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  •  The investor class pay 5% -- not 50% (1+ / 0-)
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    Mark Sumner

    Everyone, please understand, and correct the clueless.  The wealthy, if their income comes primarily from investments, pay closer to 5% than 50%.  That's because most of the earnings for the wealthy don't get taxed at all.  Here are some things that are not taxed:

    - Income and capital gains in retirement accounts
    - Income from municipal bonds
    - Income from master limited partnerships (90% deferred).
    - Income from real estate, offset by expenses

    The wealthy typically make most of their wealth from capital gains, which are taxed at 15%.  But that tax only occurs when a stock is sold.

    Now consider that the wealthy shelter many of their investments inside retirement accounts where they pay no taxes.  And since the bottom 50% in this country own only 2% of the wealth, this perk is primarily for the wealthy.  For example, the Romneys have a retirement account worth about $100 million.

    I sometimes hear people talk about how unfair it is that Romney pays 14% while middle class workers pay a higher rate.  Please understand that Romney doesn't pay close to 14%.  When you add back in all the income that isn't actually considered income, and then the Cayman Islands tax shelters, I can just about guarantee you that he pays closer to 5%.

    And I'm sure O'Reilly also has lots of investments and has stuffed lots of money in his retirement account.  My guess is his actual tax rate is close to 5% as well.  But remember, he's not a moocher -- he's a job creator.

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