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In 2018, for the first time in history America’s richest billionaires paid a lower effective tax rate than the working class.

Trojita

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https://www.washingtonpost.com/business/2019/10/08/first-time-history-us-billionaires-paid-lower-tax-rate-than-working-class-last-year/

“The Triumph of Injustice,” by economists Emmanuel Saez and Gabriel Zucman of the University of California at Berkeley, presents a first-of-its kind analysis of Americans’ effective tax rates since the 1960s. It finds that in 2018 the average effective tax rate paid by the richest 400 families in the country was 23 percent, a full percentage point lower than the 24.2 percent rate paid by the bottom half of American households.
 
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infinitys_7th

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It's odd that the trend downward is roughly linear and constant - I'd like to see the actual math to know what is going on.

On a practical side, what does it matter? The taxes from those 400 families is largely insignificant.
 

autoduelist

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They seem to be pushing wealth taxes, which means i don't trust their math.


Emmanuel Saez holds the Chancellor’s Professorship of Tax Policy and Public Finance and directs the Center for Equitable Growth at the University of California,
If you mix equitable with economy, you are coming from a far left position.

Emmanuel Saez and Gabriel Zucman present the key elements needed to successfully implement a progressive wealth tax in the United States.
Same authors:


Alexandria Ocasio-Cortez’s Tax Hike Idea Is Not About Soaking the Rich
It’s about curtailing inequality and saving democracy.

By Emmanuel Saez and Gabriel Zucman
Gabriel Zucman Associate professor of economics, UC Berkeley. ...

These people are far left activistic socialists at best, communists at worst.

While i am not denying wealth inequality, these people come to the table with an agenda. Oh, and wealth taxes are one of the dumber ideas out there.
 

betrayal

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Instead of asking why 400 families pay about the same as 83 million families in the US you should ask why there are only 400 rich families and 83 million working class families.

If you double the number of rich families these statistics would explode. The taxes the rich families pay would skyrocket and the working class will not even be near the amount of taxes these 800 families have to pay.

Or what if 200 rich families get bankrupt? Suddenly the "inequality" would be even bigger?

Instead of looking and working with those dumb graphs, like most politicians do, start to think for yourself.


Besides that, what is more important in a country like the US to get rich? Decisions or cirumstances?

Decisions

Getting rich and living a good live is almost like a science. If you're not rich i can almost guarantee you that the people who are responsible for the wealth and fortune in one of the 400 rich families, worked more, complain less, are way more dedicated and solved a problem for other people with their product or service.
 
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V4skunk

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At least hillary isn't president!
Everyone would be paying 70% tax to pay for "universal credit" with fully open borders.
 

HeresJohnny

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I’d still love to see a flat tax situation. Minimal deductions, higher tax free floor for the lower class and call it a day.

The system now is too convoluted with too many loopholes.
I would as well, but it’ll Never happen because half the country pays no federal tax. The Democrats dont like to talk about that.
 

Bolivar687

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And we have record low unemployment across the board.

My 16-year old self would hate me for saying this but its inarguable at this point: Trickle Down Economics works.
 

Cybrwzrd

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The problem is that *most* billionaires don't have actual billions. They are only worth that much on paper. If Bezos went and liquidated his Amazon shares tomorrow the valuation of the stock would plummet. Most of the money that has been hoovered up by the ultra wealthy is effectively stagnant and/or imaginary. If their sell their stocks they should be hit by capital gains taxes.

That being said, I agree with Thomas Piketty in that there needs to be a wealth tax. If you are going to park on billions of dollars to keep out of the economy, you should have to pay a tax on holding it, just like you would for any other property.

I also am not a fan of people like Soros and Gates being able to endow billions to their NGOs to focus on pet projects as a means to escape taxes. I think charitable donations or those to churches shouldn't be tax deductible after a reasonable dollar amount that won't hurt the middle class. Donating to charities should be discouraged as a tax shelter.
 
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Super Mario

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Instead of asking why 400 families pay about the same as 83 million families in the US you should ask why there are only 400 rich families and 83 million working class families.
Or you should be asking yourself how it really affects you that some people out there have more than you

Or, if you want to go even higher, work hard enough to go above the "working class."
 
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crowbrow

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Or you should be asking yourself how it really affects you that some people out there have more than you

Or, if you want to go even higher, work hard enough to go above the "working class."
It affects quite a bit, the gini coefficient which measures inequality is closely correlated to social problems. So if you live in a highy unequal society chances are you are getting to get affected by growing social issues in your everyday life.
 

Super Mario

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It affects quite a bit, the gini coefficient which measures inequality is closely correlated to social problems. So if you live in a highy unequal society chances are you are getting to get affected by growing social issues in your everyday life.
Let's hypothetically say Amazon is running a bigger scam than Enron, and went under tomorrow. How many people would suddenly be better off without Bezos' and his ex's net worth being so high?

You're confusing poor and unequal by using "proven methods" backed by Liberals.
 
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betrayal

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It's the top 400 rich families. Not that there are only 400 rich families :messenger_grinning_sweat:
So what? This doesn't make it any better, because that means that all rich families probably still pay way more taxes than the whole working class combined. They probably nit-picked the richest 400, because if you would take more rich households into consideration the headline suddenly wouldn't be true anymore. It's a clear case of bending reality till it fits your narrative.


It affects quite a bit, the gini coefficient which measures inequality is closely correlated to social problems. So if you live in a highy unequal society chances are you are getting to get affected by growing social issues in your everyday life.
Excuse me? The context is lacking or better said non-existant in that regard. There is absolutely no direct correlation between income inequality and social problems. What is true though is, that an lower income correlates with more social problems and that's probably what you mean. Other distant people, who are richer than you, have nothing to do with the social problems you experience. Actually, It's quite the opposite. Wealthy people and corporations are one of the main driving factors for innovation, research and development, which are things that require massive ressources and at the end everybody benefits from.
 
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Trojita

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So what? This doesn't make it any better, because that means that all rich families probably still pay way more taxes than the whole working class combined. They probably nit-picked the richest 400, because if you would take more rich households into consideration the headline suddenly wouldn't be true anymore. It's a clear case of bending reality till it fits your narrative.
All they did was take the top 400. Not a slice of the top 400 they wanted to pick. You are the one bending reality after you didn't realize there are more than 400 rich families in the US.
 

Ornlu

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The problem is that *most* billionaires don't have actual billions. They are only worth that much on paper. If Bezos went and liquidated his Amazon shares tomorrow the valuation of the stock would plummet. Most of the money that has been hoovered up by the ultra wealthy is effectively stagnant and/or imaginary. If their sell their stocks they should be hit by capital gains taxes.

That being said, I agree with Thomas Piketty in that there needs to be a wealth tax. If you are going to park on billions of dollars to keep out of the economy, you should have to pay a tax on holding it, just like you would for any other property.

I also am not a fan of people like Soros and Gates being able to endow billions to their NGOs to focus on pet projects as a means to escape taxes. I think charitable donations or those to churches shouldn't be tax deductible after a reasonable dollar amount that won't hurt the middle class. Donating to charities should be discouraged as a tax shelter.
Slightly off topic, but haven't some of the methods of escaping taxes via charitable donations been stopped as of last year? I seem to recall that being in the news for a bit a couple of years ago. I honestly don't know if that applies to the ultra-wealthy or not.
 

betrayal

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All they did was take the top 400. Not a slice of the top 400 they wanted to pick. You are the one bending reality after you didn't realize there are more than 400 rich families in the US.
First off, everybody who read the article know that there are way more than 400 rich families. So you can count me in on that one.

My posts directly refer to the article and the provided statistics, which are using only the top 400 families. It was not my choice.
What if you would pick the 800 richest families (see my first post in this thread). The numbers would be completely different because the taxes of the rich would skyrocket while the taxes payed by the working class would remain the same.

Maybe, for once, people here start to answer the relevant points i've made instead of fighting about numbers and my allegedly mislead interpretations.
 
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Trojita

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First off, everybody who read the article know that there are way more than 400 rich families.

My posts directly refers to the article and the provided statistics, which are using only the top 400 families. It was not my choice.
What if you would pick the 800 richest families (see my first post in this thread). The numbers would be completely different because the taxes of the rich would skyrocket while the taxes payed by the working class would remain the same.
You literally said "you should ask why there are only 400 rich families and 83 million working class families."

Bruv, come on.

If you can prove the bolded I would welcome that new information. I'd also be interested in what the top 400 are doing different as far as taxes and law that the next 400 aren't doing.
 
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Cybrwzrd

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Slightly off topic, but haven't some of the methods of escaping taxes via charitable donations been stopped as of last year? I seem to recall that being in the news for a bit a couple of years ago. I honestly don't know if that applies to the ultra-wealthy or not.
Trump definitely wouldn't close that tax loophole.
 

womfalcs3

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The chart shows consistent linear decrease in the equivalent rate for the rich since 1960, including during Carter and Obama. Your statement is nonsense.
Show me the chart for the gini index from 2000 to 2019. I bet we'll see accelerated inequality since Trash became president.
 

infinitys_7th

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Slightly off topic, but haven't some of the methods of escaping taxes via charitable donations been stopped as of last year? I seem to recall that being in the news for a bit a couple of years ago. I honestly don't know if that applies to the ultra-wealthy or not.
Donating money does not let you "escape" taxes somehow - you just are not penalized for the money you donate.

If the tax rate is 25%, donating $1 means you are out $1, but you do not have to pay the government $0.25. Otherwise, donating $1 would basically be losing $1.25.
 
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Teletraan1

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The top 400 aren't getting taxed on salaries that are congruent with their wealth and can hide money in all kinds of places. Most billionaire business people don't pay themselves an extravagant salary and is not where their wealth comes from. Lower income people don't have that luxury. This article seems like cherry picking the top 400 and pitting them against the lower income. Just more class warfare to attract shit flies with TDS like this thread has.
 
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infinitys_7th

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I also am not a fan of people like Soros and Gates being able to endow billions to their NGOs to focus on pet projects as a means to escape taxes. I think charitable donations or those to churches shouldn't be tax deductible after a reasonable dollar amount that won't hurt the middle class. Donating to charities should be discouraged as a tax shelter.
I think it would be better to limit the definition of charity, with regards to deductions, to strictly nonpolitical nonprofit organizations.

If Soros or someone wants to drop $1B on a soup kitchen, IMO that should not he taxes because there is no tangible benefit to him outside of generosity. With these NGOs they obviously do get to undertaken political activity without paying taxes for it.
 

desertdroog

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This just tells me that the government has a spending problem and not a revenue problem. How about we also lower taxes in kind for the rest on par with the richest families and reduce government spending?
 

Cybrwzrd

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This just tells me that the government has a spending problem and not a revenue problem. How about we also lower taxes in kind for the rest on par with the richest families and reduce government spending?
Government spending isn’t bad for the economy. It does more for it than say, a large company buying a startup with a stock trade, for example.
 

desertdroog

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Government spending isn’t bad for the economy. It does more for it than say, a large company buying a startup with a stock trade, for example.
People being able to spend their money is good for the economy. Government spending the taxpayers money, which they could use if they had it, keeps the bloat and waste down. The government is needlessly inefficient on all levels as well as over burdened with bureaucracy which is wasteful of time and money.
 

Cybrwzrd

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People being able to spend their money is good for the economy. Government spending the taxpayers money, which they could use if they had it, keeps the bloat and waste down. The government is needlessly inefficient on all levels as well as over burdened with bureaucracy which is wasteful of time and money.
We are talking potatoes and gundams here.

Regardless- which is better for the economy in these two situations?

Situation 1 - you get a 1000 tax break. You take that money and buy a brand new Chinesium 4K television.

Situation 2 - you don't get a 1000 tax break, the government instead takes the money and spends it toward paying a local contractor for road repairs.
 

Vade

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This is how to mislead your low-financial IQ voting population with propaganda. Most if not all of these family are not making millions or billions in cash or liquid assets each year. It is in hard assets real estate, stocks, bonds, IP ect. The liquid cash/salary/dividends they do receive is a drop in the bucket and most will borrow against these hard assets so they can spend (aka putting back into the economy). These are passive income .

Warren in particular wants to tax everyone on their net worth forcing people to come up with liquid cash every year to cover this net worth tax. Funny enough your 401k or roth is part of your net worth and will be smacked around with a President Warren. I said to a few more liberal leaning people I know when they were all about taxing the rich and suddenly they were not so pro taxing net worth when it would hit them.

The fact that nearly 50% of people in the United States do not pay taxes at all whether through sales tax, income tax, social/medicare tax and are refunded these at the end of the year yet they receive government benefits is foolhardy. Everyone wants a free meal and then to upgrade that free meal to a NY strip with all the fixings on someone else's dollar.

My personal feelings are we should be fixing all the deductions and loop holes in the tax code. I would prefer we invert our thinking and tax active income less than passive income. This would benefit those out their building their companies', lives ect. rather than hitting them higher than people who have massive dividend and rental income drops and do not 'contribute' to building.
 
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#Phonepunk#

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imagine spending a year of your life analyzing the tax habits of 400 families.

like lol, the rich are screwing us? well thank God you got paid salary & eventually tenure to tell us this completely fucking useless fact.
 
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desertdroog

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We are talking potatoes and gundams here.

Regardless- which is better for the economy in these two situations?

Situation 1 - you get a 1000 tax break. You take that money and buy a brand new Chinesium 4K television.

Situation 2 - you don't get a 1000 tax break, the government instead takes the money and spends it toward paying a local contractor for road repairs.
Situation 3 - the government reduces taxes on the middle class and stops offering grants for useless studies or other wastes and maintains the road since it is necessary for commerce and stability of infrastructure. Also get rid of pork spending and pet projects and re-appropriate necessary funds from those bloated projects to actual infrastructure.
 

Taxexemption

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I don't know that it's productive to frame things in terms of effective tax rates. I don't think most people understand that yes they pay a lower effective tax rate as a percentage of their income, that billionaire still pays a lot more taxes than you do. In general, how many people know what exactly you are referring to when you say "effective tax rate." I get the feeling there are a lot of people out there that think that rich people literally pay no tax or pay less taxes than the people that work for them. I once thought that because some of my first exposure to the topic was watching a show where a CEO went into a room full of accountants and basically said "If anyone can figure out how I can pay zero taxes they will get a promotion." In the show some lady stayed at the office overnight writing formulas on a board and apparently among all of those algebraic formulas was some explanation for how yes, the rich CEO could literally pay zero dollars in taxes.


You want to tax billionaires more? Change the long term capital gains tax, that's how they make their money. They don't make most of their money working a W-2 job, they make it by holding/selling investments, and they pay the long term capital gains rate. We should actually tax all of the wages on your W-2 less, and increase capital gains, you would in effect be taxing rich people more and working people less.


Edit: When you go to work you are using your body or your mind up. That kind of labor should be taxed far less than what you get for holding an investment. To me the idea that we would have a high tax rate for income earned from labor above some certain amount is ridiculous. If anything investment income above some threshold should have a higher tax rate.
 
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Cybrwzrd

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Situation 3 - the government reduces taxes on the middle class and stops offering grants for useless studies or other wastes and maintains the road since it is necessary for commerce and stability of infrastructure. Also get rid of pork spending and pet projects and re-appropriate necessary funds from those bloated projects to actual infrastructure.
You didn't answer the question.

You are just evading.
 

Cybrwzrd

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Nah, I'm speaking as an overtaxed middle class citizen.
If you think you are overtaxed as a middle class citizen, when taxes for the middle class are already negligible, then I don't really know what to tell you. How much do you think you are paying as an effective federal tax rate? I bet you are paying <15%, and very likely even <10%.. Also, remember that state income taxes and SSI/Medicare are not factors in this rate.
 

desertdroog

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If you think you are overtaxed as a middle class citizen, when taxes for the middle class are already negligible, then I don't really know what to tell you. How much do you think you are paying as an effective federal tax rate? I bet you are paying <15%, and very likely even <10%.. Also, remember that state income taxes and SSI/Medicare are not factors in this rate.
It's higher than 15 percent, as of my federal filings last year. I'm not going to get into personal details.
 

Ornlu

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If you think you are overtaxed as a middle class citizen, when taxes for the middle class are already negligible, then I don't really know what to tell you. How much do you think you are paying as an effective federal tax rate? I bet you are paying <15%, and very likely even <10%.. Also, remember that state income taxes and SSI/Medicare are not factors in this rate.
Why exclude these? The State/Federal relationship in particular all adds up to total $$$ taxed per household. We should also be including sales tax, registration fees, auto insurance, hunting permits, etc. if we want to make it apples for apples.
 
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Cybrwzrd

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It's higher than 15 percent, as of my federal filings last year. I'm not going to get into personal details.
Then you make well above 100k/year.

Adjusted Federal Income Tax for a $100,000 salary taking a standard deduction on the single tax table in 2019 was $15,246.50. So 15.2%.

Newsflash, you aren't middle class.

Why exclude these? The State/Federal relationship in particular all adds up to total $$$ taxed per household. We should also be including sales tax, registration fees, auto insurance, hunting permits, etc. if we want to make it apples for apples.
SSI/Medicare are both entitlements that you are pre-paying for.

Auto insurance is a tax?
 

desertdroog

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Then you make well above 100k/year.

Adjusted Federal Income Tax for a $100,000 salary taking a standard deduction on the single tax table in 2019 was $15,246.50. So 15.2%.

Newsflash, you aren't middle class.



SSI/Medicare are both entitlements that you are pre-paying for.

Auto insurance is a tax?
Middle class is listed as $40,500-$122,000 as of 2019. Newsflash, you need to learn how the tax code works.
 
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Cybrwzrd

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Middle class is listed as $40,500-$122,000 as of 2019. Newsflash, you need to learn how the tax code works.
Where is 122k listed as "middle class" income? 122k is way outside of the middle class, especially for a single person.

Regardless, at 122k, the absolute max tax you can pay at the federal level is $20,526.50, again as a single person, with only the standard deduction. That is 16.8% effective tax rate.
 
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