Well, then we’re good. Because I never said “always”.
Yes, there are salesmen in the world. Some of them are scumbags, whether they’re selling used cars, life insurance, aluminum siding, or mortgages. What a revelation! We should treat the ones selling the mortgages the same we we treat the other that have no scruples and are overly aggressive. If you can find mortgage brokers who did anything illegal, lock them up for 30 years and make an example of them.
What else do you suggest?
Meanwhile, in the real world:
The top three quintiles paid 103.9% of Federal income taxes in 2005. The top two paid 99.5%.
The top quintile in 2005:
(individual)
Made 55.1% of the pretax income.
51.6% of after tax income.
Paid 68.8% of all Federal taxes.
86.4% of income tax.
43.7% of social insurance taxes.
The top 1%:
Made 18% of the pretax income.
15.7% of after tax income.
Paid 27.6% of all Federal taxes.
38.9% of income tax.
4.1% of social insurance taxes.
http://www.cbo.gov/ftpdocs/98xx/doc9884/12-23-EffectiveTaxRates_Letter.pdf
Who ACTUALLY has a 30% effective income tax rate:
Married filing separately (no deductions/dependents): gross salary of $269,920 or more
Single (standard deduction / no dependents): $512,575 or more
…
Married (standard deduction / two dependents): $775,840 or more
As for the original question, I think it’s fair that the bottom half don’t pay income taxes.
On the other hand, I think “[The people who pay all the income taxes] don’t pay their fair share!” is ignorant twaddle.
I prefer to think of myself as Capraesque.
You sure those are real world figures?
First, give me one example of a low income applicant forcing a mortgage company to give him a mortgage. We know of plenty of cases where the opposite happened.
[Here is an old article about Countrywide (or rather BofA) settling a gigantic suit against them. Now why would they do that if all their bad loans were forced on them? Countrywide was not exactly a small operation - I think it might have been the largest there was. This was for deceptive mortgage practices.
Angelo Mozilo, their former CEO, settled with the SEC for $67.5M to avoid civil fraud charges. Link.
They are not bothering with the little fish, which is fine. Mozilo should go to the slammer. If you are criticizing the Fed for not arresting this putz, then I’m with you.
Otherwise, I hope the rock you are hiding under is comfortable.
I’m not even mentioning how the mortgage companies cut corners when selling mortgages back and forth, and hired companies which clearly couldn’t process all the foreclosures in the time given, and used robo-signers. That is just another level of illegality.
You can generate screwy numbers like this by counting the Earned Income Tax Credit as having a negative income tax liability (rather than a 0% liability, and then a separate entitlement). Thus, the lowest quintile winds up paying “negative” tax, and the higher quintiles have to pay more than 100% to make the whole pie come out to 100%.
But once you eliminate 100% as a baseline, you’ve pretty much opened the door to anything.
Let’s use this line as an example: “The top three quintiles paid 103.9% of Federal income taxes in 2005.” How do we know that the lower two quintiles didn’t pay the other 119.5% of Federal income taxes in 2005? Nonsensical perhaps but if you can have a total of 103.9%, you can have a total of 223.4% just as easily.
I’m not claiming this is the case. But any statistic that includes a figure of 103.9% of a total is sending up a big red flag that the numbers are being manipulated in some way beyond the ordinary. If nothing else, it’s an indication that you can’t accept the conclusions at face value without digging very deep into what data was used and how it was used.
Absolutely.
The bottom two quintiles were paid 3.9% of the income taxes.
You don’t have to dig, at all. You just have to look.
2005 Share of Individual Income Tax Liabilities
Lowest Quintile: -2.9%
Second Quintile: -0.9%
Middle Quintile: 4.4%
Fourth Quintile: 13.1%
Percentiles 81-90: 13.6%
Percentiles 91-95: 12.0%
Percentiles 96-99: 21.9%
Percentiles 99.0 - 99.5: 7.4%
Percentiles 99.5 - 99.9: 12.9%
Percentiles 99.9 - 99.99: 10.6%
Top 0.01 Percentile: 8.0%
Total: 100%
Since the election of Ronald Reagan in 1980 real after tax income in the United States for the richest one percent of the country has grown dramatically, while for eighty percent of the population it has declined. That is what I think is unfair.
http://investorvillage.com/smbd.asp?mb=971&mn=389436&pt=msg&mid=10153698
No, the total equals 100%. There is no manipulation. If you get a “re-fund” of greater than what you paid in during the course of the year, how can it be considered anything but a negative net payment of taxes?
This was not in question, because it wasn’t even mentioned. If you report 103% of something, you should explain why you could ever have over 100% in the first place. Had that been done in the first place, this digression would have been avoided.
This is the point I keep trying to make.
Its not the 1% of income earners fleecing the 99%. The bottom rung of the top 1% are professionals who work for a living. Top 1% income is about $400K/year. A lot of money to be sure but not so much that you can say that the money isn’t earned or that the earner is automatically wealthy.
The top 1% of the population by wealth has about $10 million. A lot of THIS money was not earned by the folks who enjoy it today. And it is this group that has been disproportionately favored by the Republican party.
At a reasonably high savings rate of 50% and a reasonable long term rate of return of 5% it would take someone earning 400K (taxed at an effective rate of 40%), it would take 35 years to get $10 million (and that assumes that I don’t pay any taxes on the growth in my investments). In fact it is difficult to save 10K/month when earning 400K/year (yeah, I know, cue the world’s smallest violin).
Over the last 40 years we have certainly seen a growing disparity in the income earned by the top 1% of income earners and the rest of us but the structural changes that we have seen to the tax code and the system generally have benefitted the top 1% of wealth owners much more than any changes in the playing field taht have advantaged the high income earner.
I gave the link for a reason. It’s not my fault that you assume that there can never be more than 100% of something.
I ignored it for a reason.
Your willful ignorance is not my problem, either.
You live a very untroubled existence. Would that we all could.
Well, it is fair to question whether it makes sense to claim that there is more than 100% of federal income taxes paid. Clearly there is only 100% of actual government revenue.
It seems to me that it’s more honest to categorize the EITC (and other refundable credits) as government spending that happens to be spent through the IRS. Otherwise you could total up what the total revenue would be without, say, the mortgage interest deduction and then count the amount deducted as a decrease only on the people who actually get that deduction.
Or you could lump SS benefits in with FICA and claim that old people pay negative SS taxes while us working folk pay 200% (or whatever).
Either way, I’m always loathe to put too much weight on the quintile numbers based on income that don’t also at least make some passing reference to wealth. Because while the top 1% may earn 18% of the income (although that bounced back up to almost 20% in 2010) they have something like 40% of the wealth.