I think that we are generally in agreement on the importance of the study. I'm just saying there are a couple of nuances. For example, you say that Buffett is "lying", but he is in the category of the super rich that I referred to. So, I don't think he is lying. I think he is correctly speaking to his experience, which is distroted because he is in such a small crowd.

On point 2, yes, I agree that the wealthy pay a higher % of their taxes than the non-wealthy. My only point is that when you look at MARGINAL rates instead of AVERAGE rates, it is true that sometimes the non-wealthy have higher marginal rates. Like you, I am including all taxes. (payroll, income, etc.)

The wealthy are likely to be paying most taxes, considering that the top 20% control about 80% of individual net worth, and the top 1% control about 30-35%

In terms of income distribution, the difference is pretty similar.

So, if the rich are paying similar rates on income (which is usually what the 'tax burden' is defined by), they will indeed be paying a large proportion of all taxes as well. Even if they are paying a slightly lower rate per income dollar, they will collectively be paying a large proportion.

Buffet has little reason to lie (not many to tell the truth, other than maintaining his image in business), and I doubt he is.

I am not saying Buffet is lying or rather the article isn't. Rather the article is saying Buffet is not telling the whole story because he isn't including all the taxes that effect his income. Basically the article is saying the Buffet does the exact same thing Geo, et. at. say I do when I reference only income tax.

Dan,

Geo's entire argument seems to be that the wealthy do not pay their fair share because their total tax burden is less then the middleclass, i.e. Buffet's 17% to his secretary's 18%. However, government statistics show this to be incorrect. The top 1% pay almost 30% compared to the bottom 50% paying about 14%.

So then not only does the top 10% pay 70% of tax income but they pay almost 30% of their income (more then double the percentage paid by the bottom 50%) in taxes.

So the questions becomes, does this not represent more then their fair share? If not what would be?

Sorry, Russell, but you appear to be comparing different things. And when you include all taxes, including State taxes, the picture looks different again.

And where does his secretary fall in terms of income bracket?

I get that the bottom pay les in tax - because the very bottom will pay little due to thresholds. What about comparing to the median, or the middle quintile?

danivon wrote:Sorry, Russell, but you appear to be comparing different things. And when you include all taxes, including State taxes, the picture looks different again.

Again this is not the argument that Buffet or Geo make. They compare only all federal tax burdens and do not include state and/or local taxes in their complaints.

danivon wrote:And where does his secretary fall in terms of income bracket?

I believe Buffet says she made $30,000 a year which would put her in the bottom 50%.

danivon wrote:I get that the bottom pay les in tax - because the very bottom will pay little due to thresholds. What about comparing to the median, or the middle quintile?

I believe the article specifically states the middle quintile is the 14% compared to the upper qunitiles 30%. At least that is the way I read the article. Did you read the article?

So the question still stands. The top income makers pay 70% of taxes and double the taxes of the median income makers. Does that qualify as their fair share? If not what does?

I'll respond to this when I have more time. Sorry.

Russell, the 'middle class' they use is defined by income level, but appears not to be the middle quintile.

I have tried to find the same stats direct from the IRS but the site is tough to navigate.

Their point on corporation tax also seems arbitrary. Are shareholders the only people affected? What about customers, employees etc?

A business raises it's prices to account for business costs. Taxes would be one of those things. Therefore, a tax increase on business is a tax on the population. Is that what the government wants?

Brad, my point was that the article was arguing that corporation tax affected shareholders (thus mostly on the very rich like Buffet). I'll go further - if we are to count one indirect effect of one tax on business, why not all indirect effects of all taxes on business?

I agree Danivon. The indirect effects not only affect the business. It affects people; whether that be shareholders, consumers, or employees.

Tell it to the authors of the article Russell cited.

By the way, sales taxes tend to affect the poorest more, and so other business-related tax passed on to consumers will. Any company planning to make a profit will account for corporation tax and build it into their pricing structure, as well as their wage structure.

Absolutely. We agree that taxes hurt the poorest among us.

That Wall Street Journal article is a fine example of cherry-picking the data. First of all, the biggest single thing to remember is that growth of income in the top 1% has been so disproportionate to that the middle class that they should be paying a higher percentage of taxes to make up for it. Second of all, state and local taxes are not included--those cut much more into middle-class incomes than on the rich. (See, again, a chart showing the effect of state and local taxes http://www.ctj.org/pdf/taxday2011.pdf). Gee, I wonder why that Wall Street journal writer did not include state and local taxes in figuring out tax burdens...

I find his contention that the top 1% paid 32% of their income in federal taxes hard to believe. The tax chart I consulted said 22.1% Given that any social security taxes and other non-income federal taxes would constitute a very small percentage of the income of a person making over 1.2 million dollars, that the top marginal rate is 35%, and they hold a disproportionate amount of stock (meaning if their income came from selling stock it would be taxed at 15%)it seems impossible that they would be paying a total of 32% in federal taxes. Unless...they are considered to be double-taxed like this Wall Street Journal writer says they are. FIrst of all, the percentage of federal taxes from corporate taxes has gone way down as a total of over-all federal taxes down from 30% to 6% in the past 50 years%--they are sending their profits overseas, or getting tax breaks, or sending it to subsidiaries in the Cayman Islands (see GE, Enron, Sherson Lehman which had 350 subsidiaries when it folded). Second of all, just because you own stock in a corporation does not mean you are that entity--sorry, you're not. You are a separate entity and when your stock appreciates then you get taxed at 15%. So, yeah, I doubt very much that the top 1% paid 32% of their income in federal taxes.

Of course I don't know what data is citing to because he does not provide any links or footnotes so that we can check his data. But he works for the Wall Street Journal so I guess we should trust him on it.

Who owns the WSJ? Oh yeah... not sure I'd take what they say on face value, to be honest, given what the UK arm of News Corp has been up to.

Thanks, freeman, for finding some data to compare against the WSJ figures.

danivon wrote:Who owns the WSJ? Oh yeah... not sure I'd take what they say on face value, to be honest, given what the UK arm of News Corp has been up to.

Finally. I knew if I waited on you, you would play the guilt by association card. You throw tantrums when anyone else comes near it.