Actually they do. In fact they get reamed. I already posted the tax schedule for single in another thread. That the rich are not paying their share of taxes is a common theme that politicians like to play out when looking at more taxes. They either have to fight 80 to 90% of the population on raising taxes or they fight 20 – 10% of the population(so called rich) to raise taxes.
This is from a 2005 tax table for single.
0 – 7299 10% marginal rate, 10% total. 7300 – 29699 15% marginal rate (additional dollars over 7300 taxed at 15% on top of the 10% on under 7300) 29700 – 71949 25% marginal rate. 71950 – 150149 28% marginal rate. 150150 – 326449 33% marginal rate 326450+ 35% marginal rate.
Add in the fact that deductions start being eliminated for incomes over 146,000(single) due to AMT. So where is it that the rich are not paying taxes? 35% of your income gone to fed taxes? Add in CA state and you are looking at 44% of your income gone to taxes. Looks like it is almost better to sit around and let the gov take care of you..
just imho…You're equating taxable earnings to the definition rich. I don't….In fact, in my mind, really rich people don't actively depend on a income that the IRS can tax at 35% (typically salaries,wages,etc)…..A $300k,$400k,or even $500k salaried income might sound all sweet. But if that's all you are depending on, imho you're not really "rich".
Take a CEO like Steve Jobs with that $1 annual salary. He doesn't make money off of a salary, he's rich off of all the assets and passive income that generates from it. And assets/passive income have so many more variables to play with. I seriously doubt someone like him pays the 35% tax rate, or sweats on which direction the government's tax rules blows any given day.
Also, take true RE investors with real RE portfolios, with multi-million dollar assets yielding passive income. I once worked with my financial advisor, who was sort of comparing my family situation to one of his other clients. Our family gross income was 1/2 the size of his other client (according to him). BUT, taxwise, we paid about the same amount of taxes. The other client (which the advisor maintained their anonymity obviously) had paid one of the lowest % tax per "income", through accounting trickery and asset shelters that are apparently available to a select few wealthy people.
Bottom line, really rich people have plenty of smart accountants, cpa, advisors, to figure ways around the system (legally, and sometimes illegally). Doesn't matter which political party is in office, what new IRS rules there are. IRS defined middle class and below don't pay the majority of the taxes either. It's everyone in between. Always has and always will be.
