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.

[scott craft]

Thanks Matt, that clears it up a lot.

[Spunt Drag]

Originally Posted by scott craft

From what I've read the "50% of Americans pay no taxes" statement isn't quite true, it's a political hype statement. I am in favor of a flat tax because I think everyone should be taxed at the same rate plus getting rid of loopholes will bring in more revenue in its own right.

Mark twain said "There's lies, damn lies, and statistics." so you're probably right. But it's not to say they don't pay income and sales taxes. They just get so much back at the end of the year on their returns they actually come out to the good.

[getonfish]

Matt I understand how the tax code works and I agree that Capitol gains is why the rich pay lower taxes. There needs to be some adjustments made to that law in my opinion.

On the other hand I also understand that it is the rich who supply the jobs to the rest of us. There are in fact HUGE additional tax breaks available to businesses that we don't even qualify for. Messing with those is a double edge sword though.

[southern151]

What are those HUGE tax breaks to businesses? I must need to investigate more. By the time I pay employee taxes, matching taxes, sales taxes and, taxes on profits, I'm taxed out! They only break I have seen is investing in more equipment which is incredibly expensive and, you guessed it, taxed!

[bmac]

You need to hire some GE accountants! They paid no federal taxes on $5 billion in 2010.

http://www.theatlantic.com/business/...in-2010/73178/

[cajunfisher]

To me the problem is not the people paying taxes. Yes, wealthy people like Buffet pay a lower rate, but that is because of the way he makes his money. For the rest of us, I think the tax rates are pretty high. I see it everytime I look at my check. But, there are two more important factors.
1) the government waste of the taxes that are collected. Any and all excess should be returned to the people who paid those taxes. Kind of like a profit share.
2) the millions who do not pay taxes at all. ie, the earned income credit. How can you earn income if you don't go to work?

[getonfish]

Originally Posted by bmac

You need to hire some GE accountants! They paid no federal taxes on $5 billion in 2010.

http://www.theatlantic.com/business/...in-2010/73178/

Same thing for general motors. That is exactly what I was referring to.

[jbert22]

correct me if im wrong but do some of you agree that we should increase taxes on businesses that have employees? I might be crazy but if business werent hit by taxes they could afford to hire more people. From what I hear Obama wants to slam businesses with big taxes so that the middle class wont have to pay as much. But what money will the middle class have if BUSINESSES have to suffer for being sucessfull???

[Matt G]

Originally Posted by jbert22

correct me if im wrong but do some of you agree that we should increase taxes on businesses that have employees? I might be crazy but if business werent hit by taxes they could afford to hire more people. From what I hear Obama wants to slam businesses with big taxes so that the middle class wont have to pay as much. But what money will the middle class have if BUSINESSES have to suffer for being sucessfull???

X2. My thoughts exactly. Like Getonfish said, it is a double edge sword. Don't tax business enough and the middle and lower class cry that it's not fair. Tax business too much and they'll either close down or move overseas where the tax laws are more palatable. What most people don't realize is that the majority of small business owners, which are the majority of business owners, don't make as much as you would expect. I know when things slow down in the shop, my old man will go months without a pay check not to have to let anybody go. I don't know of many business owners who would do this. They would simply shut the doors and move on to the next adventure. However; when the business goes, so does several people's jobs. Without jobs, the economy could not sustain itself. With that being said; without business, there would be no jobs. Democrats need to tread carefully because they are on a slippery slope.

[2ndamendment]

If you have not done so, consider seeing the movie 2016. The movie research sheds some light on this subject.

[SULPHITE]

Stuff like this happens

http://www.abc.net.au/news/2012-09-1...re-tax/4251642

[LPfishnTIM]

by reading this thread I just realized I need to switch I tax info at work to head of household.

[Matt G]

Originally Posted by LPfishnTIM

by reading this thread I just realized I need to switch I tax info at work to head of household.

http://taxes.about.com/od/filingstat...fhousehold.htm

This is the general requirements to claim HOH.

[GIBob]

Don't need more taxes, need to reduce government waste - federal, state, and local - they all start buying next election votes with our money the day they take office..

[jchief]

Originally Posted by GIBob

Don't need more taxes, need to reduce government waste - federal, state, and local - they all start buying next election votes with our money the day they take office..

Agree. Do away with EVERY federal subsidy and start over.