Tax time: It comes with mixed feelings. Some look forward to “stimulating the economy” with the refund money they receive from using the IRS as their personal savings account, while others grumble and bemoan having to write out that check to Uncle Sam. Well, now the truth is out. Yes, the rich actually do get off easy when it comes to their taxes.
The Rich Pay A Lower Effective Tax Rate.
We pay taxes all the time, not just in April. When considering local and state taxes averaged out, the lowest income earners (bottom 20 percent) pay a rate that is more than double that of the wealthiest in the United States. The bottom wage earners pay an effective tax rate of 10.9 percent, while the wealthiest (in the top 1 percent) pay less than half of that, at 5.4 percent.
It’s really as simple as math. If a family has a gross income of $600 per week (this is a $15 per hour job, or two full-time minimum wage earners) – the amount they pay to things like sales tax or yearly fees to license a car take a larger percentage of their income than say someone who earns over $100,000 per year. But, even the $100,000 earner is paying a higher percentage of their income for these things than those sitting like gluttonous pigs that are in the crust that is the top 1 percent.
That’s because many states are dependent upon things like sales tax for their tax revenue. Consequently, because no one can live life completely for free, the poor spend most of their money on necessities, which are taxed, just for survival, so by default a larger portion of their overall income goes towards fulfilling their basic needs and the taxes placed upon them.
The Rich Receive Handouts.
Unlike the social programs available to help prevent the poorest of the poor from literally starving to death, the wealthy receive their share of handouts from the government, too.
The Washington Post provides us examples of ten of these types of handouts, also known as tax deductions.
Thanks to this tax break [mortgage interest deduction], the 5 million households in America making more than $200,000 a year get a lot more housing aid than the 20 million households living on less than $20,000.
Yeah, let that sit for a moment. There are thousands of low income families struggling to afford housing, and even those that have lost their homes, yet families that make over $200,000 per year are receiving more housing aid.
Housing aid for the rich doesn’t stop there – owners of yachts can deduct their interest too. Because nothing says, “I’m in need of housing assistance” quite like owning a yacht!
But, it doesn’t stop there. Landlords also get deductions from their rental properties, including maintenance, HOA fees and interest.
If that wasn’t enough, The Washington Post also points out,
You can deduct your gambling losses up to the value of any winnings you earned . . . if you’ve got more money to gamble, you’ll have more losses to deduct.
Meanwhile, The Poor Really Are Getting Poorer.
According to the Economic Policy Institute,
The weak wage growth over 2000–2007, combined with the wage losses for most workers from 2007 to 2012, mean that between 2000 and 2012, wages were flat or declined for the entire bottom 60 percent of the wage distribution (despite productivity growing by nearly 25 percent over this period).
Yep, that’s right. Productivity grew over a decade, but wages stayed the same, and often declined, for the majority of the wage earners in the United States.
So, while we all work harder for less money and listen to rich people and their tea party puppets complain about the poor getting rich off of welfare – let’s remember that some pay far more than their fair share to support our society and still can’t make ends meet; while others continue to take unneeded government handouts and hoard money at the top.
While this video is slightly dated, it’s a startling reminder about wealth inequality in America.
Featured image via YouTube Screen Capture