[quote=bubba99]The numbers are misleading. They are for “adjusted gross income”, not total income. Most wealth accumulation is not included in “adjusted gross income” until a taxable event occurs – like the sale of a stock.
The Top 5 percent of the earners accumulate 90 percent of all the wealth increase each year. For example, Bill Gates who makes a gizillion dollars each year, only pays taxes on the Microsoft Shares he sells, not the ones he has been granted, nor on their appreciation. He also takes advantage of considerable deductions for his charitable foundation.
I am surprised at how little the supposedly smart posters on this forum actually know about taxes, income, and income distribution across american earning classes. The wage earners in California (marginal rates)pays about 23% fed tax, 9% state tax, and 8.5% social security tax plus another 8.5% ssn by the employeer (payroll tax). That is about 47% depending on how you calculate in the payroll tax.
I guarantee, that the top 1% earners pay nowhere close to that on their wealth appreciation each year. And none of this includes property tax, sales tax, et. al. [/quote]
A CA couple earning $80K paid the following percentages in income tax (assuming a $10,700 standard deduction) as a percentage of their $80K gross income in 2007:
20.3% Federal Taxes
5.8% State Taxes
7.2% SS & Medicare
That’s 33.3%, which is a big percentage.
A CA Couple earning $150,000 paid the following:
27.5% Federal Taxes
7.4% State Taxes
5.8% SS & Medicare
That’s 40.7%… an even bigger percentage.
Where the “wealth appreciation” argument goes – and company stock, specifically – don’t the corporations themselves (which are owned by the stockholders) already pay taxes at the corporate level?
And since wealth is down meaningfully between real estate and stocks over the last few years, would you also argue that the wealthy get a tax break under current circumstances (to be consistent)?
