Poll by the Pew Research Center:
“We’re not taxed enough!” is quite a remarkable polling result!
Does this represent a problem for Romney?
Upper-class people don’t necessarily consider themselves rich, though. I recall multiple threads and a poll here at the SDMB about the dividing line between “rich” and “poor.” And some (frankly delusional) people with 6-figure incomes don’t consider themselves rich.
Anyway, depending on how the question was framed by the pollsters, that could have had a strong effect on how self-described upper-class people answered it. But still, I’ve rarely seen anybody volunteer to pay extra taxes, you know? Maybe the tax code will be changed to align with public opinion, but I’m not holding my breath. The bootstraps fallacy (I am 100% responsible for my success, and it had nothing to do with the advantages of being born in this country!) is still alive and well among many, many upper-class people.
If we are going to reduce the deficit via tax increases (or tax restorations) than the Bush Tax Cut needs to expire both for the rich and the middle class which of course I don’t think will be popular…
What Qin says is literally untrue. We can reduce (not eliminate, but he said reduce) the deficit by expiring only part of the Bush tax cuts. We can reduce it even further by adding more tax brackets. No reason your 300 000 001st dollar needs to be taxed at the same rate as your 300 001st.
Here’s the problem with these types of polls. If you ask people what share of federal income taxes “the rich” should pay, you generally get a lower number than what “the rich” actually do pay. This poll just asked a bunch of uninformed people what their opinions is.
Now, it’s certainly politically meaningful since perception is reality in politics, but let’s not fool ourselves into taking this data and running with it.
Surely this depends on where you live? Around here, a $100k household can’t reasonably afford a house. And I’m not talking about a McMansion; I’m talking about something like a 1800 ft^2 starter house on a microscopic lot. $100k isn’t poor, but it isn’t rich either.
I agree education is needed. But clearing up the issue isn’t going to make it go away.
The wealthy try to obscure the issue by talking about the “rate” as if there were only one significant rate in their taxes: “I pay a 35% rate. The average American only pays a 25% rate. So I’m really paying much more.”
What they don’t mention is that this is only the rate on ordinary income. For most people, that’s the only rate that’s really important because virtually all of the money they make is taxed as ordinary income.
But that isn’t the case for everyone. If you make your money from investments (capital gains or dividends) you’re probably paying the capital gains tax rate - which in many cases, tops out at 15%.
My suggestion? Tax all capital gains and dividends as ordinary income. Then everyone is playing on the same field.
Yes, I think what really gets people riled is not so much “the rich” who pay at the 35% rate, but “the rich” who have the tax coded written in their favor so they pay a much lower rate. Folks like Romney (although I didn’t mean that he literally had the tax code written for him).
I assume you mean long term capital gains, because short to gains are already taxed at the normal rate. I might be OK with that as long as we indexed for inflation. One shouldn’t have to pay for a gain on a 10 year investment that didn’t even keep up with inflation.
The median household income in the United States is $50,046. An annual household income of $100,000 puts you into the top twenty percent.
The poll didn’t seem to specify income taxes. The rich often don’t pay income taxes at all, favoring sources that get long-term capital gains rates. It’s well-paid professionals that end up paying the top rates, since they are paid with salary and they have little flexibility there. I paid nearly triple the tax rate that Romney did in 2010.
I would love to see a tax rate histogram, but binned on dollars and sorted on earnings. That is to say, take the top X% of earners, where X is adjusted so that they comprise 1% of the total individual earnings, and compute their tax rate. Perform the computation all the way down to the bottom 1% of earnings.
Yes, I’m talking “long term” gains. And long term is relative - an investment only has to be held for one year to qualify.
As for inflation, I’m sticking with my level field principle. If ordinary incomes are indexed for inflation, I’d accept it being done for investment income. Otherwise, no - I see no reason to give one form of income preferential treatment.
My “regular house” is smaller than the square footage you just gave for your hypothetical “starter house.”
Yeah, and? Anyone earning over $30k is a 1-percenter relative to the rest of the world. Cost of living matters. And unlike actual rich people, $100k earners don’t necessarily have a lot of flexibility in where they live. Move me to Mississippi and I can afford a McMansion on my current income. But my job doesn’t exist in Mississippi, and the ones that do exist with my job description don’t pay 6 figures.
So, to clarify, we are now defining “rich” as “has the capacity to buy an 1800-sq-ft house in one of the most expensive locations in the country,” and anything less than that is “not rich”?
And if your house was as large as 1800 ft^2, would you consider yourself rich?
Let’s suppose that our $100k household can just barely afford a 1200 ft^2 condo. I was able to afford that on a bit less than $100k, although I don’t have a family or car payment and so have minimal other expenses. 1200 ft^2 is just about enough for a small family to live in comfort, although the kids will have to share a bedroom. Is that rich?
Actually, I’m saying that the bar is much higher than that. Actual rich people can afford a modest house no matter where they live. Quibbling over square feet? Not rich.
Who is “rich” is sort of moot. I have a six figure income (and my husband has one too!) and we don’t consider ourselves “rich” - Romney is rich, Warren Buffet is rich - we have to continue to work because even after saving 40% of that income (post tax) for years, we can’t support ourselves without working. Rich is when you can say “screw this” and not work - and yet not live in a cabin in Montana canning beans to get you through the winter.
However, I do think I should have a higher tax burden.
I also think capital gains should be indexed for inflation - tax all income earned in this year at the ordinary income rate, index from there on out. So, Little Nemo, if you earn any income in 2012 and don’t get paid until 2014, you can index that, too - that doesn’t tend to be the way ordinary income works, though.
Ordinary income is not paid out over a longer period than one year. That’s why capital gains made over that time period are taxed at the same rate. There’s your level playing field.
Well there is deferred compensation - “the rich” will be happy to let you index their deferred comp payments…
Somehow, I think the idea here is to close the gaps that really only exist for people in the top 5% to take advantage of.
That’s an astonishingly weak argument. We’re talking about the tax policy of the United States. What possible relevancy does the income level of people who live in other countries have?
And it’s not only irrelevant, it’s not even factually correct. The percentage of households in the world with an income above US$30,000 is far above one percent. There are actually more $30,000+ households in Europe than there are in the United States. 13% of Russian households and 21% of Brazilian households have an income above $30,000. cite