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You can thank reagan for that. Before him, the megawealthy were taxed a LOT (i don't have exact figures, but it was something like 60%). Then reagan came in with his bullshit "trickle down economy" and that was that.
edit: just saw this is about social security funds, not taxes.
i mean social security is taxes tho
oh, I'm not american and not entirely sure. Thanks for the correction.
Anybody voting for "lower taxes" was scammed into creating a class of ultra rich who don't help society and that laws don't apply to.
Reminder that during what many consider America's middle class golden age for a couple decades after WW2 we were TAXING THE EVERLOVING FUCK OUT OF RICH PEOPLE.
Then, surprise surprise, the rich people started buying off politicians to change all that.
EAT. THE. RICH.
They are blood sucking leeches.
we were TAXING THE EVERLOVING FUCK OUT OF RICH PEOPLE.
Tax avoidance during this period was also at historic highs. One of the perks of the payroll tax was that it collected at the point of the employer rather than being paid directly by the employee. This put the liability for missed payments on the business (which is risk averse) rather than the individual (which often is not) and shrank the labor required for administration from "everyone with an income" to "everyone who pays a salary".
Curiously, we choose not to do this for stock transactions and other big ticket revenue generating sales. Rather than demanding Wall Street assume liability for the vast number of brokerage sales the big clearing houses oversee, we politely ask that each individual stockholder report gains and losses at the end of the year. Private businesses are even worse. Rather than assessing their revenues through the major transaction arteries - banks and commodities/wholesale exchanges - we wait for businesses to self-report.
All this creates enormous blind spots in how taxation is accessed and collected in a way that practically invites business owners (especially small and low-volume business owners) to lie, cheat, and steal.
EAT. THE. RICH.
It's a great bumper sticker slogan. But I don't see any blood on your gums.
It was a tactical decision to turn people off of socialism/communism.
I think you'll find it's no longer needed.
I've had the desire to write a satirical swiftian letter to the editor to a national paper talking about how to tax Americans "fairly" where every single American pays the same amount in taxes regardless of age and income. Billionaires and babies owing the same amount, some ridiculous amount like $50k per person. Then I realized some people might take it as an actual suggestion and try to put it into practice.
Correct me if I'm wrong here.
But isn't it cumulative?
They pay a certain tax rate on a certain amount of money. So they're paying 12.2% within the bracket that covers that amount of earnings, then an additional 2.2% only on the income that falls into the next bracket.
So they're paying the same rate as everyone else on the income within each bracket, right?
I'm sure these medical billionaires made their money in the worst way possible, but to accumulate that kind of wealth they're generally not earning it as ordinary income.
"Buy, borrow, die" largely avoids income taxes because loans aren't taxable income.
The issue is far more devious than simply taxing a higher income bracket at a higher percentage.
There has never been a more important issue in our time than the wealth gap and economic inequality.
This is mostly right but I think missing the point. It's not 12.2% on the first bracket and 2.2% on the second. It's 12.4% on the first $184,000 and ZERO On the rest. The 2.2% is not the marginal rate they are currently paying, it is the effective rate if you add up all the taxes paid divided by all the income. It's so low because people with salaries beyond 184k stop having to pay any of this tax on their next marginal dollar.
And the reason this is a big deal is because this tax revenue is what is used to fund social security payments for older folks. The social security reserve fund that is running out (which will result in a significant reduction in payment to these old folks) could possibly be all or mostly funded if we made people making more than $184,000 pay the same rate as everyone else.
Damn. How are we not French Revolution-ing these fucks?
love island, throwback nikes, the return of the mcrib, the soap opera of the trump presidencies; they’re keeping us entertained and mollified
Similar amount maybe, not same rate. If the first 100k is taxes at 30% and the rest is at 2%, someone making 100k pays 30k. But someone making 1 million also pays around 30k + 18k maybe. But for the 100k person the total paid was 30%, and for the 1 million person the total paid was maybe 5% of their total. Warsaw away lower.
The original name was "Horse and Sparrow" as in if we give the horse enough to eat, there will be enough undigested food in his shit for the sparrow
This is called a regressive tax. The Republican party should embrace the word regression. Their followers are too stupid to understand its meaning anyway.
The reason this works out that way is because there is a wage base for the social security tax. If you don’t make more than that base then you pay that tax all year long. If you’re making 1m then you pay that tax for like the first two months and then nothing afterwards. The solution to this is just removing the wage base. If you make 1m you should pay the same percentage as everybody else on all your earnings. Magically the social security system will be overfunded.
So what you're saying is, social security should be, like...social?
The other thing to get rid of is long term capital gains taxes and just tax capital gains as regular income.
It'll trickle down.
You know, because the richest people in the United States are for sure known for giving away money and not hoarding it because they feel they have enough.....
Regressive taxation
It is. And it's wrong. But part of how we got here is it was sold as not being a tax, even though it absolutely is.
The claim was it was a mandatory retirement investment program. Because the wealthy have their own retirements figured out they don't need their payouts to continue to scale with their income, so their payments in shouldn't scale proportionally either, under this flawed premise, since it is "not a tax."
But why it is a tax is, one, most of us will never see a payout because the program is going to collapse before most of us retire, and therefore it is NOT a mandatory retirement program. And second, all payments in and out of government are fungible, so it really is a tax and a separate retirement supplemental program, where we use language around them to pretend they are one program.
Ironically, if we took all the money that was paid into Social Security and invested it in a real portfolio (actual investment), our generation would actually get something, and current generations would be getting significantly more retirement. The issue is that because whether you like government or not, it is a money loser. It's basically designed to be one. That means using the government as an investment vehicle is in pure investment terms really really bad. Plus it also sets up a regressive tax as you pointed out.
most of us will never see a payout because the program is going to collapse
I have been reading this claim my entire life. Not even my entire adult life. Like, I remember hearing this when I was still a wee little kiddo, watching Reagan give speeches from my dad's knee.
Social Security isn't going bankrupt any sooner than the Pentagon goes bankrupt or the US Treasury goes bankrupt. It's not something that can happen, mechanically speaking. Congress is always free to allocate more money to the program. The only way SS "runs out of money" is if Congress deliberately refuses to fund it.
And so much of the US economy lives downstream of senior citizens getting their checks on time that such a decision would be economically suicidal for the country. If it happens, it's only because the US as a going concern is a failed state. And a real failed state, not just some hyperbole from the latest pundit circle.
Ironically, if we took all the money that was paid into Social Security and invested it in a real portfolio
You'd have a sovereign wealth fund.
But when you've got the national reserve currency, there's no real incentive to do that. Your tax revenue is already driven by global economic growth. Our Federal Reserve Credit Window and our variety of grants, tax credits, and government contracts already incentivize capital accumulation within the scope of US taxable incomes.
You don't need to collect a dividend from a business by holding its equity if you're a federal government. You can just tax them. Dollars paid in dividends and dollars paid in taxes are interchangeable.