Poll: Most Americans say the rich don't pay enough in taxes

[John_Mace]

Here is data from 2010 for the top quintile:

Share of Income: 54%
Share of Fed Income Tax: 69%

I guess I was wrong about the earlier dates being outliers.

[Lobohan]

@John_Mace

Here is data from 2010 for the top quintile:

Share of Income: 54%
Share of Fed Income Tax: 69%

I guess I was wrong about the earlier dates being outliers.

Since we have a progressive income tax that makes sense. In fact, I’d have it higher probably.

If they had 50% of income and paid 50% of taxes, they’d be paying far too little.

[Chronos]

While we’re at it, this is also good evidence that we can, in fact, make significant headway on the deficit purely by soaking the rich. If the top quintile pays 80% of the federal government’s income, then that implies that if we increase the top quintile’s tax bill by, say, a modest 25%, we’d get a 20% increase in government income. That sounds like a pretty significant boost, to me.

[Fat_Chance]

@MsWhatsit

The idea of someone making six figures saying, “Oh, we’re not rich” is just… I mean, I can tell you’re being serious with this, but some part of me thinks that you must be pulling a prank, because that seems a little bit crazy.

.

Your location says Columbus, OH

Median home value in Columbus = $138K

in Bergen County, NJ where I work = $475K
in Orange County, NY where I live (45m from work in order to find cheaper homes) = $306K
Can you see why a family making $100K wouldn’t consider themselves rich living where I do, compared to where you live?

[That_Don_Guy]

@Rachellelogram

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.

I have a “six-figure income” (okay, very low six-figures, but still more than $99,999 per year), and I am not “rich” by any remote definition of the term. I currently owe about $200,000 on a house that’s currently worth 75% of that.

@Little_Nemo

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.

Then again, that works both ways. All of the talk about Romney paying “only 14%” is based on the amount of income tax paid as a percentage of adjusted gross income - i.e. income before deductions and exemptions. Meanwhile, people who say, “While Romney pays 14%, teachers pay 25%,” need to understand that, under the same method of calculating the percentage, that teacher needs to be making over $150,000 a year.

[Damuri_Ajashi]

@Chronos

While we’re at it, this is also good evidence that we can, in fact, make significant headway on the deficit purely by soaking the rich. If the top quintile pays 80% of the federal government’s income, then that implies that if we increase the top quintile’s tax bill by, say, a modest 25%, we’d get a 20% increase in government income. That sounds like a pretty significant boost, to me.

The federal income tax is less than half of federal revenues. Raising the tax burden on teh wealthy by 25%means pushing the marginal tax rate up to about 50% (which is fine by me but good luck getting back to tax rates we had during the early Reagan years, the new Republican party would call you a communist).

We should probably repeal ALL the Bush tax cuts, even the ones that affect me.

I was having a conversation with some doctors and all of them but one thought we should only increase taxes on those making more than $1,000,000/year but $250K was too low. Coincidentally they all made more than $250K last year. Guess which one made over $1,000,000 dollars last year?

Its funny how taht works. “Don’t tax you, don’t tax me, tax that fellow behind the tree” R.B.Long

[John_Mace]

@Chronos

While we’re at it, this is also good evidence that we can, in fact, make significant headway on the deficit purely by soaking the rich. If the top quintile pays 80% of the federal government’s income, then that implies that if we increase the top quintile’s tax bill by, say, a modest 25%, we’d get a 20% increase in government income. That sounds like a pretty significant boost, to me.

You’d have to raise several of the brackets, since many in the top 20% of income are in the 25% bracket. To first order:

25% -> 31%
28% -> 35%
33% -> 41%
35% -> 44%
I wouldn’t go for that, and I doubt if more than a small minority of Americans would, either. And since that was just a first order calc, the actual increases would be higher.

[Damuri_Ajashi]

@That_Don_Guy

Then again, that works both ways. All of the talk about Romney paying “only 14%” is based on the amount of income tax paid as a percentage of adjusted gross income - i.e. income before deductions and exemptions. Meanwhile, people who say, “While Romney pays 14%, teachers pay 25%,” need to understand that, under the same method of calculating the percentage, that teacher needs to be making over $150,000 a year.

Mitt Romney’s marginal tax rate for the vast majority of his income is 15% (he effectively pays a flat tax of 15% on almost all of his income). For single teachers making over $35K, the marginal tax rate is 25%.

To reach a 25 effective tax rate, a married couple would need an income of about $150K, an unmarried taxpayer reaches that 25% effective tax rate by about 100K.

I’m not sure any of that makes Mitt Romney’s tax rate any less obscene.

[John_Mace]

One easy way to fix that is to not exempt dividend income from the AMT. By easy, I mean arithmetically easy. Might not be politically easy. But it should be. That’s what the AMT is for, afterall.

[Damuri_Ajashi]

@John_Mace

One easy way to fix that is to not exempt dividend income from the AMT. By easy, I mean arithmetically easy. Might not be politically easy. But it should be. That’s what the AMT is for, afterall.

AMT is still only 28% We also shouldn’t exempt capital gains from AMT by that reckoning (I am going to guess Mitt gets more capital gains than dividend income).

[John_Mace]

@Damuri_Ajashi

AMT is still only 28%

It doubles what Romney would have paid in one fell swoop without changing how regular folk get taxed on dividends. I’m comfortable with that fix.

[Damuri_Ajashi]

@John_Mace

It doubles what Romney would have paid in one fell swoop without changing how regular folk get taxed on dividends. I’m comfortable with that fix.

Not if you don’t subject capital gains to the AMT.

[tim-n-va]

Part of the problem is that high income people and businesses have ways to shift their tax burden.

Rich/poor are not factors of income from my perspective. Wealth is what matters. If I have enough assets to live my desired lifestyle without working I’m rich. If I have to worry about paying for necessities, I’m poor. Everything else is “normal”.

[DMark]

There is certainly currently nothing illegal about it, but when people like Romney admit to paying only about 13% in taxes, and you are paying far more, it does make you wonder how fair this is.

Even if I were to win lottery tomorrow, most estimates are that I would probably see about 30-35% of that go directly for taxes before I got a penny of it. Granted, I could then get some good lawyers/accountants to make sure this doesn’t happen in the future, but that first hit would be hefty.

And let’s be honest - if you earn $100 million a year, is it going to kill you to pay at least 25-30% in taxes? Will this force you to cut back on your grocery bill or worry about filling up your tank to drive to the Hamptons this weekend?

I don’t believe in screwing the rich, but at the same time, they shouldn’t gloat about paying a pittance due to the current, fully legal, loopholes they have available that the average schmuck doesn’t qualify for at lower incomes (and sources of that income).

[That_Don_Guy]

What I want to know is, what fraction of the people who think that the rich “don’t pay enough in taxes” think “enough” is, “I shouldn’t have to pay any taxes until everybody who makes more than I do pays enough so our post-tax incomes are the same”?

[BrainGlutton]

@That_Don_Guy

What I want to know is, what fraction of the people who think that the rich “don’t pay enough in taxes” think “enough” is, “I shouldn’t have to pay any taxes until everybody who makes more than I do pays enough so our post-tax incomes are the same”?

No, you don’t.

[iamthewalrus_3]

@John_Mace

A better type of poll would be one that asked:

What percent of income taxes do you think the top 20% of earners should pay:

20%
40%
60%
80%
100%?

You’d get a lot of answers in the 20% and 40% category, a few in the 60% category, but very few in the 80% or 100% category.

But the top 20% pays something like 80% of federal income taxes.

I don’t think that makes it a better poll. The fact that you get answers far lower than the actual percentage we have right now doesn’t mean that people think the wealthy should be taxed less; it means that most people are innumerate.

Anyone who answers 20% or 40% to that question doesn’t understand how math works. There’s simply no way to have the top 20% of earners pay 20-40% of taxes without an absurdly regressive tax structure or a much flatter income distribution than exists in reality. I’m not convinced that asking people a math question they demonstrably don’t understand tells us much about what tax policy should be.

I agree that the poll mentioned in the OP isn’t very useful either. I just don’t think your proposed one is any better.

[Crafter_Man]

For me, a more interesting question would be this: “Why do you want taxes to be raised on the rich?”

Some people will mumble something along the lines of, “To more quickly pay down our national debt” or “to decrease our deficit.” The problem with this is twofold:

1. It assumes more revenue to the government = lower yearly deficit. History would suggest this is false. When the government receives more revenue, it is spent.

2. It ignores the negative impact to the economy. A higher tax rate can actually decrease revenue to the government.

But I don’t even think most people think it through to that point. They just want taxes raised on the rich out of envy. “Stick it to the man” and all that stuff.

[Fear_Itself]

@Little_Nemo

My suggestion? Tax all capital gains and dividends as ordinary income. Then everyone is playing on the same field.

This.

It is not the function of government to incentivize investment. The invisible hand of the market is perfectly capable of rewarding investment; it is called profit, which prudent companies share with their stockholders through dividends. Those who think government needs to motivate investors just lack faith in free markets.

[Mosier]

@John_Mace

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 is, of course, because people underestimate what portion of the the economy “the rich” actually own.