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Old July 27th, 2011, 06:04 PM   #16 (permalink)
persim
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Quote:
Originally Posted by nlsme View Post

Considering 75% of their income is not "payroll", it isn't that hard to get around.
Overall, the effective tax rate on high incomes fell by 6% in the Bush era, so the top 400 had a tax rate of 20% or less in 2007, far lower than the marginal tax rate of 35% that the highest income earners (over $372,650) supposedly pay.

Your point is what? Effective tax rate is just a net of all your tax rates. Everyone in this country has the opportunity to invest and have income from those investments, whether its 75% of your total income or 25% of your total income. That income is then taxed at a specific rate that is different from a payroll tax.

Just because 75% of their income happens to come from investments doesn't mean they are paying any less percentage (yes capital gains were lowered so that part of their income was paying less tax but so were everyone elses). They are paying exactly the rate that anyone who invested would pay on that income.

You can not compare effective tax rate to marginal tax rate as this article and many articles like it try to do. A person making 75k who had 75% of his income from investments and 25% from salary would pay a smaller effective tax rate than a person making 75k from salary only. But since they are both deemed middle class no one would argue that this person should pay his "fair share". Why are wealthy people treated differently just because they are wealthy?
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