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The Resentful Rich

March 5th, 2013
From an article in the AP's “Big Story”:
For 2013, families with incomes in the top 20 percent of the nation will pay an average of 27.2 percent of their income in federal taxes, according to projections by the Tax Policy Center, a research organization based in Washington. The top 1 percent of households, those with incomes averaging $1.4 million, will pay an average of 35.5 percent. Those tax rates, which include income, payroll, corporate and estate taxes, are among the highest since 1979. The average family in the bottom 20 percent of households won't pay any federal taxes. Instead, many families in this group will get payments from the federal government by claiming more in credits than they owe in taxes, including payroll taxes. That will give them a negative tax rate. “My sense is that high-income people feel abused by being targeted always for more taxes,” Roberton Williams, a fellow at the Tax Policy Center, said. “You can understand why they feel that way.”
No, actually, I can't. It's more an issue of why these people don't understand how well-off they are. If they want to gripe about how good the bottom 20% have it, then they should offer someone from the bottom 20% to switch places. No? Then quit whining and shut the frack up. The top 20% make a minimum of $92,000 a year with a marginal tax rate on their highest dollar ranging from 28% ($87,851 to $183,250) to 39.6% ($400,001 and up), meaning that with deductions, they probably don't even enter that bracket at all. People throughout the top 20% often pay an effective rate of no more than 20%. Plus, they often get benefits like health insurance which is not reported as income. And the bottom 20%? A shmoe breaking his back working 50 hours a week all year round, no vacation time at all, at minimum wage, will earn $18,850—putting him just barely above the top of the bottom 20%, which earns at most $18,500 a year. Give the guy one week off a year (the lazy moocher!) and he is right at about the top of the bottom-20% heap. Now, if you can get by on that much, especially with a family to feed, and pay for minimal health care, and claim you still deserve to pay federal income taxes on top of your social security tax, Medicare tax, sales tax, state and local taxes, and all the other taxes you have… then congratulations, you're Mother Freakin' Theresa. The article is slanted and just wrong in several places. Aside from the obvious falsehood of quoting marginal rates rather than effective rates, it makes the old and tired “the poor pay no federal taxes” error (the bottom 20% pay around an average 2% effective rate on federal taxes, mostly payroll), and ignores local taxes, especially the most regressive tax, the sales tax. The “many” families who get more credits than taxes are not enumerated or specified (nor are the special breaks for the top 20%, for the same reason—it would go against the false argument being made), and the “average” family in the bottom 20% makes almost no money at all, so forgive the destitute for getting food stamps so their children only starve just so much. Not to mention the fact that the article fails to mention that the wealthy in America enjoy lower tax rates than about two-thirds of industrialized countries. Sure, taxes in Korea, Belgium, and New Zealand are a bit better, but try living in France, Germany, or Belgium where personal tax rates hover around 50% and sales/VAT taxes can be as high as 20%. And then consider that even our bottom 20% looks pretty damn good to the majority of people living in the world—who probably spend way less time whining about their lot in life than our top 20% do. When Sachi and I get big tax bills to pay, that's how we see it: we're way better off than most people are in the world, and we're grateful to be there. So if you're in the top 20%: stop being a selfish goddamn crybaby, pay your damn share, and be grateful you have it so well.

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  1. Troy
    March 5th, 2013 at 20:51 | #1

    >stop being a selfish goddamn crybaby, pay your damn share, and be grateful you have it so well

    there is a real feeling of victimization here, of paying up under threat of violence.

    now, what the immensely wealthy don’t understand is that the rich have millions of ways of extracting money from the poors, while the poors only have two ways, and one of them is a felony.

    Too much money is flowing up the pyramid, from the 95% to the 5%.

    (20% percentile is in no way upper class, upper-middle, sure, but $92,000 a year gross when coming from labor is not extortive and all that wage income is spent back into the middle-class economy).

    The problem is the massive million and billion dollar incomes that are pulling trillions OUT of the working class without putting much if any of it back.

    Apple is part of this problem, actually.

    http://money.cnn.com/magazines/fortune/fortune500/2012/performers/companies/profits/

    http://research.stlouisfed.org/fred2/series/CP/

    But nobody understands this.

    Well, this guy does:

    http://www.theatlantic.com/business/archive/2013/03/corporate-profits-are-eating-the-economy/273687/

  2. March 5th, 2013 at 23:58 | #2

    Troy, this comic sums it up:

    http://dilbert.com/strips/comic/2013-03-05

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