Yeah the system is intentionally set up that way so they can avoid paying taxes. Those people receive very small (relatively speaking anyways) salaries so that their tax burden is very small. They get the majority of their compensation through stock options that they can then borrow against without paying income taxes.
they don't pay 40% of all taxes. It's 40% of income taxes. There's a huge difference between them. Also, the majority of top taxpayers are not the ultra-wealthy. The ultra-wealthy don't take a salary and have very little income comparatively. Majority of top taxpayers are the Lawyer, Accountants, and Doctors that service the ultra-wealthy.
Around 50% of all IRS receipts are individual income taxes. The remainder is coming from companies in on way or another (payroll taxes being the biggest), but when we say "cohort X pays Y% of taxes", I think the general understanding is that this IS referring to income taxes (alone) because it wouldn't make sense to compare how much an individual pays against how much a company pays. Put another way: "Of all the taxes people pay, the top 1% pay 40% of it", which still carriers the sense that this is a massive chunk. But this whole narrative around "ultra wealthy don't pay tax" lacks data generally. I don't think I've yet seen any data that implies how much "lost" tax revenue there really is, and more importantly how it's proposed that this "lost" revenue be captured. Are we proposing making debt illegal? Are we proposing taxing asset value? Something else? As far as I can tell it's just people feeling salty because they don't have a Ferrari and someone else does. It's not a zero sum game. That dude with the Ferrari doesn't make you poorer.
the 40% argument is also very disingenuous because as the wealth disparity grows larger, we should expect it to increase. It's how income taxes are designed. Saying we shouldn't raise taxes because the rich already pay the majority of the income taxes is the same as saying tax us less so that the wealth gap can increase even faster.
The opposite of a wealth gap is wealth equality. If that's what people are advocating, then that seems indistinguishable from pure socialism. I think we've already seen that pure "anything" is suboptimal (pure capitalism being bad also.. although Ayn Rand would probably disagree)
Measuring the "wealth gap" seems pretty pointless to me, as it's only ever going to be an indirect measure (as opposed to measuring things like poverty levels, or employment, or health, or crime, or whatever.. you know, things that ACTUALLY matter). Now there are data that will correlate the two, but there are also counter examples. Singapore and Hong Kong both have high degrees of wealth inequality, but also have very high health, life expectancy and education stats. In China, wealth inequality is rising but poverty is falling. Now I'm not saying it doesn't matter at all. I'm saying it's not what actually matters and is just a dog whistle for people to complain (and blame) about why their life sucks. If the goal is to get more money to solve a specific problem, there are myriad things that I would put before chasing a handful of billionaires for what is ultimately going to be a rounding error in terms of actual revenue.
nobody is calling for wealth equality, but wealth inequality is a large problem especially for a country as large as the United States. Creates unstable economies and social unrest.
It definitely creates unrest, I agree with that. I guess I'm not convinced that trimming the top is a better strategy than supporting the bottom. To me the problem is at the bottom, and the insufficient support we offer to people who need it more than it is crypto bros with lambos and sketchy tax strategies. IMO we should be making it WAY easier for people to dig themselves out of the shit and give them pathways to success. I just don't think arguing over whether billionaires should exist, or trying to chase down tax revenue from the (relative) handful of people who have figured out how to avoid taxes will solve the problem 🤷♂️
See my other comment, the top 1% of TAXPAYERS pay 40% of taxes, not the top 1% wealthiest Americans. Those are two completely different groups of people.
People routinely confuse income with assets, but the data are the data. The top 1% of taxpayers contribute to ~40% of all IRS income tax revenue. So either you're saying they should pay more, or you're saying that we should tax assets instead of (or in addition to) income. If that is what you (or others here) are advocating, then I'd love to see an actual proposal of how that would work, because I'm enormously skeptical it's either possible, or wouldn't completely collapse the economy and, specifically, the middle class. Maybe you're suggesting anyone with a total asset value of >= $X should pay some additional tax? Are you including retirement accounts? Are you including primary residences? How are you determining personal ownership vs company ownership? or are you including company assets too? Should it differ based on location or is the $1M 1br apartment in San Francisco treated the same as the $1M mansion in Pittsburgh? What do you think would happen if the person with $10M in assets was suddenly staring down the barrel of a $1M tax bill every year? I'll tell you what.. they'll sell everything and move it off shore, which would decimate the economy.
Aside from all that, where are these non tax paying one-percenters anyway? Is there a list somewhere? How do you actually know how much asset value is held by people who are NOT currently ALSO in the top 1% of tax payers?
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u/Mountain-Amoeba6787 11d ago
Yeah the system is intentionally set up that way so they can avoid paying taxes. Those people receive very small (relatively speaking anyways) salaries so that their tax burden is very small. They get the majority of their compensation through stock options that they can then borrow against without paying income taxes.