Please, let’s stop using this term “wealthy” to describe the highest bracket taxpayers. The 33% bracket runs from the 170s to the low 200s for single or married. The 35% kicks in at 373k.
Ask professionals or business owners who work their asses off if they thing they’re “wealthy.”
If the Democrats are so concerned about this, then why don’t the tax the truly “wealthy” rather than cut the brackets at these levels?
I do not consider 170 to 370 a year to be wealthy. It’s definitely upper-middle class, but that person’s not going out to buy extravagant properties, build impressive buildings, or get rich in land speculation.
As someone in the top 1% myself, I understand what you mean (when I think of “rich”, I think of Warren Buffett with $60 billion). The thing is, the average household in the United States makes $4,167 per month. The top income tax bracket doesn’t kick in until $31,083 per month.
To most people that is rich, *especially* when you consider that those of us in the top 1% know how to use private pensions, tax shelters, trusts, partnerships, and corporations to lower our income considerably. (By the time all of the tax breaks after factored in, an income of $31,083 is probably really an income of $50,000+ per month if it’s done right.)
Also, at that level of income, whether you are “wealthy” or not depends on if you on a business or you are collecting a paycheck.
What I mean is, if you are a high paid executive and you get $31,000+ per month, that’s it. If you stop working, the checks cease. Game over.
If, however, you get that same $31,083 per month from owning shares of a private business, such as a commercial plumbing firm you built from a start-up, at even a low capitalization rate of 11x EBIT, your “shares” are worth nearly $4,000,000.
You may have $0 in the bank but the reality is you are still worth a cool $4 million. Instead of owning stock in McDonald’s or Berkshire Hathaway, you own shares of *your* company. Most people can’t “see” it so they don’t believe it. They suddenly think they got rich after selling their business but they were always that rich, they just exchanged stock in a private firm for cash.
A much, much bigger problem is the middle class is being taxed out of existence. When Buffett was in his 20’s and 30’s, the payroll tax was only 3% if I remember correctly. Today, it can go as high as 15.3% for self-employed business owners. A family making less than $150,000 per year has to work their ass off just to pay the IRS and, proportionately speaking, they are paying more than ever before. That is the sick part of this mess.
The ONLY way I would support increasing my taxes would if they raised the bracket on on income over $1,000,000 per year and they drastically CUT the payroll tax back to the level of the 1950’s to give small business owners a shot at getting off the ground.
Someone who is self-employed has to be able to keep most of the money he earns in the early years and Congress is killing off these men and women with tax increases. It has to be fixed. I know it was my biggest obstacle when I started out and, frankly, I’m not sure how much longer the American dream can stay alive if they keep reaching their hands into the pockets of entrepreneurs.
>>If the Democrats are so concerned about this, then why don’t the tax the truly “wealthy” rather than cut the brackets at these levels?
Because it’s easier to create a strawman that stands in place of the “wealthy” than to attack the true power structure of the Dem party.
A retail sales tax is equivalent to a tax on wealth (as long as exemptions are kept to a bare minimum). Why not implement the Fair Tax, and thus tax the wealthy disproportionately, while increasing savings and helping to repair the balance sheets of households and businesses?
Please, let’s stop using this term “wealthy” to describe the highest bracket taxpayers. The 33% bracket runs from the 170s to the low 200s for single or married. The 35% kicks in at 373k.
Ask professionals or business owners who work their asses off if they thing they’re “wealthy.”
I think it really depends on geographics. My wife and I gross just under $60,000 a year combined but in our little county we are considered middle to upper middle class.
I heard the other day that approximately 2/3 of all filers in the top bracket were Sub-S corps -- i.e., small business/proprietorships.