On 3 Nov 2002 at 16:48, dsk wrote: > Brenda wrote: > > > > On 2 Nov 2002 at 19:16, dsk wrote: > > > > Anyway, back to your chart... it certainly looks like the people with > the highest income (top 1%) pay the highest percentage of tax (32.7%). > I don't think it's quite that clearcut, though. These are estimates, > so within every group there will be some variation in the amount > actually paid by individuals. (Just as an aside, it's hard to believe > the middle economic group only pays around 17% in taxes.) > > So to look a little closer at that seemingly solid 32.7%: for one > thing, taxes from higher income earners usually include taxes on > capital gains, and there's considerable leeway regarding those taxes > since people can choose when to sell their assets and so can pay the > tax when it's most favorable for them. I think it's a much lower rate > than personal taxes. There's no such flexibility when it comes to a > worker's payroll taxes. >
I think you should take a look at the methodology as it may address these issues to an extent you might find useful. > My other thoughts are that the 32.7% tax is on the person's money that > the government knows about. Sending money to offshore banks and not > reporting it is one way to avoid paying taxes on all of it. Money is > deposited in a bank in the islands, and the person can use an ATM card > at any bank to withdraw whatever cash they need and the transactions > can't be traced. From what I've read that's being done a lot these > days. Being done more by whom and where did you read it? It seems like people at all income levels find ways to avoid reporting income. It's just the amounts that they hide (and the way that they hide it) may be different. > > I'm not a financial planner or a millionaire so I don't know all of > the ways wealthy people lower the amount of taxes they pay. From the > little I do know, tax-free bonds, setting up trusts, giving to > charity, and investing in failing businesses are common, and all > perfectly legal, as is the scheme involving exchange funds that I read > about recently in the NYTimes. Here's a question - are all of these things attributable to law that was enacted by a Republican administration or a majority Republican Congress? I'd imagine it would take someone who knows the tax code and it's evolution to answer that, but I have a suspicion the answer wouldn't be so simple. Don't you think Democrats have participated in creating the legislation that allowed for these tax breaks? And if they were unhappy with them, hasn't there been some point where the legislature was under Democratic control and they could have gotten rid of them? (All except the exchange funds, because based on that article that appears to be something altogether different - anyone, no matter how much money they have, can buy tax-free bonds, setup a trust, give to charity and invest in failing businesses. Given Pitt's new problems this week, it seems like exchange funds have the potential to become a hot issue in a hurry.) > > Anyway, my original point wasn't to claim I knew exactly what > percentage the wealthy pay, although I stick to my idea that in > reality it's probably a smaller percentage of their true worth than a > working middle class person pays, even though the dollar amount would > be larger. If you don't mind my asking - what do you base this belief on? I'm not asking that you know the exact percentage, but your original statement was a fairly broad claim: that it is a "much smaller percentage." Which makes me wonder - is this just your gut or did you somewhere along the way read something that had a verifiable basis for the claim? And if you won't believe the CBO, what will you believe? > > Mostly, I was bothered by the Republicans pushing the repeal of the > death tax in their campaigns as though abolishing that tax will > benefit everyone. That's just not true. And it's not always true that > just because the Republicans are in charge, working people will have > lower taxes. Maybe yes, maybe no. It's certainly not as simple a > situation as the Republicans claim it is and that so many voters think > it is. Republicans are relying again on that "lower taxes" myth to get > votes from the people they're least likely to help in my opinion. > > And before anyone accuses me of Republican bashing, I also think that > the Democrats have their own set of myths that need to be looked at > closely, but those are mostly in the "we'll help everyone" area. > Well according to the LA Times, in this campaign season a number of Democrats seem to be running on "lower taxes" as well: http://makeashorterlink.com/?R2AE12452 BTW - I'm not interested in any bashing of either side; I just don't think that it's so easy to say that one side is responsible when both sides have actively participated in creating the system with which we live. Brenda
