How the IRS Helps the Rich Get Richer

[nitro]

How the IRS Helps the Rich Get Richer

The top 1 percent gets the most from federal tax breaks, a new report shows, fueling election-year outrage over income inequality.

September 29, 2016 — 4:00 AM CDTUpdated on September 29, 2016 — 11:25 AM CDT

Source: Fuse via Getty Images

This U.S. presidential campaign, and particularly that of Democratic Senator Bernie Sanders of Vermont, moved the issue of income inequality front and center. Now there are some new numbers in that department, and they won’t make many people happy. At best, maybe just 1 out of 100.

The top 1 percent of Americans as measured by income rake in 17 percent of all U.S. income on an annual basis—before taxes, of course. And that caveat is important, according to a new analysis by the Tax Policy Center (TPC),1 because that select group of citizens gets 27 percent of the tax breaks doled out by the federal government.
https://www.youtube.com/user/Bloomberg
The TPC’s calculations show an estimated $1.17 trillion in federal revenue last year going to individual tax expenditures (a fancy way of saying taxes we didn’t have to pay because of deductions, like for giving old clothes to the Salvation Army—or, in this case, collections to the Metropolitan Museum of Art). While the wealthy see an outsize benefit compared with their share, the lowest-income households get just about 4 percent of federal tax breaks, close to their portion of all pretax income. That same trend holds for taxpayers in middle- and upper-middle-income households.



Source: Tax Policy Center Microsimulation Model
Those 1.1 million folks in the 1 percent, as measured by the TPC, have annual income that averages a little less than $700,000. The top one-tenth of that group, some 110,000 households, average about $3.6 million, according to Howard Gleckman, a senior fellow at the TPC.2..

http://www.bloomberg.com/news/articles/2016-09-29/how-the-irs-helps-the-rich-get-richer

 

[Deuteronomy_24_7]

Of course deductions primarily benefit those who actually pay the taxes. Who else would they benefit?

 

[DallasCowboysFan]

Doesn't the top 1% pay like 25% of all the income taxes?

They should get tax breaks, you don't get them if you don't pay taxes like the bottom 40%.

I got an idea......how about everyone being required to pay a federal income tax, from age 18 - death ? Even if it is only $100 a year. It might eliminate the sense of entitlement that some people have thinking that the federal govt should take care of them from cradle to grave or that the world owes them something.

Or, how about putting a limit on how much one person pays in taxes each year?
Why should a man have to pay more money in taxes each year without an increase in benefits?

A man that enters the drive thru of MC D does not pay more for his Big Mac Combo if he is driving a Cadillac CTS as opposed to a man driving a 15 year old KIA.

So, why should you have to pay more in Federal taxes just because you make more? Your air is not any cleaner, you are not any freer, the country is not safer.......there should be a top dollar amount that anyone pays.

A flat tax rate for everyone, with a minimum amount that everyone pays and a maximum that is potentially paid by any individual. And no deductions.

 

[Sig]

Doesn't the top 1% pay like 25% of all the income taxes?

They should get tax breaks, you don't get them if you don't pay taxes like the bottom 40%.

I got an idea......how about everyone being required to pay a federal income tax, from age 18 - death ? Even if it is only $100 a year. It might eliminate the sense of entitlement that some people have thinking that the federal govt should take care of them from cradle to grave or that the world owes them something.

Or, how about putting a limit on how much one person pays in taxes each year?
Why should a man have to pay more money in taxes each year without an increase in benefits?

A man that enters the drive thru of MC D does not pay more for his Big Mac Combo if he is driving a Cadillac CTS as opposed to a man driving a 15 year old KIA.

So, why should you have to pay more in Federal taxes just because you make more? Your air is not any cleaner, you are not any freer, the country is not safer.......there should be a top dollar amount that anyone pays.

A flat tax rate for everyone, with a minimum amount that everyone pays and a maximum that is potentially paid by any individual. And no deductions.

Actually if you build a high end high-rise in NY, for example, you do benefit far more from a whole host of government services. For example, all the public safety (fire, police...) that make the neighborhood where your high-rise is located attractive are all paid for by tax dollars. You're getting a much bigger benefit out of that when you sell $1B worth of condo's because it's a safe and attractive neighborhood than I am when I live is a 400 square foot walk-up. And of course no one would want to live in your building if there weren't roads to get you there, airports nearby, mass transit... any number of publically funded transportation options that make your high-rise attractive and which, if they were missing, would make it a giant empty shell in the desert and are essential for you making your $1B and me making my $50K. Again, far more valuable to you than me. And let's talk about engineering safety standards; people wouldn't live in your high-rise if there aren't standards, inspections, oh and publically funded education to train the engineers and architects who build your buildings that generate your profits. On the other hand, my walk-up was built 100 years ago most probably by immigrant carpenters, so I'm not getting a lot of benefit from all that. I could go on and on and on, but over the last 5000 years or so we've determined that a society that socializes costs for things that provide a public benefit are far more efficient than the dark ages feudal states you seem to be pining for, and in this type of system a much greater portion of that public benefit accrues to the wealthy than the poor. The world is a lot more complicated than buying a burger at McDonalds, as it turns out.
BTW, about 23% of the U.S. population is under the age of 18, 6% are in college, and 18% are on social security. That totals 47% of the population, to do the math for you. So they're your "bottom 40%", and they're the one's you apparently advocate are some kind of freeloaders with a "sense of entitlement" we need to raise taxes on so we can lower them for the 1% (of which I am one, btw, and I certainly don't "need" a tax break)?

 

[DallasCowboysFan]

Actually if you build a high end high-rise in NY, for example, you do benefit far more from a whole host of government services. For example, all the public safety (fire, police...) that make the neighborhood where your high-rise is located attractive are all paid for by tax dollars. You're getting a much bigger benefit out of that when you sell $1B worth of condo's because it's a safe and attractive neighborhood than I am when I live is a 400 square foot walk-up. And of course no one would want to live in your building if there weren't roads to get you there, airports nearby, mass transit... any number of publically funded transportation options that make your high-rise attractive and which, if they were missing, would make it a giant empty shell in the desert and are essential for you making your $1B and me making my $50K. Again, far more valuable to you than me. And let's talk about engineering safety standards; people wouldn't live in your high-rise if there aren't standards, inspections, oh and publically funded education to train the engineers and architects who build your buildings that generate your profits. On the other hand, my walk-up was built 100 years ago most probably by immigrant carpenters, so I'm not getting a lot of benefit from all that. I could go on and on and on, but over the last 5000 years or so we've determined that a society that socializes costs for things that provide a public benefit are far more efficient than the dark ages feudal states you seem to be pining for, and in this type of system a much greater portion of that public benefit accrues to the wealthy than the poor. The world is a lot more complicated than buying a burger at McDonalds, as it turns out.
BTW, about 23% of the U.S. population is under the age of 18, 6% are in college, and 18% are on social security. That totals 47% of the population, to do the math for you. So they're your "bottom 40%", and they're the one's you apparently advocate are some kind of freeloaders with a "sense of entitlement" we need to raise taxes on so we can lower them for the 1% (of which I am one, btw, and I certainly don't "need" a tax break)?

Actually if you build a high end high-rise in NY, for example, you do benefit far more from a whole host of government services. For example, all the public safety (fire, police...) that make the neighborhood where your high-rise is located attractive are all paid for by tax dollars.

------
Those are paid for by local taxes....sales tax and real estate taxes. Not Federal taxes.

-----
You're getting a much bigger benefit out of that when you sell $1B worth of condo's because it's a safe and attractive neighborhood than I am when I live is a 400 square foot walk-up. And of course no one would want to live in your building if there weren't roads to get you there, airports nearby, mass transit... any number of publically funded transportation options that make your high-rise attractive and which, if they were missing, would make it a giant empty shell in the desert and are essential for you making your $1B and me making my $50K.

-----
Streets and airports are paid for by bonds, local taxes and special excise taxes. And our local airport is also supported by the $6 entry fee to the airport, higher than necessary parking fees if you park at the airport and outrageously high food prices. And I'd like to add that they hit you with additional taxes when you rent a hotel room. Don't forget gas taxes.

Very few of the items you listed are paid for by Federal Taxes. That is what I was directing my argument towards.

--------------

Again, far more valuable to you than me. And let's talk about engineering safety standards; people wouldn't live in your high-rise if there aren't standards, inspections, oh and publically funded education to train the engineers and architects who build your buildings that generate your profits.

Engineering standards have been established over hundreds of years based on previous successes as well as failures. Building Inspectors and local code enforcement is also supported by the fees received from building permits. And a lot of research is provided by professional organizations supported by their members as well as private manufacturers such as Owen Corning Fiberglas etc...

I am not sure about publicly funded education........but you pay for college at your own expense and continuing educational credits are the responsibility of the individual not government.


------




On the other hand, my walk-up was built 100 years ago most probably by immigrant carpenters, so I'm not getting a lot of benefit from all that. I could go on and on and on, but over the last 5000 years or so we've determined that a society that socializes costs for things that provide a public benefit are far more efficient than the dark ages feudal states you seem to be pining for, and in this type of system a much greater portion of that public benefit accrues to the wealthy than the poor. The world is a lot more complicated than buying a burger at McDonalds, as it turns out.

---
I have no problem paying for roads, clean water and sewers. It has benefited society in ways we have forgotten. But those are paid for by local taxes, not Federal Income taxes.

I am not pining for a feudal society. I just think that every one should pay taxes even if it is a small percentage of what they consume in benefits from society.
------------


BTW, about 23% of the U.S. population is under the age of 18, 6% are in college, and 18% are on social security. That totals 47% of the population, to do the math for you. So they're your "bottom 40%", and they're the one's you apparently advocate are some kind of freeloaders with a "sense of entitlement" we need to raise taxes on so we can lower them for the 1% (of which I am one, btw, and I certainly don't "need" a tax break)?

Children under 18 are not considered to be a part of the 40 percent that don't pay taxes. As I understand it. But I may be wrong. I believe you though.

I don't care if you are in college, you should still pay a $100 a year to support the country. $100 is only 2-3 tanks of gas or about 10 glasses of beer at a club. It's not too much to ask for. The country still has to be defended, National Parks need to be maintained and the FBI does not work for free. Yes, I graduated college. I also worked several jobs while I was in college as well.

People on Social Security should not have to pay taxes on their SS checks. The govt taxes it out of your paycheck unwillingly and keeps it for 40 years until you retire. It should be illegal to tax a tax. But if they have another income stream they should pay taxes.

I don't have a problem with retired or disabled people not paying taxes.
But there are many people that are capable of working or have an income stream that don't pay taxes.

But the costs of maintaining a society are still being expensed.

Everyone should pay something.....even if it's a statistically small percentage of what they consume. $100, $50......everyone should have to pay something. The bills still have to get paid.

 

[Sig]

Actually if you build a high end high-rise in NY, for example, you do benefit far more from a whole host of government services. For example, all the public safety (fire, police...) that make the neighborhood where your high-rise is located attractive are all paid for by tax dollars.

------
Those are paid for by local taxes....sales tax and real estate taxes. Not Federal taxes.

-----
You're getting a much bigger benefit out of that when you sell $1B worth of condo's because it's a safe and attractive neighborhood than I am when I live is a 400 square foot walk-up. And of course no one would want to live in your building if there weren't roads to get you there, airports nearby, mass transit... any number of publically funded transportation options that make your high-rise attractive and which, if they were missing, would make it a giant empty shell in the desert and are essential for you making your $1B and me making my $50K.

-----
Streets and airports are paid for by bonds, local taxes and special excise taxes. And our local airport is also supported by the $6 entry fee to the airport, higher than necessary parking fees if you park at the airport and outrageously high food prices. And I'd like to add that they hit you with additional taxes when you rent a hotel room. Don't forget gas taxes.

Very few of the items you listed are paid for by Federal Taxes. That is what I was directing my argument towards.

--------------

Again, far more valuable to you than me. And let's talk about engineering safety standards; people wouldn't live in your high-rise if there aren't standards, inspections, oh and publically funded education to train the engineers and architects who build your buildings that generate your profits.

Engineering standards have been established over hundreds of years based on previous successes as well as failures. Building Inspectors and local code enforcement is also supported by the fees received from building permits. And a lot of research is provided by professional organizations supported by their members as well as private manufacturers such as Owen Corning Fiberglas etc...

I am not sure about publicly funded education........but you pay for college at your own expense and continuing educational credits are the responsibility of the individual not government.


------




On the other hand, my walk-up was built 100 years ago most probably by immigrant carpenters, so I'm not getting a lot of benefit from all that. I could go on and on and on, but over the last 5000 years or so we've determined that a society that socializes costs for things that provide a public benefit are far more efficient than the dark ages feudal states you seem to be pining for, and in this type of system a much greater portion of that public benefit accrues to the wealthy than the poor. The world is a lot more complicated than buying a burger at McDonalds, as it turns out.

---
I have no problem paying for roads, clean water and sewers. It has benefited society in ways we have forgotten. But those are paid for by local taxes, not Federal Income taxes.

I am not pining for a feudal society. I just think that every one should pay taxes even if it is a small percentage of what they consume in benefits from society.
------------


BTW, about 23% of the U.S. population is under the age of 18, 6% are in college, and 18% are on social security. That totals 47% of the population, to do the math for you. So they're your "bottom 40%", and they're the one's you apparently advocate are some kind of freeloaders with a "sense of entitlement" we need to raise taxes on so we can lower them for the 1% (of which I am one, btw, and I certainly don't "need" a tax break)?

Children under 18 are not considered to be a part of the 40 percent that don't pay taxes. As I understand it. But I may be wrong. I believe you though.

I don't care if you are in college, you should still pay a $100 a year to support the country. $100 is only 2-3 tanks of gas or about 10 glasses of beer at a club. It's not too much to ask for. The country still has to be defended, National Parks need to be maintained and the FBI does not work for free. Yes, I graduated college. I also worked several jobs while I was in college as well.

People on Social Security should not have to pay taxes on their SS checks. The govt taxes it out of your paycheck unwillingly and keeps it for 40 years until you retire. It should be illegal to tax a tax. But if they have another income stream they should pay taxes.

I don't have a problem with retired or disabled people not paying taxes.
But there are many people that are capable of working or have an income stream that don't pay taxes.

But the costs of maintaining a society are still being expensed.

Everyone should pay something.....even if it's a statistically small percentage of what they consume. $100, $50......everyone should have to pay something. The bills still have to get paid.

You asked "Why should a man have to pay more money in taxes each year without an increase in benefits?" Well we can quibble all day about how much in federal dollars goes to transportation, public safety, and education (a substantial amount of federal dollars to to every one of the areas you think are all state, by the way). It doesn't change the fact that we live in a society where we socialize costs for public services at the state and federal level and the rich get far more out of federal spending than the poor. In other words, the man who pays more in taxes each year does accrue significantly more benefits from them.

Let me put it another way: My wealth comes from two businesses "I" started and some trading. When I say "I" I mean that my father didn't give me a "small" loan and a rolodex. However I don't have the hubris to say that I could have started those businesses or had any success whatsoever if I'd done so in say Somalia or even neighboring Ethiopia. They succeeded because I was able to hire good talent, 100% of whom took advantage of federal student loan programs attending top universities made possible by federal research grants. They succeeded because I live in a country that's protected by a military which costs more than the next 7 biggest militaries in the world combined. They succeeded because we have infrastructure and transportation that was federally funded and invented with federal research dollars that allows me and my teams to travel and work remotely. They succeeded because we have a strong judiciary and rule of law. They succeeded because I didn't lose a bunch of my employees from ebola since we have a strong public health system. It succeeded because we don't have elderly and poor people dying or rebelling because they're starving to death. My trading succeeded because we have a (mostly) fair financial system and the enforcement to keep it that way. I've benefited from that federal system far beyond the amount of money I've put in (which makes sense since it's more efficient than a feudal system), and far beyond the amount a person making $50,000 benefits from it. I fully expect to pay more in taxes as a result, all while doing my best to ensure our government is as efficient and effective as possible while carrying out these essential tasks.
I'm curious how you've earned your money and if you could have done so without all this? As a 1%er I find it either an incredible lack of self awareness/hubris or a stunning level of selfishness that my compatriots should complain that they're somehow being treated unfairly by our system when for the most part they're only where they are because it exists and they could never succeed in say, Somalia, where it doesn't.

My point on the "40%" was that it's a fabricated number that even Ryan say's he's sorry he ever used. Pull the numbers, they're readily available. Just 1% of the population gets TANF, which is what you would call "welfare", 13% get SNAP which are "food stamps" (both are also mostly state funded, btw), a big portion of whom are under 18. Only 5% of Americans get half their income or more from these 2 programs. 15% receive medicaid, meaning that they're too sick to work. Sure there's some fraud in medicaid, but the vast majority are people with debilitating illnesses like MS who most of us agree simply can't work. In other words, this vast group of capable workers who are supposedly welfare leechers who don't pay taxes that get so cavalierly thrown around simply doesn't exist. It's a very disingenuous attempt to lump everyone who a reasonable person wouldn't expect to pay a significant amount of taxes (kids, the elderly, students, and the sick) to create a big number in order to paint a picture that we're nearly a majority of "takers" now, and once we hit 50% we're all screwed. In fact that is very far from the truth when you actually take the time to look at census and agency data which is all searchable and only takes a few minutes to find.

 

[Martinghoul]

You asked "Why should a man have to pay more money in taxes each year without an increase in benefits?" Well we can quibble all day about how much in federal dollars goes to transportation, public safety, and education (a substantial amount of federal dollars to to every one of the areas you think are all state, by the way). It doesn't change the fact that we live in a society where we socialize costs for public services at the state and federal level and the rich get far more out of federal spending than the poor. In other words, the man who pays more in taxes each year does accrue significantly more benefits from them.

Let me put it another way: My wealth comes from two businesses "I" started and some trading. When I say "I" I mean that my father didn't give me a "small" loan and a rolodex. However I don't have the hubris to say that I could have started those businesses or had any success whatsoever if I'd done so in say Somalia or even neighboring Ethiopia. They succeeded because I was able to hire good talent, 100% of whom took advantage of federal student loan programs attending top universities made possible by federal research grants. They succeeded because I live in a country that's protected by a military which costs more than the next 7 biggest militaries in the world combined. They succeeded because we have infrastructure and transportation that was federally funded and invented with federal research dollars that allows me and my teams to travel and work remotely. They succeeded because we have a strong judiciary and rule of law. They succeeded because I didn't lose a bunch of my employees from ebola since we have a strong public health system. It succeeded because we don't have elderly and poor people dying or rebelling because they're starving to death. My trading succeeded because we have a (mostly) fair financial system and the enforcement to keep it that way. I've benefited from that federal system far beyond the amount of money I've put in (which makes sense since it's more efficient than a feudal system), and far beyond the amount a person making $50,000 benefits from it. I fully expect to pay more in taxes as a result, all while doing my best to ensure our government is as efficient and effective as possible while carrying out these essential tasks.
I'm curious how you've earned your money and if you could have done so without all this? As a 1%er I find it either an incredible lack of self awareness/hubris or a stunning level of selfishness that my compatriots should complain that they're somehow being treated unfairly by our system when for the most part they're only where they are because it exists and they could never succeed in say, Somalia, where it doesn't.

My point on the "40%" was that it's a fabricated number that even Ryan say's he's sorry he ever used. Pull the numbers, they're readily available. Just 1% of the population gets TANF, which is what you would call "welfare", 13% get SNAP which are "food stamps" (both are also mostly state funded, btw), a big portion of whom are under 18. Only 5% of Americans get half their income or more from these 2 programs. 15% receive medicaid, meaning that they're too sick to work. Sure there's some fraud in medicaid, but the vast majority are people with debilitating illnesses like MS who most of us agree simply can't work. In other words, this vast group of capable workers who are supposedly welfare leechers who don't pay taxes that get so cavalierly thrown around simply doesn't exist. It's a very disingenuous attempt to lump everyone who a reasonable person wouldn't expect to pay a significant amount of taxes (kids, the elderly, students, and the sick) to create a big number in order to paint a picture that we're nearly a majority of "takers" now, and once we hit 50% we're all screwed. In fact that is very far from the truth when you actually take the time to look at census and agency data which is all searchable and only takes a few minutes to find.

If I could give this more "likes", I would...

 

[Handle123]

If everyone paid taxes, Washington would just spend even more.

 

[vanzandt]

If everyone paid taxes, Washington would just spend even more.

You got that one right.

Taxation WITH representation is overrated.

 

[Handle123]

You got that one right.

Taxation WITH representation is overrated.

The people should tell them to meet every two years like state of Texas for 140 days.

"The Legislature of the State of Texas, operating under the biennial system, convenes its regular sessions at noon on the second Tuesday in January of odd-numbered years. The maximum duration of a regular session is 140 days. The governor is given authority under the state constitution to convene the legislature at other times during the biennium. Such sessions are known as called or special sessions and are reserved for legislation that the governor deems critically important in the conduct of state affairs. Called sessions are limited to a period of 30 days, during which the legislature is permitted to pass laws only on subjects submitted by the governor in calling for the session."

See how much they can spend this way.