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TAXES: Wealthy pay more than their fair share

Letter by Bruce A. Meyer, Gig Harbor on July 29, 2011 at 11:55 am with 29 Comments »
July 29, 2011 2:07 pm

In recent days, The News Tribune has published several letters advocating raising taxes on upper-income earners. They all contain the demand that the top income earners need to pay their “fair share” or pay taxes “commensurate with the rest of us.”

According to the Congressional Budget Office, the top 20 percent make 59.1 percent of total income and pay almost 70 percent of all federal taxes. This share is 4 percent higher than in 2000.

When only looking at income taxes, the share of the top 20 percent increases even further. The top 20 percent paid 86.3 percent of all income taxes. This was an increase of 6 percent from 2000.

So I’m confused. Arguing for fair and commensurate would be an argument for lowering the rates on top earners.

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  1. LarryFine says:

    “Arguing for fair and commensurate would be an argument for lowering the rates on top earners.”

    Makes perfect sense.

  2. vickistired says:

    When I speak of top earners – it’s not the individuals that are the problem (although if you break it down further – top 20 versus top 5 and 1% you’ll start to see more issues) but the corporations. The “official” tax rate for corporations is supposed to be something like 35%. Yet most of the larger corporations don’t pay anywhere near that. Boeing typically pays something like 4.5% with all the loopholes; 39 of the largest companies in the U.S. paid less than 10%. More than 100 paid less than 20%. GE, Boeing, Pfizer, Morgan Stanley, Time Warner, IBM, Phillip Morris, Microsoft, Hewlitt Packard….all companies that use the tax loopholes to evade paying taxes. When you look at the kind of revenue that the federal corporate tax used to raise – and then look at what it raises now with the loopholes we’ve given to the very giants, in many cases, who scre***d us, that’s what raises our ire. These are the wealthy giants that are not paying their fair share.

  3. LarryFine says:

    Throw us a bone and give us something to look at vick…

  4. Lowering rates on top earner, really. I guess you missed it when Warren Buffet, the sceond richest man in the nation, said he pays a smaller percentage of income than his secretary. How is this right.

  5. aislander says:

    afret: Income taxes don’t really affect the already-rich (such as Buffet and Gates),but those of us who should like to BECOME rich. The current tax system (and, to a greater degree, lefty tax proposals) make it extremely difficult to accumulate wealth. You DO want people to be able to become rich, don’t you afret, xring, tuddo, polago (where IS polago?), et al?

  6. theglovesRoff says:

    XTP is missing as well.

  7. aislander says:

    Missing, but not missed…

  8. ItalianSpring says:

    Bruce- no liberal will understand your empirical logic. What you’ve stated here makes perfect sense.

  9. LarryFine says:

    … probably got tired of logging of and on again so frequently. ;)

  10. So Vicki we should tax these corporations (like Boeing) more. Aren’t they the ones that create jobs? OK lets get rid of their evil tax loopholes. They will just have to lay off your uncle Bob and brother Bill to pay for these higher taxes. Now all these new found taxes are going to pay for Bob and Bill’s unemployment, food stamps and other subsidies. Great idea.

  11. “LarryFine says:
    July 30, 2011 at 5:46 am
    … probably got tired of logging of and on again so frequently.”

    Sayeth the red handed one. I notice that Larry Phill has retired already. Probably that faux pax the other day, answering for LarryFine

  12. “Blazerd says:
    July 30, 2011 at 8:01 am
    So Vicki we should tax these corporations (like Boeing) more. Aren’t they the ones that create jobs? OK lets get rid of their evil tax loopholes.”

    cut the crap Boeing, nor any other large corporation creates a job because of a tax break. They create jobs because they need workforce to create profits. Not that there is anything wrong with profits, but please…quit lying to yourself.

  13. aislander says:

    So…KARD…do YOU want people to be able to become rich? I left you and beerBoy out of my list above. Hope you didn’t feel slighted…

  14. LarryFine says:

    LOL… I thought you were Larry P. Hill.

  15. vickistired says:

    @LarryFine – I don’t understand what you’re asking me? What is it you want to look at?

    @Blazerd – As far as I’m concerned – if you owe 35% percent and you do everything you can to evade the tax laws so that you only pay 4.5%; you’re not meeting your obligations. We’re not talking about increasing taxes, we’re talking about enforcement of the existing obligation. Right now we’re giving these folks a free ride and just pretending we don’t see what’s happening. It’s like deciding that even though marijuana is illegal, well, if you have only a small amount and all you’re doing is smoking it, we’re not going to arrest you because as a matter of policy (rather than law) we’ve deprioritized enforcement of this crime. Plain and simple, they owe what they owe – make them pay it.

    Besides, if you follow your argument to its illogical conclusion, we’d have even more jobs and a better economy if we simply didn’t tax corporations at all. Heck, why stop there – let’s just eliminate taxes completely. Then corporations will hire everyone, everyone will spend all that money that they would’ve used to pay taxes and the economy will be great. Sure, we won’t have any government services anymore, but who needs the FAA or FDA? For that matter, I’ll maintain my own roads and put out my own fires. You know, if we stopped enforcing laws altogether we could get rid of police service too, that’d save a bunch. Retirement? Seniors? Well, take your dollars you won’t be paying in taxes and provide your own darn social security. Hopefully there’s enough jobs to go around for all of our military brothers and sisters – we won’t be needing that service anymore. Yup, I think that’s just the ticket.

  16. LarryFine says:

    Do you have a link to support your July 29, 2011 at 4:30 pm post… or is it just something you feel ?

  17. LarryFine says:

    … and for your 5:01 pm post… hyperbole much ? Too many strawmen to even bother.

  18. vickistired says:

    As for links, take your pick.

    http://www.nytimes.com/2011/05/03/business/economy/03rates.html
    http://www.ritholtz.com/blog/2011/04/corporate-tax-rates-then-and-now/
    http://articles.moneycentral.msn.com/Investing/Extra/CompaniesWithTheFattestTaxBreaks.aspx
    http://www.thedailybeast.com/articles/2011/03/28/biggest-corporate-tax-cheats-from-general-electric-to-google-to-news-corp.html

    As for my hyperbole, sure. Absolutely. Although I think of it as sarcasm. Beneath my sarcasm remains my basic point – for services, you need tax revenue. Less tax revenue = less services. Even if it were true that reducing corporate obligations through tax loopholes creates jobs, we are still collecting less revenue than we ought to be. That has to balance somewhere. While of course in reality I doubt even a tea party right winger would suggest eliminating all taxes, where is the line? At a certain point people either have to come to accept that some pretty drastic reductions in services (that many don’t even think about on a daily basis) that government provides are going to be a result of this madness. That is not hyperbole.

    Are you ready to engage with actual meaningful thoughts now? Am I only the only one who needs evidence to “prove” my argument? Where’s your evidence that lowering the rate on top earners will not result in a reduction in services? Can I see some links, please?

  19. “empirical logic” – must be right-wing new speak for ‘some in the top one percent’ pay income tax at 15%. Just like people who make less than $35,000 per year.”

    IMO: you need to be a zombie to believe that one

  20. gowenray says:

    For pete’s sake, quit the sniping. The issue never was about “raising” the income tax level for the wealthy. It’s about removing some executive mandates that allow relief for higher incomes to reduce their tax bite. As if there aren’t enought accountants and lawyers out there already doing that.
    As for the argument that the less wealthy aren’t paying their fair share, consider this. The new trend for increasing government’s tax revenues via Value Added Taxes (VAT) in the form of sales tax, fuels tax, service fee increases, etc., is the silent equalizer. Let’s quit fighting among ourselves and demand our elected leaders be more accountable for frugal spending.

  21. As far as I’m concerned – if you owe 35% percent and you do everything you can to evade the tax laws so that you only pay 4.5%; you’re not meeting your obligations.

    One – you use the term “evade” evasion of taxes is illegal so therefore this corporations and individuals should be prosecuted.

    Two – you can avoid to the best of your ability (or TurboTax, accountatn, et al) paying anymore tax that you acutally owe. Their is nothing wrong with that. I do it and I dare say you do it too.

    you (individual, family, company, corporation) are obligated to pay what you actually owe after properly filling (to the best of your ability) the necessary forms… no more… no less. That is the system.

  22. LarryFine says:

    Tax “evaders” … kooky that you would choose the term…
    Sec. of the Treasury, Timothy Geithner, owed something like $42,000 in back taxes and penalties to the IRS.

    Oops… and he isn’t the only one O’Bama hoped to give a job in the whitehouse to.

  23. concernedtacoma7 says:

    Xx- thank you for pointing out these corporations are doing nothing illegal or unethical. Their obligation is to thier shareholders. They are not a charity. They exist to make a profit.

    Lefties- Yell about the tax code all day, with exemptions only an accountant can understand. Now, ask yourself who wrote those codes and why.

  24. Vicki says:
    “Besides, if you follow your argument to its illogical conclusion, we’d have even more jobs and a better economy if we simply didn’t tax corporations at all. Heck, why stop there – let’s just eliminate taxes completely. Then corporations will hire everyone, everyone will spend all that money that they would’ve used to pay taxes and the economy will be great. Sure, we won’t have any government services anymore, but who needs the FAA or FDA? For that matter, I’ll maintain my own roads and put out my own fires. You know, if we stopped enforcing laws altogether we could get rid of police service too, that’d save a bunch. Retirement? Seniors? Well, take your dollars you won’t be paying in taxes and provide your own darn social security. Hopefully there’s enough jobs to go around for all of our military brothers and sisters – we won’t be needing that service anymore. Yup, I think that’s just the ticket.”

    Well talk about throwing the baby out with the bath water. Nobody said anything about getting rid of ALL taxes but characterizing corporations as the bad guys is unbelievable. They take all the risk, create jobs and add to the economy but how dare they actually make a profit. There is SO much waste in spending in this government. It is a lot frustrating when I go to Winco for groceries and I see the food stamp shopper loading their groceries in the Lexus. Too many people working the system at our expense. Yes, I am bitter.

  25. bobcat1a says:

    Aislander, help me out on your logic. If the lower incomes are already being taxed at a HIGHER rate than the wealthy, how does raising taxes on the wealthy PREVENT someone who is not wealthy from BECOMING wealthy? I would think real logic would dictate lowering taxes on the bottom so they could become wealthy and raising them on the wealthy who already have tons of money that they aren’t spending. In a consumer driven economy it seems we need more CONSUMPTION, not more investment. When the lower income levels have more money to spend then entrepreneurs have a chance of creating jobs. I’m not sure how a millionaire buying a new chateau on the Riviera adds much to our economy.

  26. LarryFine says:

    Your post, bob, begins with a false premise , ends with a false premise, and the middle … false premise.

  27. Oh my goodness, Bobcat! Don’t even know what to say when liberals post things like your post about higher income tax earners paying less……They DON’T. They pay much higher tax rates. The issue is whether the top tax rate should remain at 35%, or go up to 39.5%.

    Low long term capital gains rate of 15%, with short term gains taxed at your normal tax rate(short term is any investment held less than 1 year) are the strawman that Buffet and others use to pretend that the wealthy/rich/high income earners don’t pay their “fair share”. Low long term capital gains rates encourage people to move in and out of long term investements, and actually creates tax revenue that would not exist as people are willing to sell one investment to move into another; or for cash to put their kids through college, or for cash to buy a big ticket item-which results in additional revenue and ,money injected into the economy.

  28. aislander says:

    bobcat1a: Nice assemblage of straw men. Part of the problem is that liberals define “rich” very differently from those of us in the real world. I have two definitions (which I have posted elsewhere). The first is to have accumulated enough capital so as to be able to live off the income from it. Middle-class people used to be able to accomplish this through thrift and wise investing. The second (and this takes far more wealth) is to have an inbuilt resistance to being pushed around by…er…schmucks–such as those in Washington, DC and Olympia. Liberals define rich as earning a salary of $200k or more. You can see those are very different things.

    Now, it ONCE was possible for someone earning $200k to be thrifty and invest wisely and accumulate that critical mass of capital, but now…not so much. And that’s because of an injurious tax system…

  29. The author refers to numbers garnered from the year 2000 compared to now and the percentage of tax increase from then to now as paid by the top 20%. An increase of 4 or 6 percent more now than then. Seeing as how their wealth has increased sgnificantly more than the 4 or 6% more in taxes paid, they (the super rich) are getting a bargain. Bottom line, for the super rich, taxes are not commensurate with their profits and net worth. Their taxes should be higher

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