The extremes in the US have gotten more pronounced in this economic crisis. It is hard to imagine a country where 46 million people are living with the assistance of food stamps while 6 of the 400 top income earners pay no federal tax. I’m sure that just like most Americans you pay your fair share of taxes. Of course the real burden has fallen on the middle class since the recession hit in 2007. Most of the ultra-wealthy have their money vested in the stock market and since the lows in 2009, the market is up well over 100 percent. The number one asset of the middle class in housing is still down over 30 percent from the peak and is trying to squeeze out a gain in 2012. So you ask who in reality is paying for all these bailouts and transfer payments? A massive amount of the burden is falling on the middle class and debt.
How are we paying for all this?
As we have mentioned, we are running trillion dollar deficits since we don’t have the money to pay for all of our expenses in defense spending, interest payments, Medicare, Social Security, food stamps, banking bailouts, and all other large ticket items. In interesting data released by the IRS, it was noted that more than a quarter of people that earned an average of $200 million or more in 2009 paid less than 15 percent of their adjusted gross income in taxes. The odds are you pay a much higher rate once you include payroll taxes and all the other taxes you pump out through daily expenses (i.e., sales tax, etc).
One thing is rather apparent and that is in the US the extremes are getting even more exaggerated. Take a look at the number of folks on food stamps:mybudget360com
price we pay for a civilized society. So, while I don't want to pay more than my fair share, or for anyone else to pay more than fair, It gives me a screaming case of the red-ass when wage earners pay higher tax rates than investors. I would agree that some floor level of dividend income should be exempted from earned-incrome rates...but it would likely be around $50K. After that...same as earned income.
Congress is well aware of this inequity. Democrats didn't do anything about it when we held majorities in both the House and Senate and had the White House. Nada...nothing...zip.
You're right about extremes. One of these days it's gonna really get nasty.
'til I was blue in the face. Income is income, regardless of whether it came from digging a ditch, investment profits, dead relatives, whatever.
And I could make a damned good case that investment income should be taxed higher than sweat-off-the-brow, ditch-digging income. But it should at least be taxed at the same level.
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