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Comment by Retric | Hacker News Reader

My taxes are inflated so rich can pay a lower percentage than I do or even just skim off the government. Beyond that, my Rent and healthcare costs are ridiculously inflated, but you can find a lot of padding in other areas.

FYI even just at the federal level things are effed up. 33.9% of taxes collected are payroll taxes, but social security caps at ~120k. Hint it's just a tax, you can receive benifits without ever working and millions on disability are simply pulled off welfare rolls.

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Top 1% of income earners pay 50% of all federal income taxes collected.

What would you consider a "fair" share of the top 1%'s wealth?

Volume and proportion are not the same thing. 50% of net is very easy when you have >10% of all wealth. No super rich individuals are taxed at 50% either of their net income either (if they are they are doing their taxes themselves and their lawyer is a fool), it is more common for ultra high wealth individuals to pay less than 10% of their net earnings.

I see your point, but don't forget that almost 50% of Americans don't pay any federal tax at all.[1] In fact some of them get EITC, so they are getting free money from the government on top of keeping all of their salary.

So my question still stands, what would be a fair breakdown of tax burden? Top 1% pay 100% of all income taxes? 90%?

I'm not trying to start an argument, I'm asking an honest question.

Unless we know what "fair" looks like, we don't know what needs to change.

[1]http://dailycaller.com/2015/10/07/in-2015-45-percent-of-amer...

I think asking what's "fair" is the wrong question. We should ask what is effective at creating the most utility. I believe the marginal utility of money is roughly logarithmic, and thus taking money from the rich and giving it to the poor creates a lot of utility. However, this must also be balanced with the economic incentives that (potential) inequality drives, which leads to a lot of utility creation.

The intuition I take out of this, is that letting people be billionaires is a complete waste of resources, because plenty of people would still aspire to wealth even if the richest person in the world had a fraction of that.

Sales tax is still tax. While they don't personally hand the money to the government it is still coming out of their money. I am not qualified to talk about how the US tax system fits together but I assume that 50% is paying some form of land tax through local government fees that are passed on as an increase in rent. I would also assume they drink or smoke (pretty hefty taxes there too). Consider also that fees are pretty much tax by any other name (they are government revenue), there is a rather large fee to cancel US citizenship.

Asking the question what should the 'top 1%' pay is (in my opinion) the wrong question.

A better start (for me) is to ask what % of tax the people with the (for example) top 50% of income, or top 50% of wealth, should pay.

If the top 1% has (for example) 90% of the income, then only paying 50% of the tax might be considered unfair.

If the top 1% has (for example) 90% of the income, then only paying 50% of the tax might be considered unfair.

The only number I could find is that the top 1% earns 22% of all AGI (adjusted gross income). This is income after all deductions, etc; the amount of income the tax rate is applied to.[1]

I'd be interested to see how much of all income is earned by the top 1%.

[1]http://taxfoundation.org/article/summary-latest-federal-inco...

AGI is a lie.

EX: Calculate bill gates lifetime wealth and lifetime AGI. Hint, that 30 billion he donated never counted as AGI.

AGI is not a lie, it's Adjusted Gross Income, that is the income you actually pay tax on.

It's not like it's some super secret formula that no one knows how to calculate.

Income is income, Adjustment is where the lie comes from.

Sure, you can pretend it's meaningful number, but ex: charitable donations are not deductible from payroll taxes so they are clearly not going to reduce income. Or for a more obvious example, donate 1 million in appreciated and you get to deduct the full 1 million from income. (see if you can spot the problem with that.)

PS: Hypothetically, if they said AGI was income - 95% of income over 10 million per year would you still use it? After all that's just an adjustment.

I have no idea why you are calling it a lie. The AGI is clearly "adjusted" and the formula is public.

This might be more interesting...

In 2011, households in the top, middle, and bottom quintiles received 52, 14, and 5 percent of the nation's before-tax income, respectively; the shares of federal taxes paid by those households were 69, 9, and 1 percent.[1]

So the top quintile earns 52% of the before-tax income and payers 69% of all taxes. The bottom quintile earns 5% of all before-tax income and pays 1% of the taxes.

[1]https://www.cbo.gov/publication/49440

Again with the biased (and federal only) numbers.

Market income consists of labor income, business income, capital gains (profits realized from the sale of assets), capital income excluding capita l gains, income received in retirement for past services, and other sources of income.

That 30 billion Gates donated would could for 0 on that scale making it BS. Use of a company jet for 1 year, 0.

PS: Of course it's also pretending the top 0.01% is the same as the top 1%.

If you exclude payroll taxes AND ALL OTHER TAXES. Then sure you can play with the numbers.

Reality is they are not paying 50% of income tax as social security is a federal tax on income. There are also plenty of regressive taxes. Pay for lunch that's taxed, pay for an accountant free. Guess who spends more on accountants?

Why is Social Security a tax? It's a separately funded program that pays out based on what the person paid into it. It's also capped.

Just because you call a tax an insurance fund or a pogostick, does not mean it's somehow not a tax. Government collects money from X, and hands it out to Y that's a tax.

keep going until income distribution looks more like log(x)+3 instead of x^e

I'm not from US, please stop assuming it about HN readers already.

Also, the percentage of income as basis for tax doesn't make any sense. I don't pay a percentage of income for broadband or Netflix or insurance, why should payment for government services be different?

A decent analogy for most governments is that they behave similarly to an insurance company with an army. You absolutely pay a percentage of the value of what you are insuring (here your life, wealth, earning potential) not a flat fee.

Because taxes aren't a personal payment for government services for yourself. You're paying into a shared fund on a capacity basis so that _everyone_ can have access to those services.

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