What does it mean for the rich to pay their fair share of taxes? (details inside)?

1. How do you define someone as being rich?
2. How do you define fair share?
3. How much is their fair share?
4. Do they get more if they pay more taxes?


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Most Helpful Girl

  • Be realistic! If there is anyone who's income exceeds lets say $500,000 and up. Each increment of $500,000 the tax percentage increases by a marginal amount.
    Currently I believe $500,000 is at about 39% with an equal increment the percentage may be 3% to 5% more each! Try and imagine that after world war II the tax rate was between 70% to 90% and the economy, the infrastructure and jobs were grade A. Then there was a huge reduction in tax percentages for the rich in the early 80's. Combine that with the ability now to take your manufacturing to another nation and the rate of pay went from $18 an hour to $2 an hour (average) Figure the math! CEO's in the early 50's made 8% t0 15% more than the the highest paid non executive worker! It's over 200% now! The rich started taking more and more money and depositing it in overseas accounts to avoid taxation and their money accumulate exponentially by 2007. They controlled 96% of all usable income! After the Wall Street Big Banks disaster of 2008. They went up to 98%! Now. If you can imagine taking away say, 15% of the riches income and distributing to the economy. Wow More jobs and income! Better Roads and Bridges etc.

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    • 2mo

      "Currently I believe $500,000 is at about 39% with an equal increment the percentage may be 3% to 5% more each."

      The marginal rate is about 39% at that income, but only if you're a pro athlete, and it doesn't increase beyond that, not even if your income is $1 billion. "Normal" rich people pay 10-20% (on income from capital).

Most Helpful Guy

  • The whole thing is a red herring. While I believe they 'should pay' their fair share, unless you take a ridiculously wide view of what 'rich' means, most tax dollars must come from the middle class. Most spending is also on the middle class.

    That said, lets take a stab.

    How do I define someone as being rich? If when a given job ends, they take some time before considering a new job, and have no pressure in the medium term to find a job, they're probably rich.

    Fair share? At least equivalent to what they'd pay under a flat tax regime with very few deductions. I think we can say they're -not- paying their fair share if being rich means better access to tax sheltering and a -lower- tax rate. What about progressive taxation? I think you can justify it within reason. It would be easier to comment on specific cases then try to define.

    Do the get more if they pay more taxes? Well, in a sense, they typically do. They would not have the incomes they have without a functioning, law abiding society. So the platform that our net heritage of technology, our legal system, our national defense etc. provides is indeed benefitting them greatly. In many cases, they are also benefitting from their own talent and work. But that talent and work is amplified by societal structures.

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What Girls Said 2

  • What liberals mean is that the rich should be an UNfair share of taxes so they can support the leaches who are unable to work hard and do on their own.

    The rich paying a fair share means paying the same rate as everyone else. They'll still be contributing so much more because the same percentile is going to mean a lot more money when it's coming a multi billionaire vs a fast food employee.

    Let's not demotivate success in favor socialist practices.

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    • 2mo

      *pay, *it on their own, coming *from, favor *of

      My mind goes faster than my fingers lol

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    • 2mo

      @JohnDoe3000 I never said anything about any specific country, European or otherwise. I'm talking about a political philosophy and the idea of taking from the rich to give to the poor is socialist ideology.

    • 2mo

      It's more than just a loophole. It's deliberate policy to tax income from capital and labor at different rates, because of international competition. Taxing them at the same rates and not capping social security contributions would double the effective tax rate for the rich, I think most millenials would be satisfied with that that (it's something like half a trillion dollars that could be used to pay for stuff or to lower taxes for the middle class and the poor). But this can't happen until most of the world's major governments agree to raise their tax rates on income from capital simultaneously so the rich have nowhere to run.

  • they have had the beneifits of becoming wealthy in this countr. y they should pay a portion of that wealth to the gov't in the form of taxes. their share would be a percentage commensurate with the amount of wealth they've been able to accumulate. Your questions lead me to beliieve you dont understand taxation in general.

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    • 2mo

      No. My question is not about current tax laws. Its to understand how each person views what should be the tax law for the rich.

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    • 2mo

      @Djaaaaaay Let me be clear, the US gov't (IRS) does not have or impose a net worth tax. If you choose to erroniously call the tax you pay as a business owner such thats your prerogative.

    • 2mo

      What... ?

What Guys Said 22

  • Good question. So many possible answers.

    To me, the rich paying their fair share means they pay the same tax rate as everyone else for income earned. Of course, the more you earn, the more total taxes you pay, and the higher income tax bracket you fall in. There should be a cap on the income tax bracket (like 33.3%), but I don't think there should be a cap on the total amount of taxes paid.

    For example, if a person is exempt from taxes after $1 million in income tax has been paid (meaning they earned $3 million), anyone above this income level would suddenly find himself becoming exceedingly rich, very fast. That's when the gap between rich and poor get wider.

    However, if the rich pay a maximum of 33.3% on all of their income, and they are still rich, then thats great. I would applaud them for working so hard on their business that they can grow it and achieve such value from it.

    When people like Trump pay 0% tax, justifying it with "I created a lot of jobs" isn't actual justification. One could argue that all businesses create jobs - hence all businesses should be exempt from taxes. Paying taxes and creating jobs also isn't using the same measuring stick. It's like saying "I volunteered to community service, hence I should be exempt from income taxes".

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  • I will let "The Oracle of Omaha", Warren Buffett, answer your question about this issue in his own words from a New York Times op-ed piece that he wrote in 2011...

    www.nytimes.com/.../...oddling-the-super-rich.html

    Stop Coddling the Super-Rich

    for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

    These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

    Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

    If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.

    To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.

    Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

    [Part 1. Part 2 below.]

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    • 2mo

      I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.

      Since 1992, the I. R. S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent.

      [Part 2. Part 3 below.]

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    • 2mo

      But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

      My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.
      _____________
      Warren E. Buffett is the chairman and chief executive of Berkshire Hathaway.

    • 2mo

      In Part 1, I accodentally did not copy the proper start of the piece...
      ________

      By WARREN E. BUFFETT
      August 14, 2011
      Omaha

      OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

      While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

  • 1. If you earn 1 million per year or more, you're rich.
    2. A fair share is the amount of money a rich person (or indeed ANY person) can give away without having to suffer from it to an extent that is not justifiable in a caring society. For example a person who earns 1 million per year can easily give away 50% of that because you can still live a very happy, splendid life with 500,000 USD per year (certainly in the US at least). However, taking away 990,000 USD would not be fair because you can't have a decent life with 10,000 dollars per year.
    3. In my opinion, anyone who makes 2 millions or more per year should give away 85% in taxes. I also support banning the right to inherit large amounts of money. Inheriting is a very uncapitalistic and unfair custom.
    4. No, everyone gets what he/she needs and deserves. If the US collected taxes like it did in the 1950s, it would have enough money to give top-notch public education and health care to everyone, rich, poor and in-between.

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    • 2mo

      So since they worked hard to make that much, they have to give it all away? 85%?

      Where is the equality for that person to get to keep what he worked for? Seems selfish for the people who make less to want this rich person to give away almost everything.

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    • 2mo

      rich is by LETTING other people work FOR THEM. Basically, it's the same thing as in the old times when slavery still existed. The more slaves you owned, the richer you became because they could work a lot for you. And the more money you made, the more slaves you were able to buy. These days, rich people have to pay their workers but the principle is still the same. If you look at very rich people, they either let other people do the heavy work for them or they "let money work", which is even crazier (they basically create money out of thin air). I don't believe these type of jobs should be rewarded with absurd amounts of money while other people who work just as hard, IF NOT HARDER, make a fraction of that.

      And finally, 15% of 2 millions is still 160,000. If you tell me you can't live a happy life with USD 160,000 per year, you've got some problems. This becomes even more true if you're yearly income is 20 or 50 millions.

    • 2mo

      But you're generalizing that every person who is making that much never put in any effort for it. Stock brokers, have to do a lot of research. They put in a lot of hours. Take large risks. Everything has its effort into. And other people could have simply worked 80 hour weeks for 40 years to build a company that can pay him 2million a year. So he should suffer on your plan?

  • 1. How do you define someone as being rich?
    -- it's based on their annual income or asset holdings

    2. How do you define fair share?
    3. How much is their fair share?
    -- i'd define it as how much does their tax rate burden their bottom

    4. Do they get more if they pay more taxes?
    -- get more what?

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    • 2mo

      Can you be more specific?

      Get more in return for paying more taxes.

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    • 2mo

      Your first post made it sound like they must pay more. i don't understand why you say they must and how much exactly is more?

    • 2mo

      you change the tax code. close loop holes that allow multi millionaires and billionaires not to pay federal taxes, increase the tax rate on the super wealthy. a 1% tax increase on the super rich would generate 10s of billions

  • To me a "fair share" means effective taxes as a percentage of income at the very least not decreasing with higher income. In most countries it does decrease because high incomes tend to be derived from capital, not labor, which is taxed significantly less, so even a flat tax would already be more "fair" than the current reality.

    I also think that it shouldn't be possible to just keep snowballing more income from capital, especially across generations, at a significantly higher rate than a person could ever get by actually working for a living. Doing something about that is less a matter of fairness (though it is in the case of inheritances because there's nothing fair about being born as a trust fund baby) but more of a practical thing to make sure income inequality doesn't get out of hand to the point where society would effectively be divided into an entrenched capital-owning aristocratic elite and the masses of serf-like employees (which is the way things were before 1900). Because not only would that suck ass for the masses, it would also stifle innovation, market competition (yes, you read that correctly: it would actually be bad for the free market) and democracy, plus it would make society dangerously unstable (more crime and riots/revolts).

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  • Well that's why we use percentages, if you go 5% then every one is paying the same, sure the rich pay more but they also are keeping and earning more, same goes for the poor they are all contributing what they can instead we have it where the richer you are the less you pay.

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  • Well, in terms of defining rich, there is no definition of wealthy, but there are brackets to show relative wealth. 31k-40k, 41k-50k, etc. you pay 7% for the 1st, 10% for the second, so on and so forth. The reason that higher income pay more is because wealth isn't congruent. So take a person who makes $5 vs $10. Food costs $1, gas costs $1, rent costs $1. The 1st dude can carry the cost, but left with $2. The 2nd is paying the same, but has $7 left. While they both paid the same, the 1st dude only has enough to last a bit for marginal things while the 2nd can still ball out. So it's not necessarily congruent. Very arbitrary and not very complex, but that's the idea. As the more wealth grows, the less congruent wealth becomes. I forget the term, but economies of scale keeps coming to my mind 😑

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  • I support a flat tax rate at the base level which was ironically an idea first proposed by the Democratic Party. I do not believe that it is fair to force the wealthy to pay higher taxes simply because they earn more. Doing so is a form of penalizing success. However, I also do not believe it is fair to force the poor and particularly the middle class whom no one talks about to pay a huge amount of taxes when they can barely keep gas in their cars. We should settle on a universal flat tax rate, maybe 10-15%, but it should also be very negotiable. For example, rich people who create American jobs and actually help the economy should pay less taxes, while those who harm the economy should pay more. Similarly poor people who cannot afford their taxes should not pay them, but should be expected to work, and those who do work should receive welfare as incentive to keep working, at least until they reach a more stable point in their life.

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    • 2mo

      A budget neutral flat tax (which would be in the 25-40% range, depending on how many deductions there are) would effectively raise taxes for the rich significantly because the rich currently only pay a maximum 20% federal tax in the US, that's the statutory dividend tax rate, and negligible social security contributions because those are capped. So there's nothing ironic about it having been supported by the democratic party, they didn't invent it though, the idea is ancient. It's the same in Europe and Canada.

  • The basis of this discussion is around a flat tax or a set percentage of income. such as 20% if everyone paid 20% of their income, that would be in most people eyes fair. But many truly wealthy people (People who live off of investment income rather then being employed) pay little or no taxes. They take advantage of corporate tax laws, and pay capital gains tax on money not spent.

    Think of it this way, if you make $100,00 and pay income tax for it you may pay up to $50,000 in taxes, on the other hand corporations pay taxes on the money that they don't spend so if a corporation makes $100,000 but spends all of the money their tax liability is $0.00

    As ther is nothing wrong legally in owning a corporation and using corporate property (house, car, etc) those in the know incorporate themselves.

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    • 2mo

      In a lot of countries, a company car is considered a taxable benefit, same thing with a house. Sure, people can try to manipulate the line, but there's no magic solution to that, other than having reasonable rules and trying to enforce them.

    • 2mo

      Agreed, I own a corporation for tax reasons. Haters will hate.

  • 1 - someone who make more than 10.000 a month is filthy rich
    2 - fair share is defined by the current country situation. The class that pays most taxes is the middle class, therefore with a comparison we should be able to see how much there is of a difference. The gap in between can be analyzed to find out their fair share
    3 - It does depends on the country situation - a rich person may be paying higher taxes but those money goes right into the system's machine : that means foster houses, parks, orphans etc. Social works that needs to be done
    4 - I think that if you do more than Others, you have to contribute a little more. Thats called being human

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    • 2mo

      I am trying to understand your answer.

      If i were to be making 120k a year. I therefore NEED to pay more because I am making more money? Why work hard to make more money if all that does is mean that I pay more to taxes and don't get a valid return for my hard work?

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    • 2mo

      so what would be the rate that middle class would pay?

    • 2mo

      I said 10-20% as a flat rate. Im not giving an exact number. Only a range for a flat rate

  • What does it mean?
    NOT paying a lower % than the middle class incomes as happens in many countries. If I were taxed at the same rate as Trump, I'd jump and shout with joy and glee!

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  • Yes you make more get taxed more if you make 1 million and end up with 500,000 cause they took 50% vs someone with only 15% tax that makes sense

    If you don't like it you dont have to pocket 500,000 go ahead get a minimum wage job and get taxed 15% but ull also end up with barely 20,000 over the year

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    • 2mo

      So its a punishment to make more money?

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    • 2mo

      Yes id be ok with it because if i was making less id getting taxed less

    • 2mo

      Wow. Thats shocking. You would be okay getting a 30,000 raise and doing the work to justify the raise to only get $10,0000 more.

  • 1. Rich is defined as someone who has more than $1m USD in assets not including their primary residence. Over $10m USD in assets is considered wealthy.
    2. Fair is the same percentage of their income that everyone else pays.
    3. Here in Australia, fair share of taxes for rich people is about 20% of what they are paying now.
    4. No.

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  • Look up history of the 1900s. The wealthy paid a shitload more in taxes earlier in that century. They should have ZERO influence over the government with lobbyists or private donations. The rich taxes have been reduced and oh gee there are A LOT of non-rich ass people in this country, 99% of us. The wealthy should be paying a shitload more taxes but unless we put a non-rich person in the whitehouse that won't happen. #GoGreen

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  • The trueth about the rich and paying thier fair share is this... why should they when our government and current tax laws have leagal loop holes that say they don't have to pay everything as they should. Even the middle class can educate themselfs and take advantage of it too. Sorry but can't ( google ) this on line. Doesn't work that way. What's really sad is... everyone can take advantage of some sort of tax relief if they were more educated about it.

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  • that term has been used by politicians for half a century going as far back as frsnklin roosevelt. what it means is that the people the top 1 percent the donald trump mike bloomberg. warren buffett. george soros. have their corporate taxes raised. rich is defind in washington as anyone who makes 1 million dollars a year. but now its gone as far down as 250 thousand a year.

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  • you know the more of someones capital you are going to take away because of taxes the less capital they will have to invest in the economy and to start businesses so the less jobs there are and etc, etc.

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    • 2mo

      Except that Reaganomics showed they after a certain point most don't invest in the economy and let it sit in a bank

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    • 2mo

      " for a mixed system a correct understanding of both capitalism and socialism is required."
      Thats the problem we have here,
      The politicians understand Capitalism just fine, but a lot of them see socialism as some all or nothing evil empire out of cold war propoganda,
      They don't realize that in this situation, you can have both

    • 2mo

      @Waffles731 yes, an advanced society can have both capitalism and socialism.

  • The "rich" (let's say the "1%") pay more in dollars, but less in percentage. That's fine with me. If their effective 20% rate is still $160,000... I'll pay my $30,000.

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  • Everyone should pay a flat tax rate.

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  • richer people should pay more, but then not excessive. difference between an ability to pay and envy.

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  • exact same persentages as middle class

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  • the rich pay less on a percentage basis. warren buffet has admitted to this and trump boasted of paying no federal taxes for some years (maybe all years).

    Are you one of those lemmings who've been suckered into feeling sympathy for the rich who obviously need money more than you? and that somehow their wealth will trickle down to you?

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