I know it said they pay a lower percentage..and I see where if their income came only from investments that their percentage would be lower.
(1) I just find it hard to believe in all cases. That requires that those taxpayers own nothing (no companies)......and have "only investments with no ownership". Does that really sound reasonable for the top 1%? (2) What they do own is being moved over seas (if it is not there already)...specifically due to tax rates.
(3) If they own C corporations and receive bonuses which are technically "dividends", that money is supposed to be taxed twice....at 35% inside the corporation and at 15% if distributed to the owner for a total tax of 50% on that money (unless there is some way around that ...that I am not aware of ...other than stock options). If it is an S corp, the money is taxed as ordinary income rates. If tax rates go up ....to ordinary income rates on all income regardless of source....(4)in some cases that money will be taxed at 70%.
(5) Does anyone see....where the current percentages for cap gains and dividends are an incentive "to invest"... (6) and in some ways is very similar to what should be done for the corporate tax rate to bring our companies and jobs back?? It keeps the investment income in the U.S. (maybe for the most part). That investment income fuels...so many other things.
I suppose what I am saying...is taking the statement of the "top 1% paying only 17%"....doesn't tell the whole story. Maybe they should track the taxes....paid...on that money ..from start to finish and as it flows thru....rather than what happens to the tax when it ends up the taxpayers hands....only to be taxed again.
So many things here. I'll try.
1) It's not true in "all cases", just the overwhelming majority of the very richest (the top 400). So much that when the IRS compared FIT paid to
reported income they got 17%.
2) The IRS numbers include only income reported to the US tax people. If they have more unreported income, it's being taxed at 0%.
3) "Supposed" is an interesting word. Have you seen the news stories about GE?
More important, the effective incidence of a tax is not the same as the legal incidence (refiners write the checks for gasoline taxes, but you don't believe that tax reduces their earnings, do you?).
Like Hamlet, I'd be glad to give US corps a tax deduction for dividends paid to US taxpayers
if those taxpayers paid the normal schedule of tax rates.
4) The 70% requires an explanation. Maybe you're counting all taxes for the rich, but assuming the rest us don't pay any taxes except FIT?
5) I've seen that they've been sold to the public as an incentive, but I don't see any evidence that they really add to the amount of
US investments. Or that those investments actually help anyone except the investors.
6) See 3) above. Yes, if we tax corporate income, that makes it more likely that investors will invest overseas. The result of this is that American workers are already paying much of the corporate income tax, the shareholders are not paying the tax today.
7) Sure, we can track all the taxes, but we should track all the taxes for everybody. I've never seen any evidence that the very wealthy pay a higher percent of their incomes in other taxes than other people, so I think it's reasonable to expect them to pay at least the same FIT rates as high income working people.
[Just as an aside, note that hedge fund managers classify their bonuses as "capital gains". This is the type of abuse that occurs when we have different rates for cap gains and ordinary income.]
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