. We wanted the company to do well because it meant we did well too. He was very generous and I’m glad I had the opportunity to work for him.

    BTW, the company fell on hard times recently and he spent millions of his own money trying to keep it afloat.
    Blessings

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    1. How many of those rich people have their wealth because people are willing to work for $6 an hour? How many are wealthy because people overseas are willing to work for $6 a week?

      I will not criticize the wealthy for working to obtain their riches, as I would do the same, but they must realize that their ability to be wealthy is entirely dependant on the pyramid of people below them that consume the goods or services that helped to accrue the wealth.

      Having a lot of money requires that other people have less, which is our system, and I don’t have a problem with it, but maybe the wealthy should send out a few thank you notes as well.

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      1. They do send thank-you notes. They have the faces of Presidents on them. If you think they should make more then by all means risk your capital, start a business and do so.

        Sent from my iPhone

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      2. “Having a lot of money requires that other people have less”

        This is horribly untrue. Having a lot of money requires doing what most people won’t do or can’t do. Having a lot of money requires providing a newer or better product or service at a better price than existing products or services of the same type (or products or services that didn’t exist until the rich guy invented it).

        If you want to provide a product or service to as many people as possible (which is where the money comes from) you are perfectly free to pay your employees the same rate of pay that you get. For many entrepreneurs, that can mean NO INCOME for the first six months to two years. Who would work for nothing? Not too many people who aren’t the entrepreneurs.

        Everyone has the right to negotiate the best deal they can get. If a regular job provider won’t budge on his starting salary offer, you then have the right to go elsewhere. If no other options present themselves, then you have no bargaining power. That’s OK. If you still won’t take the gig, someone else will. What is offered isn’t simply a number picked by throwing darts. The owner thinks in terms of what the job is worth on the current market and then adjusts according to his plans. If he can’t get any workers, he’ll offer more. If the wage reduces company profits (not to be confused with the owners’ personal income) then the next guy will get less.

        Demand for “living wages” and other tug-at-the-heart-strings ploys have made job creation harder. Now that some are getting more for their starting wage, fewer have jobs to pay them anything.

        Wealth creation for the average joe isn’t any different than it is for the rich guy. Use, spend and invest the money you DO have wisely. Anyone who has a 401K or similar plan, has had the idea of compounding interest explained to them. This isn’t rocket science. Out of every paycheck, a percentage should be put aside for God, retirement and investment. Live on what’s left. If you’ve already filled your life with expenses, like homes, furniture, flat-screens, fancy cars, and children, before you can afford them, then it will be harder, but that’s not anyone else’s problem but your own. It’s not the employer’s fault you did things backwards. (This is not a rant toward Ryan, specifically, but to everyone who complains the same way.)

        The bottom line is that what the wealthy has is no impediment to what anyone else can have if they are willing to employ the same strategies the rich folk employ.

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      3. Ok, I agree with pretty much everything you’ve said there, but it only applies in an ideal world. The reality is that a huge portion of the wealthy did not get where they are because they “made a better product at a lower price”. Most of them did no such innovation themselves. Most of them invested in companies and real estate, and used tax loopholes maximize their profit. Most of this is perfectly legal and a morally acceptable way of earning money, but in these cases, the requirement to make money is to already have enough to invest, not to be smart or innovative.

        Your ideal world also assumes that everybody has equal opportunity to accrue wealth, which is very untrue.

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      4. I agree with Ryan. Just look at how America was built. It has always prospered under low paid workers like slaves and new immigrants. The access of wealth is not equal. Most people get money because they are from generations of a family that has political capital and “old money”. However, there are ways that many people can get wealth, it just takes time and effort. Some people just don’t want to invest their time and capital to owning a business. Well, that is just my take on it.

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      5. “Most people get money because they are from generations of a family that has political capital and “old money”.”

        Nonsense.

        http://www.nytimes.com/books/first/s/stanley-millionaire.html

        “Most people who become millionaires have confidence in their own abilities. They do not spend time worrying about whether or not their parents were wealthy. They do not believe that one must be born wealthy. Conversely, people of modest backgrounds who believe that only the wealthy produce millionaires are predetermined to remain non-affluent. Have you always thought that most millionaires are born with silver spoons in their mouths? If so, consider the following facts that our research uncovered about American millionaires:

        * Only 19 percent receive any income or wealth of any kind from a trust fund or an estate.

        * Fewer than 20 percent inherited 10 percent or more of their wealth.

        * More than half never received as much as $1 in inheritance.

        * Fewer than 25 percent ever received “an act of kindness” of $10,000 or more from their parents, grandparents, or other relatives.

        * Ninety-one percent never received, as a gift, as much as $1 of the ownership of a family business.

        * Nearly half never received any college tuition from their parents or other relatives.

        * Fewer than 10 percent believe they will ever receive an inheritance in the future. “

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      6. These stats don’t deal with the way that money is moved around by wealthy people, and they don’t represent the really really wealthy people of the world. Where I live, the average house price just hit $1,000,000, and that is for all single family dwellings in the city, including apartments. Being a millionaire does not mean what it once did.

        The rich deal with inheritance in a very different way. Direct inheritance means huge taxes (which i completely disagree with by the way), so they gradually “transition” wealth by way of payroll and job appointments. You can “give” a small part of your business away to a child before it is successful and let them accrue wealth as owner of that company while it grows easily under the umbrella of it’s parent company, for example.

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      7. The question is what do you want to do from here? Confiscate legally acquired wealth? Seems like there are some downsides to that. Close loopholes? No problem there. Please do so, keeping in mind that you’ll probably open a couple new ones at the same time.

        I prefer keeping the barriers to starting businesses low, having low capital gains taxes, keeping dividend taxes low or non-existent, keeping the rule of law, respecting private property, etc. Those things are what helped bring countless people out of poverty.

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      8. I agree with you. I’m not in favour of restricting business growth. People with a ton of money are not being impeded by the current tax rate. They are business people, and when they argue for lower taxes, they are concerned about their own personal gain, not the amount of people they can employ. Growing their business steadily and hiring more employees will always increase their bottom line eventually. They just want to pay them less.

        As for confiscating wealth, well that’s just a scary phrase for taxes. We need to tax people something, so some wealth will always be confiscated. There will also always be people who pay no taxes, and many of those people have already paid more in taxes than you or I, and some of them will eventually pay more taxes than you or I.

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      9. It is a true description of taxes, but you can substitute any term you like. The point was about what is being taxed. Earnings or wealth you already paid taxes on.

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      10. Catagorizing the many ways the wealthy became so might be a good exercise. But it really doesn’t matter how many did it through providing products and/or services such as computers or computer related services. Some products are talent related, like books, music, films, acting, sports, etc. Like the more typical products and services, the same attitudes and strategies are in play, like delaying self-gratification while developing the skills necessary to be successful, a most important tactic and one in which so many are unwilling to engage themselves.

        Even in the world of investing, there is a necessary learning curve that requires the same attributes in order to succeed. Then, there’s the risk taking that’s involved in all the many ways of creating wealth. What it comes down to is that more of the wealthy did earn their wealth in some manner, and they did so in a way that anyone else can as well. THAT’S the real key. ANYONE willing to do what wealthy people do can become, if not wealthy, at least much better off than they are now. There’s no limit to how many can become wealthy. At least there’s no limit that has ever been pushed as evidenced by how many are less than wealthy.

        As for tax loopholes, that’s a term used to ease the pain of the truth for those unwilling to do what the wealthy have done. “Loopholes” are generally available to anyone who does more than simply work for someone else. If you start a crappy little business in your home, you can then employ an number of tax laws that you couldn’t touch before. With a little effort, that crappy little biz can provide extra income as well as allow you to buy through the business and thereby acquire products that can be written off as legitimate biz expenses for the portion of time used for biz purposes. Much of the tax law was originally written to promote and encourage the type of entrepreneurial behavior that benefits the entire nation. The aquisition of wealth means that even with tax breaks, tax revenues generated are still huge.

        Any way you wanna look at it, the wealthy are doing their part. Are there scumbag rich dudes screwing people to add to their wealth? Sure. But I’ve met a ton more scumbags who weren’t wealthy doing the same thing. Most wealthy realize they don’t need to be scumbags to create more wealth. They find it’s too easy to do it legally and ethically.

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  2. You may not post this – or even receive this – from me, but I would hope you might consider addressing this fact…

    These data suggest that wealth is concentrated in the hands of a small number of families. The wealthiest 1 percent of families owns roughly 34.3% of the nation’s net worth, the top 10% of families owns over 71%, and the bottom 40% of the population owns way less than 1%.

    So, those who own ~34% pay ~40%. Those who own less than 1% pay 0%. That does not sound unreasonable to me.

    Also, we need to keep in mind that while the bottom may not pay much or any in federal taxes, since they have to purchase gas, food and other goods that ARE taxed, they ARE paying taxes, too.

    Dan

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    1. Sales tax is a different animal. It’s so sad that people who buy must pay it, isn’t it?

      The idea that anyone own’s X% of the “nation’s” wealth isn’t factual. The wealthy own 100% of their own wealth. They created and/or earned it. It is their’s, not the nation’s.

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      1. Pedantry isn’t your usual style Marshall. I think we all know that when Uncle Sam talks about “the nations wealth” he’s referring to what economists would call GDP.

        Don’t worry, there are still no commies under the bed.

        Regarding sales tax, it’s a horrible tax, very messy. You should consider Value Added Tax (VAT). It’s both equitable and easy to collect. In fact it’s the Bugatti Veyron of taxes – beautiful and efficient.

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      2. No it’s not, Boo. But this is a case where I think it is necessary to point out this supposedly obvious fact. There are those who speak of money as belonging to someone other than the moneys’ true owners. For example, the left too often views tax money as the gov’t’s, even when they speak otherwise.

        I wouldn’t be surprised if a fiscal conservative would use the same expression, but I would feel compelled to state the obvious yet again. If more people did, the practice would end and a more precise way of speaking would take it’s place (I hope).

        I still need to study the VAT ideas more closely.

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      3. The VAT might have merits but the problem is that those pushing it aren’t considering it as a replacement but a new revenue stream. Bad idea.

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  3. Ryan said “Having a lot of money requires that other people have less” – this assumes that the amount of money in this world is fixed, but it’s not. A better idea is for those at all levels to try to earn more.

    Uncle Sam, I read the post you pointed to and found it interesting. It seems to support a tax on wealth, not on income. The idea is that once you buy something, you are taxed on it forever. Doesn’t seem right to me as “ownership” is never attained. The government can take away your “ownership” at any time. I will follow up on the reading.

    I figure I have very little chance of impacting this for the rest of the US, so I’m going to do what I can to impact it for me and my family. I will never be a Bill Gates or Warren Buffet, but I’m a long way from where my mom & dad were. I’m very fortunate and have now entered the stage of my life where I’m giving back – not financially, but of my time. My goal is to hep others move up the ladder.

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    1. What is the source of “money” that allows you to believe that it has no limit? If that’s the logic you use, then why don’t we encourage the government to give yearly cash infusions to all businesses?

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      1. Wealth is created when economic activitiy occurs between persons. Money represents that wealth.

        Merely printing money devalues wealth because each printed dollar causes all dollars to represent less wealth than they did previously. That is why controlling the money supply properly is important, so as to ensure that the value of the dollar remains relatively stable compared to the wealth it represents.

        The de-valuing aspect of all wealth through inflation is natural, since as the amount of wealth expands, the ratio of the wealth in question (say in the form of an asset like a house) to the total of all wealth decreases. This is why money supply and inflation are closely linked.

        Can the amount of wealth expand infinitely? Of course. But it can’t do so instantly. Think of it like the universe. The universe appears to be capable of expanding infinitely, but even the universe has a rate of expansion.

        I hope that clarifies things a bit.

        Wealth is not a finite good. It is an infinite good. That is why we can speak of ‘wealth creation’ and ‘economic expansion.’

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      2. Excellent summary, LCB. One of the foundational problems with Liberalism is that it erroneously treats wealth as a zero sum game. That error leads to all sorts of other errors, which hurt the people they claim to want to help.

        Sent from my iPhone

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  4. As a small business owner, I strive to live up to all the requirements of the law which includes paying federal, state, and municipal taxes. I have nothing against making a profit. That is part of the American dream, afterall. Hard work, long hours, minimal pay and sacrifice are all a part of starting a new business. Once it is sustainable, then one can work on amassing wealth. Weath and prosperity are blessings from God.

    As a believer, I agree with the scriptures that tell me everything belongs to God, and I am merely a steward of what He puts in my hands. It provides a clear perspective on my obligations and expectations. He allows me to bless others with the resources provided to me. There will be an accounting for all of it.

    But as a realist I know most people try to hang on to as much of what is placed in their hands as possible. As humans we are inherently stingy and self-serving. This generally means most look for as many loopholes or tax breaks as they can when it comes to paying the government. Though Jesus said to “render unto Ceasar…”, the reality is that many of the wealthiest dodge paying their taxes.
    Unless you are as crooked as Madoff or the public demands a scapegoat, most get away with minimal fines or retribution for their “white collar” crimes. We even promote and reward some of the biggest criminals in today’s America. It is a grave injustice, and especially unfair to all who are above board with all their dealings. Thank God we do have a righteous judge that will bring justice to mankind one day.

    I noticed Neil has a link to Dave Ramsey on the sidebar. Dave’s teachings are excellent and biblically based. If you are unfamiliar with him, he is definitely worth your time. He really blessed us when he taught in my local church.

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