Bar Stool Economics

[Matt G]

Originally Posted by scott craft

Does anyone know what the tax rate is on those in the top 2%? I understand these guys pay more taxes, but is that because they are taxed at a higher rate or simply because of the amount they are taxed on? I suspect it is because they make more and not because of their tax rate, but I haven't researched it.

Originally Posted by getonfish

Warren Buffet publicly said he pays a lower tax rate than his assistant who makes around 50,000 a year. It is well documented that the super rich pay next to nothing in taxes compared to the middle class. Yes they pay much more in regards to monetary amounts but the breaks they receive are ridiculous. They should pay the same rates we pay. Our national debt would be much better off and they would still be ridiculously rich.

We have a progressive tax system, meaning your are taxed at a higher rate as you earn more. Example: If you file single status; the first $8,500 you earn is taxed at 10%, everything you earn after that up to $34,500 is taxed at 15%, and so on down the schedule. If you are married filing jointly, married filing single, or HOH you use the respective schedule (see 2011 Schedules below).

Capital gains taxes on the other hand are taxes on the appreciated value (gains) of capital assets (stocks, bonds, real estate, etc....) at the time of sale. However, these assets must have been held for at least 1 year before the sale. Capital Gains taxes for 2011 were 0% taxes for those in the 10% and 15% tax bracket, and 15% for those in the remaining brackets.

So the reason the ultra rich are not paying their "fair share" as you claim GETONFISH is because they make the majority of their money through investments. It is apparent that you cannot become "ultra rich" by working the normal 8-5 like the majority of us on here do. You need something else to help subsidize your ordinary income. Smart people use investing, others use the government. Why should the smart people be be penalized for putting their money at risk to better themselves? You have the same exact tax break that they do if you invest. Otherwise, you would be treating these gains as ordinary income, which could actually put you in a higher tax bracket if you have a substantial amount of investments that were sold in a single year. They are not screwing the system are commiting fraud. They are simply enjoying the same breaks that are afforded to me and you.

SingleFiling Status


[Tax Rate Schedule X, Internal Revenue Code section 1(c)]

• 10% on taxable income from $0 to $8,500, plus
• 15% on taxable income over $8,500 to $34,500, plus
• 25% on taxable income over $34,500 to $83,600, plus
• 28% on taxable income over $83,600 to $174,400, plus
• 33% on taxable income over $174,400 to $379,150, plus
• 35% on taxable income over $379,150.

Married Filing Jointly or Qualifying Widow(er) Filing Status



[Tax Rate Schedule Y-1, Internal Revenue Code section 1(a)]

• 10% on taxable income from $0 to $17,000, plus
• 15% on taxable income over $17,000 to $69,000, plus
• 25% on taxable income over $69,000 to $139,350, plus
• 28% on taxable income over $139,350 to $212,300, plus
• 33% on taxable income over $212,300 to $379,150, plus
• 35% on taxable income over $379,150.

Married Filing Separately Filing Status



[Tax Rate Schedule Y-2, Internal Revenue Code section 1(d)]

• 10% on taxable income from $0 to $8,500, plus
• 15% on taxable income over $8,500 to $34,500, plus
• 25% on taxable income over $34,500 to $69,675, plus
• 28% on taxable income over $69,675 to $106,150, plus
• 33% on taxable income over $106,150 to $189,575, plus
• 35% on taxable income over $189,575.

Head of Household Filing Status



[Tax Rate Schedule Z, Internal Revenue Code section 1(b)]

• 10% on taxable income from $0 to $12,150, plus
• 15% on taxable income over $12,150 to $46,250, plus
• 25% on taxable income over $46,250 to $119,400, plus
• 28% on taxable income over $119,400 to $193,350, plus
• 33% on taxable income over $193,350 to $379,150, plus
• 35% on taxable income over $379,150.