Who the 53%'ers should really be mad at

So the 99% are mad at the 1%, the 53% are mad at the 47%, and 100% are just plain mad.

The majority of the people in the 47% aren't paying taxes because they simply don't earn enough money.  (Sure there are some who are doing it illegally, but most are obeying all US laws)

The 53% should really be mad at those people who are TAX EVADERS.   These are people that should be paying taxes according to US law, but are not.

According to wikipedia:  http://en.wikipedia.org/wiki/Tax_evasion

The Internal Revenue Service has identified small business and sole proprietorship employees as the largest contributors to the tax gap between what Americans owe in federal taxes and what the federal government receives. Rather than W-2 wage earners^{[clarification needed]} and corporations, small business and sole proprietorship employees contribute to the tax gap because there are few ways for the government to know about skimming or non-reporting of income without mounting more significant investigations. When tips, side-jobs, cash receipts and batter income is not reported it is illegal cheating because no tax is paid by individuals. Similarly, those who are self-employed or run small businesses may not declare income and evade the payment of taxes.

So, the largest contributors to the tax gap are small businesses!!!?   Very interesting....read on

 

In the United States, the most recent IRS estimate of the tax gap was for 2001 at which time, the tax gap amounted to $345 billion.^[25] A more recent study^[26] estimates the 2008 tax gap in the range of $450-$500 billion, and unreported income to be approximately $2 trillion. Thus, 18-19 percent of total reportable income is not properly reported to the IRS. The typical tax evader in the United States is a male under the age of 50 in the highest tax bracket and with a complicated return, and the most common means of tax evasion is overstatement of charitable contributions, particularly church donations.^[27]

And more detail, revealing that the typical tax evader is a male under the age of 50 in the highest tax bracket, and the most common means is overstatement of charitable contributions, like church donations!!!    Does this demographic ring a bell to you?     Here's a link to their website:  http://www.teapartypatriots.org/

Top 1% paid 38% of federal income taxes

So, it's a fact that the Top 1% paid 38% of federal income taxes.  No one can argue that.  But what should be discussed is the question as to whether this is a beneficial argument to the side that think the rich pay too much in tax or the side that say the rich are getting richer and the poor are getting poorer and everyone needs to pay their "fair share".


Let's look at the facts.  53% of people pay income tax, 47% don't.  With the whole "occupy wallstreet" hoopla, there is now a group of people calling themselves the "53 percenters" (ridiculing the "we are the 99%" mantra of the occupy movement).   Their point is that they are paying taxes, not complaining, and their taxes are going to, among other things, the "entitlement" programs for the poor.

The fact that the rich pay 38% of income tax, in my opinion, is a by-product of the fact that they earn an excess of money, and the 47% not paying taxes earn very little money by comparison.  Some more facts:  the per capita income (ie average or mean) in the US is approximatly 47K.   However, the MEDIAN HOUSEHOLD income is just about $50K.  So with a little knowledge in statistics, one can deduct that income is not normally distributed, and is thus skewed.  (I can go into more detail if anyone likes)

Top 1% tax bracket for 2011 are people that earn over $379,151.   However, a family in the top 99.9% percentile makes $2,075,574.  43.6 million people lived in poverty in 2009.   Poverty level is $22,350 for a family of four.

Let's do a little math exercise.  There's a group of 100 people.  99 of them earn $50,000 per year, 1 earns $3,000,000.   To make things simple, let's assume there is a 20% flat income tax with no deductions (a dream for Republicans, and along the lines of what Rick Perry is proposing).  Each of the people making 50K would pay $10,000 in taxes.  The person making 3 million, would pay $600,000 in taxes.  The total revenue generated from the 99 would be $990,000.   As a percentage, the 1 person making 3 million would be paying 38% of the taxes.    Or in other words, 1% of this population would be paying 38% of the total taxes ($600,000/$1,590,000). 


In my opinion, it's a no-brainer to return the tax rates for the rich to what they used to be (I guess this depends on who you define as rich, which is a whole different story.  But let's for kicks, say anyone earning over 1 million dollars)  and to leave the tax rates the same for others.   I don't think the 47% not paying taxes should start paying taxes.  Why should a person who makes $9000 a year pay more taxes that what they are currently paying, while someone making 9 million gets a tax cut?   Makes no sense.  Some people think the 47% are doing something illegal to not pay taxes, but that's not the case.   The reason they aren't paying taxes is that either they aren't flat-out earning enough money, or when you factor in deductions (mortgage, married, children, charitable donations) it leaves them not paying any taxes.   This is the same exact way that the rich's accountants figure out how they can pay LESS taxes.  They maximize their deductions by making a ton of charitable contributions, among other things. (There's also capital gains taxes which I will talk about another time)

All that being said, I do think major overhauls to the "entitlement" programs need to be made, they are a complete failure as they are functioning today.  People should not be milking the system (ie people that have the ability to work, should work!!)  I am all for illegal drug testing of those people on welfare.  If you are spending my tax dollars on illegal drugs, then you shouldn't be receiving my $.  There are plenty of hard-working people who could genuinely use our tax dollars to pay for baby formula, food, clothes, and heating to keep their houses warm.


So much to talk about, this discussion WILL be continued.

Please comment - would love to hear some feedback and ideas.  Always open for good, clean, healthy discussion!

What a weekend - hope you all in the northeast got your power back and are staying warm!   Time for some Sunday night football!