Jaynes Your Way

Here are my thoughts about films, life, and what not. If you don't like them I'll give your money back.

Not So Taxing Read on Taxing

17 August, 2010

I'm happy that this isn't a status on Facebook because the word 'tax' has become a hot button topic--I'll tweet it though. I'll admit that I am not a tax scholar (yet), but I have a curiosity about the topic since I plan to be rich one day, which is why I took notice to The Financial Page in the August 16th New Yorker.

 James Surowiecki writes about the fight on Capital Hill over tax policy. Here is the link and you can read it for yourself (it's a quick read), but I wanted to pull out some of the statistics he sites--please feel free to refute them, but include your references.

  • Between 2002-2007 the botton 99% of incomes only grew 1.3% a year, while the top 1% grew 10% a year.
  • The top 1% growth accounts for 2/3rds of all income growth in those years.
  • The top .1% of income tripled over the same period. 
  • The top .1% earn as much as the bottom 20 million. (Need to convert this to either both percent or both actual numbers) *

Surowiecki's point is that the very, very rich are pulling away from the merely very rich and that the current tax bracket doesn't account for that. The way the brackets work now is that anything over 375,000 with a tax rate of 35%. Basically, Lebron James and Lebron James's dentist are taxed at the same rate. Surowiecki writes, " The US is now a place where the rich and the ultra-rich really inhabit different worlds." I don't want to use the word reform here, because I don't have any suggestions, but it makes sense to me that there should be a frank discussion on the tax system,. A good healthy discussion should encourage people to have a better understand of the tax system, not just reactions to raising and lowering them. 

I'll gladly take any recommended readings.

* I tired to research the actual number the .1% represents and I found this: "This 10 percent of the returns in the top 1 percent amounts to only 141,000 tax returns but accounts for nearly 12 percent of the adjusted gross income earned and approximately 20 percent of the nation's federal individual income taxes. "


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