I always hear people say that the rich pay 95% taxes or whatever

[Broletariat]

I remember reading once that they have a way around paying those 95% taxes or whatever the number is, but I can't recall it. Anyone refresh my memory?

[ContrarianLemming]

95% is almost certainly not true.

[Broletariat]

95% is almost certainly not true.
Ehh the way I worded the OP and topic title was weird, I meant to say 95% of their income is taxed or something like that.

[Bright Banana Beard]

They can get away by giving away some of their money to charity, that why you see them everywhere.

[Crusade]

Ehh the way I worded the OP and topic title was weird, I meant to say 95% of their income is taxed or something like that.

Nah, what they mean is 95% of tax dollars come from the rich. At least they're SUPPOSED to, the problem is most of them find ways to not pay all of their taxes, or just not pay them at all.

[Q]

This differs from tax system to tax system. My advise is to delve yourself a bit in how the tax system works in your country and calculate some examples.

[ed miliband]

Some British banks have a system whereby their employees are paid around 30k a year that they declare and are then given a tremendous amount of money in other forms which can be paid into businesses or whatever. That way they'll pay tax on the 30k, but not on anything else that they get.

Well, I explained that awfully, but I presume companies all over the world have a similar system for their wealthy staff.

[Luisrah]

Some British banks have a system whereby their employees are paid around 30k a year that they declare and are then given a tremendous amount of money in other forms which can be paid into businesses or whatever. That way they'll pay tax on the 30k, but not on anything else that they get.

Well, I explained that awfully, but I presume companies all over the world have a similar system for their wealthy staff.

I get what you're saying. Their official salary is 30k, but his unofficial salary is much higher, and he gets it through others ways that are not taxed.

[Sperm-Doll Setsuna]

There was actually a time in the past where the Social democrats in Sweden did enforce a de-facto taxing in excess of 100-110% for the highest income earners (because it also taxed wealth they had saved).

[Catillina]

Well, if 95% of the income of the state comes from the rich, what does it tell us? That they are so fucking rich that a small % of their income is enough to cover 95% of the state's income!

[durhamleft]

I know my father saves large amounts of money on tax by paying family members as secretaries, spending a lot of his profit on capital as in the UK CGT is less than income tax, and other evasion techniques that his accountant works out.

The whole tax system is an absolute con and we have situations where the rich who can afford accountants can save large amounts of money but the poor can't- and the worst part is it's bloody legal over here.

[eyedrop]

Generally the wealthy pay a smaller percentage of their various earnings than the regular folks, so if they pay 95% of all taxes that just says something of how incredible much wealth there is to be equalised.
There was actually a time in the past where the Social democrats in Sweden did enforce a de-facto taxing in excess of 100-110% for the highest income earners (because it also taxed wealth they had saved).
This sounds like right-wing propaganda, I'm pretty sure Sweden has always treated its capitalists just fine. Any source?

[bawbag]

I know in Britain there are people known as "super rich" who don't pay taxes at all, maybe because the government thinks they will leave and go to Switzerland.

why don't we tax them and get that money off of them?

Surely that would help David Cameron's plan to reduce the massive deficit he faces, no?




Oh wait, I just realised what I said, how silly of me, :rolleyes: I forgot it is only us poor folks he wants to rob. Oops. :lol:

[gotyourpants]

I created an account just so I could post in this thread. I can't speak for other economic systems, but I can share a firsthand account of the American one. All the numbers I'm using currently are approximates, because I'm citing from memory, but the actual statistics should be easy enough to find. I believe it was FDR that instituted the progressive tax system in America. This meant that people who had no money payed a very small percentage of their income as taxes, whereas the the richest one percent of Americans supposedly payed 90% or so of their income. What people seem to forget are the tax breaks. I've been around financial planners for years, and my own father used to be one. People may be in a 90% tax bracket but that doesn't mean they actually pay 90% of their income. There are countless deductions to take advantage of, so they functionally pay less than 1% of their incomes. I wouldn't think this was possible if my own father wasn't the one helping people do it. What we need is a flat, 10% income tax on every American, with no deductions. It'd fix the national debt in a ridiculously short amount of time. I haven't had the time to calculate the precise times yet, because the debt increases so rapidly, so if anyone would like to help me with the math and the research, it'd be greatly appreciated :D

[Catillina]

Overall I realy appreciate your Post, and welcome to the forum :)

BUt something bugs me

What we need is a flat, 10% income tax on every American, with no deductions. It'd fix the national debt in a ridiculously short amount of time.

Do you mean that everyone should pay 10%??? The poor, as well as the rich?
I rather think, that the taxes should augment, depending on the income( exemple germany: poor guys, who only own the minimum alloed by law pay nothing, >250.000€ pay 45%, of course my jump is big, there are plenty of other tax classes between, but I dont know them)

[durhamleft]

I know in Britain there are people known as "super rich" who don't pay taxes at all, maybe because the government thinks they will leave and go to Switzerland.

why don't we tax them and get that money off of them?

Surely that would help David Cameron's plan to reduce the massive deficit he faces, no?




Oh wait, I just realised what I said, how silly of me, :rolleyes: I forgot it is only us poor folks he wants to rob. Oops. :lol:

That isn't entirely true, they just get tax breaks on certain investments and what not (don't get me wrong, its still a bloody outrage).

[eyedrop]

To gotyourpants:

There is also the possibility of having an progressive tax that actually works. I bet there is a reason why politicians aren't able to push trough measures forcing the wealthy to pay their shares of tax.

[Invincible Summer]

[Warning this is being written by someone who has no idea how economics/taxes etc work - it is all "by feel" ]

Lots of people hail Steve Jobs as some sort of "humble CEO" or something, just because he supposedly gives himself a $1 annual salary.

I assume then he doesn't get taxed on his income.

However, with his amount of stock ownership and investment and whatnot, he earns millions through capital gains (I think that's what it's called), which is (to my understanding) taxed much less than actual salary/wage income.

I'm sure this is the case with many other rich people. They try to seem humble and down to earth, but they're just making their money in some other devious way.

[farleft]

What is defined as rich?

In the UK the tax rate for those earning over £150,000 a year is 50%.

[Sperm-Doll Setsuna]

What we need is a flat, 10% income tax on every American, with no deductions. It'd fix the national debt in a ridiculously short amount of time.

wait, someone wants a capitalist country with a ridiculously low flat-rate (regressive) income tax? What is this liberalism? (Even neo-liberal slave states like Romania has a flat-rate of 16%).

I certainly think it is bad that funding for everything is based on the willingness of capital to share via taxes (it also creates a co-dependency between government and business, a common profit-motive) and think taxes should be abolished as soon as possible during the transition; but this idea of flat tax in a capitalist society is revolting. If anything, abolish the tax breaks and exemptions (highest bracket in the U.S. today is not 94% as it was early during the 20th century, it's something like 30-35%) and let them pay what they are to.

Next we'll have "leftists" saying that the Fair Tax is the solution to all social problems in the U.S...

[chegitz guevara]

The figure of 95% of all taxes in America are paid by the rich is misleading. The actual metric is, 95% of all income taxes are paid by the upper 50% of the population. This should not be surprising, as more than one third of the population makes less than $25K a year and more than 70% (slightly over 50% of households) make less than $50K. Under this amount, the amount of income taxes you're paying is rather negligible, especially on a household bases. Once you take out for deductions, allowances, and earned income credits, and you're talking a very small amount of money. I think the year (2000) I made $46K, I paid 8% in income taxes.

What needs to be kept in mind is that this figure doesn't take into account sales tax, gas tax, soda tax, medicare, social security, capital gains, corporate taxes, royalties, excise fees, duties, etc.

Something else to keep in mind that progressive taxation isn't one simple number. While I'm in the second from the top top tax bracket, which I think is 33%, I don't pay that amount on all my income, but only on my income over a certain level. I pay (following numbers made up for illustration and because I'm too lazy to look up the real numbers) 15% on the first $20K or so, 24% on the next $15K, and 33% on the rest. Once you take all that into consideration, you can understand why folks on the bottom end of the pyramid pay such a small proportion of the national income taxes.

You can see the breakdown of incomes here:
http://en.wikipedia.org/wiki/Household_income_in_the_United_States
http://en.wikipedia.org/wiki/Personal_income_in_the_United_States

and tax breakdowns:
http://en.wikipedia.org/wiki/Taxation_in_the_United_States