08-10-2011, 02:57 PM
I hate hearing this bogus argument every time someone says the "rich" aren't paying their fair share" or "tax breaks for the rich". The same tax breaks the "rich" use are available to us non-rich too - we just don't usually have the excess resources to use them! They may not be paying big taxes today - but I am sure they paid a lot of taxes as they were getting rich!
Everyone understands that taxes are paid on earnings and gains - they are not paid on wealth (or stored earnings or stored gains) until you die (that is a whole other debate). You can be a millionaire today and not make earnings and gains to pay taxes on tomorrow.
You don't pay income tax on wealth - thats why they call it "Income" tax!
If you have 1 trillion dollars sitting in your mattress today, you probably don't have to work or "earn" much - therefor you will not be paying taxes on earnings! Duh.
As far as gains, this is usually how the rich get richer - they invest their wealth in big & small business, public bonds and other instruments that are designed to grow the economy. The way the economy has been in the last couple years, I bet most millionaires have been loosing more than you and I make in a year on their investments. Those losses offset any gains according to our tax code and may often time be greater than any current earnings! Also keep in mind that a large chunk of charitable contributions come from "the rich" too! Our tax code also allows us to deduct these donation from our earnings and gains too!
I would certainly bet they paid a lot on the earnings and gains it took to actually become a millionaire!
JPK
I have been reading more and more about the flat tax concept and it makes more and more sense. It is also a way to get everyone to have some "skin" in the game, which I think having 4X% of the population being takers not givers is the biggest problem with the system. Yes, I believe in social safety nets, but the system is totally abused and is to blame for a chunk of today's probems.
Everyone understands that taxes are paid on earnings and gains - they are not paid on wealth (or stored earnings or stored gains) until you die (that is a whole other debate). You can be a millionaire today and not make earnings and gains to pay taxes on tomorrow.
You don't pay income tax on wealth - thats why they call it "Income" tax!
If you have 1 trillion dollars sitting in your mattress today, you probably don't have to work or "earn" much - therefor you will not be paying taxes on earnings! Duh.
As far as gains, this is usually how the rich get richer - they invest their wealth in big & small business, public bonds and other instruments that are designed to grow the economy. The way the economy has been in the last couple years, I bet most millionaires have been loosing more than you and I make in a year on their investments. Those losses offset any gains according to our tax code and may often time be greater than any current earnings! Also keep in mind that a large chunk of charitable contributions come from "the rich" too! Our tax code also allows us to deduct these donation from our earnings and gains too!
I would certainly bet they paid a lot on the earnings and gains it took to actually become a millionaire!
JPK
I have been reading more and more about the flat tax concept and it makes more and more sense. It is also a way to get everyone to have some "skin" in the game, which I think having 4X% of the population being takers not givers is the biggest problem with the system. Yes, I believe in social safety nets, but the system is totally abused and is to blame for a chunk of today's probems.