According to Emmanuel Saez and Gabriel Zucman, here's what the US tax system looks like today compared to 1980:
For most people in the middle and upper middle classes, not a lot has changed. Tax rates are a few points lower than they were in 1980, but that's it. There are two big changes:
- Tax rates of the poor have gone up.
- Tax rates of the very richest have plummeted.
If Saez and Zucman are correct, the burger flipper at the Omaha McDonald's really does pay a higher tax rate than Warren Buffett.
How, exactly, do the poor pay 25% tax?
Their standard deduction takes income tax to zero. Sales tax is not 25%. Social Security, for them, is a net positive - they get more out than they put in because Social Security is progressive - so accounting for this as a tax is ridiculous.
Something is wrong with the numbers.
Gas taxes, property taxes, excise taxes, state income taxes.
And a lot of folks who pay into Social Security never get anything out of it. They die before eligibility. So yes, those are taxes.
Sales tax, in some places city and/or county as well as state.
Property tax passed through to renters by landlords. Is that included in the data KD cites?
Tariffs on imported goods passed through to consumers. Same question.
If you count Social Security pay ins as taxes then logically you must consider pay outs to be negative taxes, in which case Social Security is a negative tax on the poor.
Property taxes fall mostly on the rich and middle class. By definition, the poorest own little property.
Somebody already gave it a snack, but don't feed the MotherFcking trolls. It isn't arguing in good faith and it just lives for throwing everything against the wall to see if it can rile up anybody else. It is scum that deserves to die painfully all alone.
With you, 100%, in this.
The troll you reference seems pretty ignorant, at best.
I gotta think that English is not the first language of a troll who picks that username.
Yes, FICA taxes are, indeed, taxes. Presumably, you get some benefit from all the taxes you pay, but if you're relatively young you won't see the benefit of FICA taxes for decades, whereas the other taxes are spent on public benefits in the same year they're collected.
FICA taxes are also spent on public benefits the same year they are collected.
Right! Go back to the tax rates in the 50s when America was great!
I don't know how these guys come up with 12-13% consumption tax for workers earning under $20K annually. And while I can see why they add in health insurance as a tax for some earners, surely they are disregarding income tested benefits such as SNAP, etc.
It looks like they goosed their numbers to make a pretty graph. Which seems like a mistake since the revenue at that left end of the graph isn't going to be significant anyway. But it does plant doubt about their methods.
The donor class knows how to get what they pay for. Part the infinity.
American Democracy. The best government money can buy. Literally.
It’s what makes our country great!
/S
Back when I was making sixty cents an hour, I paid a huge part of my income to the government in the form of taxes.
Ever since then, the more money I made, the less the percentage of my income went to taxes. Some years, the government paid me.
Personally, I seem to have hugely benefited from the unfair tax structure, but I think, in reality, the world would be a much better place if taxes rose at a greater rate than income, and if billionaires were taxed out of existence. In that world, I might be doing even better than I am in this one.
Money = Power, and if you like democracies and what they can bring you, you should hate income inequality.
In fact, I think that the greatest threat to democracy is the concentration of wealth in individuals and in corporations. Politicians are just too affordable
As someone who moved from the lower middle to the upper middle, I would say that the slight rise in taxes seen in the chart is likely accurate. Some types of taxes drop as a fraction of income, while others rise. I happen to be in a state that exempts food and clothing from sales tax and has state income tax rates that rise with income level, so that shift to paying more as you earn more may be more prominent for me than for people in states with no income tax and high sales taxes on necessities.
You have to earn quite a bit to effectively shelter a lot from taxation. As the chart shows, even the upper middle class can't do much of it, and the low rich can only do enough to tread water tax-wise.
"…I think that the greatest threat to democracy is the concentration of wealth in individuals and in corporations."
Bingo! All you have to do is to look at Russia and the oligarchs.
Reminds me, I saw via the Economist not very long ago that there was a dispute between Piketty/Saez/Zucman and Gerald Auten/David Splinter as to whether inequality has increased significantly since (I think) the '60s.
The rule in America since Reagan is that if you work for your money, you pay the taxes. If your money works for you.... heyyy!! *.gif of The Fonz giving a thumbs-up*
I don't actually have a problem with poor people paying some tax. Our peer countries generally have higher taxes on the poor than we do. But I only support poor people paying taxes if poor people actually get services for their taxes. It is far from clear that poor people get treated equally as well by all levels of government as taxpayers of higher incomes: poor people generally have crappier schools, crappier infrastructure, crappier response times to emergencies (crime, injuries, disasters, etc.), crappier responses to emergencies once responders finally do arrive, crappier pollution mitigation efforts, crappier protection from the court system, etc. Rich and middle class people do not experience the same "government services" that poor people experience, which is why I favor exempting the poor from taxes: they shouldn't have to pay for all the shit government shovels into (or allows others to shovel into) their lives.
I don't have a problem with the lower-income quantiles paying taxes, as long as every FTE worker gets a take-home living wage. We are far from that.
I bad-mouth economists here a lot; one of the principal reasons is that mainstream economics should lead directly to support for a living wage. Any worker who isn't paid a living wage is dependent on third-party support -- relatives, government or charity -- the employer is not paying the full cost of provisioning labor. Such an externality is inefficient, according to classical economic theory. Nor am I aware of any heterodox economic theory which holds otherwise. Yet few economists have anything to say about this inefficiency.
Private gain, public costs--the only way to make real money.
Thanks for the link. The really included all taxes, e.g. payroll taxes, local property and sales taxes, etc. They even included the costs for health insurance on one of the charts.
The only thing missing was the huge increase in fees and issuance of tickets now used to fund local governments in lieu of raising taxes.
The Republicans will of course only talk about tax rates on regular income and ignore the way the wealthy can hide their income, get various tax breaks, and to avoid the standard income tax, get their pay in the form of capital gains so will be taxed at a lower rate, etc.
fyi:
https://www.cnn.com/2024/04/15/investing/trump-stock-new-shares/index.html?utm_source=business_ribbon
(DJT dropped 18% today, rest of market down around 1-2%)
Make the capital gains tax progressive. Problem solved.
The capital gains tax is progressive, though not as progressive as the rest of the income tax. More importantly, investment income needs to be treated just like all other income, without special, lowered rates.
Your last sentence is just the thing I have been saying for years, to the annoyance of many. All sources of income should be taxed at the same rate. The rich already have enough money and property. They have no right to continue depriving everyone else of sufficient income. Not only are they not actually dragons, but dragons are frequently slain. Be careful what you wish for…
Seems like this would be better depicted without the change in scale after 90%, using the same scaling as the rest of the chart would better depict how abruptly rates change from that point. Currently it's a tad misleading.
Kevin keeps claiming that inequality has been declining lately on the basis of selected income data, but Saez and Zucman show how wealth and income inequality were increasing greatly through 2020 and there have been no fundamental changes in the overall situation. Since the pandemic real production-worker wages are essentially back on the same trend that has existed since the 90's:
https://fred.stlouisfed.org/graph/fredgraph.png?g=1kem7
And this rate of gain is far less than that of GDP per capita. Most of the gains in production and wealth have been going to the very top incomes. The country is basically still on the conservative or "neoliberal" economic path that it has been on for about 50 years.
Of course real wages have increased since the Trump administration, so any claim that things were better for workers then is just false. The blip in real wages between 2020 and mid-2022 is mostly if not all due to layoff of the lowest-income workers.
The conservative guide to tax policy:
a. Chop tax rates for the ultra-rich
b. Claim sympathy for the poor taxpayer
c. Decry all spending and debt
Remember this above all:
"There is no magic money tree!"
Remember, for the people in charge, this is a feature, not a bug.