OMB: Top 20% pay 95% of taxes, middle class 'single digits'

[CaptUSA]

If you think about it, a 40-50% effective tax rate is very low, compared to lets say a tax rate of 60-70%

We should all feel very lucky to live in a country with such low taxes

Should 5% appear too small?

 

[Brian4Liberty]

The progressive system makes the poor happy, not the rich. And yeah, it's the greatest number. Just when we had slavery back in the day. It was great for most people but it sucked for the slaves.

The idea that the rich have lots of loopholes is a myth, comrade. That's why they're moving offshore.

Offshore is a loophole, among many others. The new corporate tax is huge. People can only pay 20% if they utilize a corporation (which the wealthy have always done).

 

[Madison320]

Offshore is a loophole, among many others. The new corporate tax is huge. People can only pay 20% if they utilize a corporation (which the wealthy have always done).

The owners of a corporation are its shareholders. The profits are in the form of dividends. The shareholders get a microscopic fraction of the profits compared to the government, think of all the layers of tax a the government gets from a corporation. The government gets like 95% of the take when you compare it to what the shareholders get. Suppose a poor person made 10K in a year. If he was a corporation he'd get $500 and the government would get $9,500. As for offshore corporations, why should they pay any US taxes at all? They already have to pay the local corporate tax.

 

[Brian4Liberty]

The owners of a corporation are its shareholders. The profits are in the form of dividends. The shareholders get a microscopic fraction of the profits compared to the government, think of all the layers of tax a the government gets from a corporation. The government gets like 95% of the take when you compare it to what the shareholders get. Suppose a poor person made 10K in a year. If he was a corporation he'd get $500 and the government would get $9,500. As for offshore corporations, why should they pay any US taxes at all? They already have to pay the local corporate tax.

Not sure where you are getting your figures, but let's imagine a simple scenario. Hillary and Bill Clinton go out and do various speaking engagements. The payments for these "services" are paid to Clinton Shell Foundation Inc., of which Hillary owns 60% of the shares, and Bill owns 40%. They pay the corporate rate for that income, which will now be 20%, instead of personal income tax rates (even under past tax schemes, they would pay less than the personal rate). Add to that the fact that there have always many more deductions, write-offs, etc. for a business, further lowering the taxable amount. Want a private jet? Bought and paid for by the corporation. Lodging at a ski resort in Davos? Corporation pays.

 

[Madison320]

Not sure where you are getting your figures, but let's imagine a simple scenario. Hillary and Bill Clinton go out and do various speaking engagements. The payments for these "services" are paid to Clinton Shell Foundation Inc., of which Hillary owns 60% of the shares, and Bill owns 40%. They pay the corporate rate for that income, which will now be 20%, instead of personal income tax rates (even under past tax schemes, they would pay less than the personal rate). Add to that the fact that there have always many more deductions, write-offs, etc. for a business, further lowering the taxable amount. Want a private jet? Bought and paid for by the corporation. Lodging at a ski resort in Davos? Corporation pays.

That's a good point, I wasn't thinking about an individual incorporating. Can anyone incorporate? Wouldn't everyone incorporate if it was a better deal? Also remember this about deductions. You're paying $100 to save $20 so it's not as great as you think. Like the mortgage deduction. You pay 10K in mortgage payments to save 2K so you still spent 8K. The bottom tax bracket is 10% plus you get a personal deduction close to 10K so you're only paying a maybe 3%.

I remembered something else. Corporations pay tax on their income and then the dividends get taxed AGAIN. Currently the top corporate tax rate is 35% and the dividend tax is 15%. So assume one individual was a the sole owner of a corporation and the corporation made a million dollars. That would be taxed at 35% leaving 650,000 in dividends. And the dividends would be taxed at 15% leaving 552,500. So that's about a 45% tax rate and that doesn't include state and local taxes. Compare that to the guy who makes about 15K and is paying about 3%. I'd say our tax system is pretty damn progressive. Karl Marx would be proud. Remember, progressive taxation is the second plank of the Communist Manifesto.