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 Originally Posted by Poopadoop
How in the fuck can the wealthiest people be paying 3.8% effective taxes?
They don't. That's bullshit. The reports/links provided are full of baloney.
Digging into the details, a big part of the equation is sales and other consumption taxes.
Another misconception, is that FICA taxes are taxes. They aren't. They're insurances. 7.65% of your pay comes out to pay for medicare and social security. Those programs will only pay so much. There's a cap.
Say someone makes 10 million per year, then he retires....does he expect social security to replace his income? Of course not. But the guy who made $50K per year, then retires DOES expect social security to replace his income.
I don't know what the cap is anymore, 10 years ago it was like $90K. I suspect it's a hundred and something now. For the sake of argument, let's say it's $150k. Anyone making up to that amount pays FICA taxes and is entitled to benefits later in life up to a certain amount depending on how much they paid in.
So the guy making $10 million/year only pays 7.65% on his first $150K, and then nothing on the rest. That's going to SERIOUSLY affect his 'effective tax rate'. It's going to look ALOT lower than someone making $50K per year.
I dont' see what's wrong with that since the money isn't meant to be used on infrastructure, police, schools, or public service. The taxes collected are meant to fund those insurance programs. It's contained, or at least it's supposed to be.
Sidebar: Anyone who believes Salon.com is credible is no longer allowed to ever give me shit for watching Fox News.
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