Why do the mega rich only pay 15 percent in income tax and very little payroll tax?

nytimes.com/2011/08/15/opinion/stop-codd... Asked by GoldenLion 2 months ago Similar questions: mega rich pay 15 percent income tax payroll Business > Taxes.

Similar questions: mega rich pay 15 percent income tax payroll.

While some of that group do make some valid points, you can't believe everything you hear / see / read......from that group or from talking heads on TV. The top earners pay 35% on their ordinary income. The 15% rate is for capital gains - money earned on investments.

The moneychimp link below is neat, I think: it shows the tax rates for various incomes and for all four filing groups (single, married-joint, married-separate, head of household). It lets us play with the calculator and see what various income levels would pay to the federal government in income taxes.To look at the taxes at all income levels, never leave out the experts: the IRS, at irs.gov/pub/irs-pdf/i1040tt.pdf.And there's that term - payroll tax - which confuses many of us, as all taxes on income is deducted from our payroll checks. This term has come to mean Social Security tax.

The wealthy pay the same rate as we do on our earned income - Social Security (OASDI, to use the correct term - Google it). They just have a stop-taxing level. That's because Social Security benefits are pegged to income.

In order to pay on larger and larger amounts of income, SS benefit checks would have to be larger and larger as well. That's what the government decided, after considering what to do. Tax rates are set by the House of Representatives and the Senate and signed into law by the President.

So the quick answer to your question about tax rates will always be - because that's the tax set by the government. Should the rates be higher on those who have higher incomes? I think so.

But I think about a zillion tax deductions should be eliminated before higher tax rates should be considered. Many people call those 'zillion tax deductions' loopholes, and speak of them as if someone 'found' a loophole. Nonsense: they weren't lost: those loopholes are there because someone/some group wanted them there.

The loopholes/deductions are the details of our tax code - and the devil is in the details.Htm.

Ancient_hacker said, Nope, I haven't been watching Fox News...........I've been cruising the IRS website and moneychimp and the Wall Street Journal for information. What the IRS says is income is total income on which taxes are due: that's the important number. But as I said above, the 'zillion tax deduction' loopholes are where the devil is..........all those loopholes that are there because Congress puts them there..........all those deductions that shouldn't be there, in my opinion.

I also said I think the very wealthy should pay a higher rate. But a higher rate won't help IF the 'zillion tax deductions' remain in place. It's the tax deductions that bring them from the current 35% down to 20%.

The devil is in the deductions! .

The Occupy Wall Street and other of the city/street/park occupiers don’t have a clue how many entertainers make mega-millions each year. Funny thing I’ve noticed in TV interviews of the OWS group is that Russell Simmons of Def Jam fame has been there several times, and has spoken for the cameras several times. He offers sympathy.

What’s funny to me is that the people staying in the park seem clueless that Simmons is no doubt a top customer for a Wall Street firm, in charge of managing his several hundred million dollar fortune, making it grow larger, and advising him how to shelter some of it from taxes, etc. Money is money. Why object to $350 million for a CEO and not object to $350 million for an actor? Johnny Depp said on TV recently that he is overpaid........he made $350 million for the Pirates movies thus far.

I think GE’s Jeffrey Immelt is overpaid. So is Russell Simmons, and Johnny Depp, and Angelina Jolie and Brad Pitt and ………. You get the idea.

Schelli makes the point But the wealthy are bipartisan. Wall Street has given more to President Obama's war chest for the 2012 election than to all the Republican candidates combined. This article is from The Washington Post: "Obama’s ties to Wall Street donors could complicate Democratic plans to paint Republicans as puppets of the financial industry, particularly in light of the Occupy Wall Street protests that have gone global over the past week.In response to the protests, the Obama campaign and other Democrats have stepped up their attacks on Romney and other Republicans for their opposition to Wall Street regulations.

One top banking executive who raises money for Obama, discussing fundraising efforts on the condition of anonymity, said reports of disaffection with the president “are exaggerated and overblown. ” He said a strong contingent of financiers in New York, Chicago and California remains supportive of Obama and his economic policies, even as some have turned on him. But, this donor added, “it probably helps from a political perspective if he’s not seen as a Wall Street guy.

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You did a great job explaining payroll tax and capital gains. I still am not convinced. The rich statistically are pay less in taxes per income than they did a decade ago.

How do you explain that? If the rich pay capital gains tax and payroll tax, why would the amount be decreasing. I do believe the rich and poor should keep as much money as they legally can.

I don't think the rich should be given favored privilege because they are rich. GoldenLion 2 months ago .

The stop-taxing level for Social Security is the same across the board. Called the maximum taxable earnings, for 2011 the amount is $106,800. The SS tax rate for 2011 is 4.2% for employees.An employee who earns $106,800 will pay $4485.60 into the Social Security fund.

An employee who earns $156,800 will pay the same amount - $4485.60 - because the tax stops at $106,800 level. An employee who earns $53,400 (one-half the maximum taxable earnings amount of $106,800) will pay $2242.80 into the SS fund.It's easy to see the lower earner (most of us) pays on 100% of his/her income, and that the high earner pays on a percentage of his/her income. This issue seems to be one of those 'how do you make this fair' questions, because the higher earner would say 'if I pay more money into the program, I should get more out of it when I retire'.

It's true that someone who earns less gets a smaller Social Security check, and someone who earns more gets a larger Social Security check on retirement. But can the SS fund afford to pay out the larger checks? This is a question for someone with the wisdom of Solomon.

I can't think how to make this fair! Luckily, I don't have to do that. Gov/app/answers/detail/a_id/240/~/2011-social-security-tax-rate-and-maximum-taxable-earnings.

Please I'm begging you, days of rich vs poor questions. Can't you find another topic you usually have a zillion of them in your head. What are you trying to get at anyway?

The rich are good, bad, indifferent, mean, the poor are good, bad, being held down? What the heck is your point? .

Everyone knows that not all rich people are bad GoldenLion 2 months ago .

Because they have the government, especially ther Republican side of the house, in their pockets and can get whatever they want. They should be paying 60+ % like they were in the early 60s.

Yes, they have protected the rich, by lowering taxes from 60% to 20%, giving them excessive loopholes and dropping the capital gains taxes, where they make most of their money. They explain it by making it more of a burden for the poor and middle class and less of a burden for the rich.

The top earners pay 35% on their ordinary income. The 15% rate is for capital gains - money earned on investments. Ah, no.

You've been listening to Fox News and Friends. You can go look at the REAL tax rates paid ACTUALLY paid, they're at the IRS web site. The rich, surprise, surprise, pay about 20% average.

The really smart ones, like the top 12 partners in Lehman Brothers, DO NOT PAY A CENT. Or as just one example, Warren Buffet pays like 18%, his secretary who makes exactly 2,000 times less than him, paid 34%. Real numbers, real people.No wonder the peasants are revolting.

" "my daughter is in foster care, I pay 59% am I allowed to file her on my income taxes" "I recently inherited $25,000. Will I have to pay income tax or inheritance tax on it? I live in California.

" "what percent of 2760 a month would I have to pay in taxes? " "Is there a listing of total taxes paid by demographics in the US? Including income, sales, payroll, property, etc.?" "Is there a Growing Income Inequality in the US?

There's the Sort of Rich. That's everybody in the top 10 percent" "I am self-employed and would like to know why I pay more federal income tax than when I was employed by a business. " "CAN A 22 YEAR OLD CLAIM THE EARNED INCOME TAX IF CLAIMING A GRANDMOTHER ON HIS TAXES" "My total income is $18,000yr I cashed in an ins.

Policy and got $2200 from it Will I have to pay taxes, I am 70" "my employer only wants to pay me by 1099 but I am a reqular employer, how can I get him to tax my payroll check?

My daughter is in foster care, I pay 59% am I allowed to file her on my income taxes.

I recently inherited $25,000. Will I have to pay income tax or inheritance tax on it? I live in California.

There's the Sort of Rich. That's everybody in the top 10 percent.

I am self-employed and would like to know why I pay more federal income tax than when I was employed by a business.

Can a 22 year old claim the earned income tax if claiming a grandmother on his taxes.

My total income is $18,000yr I cashed in an ins. Policy and got $2200 from it Will I have to pay taxes, I am 70.

Everyone knows that not all rich people are bad davepamn 49 months ago.

I cant really gove you an answer,but what I can give you is a way to a solution, that is you have to find the anglde that you relate to or peaks your interest. A good paper is one that people get drawn into because it reaches them ln some way.As for me WW11 to me, I think of the holocaust and the effect it had on the survivors, their families and those who stood by and did nothing until it was too late.