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400 Richest Americans Pay Only 18% Tax Rate
by Mark Berman, -- Jul 26, 2011

If politicians really want to dig their way out of this debt ceiling mess, they should look to the ridiculously low tax rate paid by the 400 richest Americans. On average their tax rate is 18%, Wall Street financier Steve Rattner said on MSNBC on Monday.

Forbes reports that the reason is because of the Bush tax cuts, which reduced the tax rate on capital gains and dividends to 15%.

Another expert said if those tax breaks and other loopholes were closed, the country would be fine. "If there is political will, the political parties can very easily find a Trillion dollars just in the tax code," said Ron Weiner, resident of RDM Financial Group.

Easy Money!   Millions in fortunes -- Taxed at only 15%  ...

larger {snicker, as if}

How large is your Effective Tax Rate, after your long days of toil?

Hint:  It's a LOT more than 15% -- try nearly doubling that default Wall Street Welfare rate.

All About the Rich People

The top earners are willing to blow up the house rather than have Obama touch their golden goose, the capital gains tax.

by Brian Morton, -- July 20, 2011

The dirty secret is that capital gains taxes -- taxes on “unearned wealth” -- are what allow people like Donald Trump to pay a lower tax rate than his maid or secretary. Right now the long-term rate on capital gains -- investments or assets that are held for more than a year -- are taxed at 15 percent, compared to the top income tax rate of 35 percent. And rather than accept everything that the president offered, which would be far more than they could ever get under a Republican president, the top earners are willing to blow up the house so he can’t touch their golden goose, the capital gains tax.

Who says the Wealthy don't benefit from Welfare?    Wall Street Welfare.

Just try bumping their Tax Rate up to that of their Secretaries (around 30%)-- and see how quickly they jump on their Corporate Jets, and fly to Washington to read their Congressperson the Riot Act!

They won't have it -- anyone messing around with their Golden Goose.

NO WAY!   No How!   NO  New  Taxes!

The Secret Issue At The Heart Of the Budget Fight
by Jonathan Chait, -- July 14, 2011

Obama's deal on taxes was that he proposed to start with the revenue levels we'd have if the Bush tax cuts only on income over $250,000 phased out. But, to assuage Republican concerns about higher tax rates, he agreed to tax reform that would drop the rates back down to Bush-era levels, and make up the lost revenue by closing tax preferences.

Now, here is where things broke down. To do that in a way that means the progressivity of the tax code, you'd almost be required to reduce or eliminate the tax preference for capital gains. That's how the Reagan administration and Democrats did it when they reformed taxes in 1986 -- they dropped the top tax rate from 50% to 28%, but the rich wound up paying more because they ended the preference for capital gains.

This, however, is a a huge bugaboo to the right. Since 1986, the GOP has obsessively and successfully crusaded to re-open the capital gains tax preference. Most of the very, very rich get the bulk of their money from capital gains. There's nothing they'd like less than ending that preference.

IF ... we could somehow how put Capital Gains Tax back on that "equal footing" of the Reagan era -- How much extra Revenue should it bring in to the U.S. coffers?

(Assuming the Tea Party crowd, gets replaced by real Representatives, progressive Representatives, in 2012, ... that's the BIG-IF.)

"The Peoples Budget" -- The Alternative Solution We Can All Support Now
by BPC, -- April 24, 2011

Tax Capital Gains and Qualified Dividends as Ordinary Income

The People’s Budget would eliminate the preferentially low rates on long-term capital gains and qualified dividends, and it would tax all capital income as ordinary income under the marginal tax rate structure. The Tax Policy Center (TPC) estimated that taxing capital gains and qualified dividends as ordinary income would generate $989.8 Billion over the 2007-17 period, relative to then-current law (the Bush-era tax cuts would have expired for all years in the 2012-21 budget window).

Extrapolating from this score, taxing capital income as ordinary income is projected to generate $1.0 Trillion in savings over the 2012-21 period.

What a Capital Idea -- $1.0 Trillion Dollars -- either to be gambled away on the Wall Street Casino, or captured and Re-invest in the Nation's Future.  

Who's to decide?   The IRS or the Bankers?   The Tea Party Pledgers, or the Party of the People ?


Capital Gains are Taxing the Economy ...

And the Wall Streeters are benefiting from it, day in and day out.  They are secretly addicted to that Welfare spigot for the Wealthy.   Whatever you do -- Don't Turn Off the Tap! ...

Capital Gains are Taxing the Economy ... when instead,

The Economy should really be Taxing Capital Gains!

Shouldn't the Wall Streeters be paying back, just a small percentage, of their low-tax "unearned" Billions, that they've been raking in for all these years?  

It may be their Money Tree, it may be their boundless Spigot, it may be their Golden Goose -- but it really should be OUR Economy.   That should really belong to the Nation.  Including some of those untapped Eazy Money sources.

And while were at it -- we need to start Taxing the Job Exporters too.  But that's a story for another day.  It really should be OUR Economic Workplace too.   Shouldn't that Golden Goose really belong to everyone?

It's only Fair.  Why is it, only OUR Goose -- those of the working stiffs -- that gets cooked, day in and day out?   To feed the Economy ... To fuel the Nation?

Why are those Capital Gains Taxes, so hoggishly low, anyhow?    Why are they so easily ignored ... by those who say the want to jump start the Economy?

Originally posted to Digging up those Facts ... for over 8 years. on Thu Aug 04, 2011 at 04:38 AM PDT.

Also republished by ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement.

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Comment Preferences

  •  Tip Jar (12+ / 0-)

    What is necessary to change a person is to change his awareness of himself.
    -- Maslow ...... my list.

    by jamess on Thu Aug 04, 2011 at 04:38:02 AM PDT

    •  Common Ground (1+ / 0-)
      Recommended by:

      it's larger than a Bread Basket

      and smaller than the National Debt.

      Hopefully, the hard working people of the nation,

      will find it.  will re-claim it.

      will find a way to present a United Front,

      before anymore of that Common Ground, crumbles away.

      into the coffers of those still unaccountable, to no one,

      but the markets.

      What is necessary to change a person is to change his awareness of himself.
      -- Maslow ...... my list.

      by jamess on Thu Aug 04, 2011 at 06:03:29 AM PDT

      [ Parent ]

      •  Some not so Common (0+ / 0-)

        But very Stunning Charts.  

        It's the Inequality, Stupid

        Eleven charts that explain everything that's wrong with America.

        by Dave Gilson and Carolyn Perot,  -- March/April 2011 Issue

        Illustrations by Jason Schneider

        Funny what you might find ... when you actually "Follow the Money" ...

        What is necessary to change a person is to change his awareness of himself.
        -- Maslow ...... my list.

        by jamess on Thu Aug 04, 2011 at 06:10:56 AM PDT

        [ Parent ]

        •  james - how should we treat losses? (1+ / 0-)
          Recommended by:
          Roger Fox

          The primary reason there is a different rate for long term capital gains and earned income is the restriction of taking long term capital losses as an offset against earned income. If we think that capital gains and earned income should be taxed at the same rate what do we do with capital losses, which are negative income? There is an annual $3,000 maximum LT capital gains exclusion from income. So if someone lost $10,000 on an investment, and sold the asset and realized the loss, it would take more than three years to write off that loss against their earned income.  If someone lost $100,000 it would take more than 30 years. I think investors would agree to taxing all income the same if losses could be written off in full in the year the loss was recognized.  

          The second issue is capital gains tax rates and capital gains tax revenue. Capital gains tax revenue to the US Treasury is the highest when the markets are high and capital gains tax rates are low.  Revenue to the Treasury is lower when markets are lower or capital gains tax rates are high. Why is this? When capital gains tax rates are high investors who own appreciated capital assets will borrow against those assets if they want to access cash. Borrowing triggers no tax. When capital gains tax rates are low investors recognize gains, pay the tax and move on to other investments or uses of the cash.  I do not favor higher capital gains tax rates because there isn't a strong correlation between higher rates and higher income for the Treasury. Lower capital gains tax rates do, at some level, encourage investment and capital formation. However, I do favor taxing dividend income at the same rate as earned income. I can't think of any good reason for it to be at lower rates.  

          "let's talk about that"

          by VClib on Thu Aug 04, 2011 at 07:21:30 AM PDT

          [ Parent ]

          •  Sometimes raising taxes isnt about the revenue (1+ / 0-)
            Recommended by:

            It might be "where the revenue comes from".

            I can think of a few revenue neutral tax ideas that should have very positive effects.

            And let me add, that as a percent of Fed revenues the biggest change is in revenue from corporations over 30 yrs..

            FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

            by Roger Fox on Thu Aug 04, 2011 at 08:50:47 AM PDT

            [ Parent ]

  •  Great diary! Tipped & Rec'd (3+ / 0-)

    I have always believed tax policy can drive behavior.  If taxes are levied on companies offshoring jobs to a level that it is no longer profitable to send the jobs overseas then they won't.

    It seems like common sense, but I must be missing something because I have not heard this idea floated by any of our politicians.

    Let's face it - after Monday and Tuesday even the calendar says W T F

    by Actbriniel on Thu Aug 04, 2011 at 04:48:25 AM PDT

    •  The way I've been looking at it lately (2+ / 0-)

      Is focusing on that "Follow the Money" Mantra ...

      The local Cash Registers aren't ringing like they used to,

      So were did the Money go?

      A lot evaporated in the Crash of 2007-2009;

      A lot is going to Savings, by those afraid "they're next";

      And an LOT went to Wall Street and the Upper Crust's Portfolios.

      If we are ever to jump-start the Economy, and avoid our "Lost Decade" ...

      We got to get those Lost Sources of Money, re-circulating back in the Economy again

      Somehow get those local Cash Registers ringing again.

      one way, is Tax the Fat Cats.
      another way,  is Tax the Job Exports.
      another way, is a National Jobs program.
      another way, is an underwater Mortgage buyout program.
      etc. etc.

      thanks of the T&R Actbriniel, appreciate it.

      What is necessary to change a person is to change his awareness of himself.
      -- Maslow ...... my list.

      by jamess on Thu Aug 04, 2011 at 05:45:14 AM PDT

      [ Parent ]

  •  Thank you for this diary. (1+ / 0-)
    Recommended by:

    It should also be noted that both the Simpson Bowles draft proposal and the Gang of 6's proposal included this very thing -taxing capital gains and dividends as ordinary income, as well as raising the cap on FICA taxes. Yet people focused on the part that lowers marginal rates and ignored the fact that it makes the income tax more progressive and raises revenue. Same with proposed changes in corporate taxes.

    You can't scare me, I'm sticking to the Union - Woody Guthrie

    by sewaneepat on Thu Aug 04, 2011 at 05:08:53 AM PDT

  •  Media criticism sidenote: (1+ / 0-)
    Recommended by:
    On average their tax rate is 18%, Wall Street financier Steve Rattner said on MSNBC on Monday.

    That's public information.  Why is this asshat relying on what someone else says about it?  Same goes for potential income raised; one could calculate a max range very simply by just reviewing the IRS data.
    •  could you do that calc (0+ / 0-)

      say if the Cap Gains

      went from 15%

      to 20%,  to the proposed 23%, to 25%, to 30%, etc ?

      (in GDP terms, if possible)

      I was looking for, but could not locate those extra Revenue Projections, last nite.

      many thx, for any help you can provide.

      those would be some interesting numbers to see,
      assuming we could Tax the Fat Cats.

      What is necessary to change a person is to change his awareness of himself.
      -- Maslow ...... my list.

      by jamess on Thu Aug 04, 2011 at 05:21:57 AM PDT

      [ Parent ]

      •  Numbers are @ the IRS site (2+ / 0-)
        Recommended by:
        VClib, jamess


        The top 400 have cap gains of 61 billion, and total cap gains are 590 billion.  @ 15% tax is 9 billion and 88 bill, and if it were raise to 35% the net increase is $12 bill and 117 bill.  That assumes that raising the rate won't decrease capital gains, which is a pretty debatable assumption: when rates rise, people tend to hang on to their appreciated positions, especially if they have enough to live on and know that the estate tax will result in a step up in basis for their kids.

        At any rate, thems the numbers!

        •  johnny - this is the key (0+ / 0-)

          Revenue projections based on a static analysis are not realistic. When capital gains tax rates are high rich people don't sell their appreciated capital assets.

          "let's talk about that"

          by VClib on Thu Aug 04, 2011 at 07:24:15 AM PDT

          [ Parent ]

      •  james that calculation makes the false assumption (0+ / 0-)

        that higher rates would not change behavior. What we know from historical data is that when capital gains tax raes are higher rich people hold their appreciated capital assets and don't sell them as frequently. If they need cash they borrow against the assets.

        "let's talk about that"

        by VClib on Thu Aug 04, 2011 at 08:11:07 AM PDT

        [ Parent ]

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