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Why American Workers Pay Twice as Much in Taxes as Wealthy Investors | Bloomberg

Bloomberg personal finance reporter, Ben Steverman, doesn’t hold with the “trickle-down” theory of economics. Steverman explains why, as he explores what kind of tax reform would be best for the country and fair to all tax payers…


“Let’s say you and I are neighbors. You’re an emergency room doctor, and I don’t work, thanks to a pile of money my grandparents left me.

You spend your days and nights stitching up gunshot wounds and helping children survive asthma attacks. I’ve gotten really good at World of Warcraft, winning EBay auctions, and frying shishito peppers to just the right crispiness.

Let’s also say we both report $300,000 in income to the Internal Revenue Service this year. Who pays more in taxes?

You do, by a lot. You owe the IRS about $38,500 more, assuming each of us pays the maximum with no special deductions. I also have more flexibility to lower my burden with tax planning strategies and other tricks, and I get to skip about $24,000 in payroll taxes that you and your employer must fork over each year…”

~ Ben Steverman

READ MORE: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors | Bloomberg


Be aware. Be fair.

 

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About The Author

JoAnn Chateau

JoAnn Chateau likes progressive politics and loves the canines. She writes fiction about an alpha Bichon named Chester, and his friends--with a dash of humor and a dab of poli-sci. JoAnn worked professionally in the Psychology and Information Science fields. Retired now, she enjoys the creative life.

11 Comments

  1. paulbern77

    At the end of the day, the truth remains that the federal income tax is unconstitutional! It should be replaced with a national sales tax instead. Although this is not a new idea — it has been proposed as far back as the 1970’s — it is one that should be revisited.

    Reply
    • JoAnn Chateau

      I don’t know much about it, but yes, maybe a national sales tax would be more equitable. Thanks for sharing a possible solution, Pastor Paul.

      Reply
  2. dancingpalmtrees

    As far as retirement goes Yes I will be eligible to retire next year but the question is Can I afford to retire? Because I belong to a Union (DC 37) I will receive a Pension but will I be able to live on that Pension. Many people don’t realize buy your Pension is only a Percentage of your pay. Not the entire paycheck you received while working. So my options are to retire next year however I won’t be 62 which is the age you need to be to collect Social Security. Or retire from this current job in October 2018 and immediately find another job. That lost income must be made up somehow. I have many decisions to make in 2018.

    Reply
  3. dancingpalmtrees

    At least I have a job. I may not like having to work overtime but it is better than needing and not having a way to make extra money. So I am Grateful and Thankful for my job.

    Reply
  4. dancingpalmtrees

    Ugh! I know the feeling. I must work an additional 20+ hours just to make ends meet and most of my overtime pay in fact 30% goes towards taxes. Let’s say my Gross pay is $2K I will only see maybe $1,200 if I’m lucky. I figure the only way I could advance would be to work perhaps 30 or 40 hours more of Overtime but that’s physically demanding and darn near impossible since I am not Wonder Woman.

    Reply
    • JoAnn Chateau

      That is not fair. And how does under-taxing investment earners help our economy? It does not.

      Reply
      • dancingpalmtrees

        No. It’s not fair but I must work more. In fact I will be going to work tonight.

      • JoAnn Chateau

        Hang in there (hopefully, retirement is nearing).

      • dancingpalmtrees

        We will see. I must decide if I can live on my pension. If not then I will be in the workforce several years.

      • JoAnn Chateau

        The best to you.

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