How does the following make you feel?
Are you mad that the rich get away with something? Do you believe your taxes are too high? Who is not paying their fair share? Do you think this Tweet is accurate and honest?
It’s not, it’s an attempt to manipulate you. And for too many Americans it works.
The growth in wealth, unrealized wealth at that, is not income. If you are investing for retirement, is the growth in value in you IRA or 401k taxed before you receive it? If you use a Roth account that growth is never taxed. If you buy a stock, the growth in value is not taxed until you sell it.
The Sanders Tweet is a false narrative.
A tax rate of 0.01%? Based on what, taxes paid versus growth in wealth? Another misleading “fact.”
“Average working class American tax rate 24.8%.” That would be a good trick. The average U.S. household income is $87,864, and the median is $61,937. To get taxable income, at a minimum subtract the standard deduction of $25,100.
Now look at the tax tables below which reflect taxable income. Add back the standard deduction to see the total income. A “working class” American family would have to earn $197,851 to be taxed at the 24% rate. Is that the new working class?
Maybe the Senator is misleadingly including payroll taxes in his 24.8%? Even then the numbers don’t work for the working class.
The Sanders Tweet is a false narrative.
There is little doubt the entire process of taxation could use a review to address inequities at all levels. But doing so requires honesty, not false narratives and creating class envy.
Great article in today’s WSJ – Peggy Noonan on Bill Maher. Times have changed, America is better today than yesterday, and on a path of continuous improvement (perhaps in fits and starts and stops).
I agree, 70% of American workers live paycheck to paycheck – they would have some or significant difficulty in paying their bills if their next paycheck was …. DELAYED ONE WEEK! Not missed, just delayed, and just delayed one week? (Annual survey of the American Payroll Association). However, in this same survey, consistently for a number of years, the data also confirmed that 86% of those survey respondents, most of whom admitted to living paycheck to paycheck, were ALSO saving in their employer-sponsored retirement savings plan!
My personal experience, after 42 years in corporate employee benefits, is that people who have retirement preparation and household financial health and enjoying life generally are willing to make the sacrifices, make the investments in time and resources, and do the work to achieve those outcomes. Nonetheless, despite their best efforts, some do fail due to setbacks from disabilities, health issues, etc.
Unfortunately, many have to overcome not only their circumstances of birth, and perhaps modest talent, but also failed government policies (e.g., Democrats who decades ago supported redlining which in turn often created school district lines, the Great Society, etc.) See for example:
One Democrat, Daniel Patrick Moynihan (D-NY), then part of the Labor Department, saw all this unfolding nearly 60 years ago – See: https://www.theatlantic.com/politics/archive/2015/09/the-moynihan-report-an-annotated-edition/404632/
But, little surpasses the barrier, the tall, wide impediment children raised in single parent homes face – black, white or otherwise. Moynihan had that right, nearly 60 years ago. Sara McLanahan and Gary Sandefur, in their recently released book, Growing Up with a Single Parent: What Hurts, What Helps, used Census data and the National Longitudinal Survey of Youth. They found that black and white children from intact homes are significantly more likely to be flourishing economically, educationally, and socially on at least three outcomes: child poverty, education, and incarceration.
While a two-parent home is no panacea, it almost certainly means that the household will have a higher income.
Think about it. Given the success so many Americans have achieved, not just in incomes and wealth accumulation, but in “actualization” – enjoying family, communities, life, etc., just think what might have been but for the “equal opportunity tsunami” of failed government policies and single parent households that has swamped so many dreams and efforts.
Do not believe the left, we do not have a taxation problem in the United States, we have a spending problem. Soon we will be paying more to service the DEBT than we spend on National Defense. The Political Elite in our country spend like drunken sailors (at least sailors spend their own money) and never cut any spending, even if the program has been proven to be a waste of money. Head Start comes to mind – By 3rd grade students who did not attend Head Start catch up with the students who attended Head Start. We need to fund any new spending with additional taxes and fees or stop adding new programs. The truth is, if we are going to spend 1 Trillion Dollars more than taxes provide each year, we should all be willing to pay more in taxes, because currently no one is paying enough to fund our government programs.
Another false narrative.
For some reason, this popped up in my feed this morning…
“Today government redistributes sufficient resources to elevate the average household in the bottom quintile to a net income, after transfers and taxes, of $50,901—well within the range of American middle-class earnings.”
From “The Truth About Income Inequality”
By Phil Gramm and John F. Early, 2019
No way! I thought that was debunked years ago.
Buffett and Gates have already said that they and others should be paying more taxes. Even that businesses in general should pay more taxes. “It’s ‘corporate fiction’ to say higher business taxes hurt customers.” (Buffett)
For billionaires, and for many middle income earners, “it’s all on paper” anyway.
But there is a difference for a large group of Americans…
“The methods they use are available to all.”
“…jealous people who refuse to be educated about simple finance, simple savings, simple investing, living a simple live, and the power of compounding.”
A lot of us take that for granted. We can, for example, spend a few days, do some internet searches, talk to friends or a paid financial advisor about converting our regular IRA to a Roth IRA. (Going with ‘yes’.)
However, for a very large group of Americans, savings, investing, compounding, tax avoidance, etc., is moot. Wealth is on paper, but poverty is real. It’s not so much a question of asset allocation as “Do I have enough balance on my credit card to keep them from shutting off my utilities?”
And these are, for the most part, not stupid people. Not lazy. Not greedy. Not even jealous, in most cases. Paycheck to paycheck is a fact of life. With hard work, education, and luck, some of these people can prosper, but most can not. It is mathematically impossible. We can applaud those who “make it” out of poverty, but it would be a serious mistake to blame or disparage those who do not. You might as well deny gravity.
Why can most in poverty not prosper? With various safety nets in place why not? I say one big factor is family structure. The high school where I graduated in 1961 that then was 50% minority now spends an amount per student equal to some of the wealthiest towns in the state but has a math proficiency rate of 2%. You aren’t going anywhere with those numbers.
The department I worked for had a little over a hundred people.
One regional manager
About forty of those on the bottom rung… Entry level.
And another fifty or so in three progressive technical levels.
I progressed to the highest tech. level in four years, and stayed there. No interest in management, and a comfortable salary (30 percent above entry level).
The regional manager made 30 percent more than I*, and it took over 35 years to get there.
Of those guys on the bottom row, entry level jobs, many (guesstimate half) were still entry level when they retired. Many were living paycheck to paycheck, with no savings or investments. They weren’t dumb (usually) or lazy, or inferior in any way. I trusted my life to some of these guys/gals regularly. Basically, there was no place for them to go, or limited opportunity. Some were more ambitious, of course, some were resigned to their fate, some were ecstatic just to have a job.
For his last thirty years, Dad worked on various assembly lines in a low paid factory, like several thousand others in our small town. Some promoted. A few left for better jobs elsewhere, but most didn’t. Couldn’t. That’s why I said you may as well try to deny gravity. It’s math. There is nowhere for them to go, and the jobs –have– to be done by someone.
Anyone can grow up to be President, or CEO. But everyone can’t.
You studied to be an engineer? I apprenticed to be an electrician. But there are only a limited number of openings.
*I was always on emergency call, and some years, with OT, (not pensionable) I made more than he.
What you describe is the difference among people, not limits on opportunity IMO. My first job out of high school was mail boy at $1.49 an hour, the lowest paid person of 15,000 employees. There was a guy working with me named Tony. Six months after I started I was laid off from the mail room, but the union got me a job as clerk in the same company. Over the years I received some promotions, some setbacks, spent time in the army, finally started college in 1969 for nine years at night. In 2010 I retired as VP in the same company. In 2020 Tony died at about age 80, still working in that mail room. During those years to reach my goals while we raised four children, I did side work, started a very small side business, wrote articles. There is always opportunity and I suggest more so today than in the past.
As I said, ” Paycheck to paycheck is a fact of life. With hard work, education, and luck, some of these people can prosper, but most can not.”
I could add, will not or should not.
Of course there is a difference among people. Vive la différence.
I’ve known lots of Tonys. We need them. If everyone followed your example, the mail room would shut down. And VPs would be a dime a dozen.
If one or two people stand at a ballgame, they can get a better view. If everyone stands at the same time, it defeats the purpose.
My Dad, most of my family, retired after a lifetime of low paying jobs. Factory worker, secretary, janitor, waitress, you don’t have to “blame” it on family structure or math proficiency. They are not defective, dumb, or lazy. They don’t even have tattoos (well, maybe one).
Here is the danger. America has a raft of economic problems in need of solutions. I hear some people imply that the problem is that some (most) people are just not trying hard enough. That’s not it.
Case in point:
June 19, 2021 at 7:44 AM
Lack of savings is a symptom of another problem…you can’t fix lazy.
I have mixed feelings about this subject. In general I agree that the far left mantra of taxing the ultra-wealthy is out of wack. But I recently listened to a podcast done by New York Times reporter Kara Swisher where she interviews Jesse Eisinger of ProPublica and they lay out some of the methods that the ultra rich use to avoid paying income taxes—legally. After listening to that I feel a little differently. Like almost all policy topics, there are a lot of nuances and moving parts. It isn’t just black and white. Some of the ultra rich do benefit greatly from the taxes paid by the rest of society by using the country’s infrastructure to grow their business, etc. Then they use the tax code’s twisted earned income focus to dodge paying their own income taxes by creating money to spend on their lavish lifestyles using debt, not earned income.
I listened to a similar interview on NPR. I was impressed by the undertone consistent with the fair share story. I caller noted that Buffet and many others will give most of their wealth to charity. The reported replied that was correct, but they got to select the charities instead of giving it to the government to use. That told me how objective he was. The methods they use are available to all. In fact, many more provisions benefit average folks.
These are just jealous people who refuse to be educated about simple finance, simple savings, simple investing, living a simple live, and the power of compounding.
Warren Buffett salary has only been paid $100k per year for the last 40 years (per SEC filings). His total CEO compensation for 2020 was $380,328. Some of that compensation is for personal and home security services which a man of that wealth needs in this day and age. This would put him in the 24-32% tax brackets depending on what else is on his return.
Of his $107 billion fortune, 85% of his wealth ($90.9B) is going to 5 charities. I trust those 5 charities will do a much job of helping people that the federal government can ever dream of doing. Warren Buffett has already given $37B to charities since 2006.
The remaining $16B will go to his kids and the federal government is going to take an excessive share from those kids in the name of the estate tax of which up 40% and another 18% by the state of Nebraska.
Government is going to get their money. The politicians are just mad they can’t waste that money now.
He offers free advice on investing too. Invest in low cost index funds for the long term. He proved it in a 10 year bet for charity with a managed fund that you will make more money. His advice validated my 401K investing strategy and I have no complaints. I was able to retire at 55 so it works. Will I be a billionaire? But I am also not working at the age of 89 like him either. He is not a god, but follows sound investment strategy not built on emotions.
Democrats believe in lies to soothe their feelings …IMO !!