Comment by radicaldreamer
6 days ago
They don't pay anywhere close to that, there are tons of tricks to avoid paying that % on gains and the more money you have the more leeway for loopholes.
Very relevant in startup ecosystem as well (look up exchange funds, opportunity zones etc.)
40% of Federal income tax revenue comes from the top 1%.
Imagine how much federal revenue would increase if that 1% paid the same effective rate as say a typical plumber, rather than the <10% they currently pay. That might actually put a dent in the trillions of dollars this congress is about to add to the national debt.
shrug
I hear that sentiment a lot, but it doesn't seem right to me. My salary is pretty close to the median plumber's income, and my family's effective tax rate last year came in at... 1.6%. And that's with all retirement account contributions going toward Roth accounts. If we'd chosen to contribute to traditional IRA/401k accounts instead, the EITC and child tax credit would easily turn our tax bill negative.
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"That might actually put a dent in the trillions of dollars this congress is about to add to the national debt."
It might also result in even more spending. I don't think that there is any "natural ceiling" when it comes to willingness of politicians to spend other people's money. The only ceiling is external - how much will the system bear.
> rather than the <10% they currently pay
I suspect you're using a different definition of "income" than the IRS. What is it?
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https://www.pewresearch.org/short-reads/2023/04/18/who-pays-...
For one thing, many plumbers do make it to the 1%: Trades are a profitable line of work for the industrious.
But the median 1%’er is paying 3-4X the effective rate of the overall median earner.
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What percent of all income do they make?
Edit: it's an honest question. Maybe the top 1% paying 40% of all income taxes is too much tax. Maybe it's not enough. Without knowing how much of all the income they make it's a meaningless number.
According to the Tax Foundation[1], for tax year 2021, the top 1% of U.S. earners—those with an adjusted gross income (AGI) of $682,577 or more—accounted for 26.3% of total AGI and paid 45.8% of all federal income taxes.
My personal opinion is that income tax should be more progressive, but I know that plenty of smart people disagree on that.
[1] https://taxfoundation.org/data/all/federal/latest-federal-in...
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20%. https://ourworldindata.org/grapher/income-share-top-1-before...
The top 1% of people make 20.7% of the country's income. Given progressive tax rates, they should be paying a lot more than 40% of Federal income tax revenue, but rates don't scale enough, and aren't lax enough on other classes.
Can you explain your reasoning behind "they should be paying a lot more"? I kept hearing that they didn't pay their "fair share" when in fact it appears they pay double. It just seems like whatever they actually pay, measured in dollars or as a percentage, will always be widely regarded as not enough.
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What is the right percentage for the 1% to pay? State a percent.
I keep here this “the rich should pay more”, but rarely do I hear a number.
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https://nymag.com/intelligencer/article/fact-check-richest-1...
That seems excessive.
Corporations are persons, right? Why is their tax rate just half that of real people?
Why aren't all persons taxed equally?
The top 1% own 39% of everything in the U.S. You are not in the top 1%. Why are you complaining again?
The city claims to own my house, as they charge me rent every year, and have a long list of things I'm not allowed to do with it.
That rent went up over 10% last year. For contrast, the rent control people want to cap rent increases to 7%.
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If they don't wanna pay so much in taxes, they should stop having so much money. Taxes function to raise revenue and thus have to go where the money is.
This conversation is about billionaires, not the top 1%.
There are no loopholes for investment gains. If you are talking about offsetting losses and delaying gains, those options would likely be available to endowment funds.