What If The Top 1% Stayed Home?
According to data on the National Taxpayers Union Foundation website the top 1% of wage earners in the USA pay about 39.89% of the income taxes collected (I'm using 2006 numbers). These folks have an Adjusted Gross Income of $388,806 or more. The bottom 50% of wage earners who do pay income taxes account just under 3% of the income taxes collected.
I don't know about you but I think I could live very well on $388,806. In fact, that amount is equal to more than four times my annual gross income. If I made $388,806 this year I could keep my present lifestyle intact and not work for the next few years without a single worry about money.
It is important to remember that some wealthy folks do not pay income tax at all. These folks pay Capital Gains taxes instead. Yes, those "amazing" CEOs who say they want a salary of $1 per year while raking in millions on stock options are moving their executive compensation away from the (higher) income tax rate to the (lower) capital gains rate.
Imagine if you will a world where the top 1% are forced to pay an even larger portion of their earned income in taxes. Do you think they will pay more without complaint? We have already seen corporations move their offices off-shore to circumvent corporate taxes so why not individuals?
Unlike the rest of us the top 1% people can easily afford to take a year off or even drop their salary to $1 and work out a stock option pay plan. Those of us who make under $100K per year can survive a few months without an income but not much longer.
So, think for a moment. What would happen if the top 1% decided to "go on strike" against paying income taxes? How would we make up for that 40% in taxes that is not being collected?
Very thought provoking. As a tax attorney, I find this topic very interesting.
if they decide to do that, the government i’m sure will respond accordingly, as it won’t want tax revenues to suddenly decrease. so laws will be passed, and loopholes closed. after all, taxes are the lifeblood of the government.
I guess we shouldn’t complain too much about the taxes we pay. I’m certainly not in their tax bracket, so I don’t mind them paying 40% of the tax burden. Although that doesn’t make my income tax any easier to swallow.
I would prefer a flat tax system where everyone pays the same percentage no matter how much they make. I don’t see why someone who works harder should make less money the more they work.
I’m not talking about someone who has a base salary of $250K+. I’m talking about the people who work a second job when their first job does not offer overtime.
It’s not so bad for me, I get time and a half when I work overtime. the extra pay takes care of any loss due to bumping myself into the next higher tax bracket. If I were working two jobs (same pay) than the second job could end up paying less because it pushes me into a higher tax bracket.
HMTKSteve, +1
The top 1% staying home would do a fair amount to limit progress. They are the top 1% since they are producing/creating at a higher rate/level of production than the other individuals. It would not be good if they stayed home, as they could not provide their service.
Finally some appreciation for the top 1%? Perhaps it’s about time. I’m tired of the class warfare each election cycle where politicans attempt to paint a picture that the lower and middle sectors carry the load and the wealthy skate – it’s total rubbish. The top 1% account for 20% of the earnings but are burdened with 30 – 40 percent of the tax load. I think God for Oprah Winfrey and Bill Gates each day. The last thing we want to do is piss off the top 1%, which isn’t as high as one would think (about $400K). Also, these same politicians paint a picture that this group magically gets to this strata and everyone else has no chance to get there – also total BS. Most in the upper 1% were, at one time or another, in the lower income strata and worked their way to the top.