Comments on: Why Doesn’t Anyone Feel Remorse When it Comes to High Earners and Income Taxes?

By: Yakezie Member Post – My Journey to Millions | Yakezie.com

Yakezie Member Post – My Journey to Millions | Yakezie.com — Wed, 01 Sep 2010 08:02:07 +0000

[...] estate issues.I don’t think I write about any one thing too much.Â I try to juggle between tax posts, insurance planning posts, my personal situation and very often some random rants and political [...]

By: The Yakezie Challenge Carnival #8 – Tax Day Edition! | MyMoneyMinute.com

Mon, 19 Apr 2010 08:52:28 +0000

[...] My Journey To Millions — Why Doesn’t Anyone Feel Remorse When It Comes To High Earners And Income Taxes? [...]

By: The Amateur Financier

The Amateur Financier — Thu, 11 Feb 2010 15:13:18 +0000

I think that you’ve making a common mistake, assuming that because high income earners pay a larger portion of the total tax bill, they are being taxed at higher rates than those with moderate income. There’s been research to indicate that, to the contrary, the tax burden on those who aren’t in the lowest income quintiles is effectively flat: http://www.ctj.org/pdf/taxday2009.pdf (Check out the first table, about one screen down; it shows the average income, average taxes, and the percentages of each total that are allocated to each quintile. The average total tax rate hovers around 27-33% for everyone above the bottom two quintiles.)

Why, then, does the highest 1% of earners pay more of the overall taxes in this country than the lowest 95% of earners? Simply because they earn (much, much) more. Even with a flat tax system, the rich are still going to paying far more into the system than the less well off, simply because they have more.

On the table, you can the see the median income for the top one percentage is ten times that of the ‘Next 5%’ (the ninety-first through ninety-fifth tax brackets; the top earners of the ‘other 95%’ referenced in your graph). Even if they pay identical rates, say ten percent, the top one percent is going to pay more, simply because $144,500 times one percent of the population is more than $14,400
times five percent of the population.

All of which is to say, no, I don’t really feel remorse for the tax burden faced by the rich, mainly because it’s about the same as mine, when calculated as a percentage of their income.

As for the percentage of people who pay no taxes, that does frustrate me a bit. Of course, I’d guess that many, if not most of those people fall beneath the federal poverty line, and thus, by almost any standards, shouldn’t have to pay taxes, anyway. (Going back to the linked table, the median income of the bottom quintile is just about the poverty line for a single person ($10,830) and the median income in the second lowest quintile is below the poverty line for a family of five ($25,790). Given these facts, I’d say there’s probably a good chance that many of the tax payers are literally too poor to be taxed.)

By: Weekend reading: Interest is interesting

Weekend reading: Interest is interesting — Sat, 30 Jan 2010 11:55:37 +0000

[...] High earners and high income taxes – My Journey to Millions [...]

By: Monevator

Monevator — Sat, 30 Jan 2010 10:42:58 +0000

The benefits of a flat tax are it’s efficient and transparent. The reason you rarely see it is politicians like to tweak with the system to make various parts of the electorate feel they’re doing them a big favour. You can’t do that with a flat tax!

I don’t like to see 33% of people not paying taxes. There’s an argument that everyone should pay *something* in tax, so they feel like part of the system, not a passive recipient.

By: Advertising for A Cause on Financial Samurai | Financial Samurai

Advertising for A Cause on Financial Samurai | Financial Samurai — Mon, 25 Jan 2010 09:02:19 +0000

[...] “Why Doesn’t Anyone Feel Remorse When It Comes To High Income Earners And Taxes?” by E-dog tries to garner sympathy for those in the highest tax brackets.Â Can you imagine paying [...]

By: Investor Junkie

Investor Junkie — Mon, 25 Jan 2010 00:15:01 +0000

Hi Kevin,

Hmm I never said a flat tax isn’t an income tax. I said they (CPAs) wouldn’t have much work to do with a flat tax. Meaning it’s just 15% off your income and your a done.

As far as idea of wanting a flat tax, you’ll have to as Financial Samurai as it wasn’t my idea. I’m just saying I think I’m beginning to agree with that statement.

By: Kevin M

Kevin M — Mon, 25 Jan 2010 00:09:35 +0000

Tell me again how a “flat tax” is not an “income tax”. (Full disclosure, I’m a CPA.)

Say we do have a flat tax, starting 1/1/2011. What the tax base (i.e. taxable income you multiply your flat tax rate with to come up with your tax?)

By: Evan

Evan — Sun, 24 Jan 2010 19:08:49 +0000

I have one buddy that calls me E-Wiggidy but that came after a long night of drinking. When I was much younger (wrestling high school days) I was called goat, but I think that had more to do with me being Greek and all lol.

In th ened its either Evan or Ev…no real nick name my name is too short

By: Financial Samurai

Financial Samurai — Sun, 24 Jan 2010 04:16:47 +0000

That is pretty hilarious about calling you by the one name you’ve always been dreamed of calling btw! How did I know? I donno. What other names did they end up calling you??