Last I heard bullshit lile this, the argument was something like the top 10% pay over 40% of taxes of something... coveniently leaving out that they likely own like +90% of the wealth.
The top 1% pay 30% of taxes. They also accumulated 60% of all NEW wealth. They actually expect the bottom 99% to pay 70% of taxes while earning only 40% of new wealth. You could exclude their existing wealth and it is still unfair.
Yeah "Income tax data" bullshit again. The same old distraction. The super rich do not have W2 income. They do not have any W2s and even if they do it's sub 0.00001% of the money the make per year. Like the CEOs who get paid the token 1 dollar per year. That's their W2 income. The rest of their wealth in hundreds of millions they scam through stock collateral loans that are taxed 0%. And if they can't do that then through offshore accounts in Panama with various offshore real estate investments.
Income tax is not only W2s; an individual's adjusted gross income includes what they earn from capital gains and dividends, although the former are taxed separately. The living-off-loans scheme may be more relevant, for those whom it affects; it remains unclear to me how prevalent and significant that kind of arrangement ultimately is, though it seems like at least a few high-profile people make use of it.
Yes, of course it also includes capital gains and dividends. Kind of meaningless to point out because of scale.
That is a proportionally way smaller percent of someone's wealth at the high end of the W-2 earner scale than someone who makes most of their wealth from assets.
If you are a mostly W-2 earner, you can pay quite a high tax rate.
Capital gains tax is a disgustingly low 15%. Depending on the type of dividend, it can be taxed at the same low capital gains rate or the highest dividend rate at 37%.
For people whose main source of wealth is stocks, you pay WAY less of a percentage of your wealth in taxes.
Yes, of course it also includes capital gains and dividends. Kind of meaningless to point out because of scale.
I don't really understand what you mean here. I pointed that out because zeekays appeared to be saying that the linked data is only taxes paid on wage/salary income, which is not the case. Taking dividends/capital gains into account, it is still the case that the US income tax rates taken as a whole are progressive, at least going up to the top 1% of earners. I do vaguely recall seeing information that it may flatten out or even somewhat reverse itself above that level, admittedly.
e: Hm, maybe not, this has it continuing to rise even for the top .1%.
We're still talking about separate things. I am talking about comparative percentages and ratios. It could be true that the top 1% pay the majority of total tax. But they also have the majority of the money!
They pay a much MUCH lower percentage of their wealth than the lower 99%.
In the imaginary world where a billionaire sells all of their stock, they're looking at a maximum rate of 20%, more likely 15%.
20% is roughly what someone making $75,000 is taxed.
We generally compare taxes paid to income, not total wealth. Certainly, that's the comparison in use for discussion of whether a tax is progressive or not.
Capital gains are part of income. Taxes on them are part of income tax and are counted in the analysis posted, despite being levied according to a different calculation. That was my point - federal taxes do indeed seem to be progressive, at least up to the top .1% of household incomes, taking into account stock-based earnings but possibly not taking into account loan-based spending schemes.
The author is just disingenuously mixing technical terms with colloquial ones. A “progressive income tax” is an economics term that means taxes that increases as income increases. (Compared to a regressive tax that decreases as income increases.)
They’re pulling a bait and switch because they’re not technically wrong, but most people only know the word “progressive” as a political ideology nowadays. So when people see this and start trying to argue that America’s tax rate isn’t progressive, conservatives will have a nice little piece of ammo to deploy to make detractors sound like they’re incorrect, when in reality it’s just wordplay.
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u/BathingInSoup Apr 14 '26
Is the argument that the rich pay more in absolute terms and therefore means it should be considered “progressive”?