Video: The one percent (loan, percentage, deduction, millionaires)

[k374]

Interesting documentary made by one of the Johnson & Johnson children: (if you have Netflix you can stream it from there as well in better quality):


The One Percent 1/8 - YouTube

[a34dadsf]

Its a stupid documentary if you ask me simply because the kid inherited all his money and he didn't work for it. Most people who inherit wealth simply blow the money and squander the wealth, unless they are wise and well educated in terms of money. The documentary maker is making the false assumption that if you take the wealth from the rich and give it to the poor it will solve the problems, which is entirely false simply because the standard of living of any society is based on the level of production of goods and services that consumers demand. The 1% are simply better at operating businesses and producing goods and services than the 99%. If someone else figures out a more efficient business then the existing 1% will be dethroned and the new business owner will be thrusted into the 1%. Furthermore, the documentary maker is making the assumption that the wealthy are getting rich AT THE EXPENSE of the poor. This is not true. They are creating NEW wealth. The massive wealth disparity we see is a direct result of government - big government teaming up with big business to STEAL tax dollars.

Personally I have no problem with the 1% as long as they follow the laws, provide a good product/service to their consumer and don't violate other people's rights. The issues come when big government and big business team up to extract wealth (tax dollars) from everyone else. Now that is something that is a serious issue and something which we should seek to stop.

[k374]

a3, you are partly right in that the top 1% are creating wealth and jobs with their investments, creativity and business acumen, however you also fail to consider that the tax code is extremely biased towards favoring the rich.

When a millionaire pays 15% on dividend income and a W2 worker has to pay as much as 40% on the interest on his meager savings then it is not fair at all. In addition the rich are able to influence government policies to their advantage using contributions (aka bribes) which is outright fraud in my opinion.

The capital gains rate should be limited to the amount of other ordinary income, if you earn $50,000/yr then the first $50,000 in capital gains can be taxed at 15%, the rest is taxed as ordinary income at your marginal rate.

Therefore millionaires who have only dividend income will be taxed the full rate on most of their income just as it should be. We have a progressive tax system for the middle class, this progressive system applies to everyone including the rich.

However the rich pay very little in taxes as a percentage of income.

[a34dadsf]

When a millionaire pays 15% on dividend income and a W2 worker has to pay as much as 40% on the interest on his meager savings then it is not fair at all. In addition the rich are able to influence government policies to their advantage using contributions (aka bribes) which is outright fraud in my opinion.

Yes the millionaire will pay 15% on dividend income/cap gains BUT the middle class and poor will ALSO pay 15% on their dividend/cap gains. Whose fault is it that the middle class and poor don't invest their money? Also in terms of, "interest on the savings account" the rich will also pay the same tax as the middle class. In terms of w2 income, around 50% of the middle class and poor pay zero income tax due to deductions and tax credits. Just look at your own tax return. Even people making a modest income will pay around 10-20% fed tax.

In addition the rich are able to influence government policies to their advantage using contributions (aka bribes) which is outright fraud in my opinion.

I agree but not every rich person bribes the government. We should prosecute the rich and politicians who take bribes or give bribes.

The capital gains rate should be limited to the amount of other ordinary income, if you earn $50,000/yr then the first $50,000 in capital gains can be taxed at 15%, the rest is taxed as ordinary income at your marginal rate.

I disagree. I think we should cut government spending and make a law that says the maximum amount of taxes that anyone pays is to set to no more than 15% of your income from any source (at the federal level). Also its important to note that in order to get capital gains you have to had made money. That is not always the case when it comes to investing. Sometimes you win and sometimes you lose. I've made alot of money in the stock markets and I've also lost alot of money in the markets. No risk no reward.

However the rich pay very little in taxes as a percentage of income.

and the upper middle class pay too much taxes as a percentage of income. Raising taxes is not the solution. Big government and corrupt politicians is the problem. Also just think about it. You just said before that the problem was: "In addition the rich are able to influence government policies to their advantage using contributions (aka bribes) which is outright fraud in my opinion." So if the politically connected rich are bribing the government where do you think the increased tax revenue is going to go? Back in their pockets and they will get even more rich! As a I said before big government and corrupt politicians is the problem. If we don't fix that then we will fix nothing.

[k374]

Originally Posted by a34dadsf

Whose fault is it that the middle class and poor don't invest their money?

The rich have the benefit of capital to make primary income through investments, the poor and middle class have no such benefits. I'll tell you what...let the rich loan the poor a good amount of money, then the poor will invest that money and pay capital gains on it, sounds good?

The poor don't have access to capital, you cannot expect the poor to make their primary income through investments, to even suggest that is ridiculous!

If your view is adopted then only those that have money will be able to make more money and the rest 99% will be just left at the bottom (the current system of affairs)... that is not what America is about!

BTW, I HAVE looked at my tax return my marginal tax rate including payroll taxes is close to 50%, my overall tax rate last year was 35% (and that's only because I moved and donated a lot of my stuff to charity) otherwise it's typical around 37-38%. I definitely resent paying 35-40% of my income in taxes when I know people with 10x my income pay only 15%... everyone paying around 25% total taxes would be more fair.

A lot has been said about 45% paying no tax at all...well, that is because their income is very low.