chenr@tilt.UUCP (Raymond Chen ) (04/11/84)
<fixit please...>
To uiucdcs!renner:
I think that if you were to look at the figures based on the
unadjusted gross income, like you said you would have preferred to do,
or looked at income adjusted in a different way, you would have reached
different conclusions.
I've taken a few politics courses and econ courses here at school
and remember my professor's giving us data on this subject. The data we
got ended up being in the form of your basic bell-curve, with the lower
income brackets paying from 10% and up, peaking at about 35-45% in the
$30-40000 dollar range, and dropping to below 5% at the highest brackets.
Again, the same caveat: I don't know exactly how these figures were arrived
at, although I do know that they weren't the ravings of ultra-liberal
crusaders. The professors were all fairly moderate and thought they had
honest figures.
So, there do exist other data that would support sevener's claim.
Whether the data is biased incorrectly is something else. Does anybody
out there have any researched numbers they could post? (Sorry I couldn't
do it myself ...)
Remember: Figures don't lie, but liars can figure...
(flames > /dev/null)
--
From the Random Fingers of --
Ray Chen
{allegra | ihnp4 | mhuxi}!princeton!down!tilt!chenr
"It's amazing what a thousand monkeys and a few typewriters can accomplish..."notes@iuvax.UUCP (04/12/84)
#R:uiucdcs:29200122:iuvax:2000024:000:724 iuvax!scsg Apr 11 09:29:00 1984 The caveat about Adjusted Taxable Gross Income not accounting for abusive tax shelters is the crux of the biscuit. Sure, once you've taken out half a person's income in deductions then the percentage of taxes paid will seem more equitable. But that is precisely how 117 millionaries actually ended up paying no taxes whatsoever after Reagan's tax changes--they had no TAXABLE income after accounting for their numerous tax shelters. Your statistics were useful but still fail to address the question of how much different income groups pay in taxes based on their actual income, not their "taxable" income. But it certainly is refreshing to see some facts! tim sevener Indiana University, Bloomington pur-ee!iuvax!scsg
lkk@mit-eddie.UUCP (Larry Kolodney) (04/13/84)
Scott Renner's tax tables are quite convincing until you read his last paragraph. Of course people with adjusted gross incomes in the 50% range pay a much larger percentage per person of the tax burden, thats just simple mathematics and you don't even need those charts to back it up. MOST tax loops-hole use deductions on UNADJUSTED GROSS INCOME in order to make the payer pay less. Thus, your statistics only tell us about those rich who choose not to take advantage of the loop-holes. It is quite conceiveable, for instance, that a person with an annual income of $100,000 could claim $0 AGI due to business expenses such a purchasing a rolls-royce or going to a convention in geneva switz. (yes, a rolls-royce is a valid deduction). The Reagan Administration has also speeded up the depreciation schedule, so that still another source of deductions has been made available. There was a very interesting Article in an issue of co-evolution quarterly last year. It made an argument that a flat tax of something like 14% on total income with no deductions (adjusted for social security at the $30,000 point), would provide equal funding to the current system. THis has the benefit of decreasing the marginal tax rate as well as eliminating tax-loopholes. It claimed that most people's taxes would go down. I'll post excerpts from it if there is interest. -- Larry Kolodney (The Devil's Advocate) (USE) ..decvax!genrad!mit-eddie!lkk (ARPA) lkk@mit-mc
renner@uiucdcs.UUCP (04/13/84)
#R:uiucdcs:29200122:uiucdcs:29200129:000:2536 uiucdcs!renner Apr 13 09:29:00 1984 /**** uiucdcs:net.politics / iuvax!note / 8:13 am Apr 12, 1984 ****/ > The caveat about Adjusted Taxable Gross Income not accounting for > abusive tax shelters is the crux of the biscuit. Sure, once you've > taken out half a person's income in deductions then the percentage > of taxes paid will seem more equitable. But that is precisely how > 117 millionaries actually ended up paying no taxes whatsoever after > Reagan's tax changes--they had no TAXABLE income after accounting > for their numerous tax shelters. Your statistics were useful but > still fail to address the question of how much different income > groups pay in taxes based on their actual income, not their "taxable" > income. But it certainly is refreshing to see some facts! > -- tim sevener It is important to use the correct terminology here. Deductions are subtracted from AGI to form taxable income; exemptions are subtractions from all income to form AGI. The figures in my original article show that the rich as a class do not have exceptionally large deductions; their deductions average 23% of AGI compared to about 20%. Thus the only tax shelters that need concern us involve those which produce capital losses and business expenses; those involving deductions from charitable contributions, etc. have been accounted for. The April 16 issue of Newsweek has an article on tax shelters which provides some more figures on the subject. * sales of limted-partnership tax shelters totalled $14 billion in 1983. * of the example tax shelters given, tax savings averaged about half of the amount invested. * the IRS figures it could net as much as $7 billion when it audits another 350,000 returns claiming sheltered exemptions. * buying into a tax shelter can be a reasonable proposition for those in the 40% tax bracket (income of $45,800 for married couples, $34,100 for singles). * many real-estate shelter purchase are made through IRA/Keough fund accounts, which are already sheltered from tax. It doesn't seem very likely that the total income exempted via tax shelters will amount to more than, say, $20 billion. If we define "rich" as "in the maximum tax bracket," then the total AGI of the rich is $104.2 billion, in which case they are exempting no more than 16% of their total income. These figures are admittedly not nearly so convincing as those from the Statistical Abstract, but they do help to put some bounds on the effects of tax shelters for the rich. Scott Renner {ihnp4,pur-ee}!uiucdcs!renner
rjb@akgua.UUCP (R.J. Brown [Bob]) (04/13/84)
The era of the expensive car tax write off is now over.
I don't remember the exact number, but the 1984 tax year
will have a $ limit. (Anybody know the number?)
Bob Brown {...clyde!akgua!rjb}
AT&T Technologies, Inc.............. Norcross, Ga
(404) 447-3784 ... Cornet 583-3784tac@teldata.UUCP (04/16/84)
, (sop to the blank line eaters--consider it a religious sacrifice)
We seem to have a problem with income (Taxable or Adjusted Gross or
whatever) versus millionairs. Just because a man (or woman) has
$1,000,000.00 or more in the bank does not mean that that person
received it as income this past year, and should be taxed on that
full amount. How would you feel if the tax regulations told you to
add all of your savings (including pension plans, etc.) to your income
then taxed you on the *TOTAL*? The average millionair is probably
making 20-25% interest on most of his money, but the total worth of
the person is how they were billed as a millionair. The total worth
includes holdings in companies etc. which may not show any income
until they are sold some years down the line. Even if we take the
25% figure on $1,000,000.00 for each of them that is only $250,000.00
which could be construed as income. Given that much income I feel
certain that I could find enough worthwhile investments which receive
more than 1:1 tax deductions to cover my *COMFORTABLE* living expenses.
The thing which seems to be missed is that those "tax shelters" are
usually good for the economy or the country (not always mind you, just
usually). So here we have someone receiving much money each year, but
giving or investing most of it into something which will aid all of us
as well. Sound like a bad deal when put that way? I personally feel
that the investments will do more good than giving the money to our
government to spend.
Now about the complaints. How many of you took a tax deduction this
year? Gee, I don't see anyone who hasn't raised his/her hand. I had
the impression that many of you thought it a sin to take a tax deduction.
Ohh, you mean only when someone making more money than you does it. I
see. There are many more poor people than rich. If you don't like them
taking their tax deductions elect representatives to the government who
will eliminate any deductions. Then the tax rate could be set at a
straight 15% for everyone and we would all do better. (From a book by
George Hansen, U.S. Representative from Idaho, entitled "To Harass Our
People: The IRS and Government Abuse of Power", 1984 edition.)
From the Soapbox of
Tom Condon {...!uw-beaver!teltone!teldata!tac}
A Radical A Day Keeps The Government At Bay.renner@uiucdcs.UUCP (04/23/84)
#N:uiucdcs:29200122:000:4299 uiucdcs!renner Apr 9 23:15:00 1984 tim sevener (iuvax!scsg) writes: > ...the middle-income taxpayer is forced to pay the taxes the wealthy > should have paid but didn't... Perhaps a few facts will help in understanding this issue. My source is the U.S Statistical Abstract (1982-3), table number 435: "Individual Income Tax Returns, by Adjusted Gross Income Classes: 1965 to 1980." All figures are in billions (1.0e09) of dollars. The question here is: do the wealthy avoid their "fair share" of the tax burden? The following table gives the total AGI, taxable income, and tax paid for 11 AGI classes in 1980, as well as the % of AGI deducted to form taxable income, and the % of taxable income paid as taxes. % of Adjusted total taxable % de- tax taxable Gross income class AGI income ducted paid income Under $5000 18.1 14.5 19.8 0.6 4.1 $5000-$9999 109.9 86.0 21.7 7.8 9.0 $10,000-$14,999 172.5 136.7 20.7 17.0 12.4 $15,000-$19,999 191.1 154.3 19.2 22.8 12.4 $20,000-$24,999 204.0 164.5 19.3 26.8 16.2 $25,000-$29,999 185.1 149.9 19.0 26.6 17.7 $30,000-$49,999 406.2 329.4 18.9 69.9 21.2 $50,000-$99,999 165.0 133.2 19.2 39.5 29.6 $100,000-$499,999 86.7 70.0 19.2 30.2 43.1 $500,000-$999,999 8.3 6.5 21.6 3.6 55.3 $1,000,000 and over 9.2 7.0 23.9 4.3 61.4 But how about those millionaires that pay no income tax at all? Table number 436, "Nontaxable Individual Income Tax Returns", says that there were 15,000 nontaxable returns with an AGI >$50,000 filed in 1980. The total income of all of these returns amounted to 1,109 billion dollars. The percent of AGI taken in deductions seems fairly constant at all income levels. The % of taxable income paid in taxes increases greatly with income. One might still wonder if the rich are paying their "share." The next table uses data from Table 433: "Federal Individual Income Tax Returns with Adjusted Gross Incomes," to present a breakdown of % of returns filed and % of total tax collected by AGI classes. number of returns filed % of total tax paid % of total Gross Income class (thousands) returns ($billions) tax paid Under $5000 19,492 20.7 0.6 0.2 $5000-$9999 18,371 19.5 7.8 3.1 $10,000-$14,999 14,303 15.2 17.0 6.8 $15,000-$19,999 11,098 11.8 22.8 9.2 $20,000-$24,999 9,159 9.7 26.8 10.8 $25,000-$29,999 6,784 7.2 26.6 10.7 $30,000-$49,999 11,004 11.7 69.9 28.1 $50,000-$99,999 2,568 2.7 39.5 15.9 $100,000-$499,999 444 0.4 30.2 12.1 $500,000-$999,999 12 0.013 3.6 1.4 $1,000,000 and over 4 0.004 4.3 1.7 If one defines "rich" as AGI>$500,000, then in 1980 the rich made up 0.02% of the US population and paid 3.1% of the total income taxes. CONCLUSION: Based on the above data, it does not appear that the rich are evading their reasonable share of the tax burden. Caveat: the definition of AGI (see below) does not exclude all abusive income shelters. I would have prefered to work with unadjusted gross incomes, but couldn't find that data. Obviously, I don't think the distinction destroys the validity of this article, or I wouldn't have bothered to prepare it. You may reasonably draw a different conclusion--but if you flame, please include *your* data and sources. [AGI is Adjusted Gross Income: gross income from all sources subject to tax reduced by legally permitted subtractions such as: expense of operating a business or trade, losses from sales of capital assets, etc. I am not able to compensate for capital loss exemptions, which include some (but not all) of the abusive tax shelter schemes.]