Why are any Democrats in favor of extending 15% dividend tax rate?

[papau]

Current GOP "flat tax" has average rate nearly same at $100K and over $1M -We have a flat tax NOW in effect if one counts the regressive effect of the payroll tax -6.2% — which applied last year only to the first $90,000 in wages - so that folkss that earned more than that paid a smaller percentage of their income in payroll taxes than did those who earned less (e.g., folks with income between $500,000 and $1 million owed the same share of their income in combined federal income and payroll taxes — 22% — as did taxpayers reporting at least $1 million in income). Average family net worth has continued to grow because of rising home prices. When CEO's make on average 279 times average non-supervisory production worker pay, a progressive tax is simply a flat tax that taxes investment income the same as wages. http://www.americanprogress.org/atf/cf/{E9245FE4-9A2B-43C7-A521-5D6FF2E06E03}/PPP_TAX_SUM.pdf And the GOP wants to extend the 15% dividend tax rate so as to help who?


http://www.latimes.com/news/nationworld/nation/la-na-taxday17apr17,0,4398193.story?track=tottext

From the Los Angeles Times
Taxes Flatten but Deep Pockets Still Bulge
By Joel Havemann
Times Staff Writer

April 17, 2006

WASHINGTON — <snip>But as millions of Americans face the deadline for filing their federal tax returns, they are operating in something very close to the world Forbes and other flat-tax visionaries proposed. Without any fanfare or philosophical debate, millionaires and middle-class Americans now pay taxes at almost the same rates.<snip>

Though most pay at least somewhat less in taxes than they did a few years ago, the Federal Reserve Board, in its latest three-year examination of family finances, found that average family income fell by 2% between 2001 and 2004 after adjusting for inflation. In the previous three-year period, average family income grew by 17%.

Thanks to more credit card debt and borrowing against their homes, the 25% of Americans at the bottom of the wealth scale had negative net worth in 2004. On average, these families owed $1,400 more than their possessions were worth.<snip>

The first federal tax code specified a maximum rate of 7%, but after the U.S. entered the war in 1917, Congress boosted the top rate to 77%. During World War II, the top rate hit an astonishing 94%. As recently as 1980, the maximum rate on investment income was 70%, although the top rate on wages was 50%.<snip>




http://www.taxpolicycenter.org/TaxFacts/Tfdb/TFTemplate.cfm?DocID=446&Topic2id=20&Topic3id=22
http://www.taxpolicycenter.org/TaxFacts/TFDB/TFTemplate.cfm?Docid=456

The average percentage of their income that people paid in combined federal income and payroll taxes in 2005: Income What people actually paid
(In thousands of 2005 dollars)
Less than $10 2.3%
$10-20 3.7
$20-30 9.1
$30-40 13.6
$40-50 15.8
$50-75 17.4
$75-100 18.9
$100-200 20.6
$200-500 21.5
$500-1,000 22.0
Over $1,000 22.0
Starting Source: Congressional Budget office

[BlueManDude]

1. Don't want to be accused of "class warfare" by Tim Russert. n/t

[rfranklin]

2. Fuck class warfare...eat the rich!

Yum, yum!

[Warpy]

3. Your last table was for income taxes, alone. You need to add

payroll taxes to it. People who earn ten bucks still pay the same percentage as those who make $90,000--7.5%. That should have been added to the percentages you gave. Plus, those payroll taxes are only on the first $90,000, skewing the top rates downward.

Less than $10 - 9.8%

$40-50 - 23.3%

Over $1000 - 25%, declining to 22% as the payroll taxes on that first $90,000 become statistically negligible.

Plus the richest get tax breaks that the rest of us have no access to.

The reason to figure payroll taxes into the overall tax burdern at lower income levels is because 40% of them are ROBBED to cover the tax cuts to the rich.

[papau]

4. The 22% average total tax take (21% at 100K) includes payroll tax

people with income between $500,000 and $1 million owed the same share of their income in combined federal income and payroll taxes — 22% — as did taxpayers reporting at least $1 million in income, according to the Tax Policy Center.

And taxpayers in the $100,000 to $200,000 range paid nearly the same rate, 20.6%.

Those in the $50,000 to $75,000 range paid 17.4%

taxpayers in the $40,000 to $50,000 range paid 15.8%

and those in the $30,000 to $40,000 range paid 13.6% - of which almost half - 6.2% - was payroll tax.

The above are not marginal rates - the extra tax on an extra dollar - they are simply total tax paid divided by total income.

The top tax rate is 35% - the "marginal" FIT piece of every dollar paid in tax on income above $326,450 in 2005 - and obviously there is no payroll tax paid on that dollar because it is earned above the $90,000 wage cap for the payroll tax. However nobody pays that percentage in total because it applies only to income beyond the first $326,450. At the other end of the income scale, the lowest rate — 10% — applies only to the first $7,300 in income. And as you said there are deductions the rich use, and trusts that transform wages into dividends that are only taxed at 15%, and offshoring that all serve to reduce the rich average tax rate well below even the 22% that is reported.

[Jason101]

5. My tax loophole

I love the democratic process! I may be on welfare but I manage quite well. I don't have to worry about the commute, paying big taxes or dog-eat-dog politics. I used to be in the corporate world and really fed up with the world and politics near and far. I even voted Republican back a few years ago and I had this big pipe dream of retiring wealthy. Well I tell you, I am now living that dream. I cashed in the home, car, 401K, gold and all that I had. Basically sold it all, so to speak, and went on public assistance. I am now on welfare and loving it. I am fully supportive of the socialistic process, medicine etc that many of my ex-colleagues in the EU enjoy. If you can't beat em...well ..join em.

Forget tax rates...let the wealthy have their big dollars for now. If more people would take my advice, they could live like kings and eventually all that will be left will be a bunch of highly taxed, over worked people.

J

[papau]

6. I doubt you have ever missed a meal in your life - but those on Welfare

often miss meals for lack of food and and lack of money to buy food.

We can only hope the US will one day be as humane as the EU.