Hacker News new | ask | show | jobs
by wooter 3885 days ago
Your conjecture isn't true though. In the US, the top 10% pay 68% of all federal taxes - the top 1%, 35%.

So how are they effectively paying the lowest band?

2 comments

The GP is talking about the percentage of their income being spent on taxes.

If you make 1 million dollars per year, and I make 100k, and my taxes are 30k per year while yours are 100k/year (numbers made up), you'd be paying more total taxes, and a larger slice of the total tax dollars paid.

However, my taxes are 30% of my income, whereas yours would be only 10% of your income. If we paid at the same "band" of taxes, you would be paying $300k instead of $100k.

Because the tax bands tax you at a lower percent the higher up you go, making more money leads to less proportion of taxes.

Consider also that the people who pay the most tax (in dollars) often have a substantial amount of their wealth in real estate, stocks, or stock options, rather than cash income, and those are all taxed differently than the kind of income that most of us have.

Not to be mean, but this is still all false conjecture and no source. The top 1% earn 19% of income yet pay 35% of all Fed Income Tax. The top 10%, 12% of earned, 12% of paid. The bottom 50% earn 12% but pay 3%.

And thats at the federal level. State income taxes vary from place to place, but nowhere is what you are saying true. And a state would have to apply a substantial effective negative income tax rate for high earners which is laughably unheard of.

The argument is not complete only looking at the amount paid - you must account for what assets and income people get taxed upon. If the top 10% own 80% of all the income and assets, if they're paying about 40% of all the income and assets in the country (not an actual figure, just using for sake of cohesive argument), they are not paying their fair share. Then there's the fact that most high net worth individuals do not have most of their income from direct work anymore as much as passive income through stocks - the few exceptions are Hollywood celebs and similar that wind up getting taxed quite heavily. For example, most people's assets are primarily a single home and a retirement account in the form of a 401k or fixed income via pensions and social security, but this isn't similar to the asset distribution of the wealthy today almost ever. In fact, I remember someone noted how pro athletes that spend their money like how normal people do in direct proportion would wind up bankrupt quickly.