- Posted May 12, 2012 by
taxes & our economy
Warren Buffet has stated that relative to his total income his tax rate is 17%. All the tax loopholes benefit the very wealthy so that many with million dollar incomes pay taxes at less than 20%. Yet some politicians want to balance our federal budget by reducing social security benefits and medicare. But some people on social security already face a marginal tax rate of almost 52%. A single individual with adjusted gross income over $34,000 will have an income where every extra dollar of regular income causes $.85 of Social Security to be taxed as well, so that tax becomes due on $1.85. Income from pensions and/or a 401K or Ira could well result in income sufficient to place one in the 28% tax bracket. Hence 28% x $1.85 = $.518, almost 52 cents additional tax for each additional dollar of income. In an article by Charles Morris in the magazine Commonweal, Nov. 18, 2011 issue, he compares the growth in real after-tax income from 1979 to 2007. The bottom fifth in income saw only about a 20% increase, the middle fifth saw about a 35% increase. Those in the 81st to 99th percentile saw about a 70% increase. Those in the top 1% saw about a 280% increase. The wealthy support of politicians has persuaded them to maintain low tax rates on the wealthy and seek to reduce medicare and social security to fund the tax loopholes enjoyed by the multi-millionaires. IN SHORT WE LIVE IN A PLUTOCRACY, NOT A DEMOCRACY !!! This is like the middle ages when royalty lived in castles while the serfs grew the food that kept them fed in their castles.