New York, Wealth and Taxes: A Teaching Moment

Why does Warren Buffet, the #1 ranked man on Forbes Richest
list pay 17%
in taxes on his income whereas his receptionist pays
about 30% of her income.

Good question?

The answer? Wages are taxed differently than investments.

If you are earning $10-20K/month in income from
stocks,rental income and other investments,
which is being taxed at 15%, you may not
be that pressed that your $2,500/month salary
being taxed at 30%.

But, if you are earning $9.72/hour at Macy’s and
being taxed at 30% that is a whole other ball game.
The article goes on to address the discrepancy saying,

One might wonder how Mr. Buffett gets away with a tax rate of only 17.7 percent, while a typical millionaire is paying so much more. Most likely, part of the answer is that Mr. Buffett?s income is made up largely of dividends and capital gains, which are taxed at only 15 percent. By contrast, many other top earners pay the maximum ordinary income tax rate of 35 percent on their salaries, bonuses and business income.

There was a piece in the New York Times on how 1% of the
population
earned 30% of the adjusted gross income.
(The AGI is
used in the calculation of an individual’s incometax liability income and
includes
wages, interest income,dividend income, income from certain retirement accounts,
capital gains, alimony received, rental income, royalty income, farm income, unemployment
compensation, and certain
other kinds of income).

The top 1 percent of New York City tax filers now receive more than a third of the city?s adjusted gross income, according to an analysis released today that looked in part at tax returns. That means for every dollar earned by the top fifth, only 11.5 cents is earned by the bottom fifth. This is the biggest gap in all the states, and like those in the rest of the country, it has been growing for the last 20 years. (Though the disparity is growing fastest in Connecticut, as an article noted today.) The top 1 percent of New York City tax filers, 32,000 tax returns representing 82,000 New York City residents, received 37 percent of the city?s adjusted gross income ? which includes wages, business income and capital gains, among other earnings. They earned 20 percent of wages, 59 percent of dividends and interest, 70 percent of business income and 86 percent of capital gains.

When you have extreme concentrated wealth and extreme
concentrated poverty within
20 miles of each other, this is
bound to happen without strategically implemented
policies on wages, housing and education.
What surprised
me was that the comment section indicated a lack of
understanding of Capitalism?

  • 5.

    Antihypertensive medications: cialis canada online These medications are utilized to decrease stress, and also they are additionally connected to heart troubles. An actual physical and nerve diagnosis may possibly divulge the reason time frame usa cialis back problem. It is used not only curing the disease from the symptoms but also from the root causes. viagra online france This idea employs consideration of a few hormones such as the human growth hormone canadian viagra generic and cause symptoms related to acromegaly.

    I think it has less to do with income inequality than a substantial number of extremely wealthy individuals that for whatever reason decide to make new york their home.

    ? Posted by David

  • 29.

    So why don?t poor people just move somewhere else?

    ? Posted by Ben

Then, of course there was a redeeming moment with this comment:

  • 14.

    It would be enlighting if the 1% with 37 % of AGI
    what percentage of the tax revenue they paid
    ?
    I bet not more than 10%

  • ? Posted by joez

Learn what your tax bracket is here.

What this chart doesn’t indicate is that different types of income are taxed at different rates. Why do we call them taxes anyways?

What if we called taxes dues instead
? Would they better reflect
what they were? Would they be easier to pay?

Yes, this is a little sneaky. Some conservatives may even call it Orwellian, and they ought to know. But the word ?dues? also plays into the psychology of group identity, and that can work to the benefit of conservatives and liberals alike. Consider that ?tax? comes from the Latin for ?appraise? with punitive overtones of ?censure? or ?fault,? as if wage-earners have done something wrong by their labors. ?Dues,? in contrast, is rooted in social obligation and duty.

So this will be an uphill struggle. But we need language to remind us that this is our government, and that we thrive because of the schools and transit systems and 10,000 other services that exist only because we have joined together. Instead of denouncing taxes, politicians would do better to appeal to the patriotic corners of our hearts that warm to phrases like ?we the people.? ?Taxation? is a throwback to the time when kings picked our pockets. ?Paying my dues,? a phrase popularized in the jazz music world, is language by which we can stand together as Americans.

I like it. Without taxes we have no cities, I like cities so I accept taxes.

Speaking of taxes and wage earners I found this great comment on
the subprime bailout from an article on the need for the regulation
of global financial markets.

  • 5.

    The Wall Street titans want free market profits and
    socialized losses
    . Huge compensation has been paid in
    recent years on ?profits? from phony mark-to-market prices
    of derivatives. These idiots need to be reigned in before they
    destroy everything.

  • ? Posted by T.F.

Do, do, do, do, do, thats the Audio Daily Double/
n*ggas need to fall off just to save me the trouble yo.
~Doom, Doomsday

nail—><---head. ===
===

You pay taxes this year?

You already spent that rebate, hunh?
And it ain’t even mailed yet. LAME.

Why don’t people understand the wage/investment
tax distinction?

Guess its my/our job to teach, hunh?

===
===

Comments

  1. manaen says

    FWIW, the umbrella used for the lower tax rates on investments is that they redirect capital to create solutions for the social needs favored by the taxing body: job creation, housing, pollution reduction, scientific research, etc., but wages and salaries (i.e. labor) aren’t so redirectable to create social solutions.
    .
    (Or, the capital owners just bought off the politicians to get favorable treatment)
    .
    Government training programs frequently offer incentives to prospective employers of their graduates, which theoretically increases the money available to pay the graduates in more jobs/higher pay, but this more redirects who’s hired in the same fields than spur investment in new social solutions.
    .
    Republicans tend to favor tax-rate incentives and Democrats tend to favor tax credits and discounts to redirect capital, (e.g. Michigan’s newly-announced 40%-of-expenses rebate to film makers who go there). The parties trumpet their difference in philosophy, but aside from the Republicans’ method using a-priori enticements and the Democrats’ method using after-the-fact rewards, both parties offer lower net taxes to direct the use of capital.

  2. M.Dot. says

    (e.g. Michigan’s newly-announced 40%-of-expenses rebate to film makers who go there)
    ======
    My girl is getting ready to shoot. I will let her know. I wonder how comparable this is to the discount offered in Canada.

    which theoretically
    =======
    I love that. Because you and I both know that there is a HUGE difference between theory and practice.

  3. manaen says

    you and I both know that there is a HUGE difference between theory and practice.
    ====================
    True enough — and it goes both ways. My ex-lady friend and I have a hair salon (which we’re now selling). We stopped interviewing grads from the local ROP program, even though the program will reimburse their first couple weeks’ wages, because their high absentee/delinquency rate, poor vocabulary, and inability to center on *customer* service hurt our business more than the free labor was worth. We had to choose between keeping them or keeping our customers.
    .
    I had a check-in conversation with one of our stylists, who lives in a rougher neighborhood, yesterday about her attendance. She told me that she missed one day for illness and was two hours late another day for a MediCal appointment that she couldn’t reschedule. When I pulled her time card after our discussion, I noticed that she hasn’t clocked in on time once in the last two weeks. She didn’t lie: in her mind, coming 20 minutes late just doesn’t count as late.
    .
    To me, this suggests a deeper problem that people in some pockets of our society are so bereft of stability (family, housing, neighborhood, etc. — my fiancee lives in a hurting part of LA and she has a bullet hole in her door) that many of them don’t understand the standard needed to succeed in the main stream. How do we stop the creeping madness enough for them to learn?

  4. M.Dot. says

    even though the program will reimburse their first couple weeks’ wages, because their high absentee/delinquency rate, poor vocabulary, and inability to center on *customer* service
    =======
    =======
    I wonder if there was another way of dealing with this than to no hire them.

    Please believe, I am not judging, I just always wonder about other choices.

    She didn’t lie: in her mind, coming 20 minutes late just doesn’t count as late.
    =========
    Man….I am historically and categorically late to EVERYTHING. usta say….Only since I have started doing logistics professionally have I got a handle on it . My Dean and l-school professor usta say “you were late…and that was your way of saying that something was wrong w/o saying it”. That was the realeness. WE as negros are on CP…not an excuse tho. It makes us look really bad and tarnishes ANY thing else we may have to offer an organization/institution.

    that many of them don’t understand the standard needed to succeed in the main stream. How do we stop the creeping madness enough for them to learn?
    ========
    Birkhold would say that it starts with having radical self love for themselves. ( I tell him, blood when you say that shit in public you are going to sound like the uber hippie) but he is right. Think about it, if your self love game is tight, you will keep our word, arrive on time, be less likely to MURK someone because you are angry at them…etc…. How do we start bringing about self love….man listen…let me know…

  5. jpollard says

    I moved into a higher tax bracket and got less back on the refund. I need more investments son. And my economic stimulus check wasn’t shit – Fuck Bush.

  6. Anonymous says

    ha! JPOLLARD… me too!

    its some BS but whatev…i got a movie to make so ima take my wages and run. 😉

    ~lightdigga

    ps. i learnt something from this post. thx!

  7. M.Dot. says

    And my economic stimulus check wasn’t shit – Fuck Bush.
    =======

    I could see ya face when you said that sh*t. LOL’s.

  8. M.Dot. says

    ps. i learnt something from this post. thx!
    =====

    Thank you ‘ma. You know I be trying to share-bear.