Who is rich, and who pays the taxes in the USA?

In response to a Democrat on Facebook who slavishly follows his party line about taxes, border, religious freedom, education, political motives, abortion, etc. here's the truth about federal tax cuts in 2017 (aka, Trump presidency and his keeping his word to the voters)

"Income data published by the IRS clearly show that on average all income brackets benefited substantially from the Republicans' tax reform law, with the biggest beneficiaries being working and middle-income filers, not the top 1 percent, as so many Democrats have argued.
A careful analysis of the IRS tax data, one that includes the effects of tax credits and other reforms to the tax code, shows that filers with an adjusted gross income (AGI) of $15,000 to $50,000 enjoyed an average tax cut of 16 percent to 26 percent in 2018, the first year Republicans' Tax Cuts and Jobs Act went into effect and the most recent year for which data is available.

Filers who earned $50,000 to $100,000 received a tax break of about 15 percent to 17 percent, and those earning $100,000 to $500,000 in adjusted gross income saw their personal income taxes cut by around 11 percent to 13 percent." (From Yahoo news via The Hill, Dec. 24, 2021)

 
Although any tax cut benefits the rich since they pay over 70% of the federal income tax and the lowest income receive wealth transfers and 50% don't pay any federal taxes. With the Trump administration tax cut the top 1% who pay over 40% of the taxes saw their average rates fall to 25.4% from 26.8%. 

They make the most money--it's incredible how well millionaires can do in the USA, but they pay far more than their "fair share" and Democrats just want to drive them out of the country. Every president since I've been voting (JFK, 1960) has brought in more taxes to support some pretty odd and bizarre programs by reducing taxes, not punishing the successful. Biden wants to punish success, and although he puts "rich" at $400,000, we know he lies and doesn't keep his word.

"Rich" is a relative term. But if you're talking income from salary and not "wealth" you need to be earning $350,000 to be comfortably rich in an expensive or coastal city. (That's virtually all of Congress and "think tank" CEOs in DC.) And if you do and you are a family of 4, contribute to a 401k, pay federal and state and local taxes, plus FICA and take a child credit, you're paying $92,160 (32%) in taxes. And you can see the upward creep in taxes at https://www.financialsamurai.com/how-much-income-do-you.../ 

Democrats in Congress, the most overpaid and underworked Americans, lusting for more money to fund their socialist programs like climate change and woke capitalism, are mad that the rich actually made a lot more money with a tax cut that was smaller than the middle class. Duh! They didn't get rich by being stupid. Maybe they took that savings and invested it in stocks, or bought a new income property or paid off some high interest loans, or started a small company. The tax cuts made no difference to the low income or the no-income. You can't take away from zero. In the USA you can earn over $50,000 a year yet with Earned Income Tax Credits, the government will give you another $5,000 if you have 2 children and you pay NO taxes. No wonder people jump the border to get here.

Eighty three federal programs to help the low-income, poor, and single mothers

The abortion wars are building. The Pro-Aborts are threatening violence in the streets this summer, even though they will still be able to kill babies under state law. It's a power trip.

 
If you're tired of the old saw that pro-lifers don't care for children, only the fetuses, then you need to tell your accusers the truth. Welfare, under any name, has always been bipartisan, with Republicans often dumping more money on the programs than Democrats. EITC, for instance, was a Nixon plan, and until Obama, GW Bush was the biggest welfare spender. Many of the Covid supplemental programs were Trump's and continued by Biden. Republicans give more in their private lives, and when in government, they can't pass up a chance to be the do-gooder. The exception was Obamacare--which could not garner a single Republican vote because it was just BAD and horribly expensive.

 
Right now we have 83 means tested programs for the low income, poor, and single mothers. You really need to click on some of these and see what is involved. There are 27 programs just for single moms--everything from housing, to food, to medical care, to education. There were special supplements to these programs for Covid. Democrats didn't do this, Congress did, and it's been many years building. What HAS failed is Biden's sub-section of Build Back Better, called the American Families Plan. He's really flogging that dead horse--he makes it sound like we're pikers.

 
However, it will keep more people in poverty than just about anything they've dreamed up in DC. Uncle Sam is not a good step-father. Very few children of married parents ever live in poverty. The low income person will never be able to get ahead because it is too expensive to take a good job or a promotion. A $10/hour raise could cost them hundreds. They will pay a higher tax rate for a promotion than the wealthiest CEO in the country just by losing thousands in gov't benefits.

https://singlemotherguide.com/federal-welfare-programs/?

If you are married with 3 kids earning $57,414 (social worker, school teacher, pastor, retail manager, etc) instead of you paying taxes on it, the gov't will give you $6,728 (EITC).

If you've got a student loan Covid has paused your loan payments and set your interest rate to 0% starting March 13, 2020. This payment pause, also known as the administrative forbearance, will end Aug. 31, 2022. I'm guessing that will be renewed and renewed until we are stuck with complete loan forgiveness. I'd like to be proven wrong, but look who's in the WH.

A 3-person household which got $200 in SNAP, gets $458 as a covid supplement to bring it up to the $658 maximum benefit. No, SNAP doesn't mean you can eat on that amount, the S stands for supplement so you can afford healthier meals, not more chips and pop.

Women eligible for WIC get over $700, plus extra for fruits and vegetables. There is a formula shortage because the WIC program uses/buys 50% of the formula in the U.S. and the gov't really messed up on the supply chain.

Section 502 Direct Loan Program for rural low-income Americans to get decent housing. Special supplements for Covid with payment moratorium.

And on and on. You'll be amazed how generous you are. Because the government has no money except YOUR money.

49% of Americans pay no federal income tax

Some of them are very wealthy, and therefore aren't employed. They let their wealth work for them. Or they create non-profits with their wealth and contribute to them. But most are on the receiving end.

A worker with a stay at home spouse and 4 children, might earn $50,000/year and receive a check from the government instead of owing--Earned Income Tax Credit. That worker is better off than someone earning $65,000 and paying taxes. It keeps people in the low income bracket.

Our tax system is called "progressive," not in the political sense, but in economic. The more you earn, the higher your rate of taxes. The top quintile is paying for the rest of us. Democrats lie in spirit when they whine that the breaks go to the richest in the new tax plan. The wealthy are paying more than their fair share because of this progressive system.

The top 1% of Americans, who have an average income of more than $2.1 million, pay 43.6% of all the federal individual income tax in the U.S.; the top 0.1% — just 115,000 households, whose average income is more than $9.4 million — pay more than 20% of it. (Market Watch, 2016) Tell me what is fair about 1% paying 43.6%. But it is progressive. Tax Foundation uses different figures--not sure why these figures never match, but the outcome remains the same, the more you make, the more you pay for it. It's the American way.

Obama’s new proposals are anti-marriage

"The Obama policies [SOTU speech] would also increase anti-marriage incentives in the welfare system. While the two-earner credit would reduce marriage penalties in some cases, the expanded EITC for non-parents and for absent fathers is larger than the two-earner credit and is blatantly anti-marriage. Absent fathers and other males would receive this new EITC credit only as long as they were not married. When they marry, the new credit would be removed. Overall the Obama policies increase rather than decrease penalties against marriage in welfare. Policy should seek to reduce marriage penalties, rather than take another strike against it."

http://dailysignal.com/2015/01/21/obamas-new-tax-plan-discriminates-stay-home-parents/?

Marriage is our society’s strongest protection against childhood poverty. Do we really another reason to discourage it?

Actually, this whopper may not be that big

 

The trick word here is "expanded." For instance, under Bush SNAP eligibility was expanded, but Obama increased recruitment to the program. EITC, HEAP, TANF, Medicaid, SCHIP, disability, even Obama phones (phone assistance began under Reagan) etc. were all programs of other presidents. Lack of good jobs and reductions because of Obamacare has pushed more onto government benefits.  What's new is people fleeing the workforce to apply for and get SS disability because he couldn't turn around the job situation.

What has expanded is the wait for veteran’s benefits.  For welfare recipients, there is a 30 day wait to qualify for food stamps, or expedited, 7 days. Over 675,000 claims pending for veterans, 58% for over 125 days. Why are veterans required to wait? Haven't they already paid? Are the low income, unemployed a bigger voting block than disabled veterans?

IRS overpays EITC 132 billion in 10 years

EITC, The Earned Income Tax Credit,  was primarily a Republican idea, and was signed into law in 1975 with bi-partisan support. The "refund" doesn't affect any other benefits received like welfare (TANF), food stamps, Medicaid, housing, etc. In fact, for some families it would be a loss if they got a raise at work and weren't eligible for EITC--which is how we hurt the poor with government transfers.

132 billion in EITC was overpaid by IRS to people who paid no income tax. From the IRS website:  "The EITC is a refundable tax credit. This means taxpayers may get money back, even if they have no tax withheld [from earned income]. Nationwide last year [2011], over 27 million eligible individuals and families received nearly $62 billion in EITC." This overpayment is an IRS problem, not an Obama problem. It has been going on for as long as the law has existed. There was recently a law passed to get the figure lowered which has been ignored. This is the agency that will be enforcing ACA, the Obama insurance law declared a tax by SCOTUS. http://www.thefiscaltimes.com/Articles/2013/04/24/IRS-Overpaid-Low-Income-Tax-Credit-by-132-Billion

The level playing field

Early in the morning (dawn usually) I'm on the road to a coffee shop within a mile or two of my home. This morning at the first stop light I was noticing all the service people out there long before me, delivering, stocking, cleaning, preparing, etc. and wondering about those households sleeping in receiving about $60,000 in government benefits who are NOT working. How many of these people taking care of our basic needs for food, goods and services will ever make $60,000, and why do Democrats say it's never enough? Tell me again, Mr. President, about that playing field you want to level.

                         

When the rich take legal deductions it’s called loopholes

Can you define a "living wage?"

Or, how about an "American working family?" These terms are pandering policy pablum. It's like trying to figure out the word, "uninsured." It's nailing Jello to the wall.

Let's begin with two classic cases--both single moms with 2 children. Melanie had a significant other she met in college, but they never married, and he's wandered off the reservation looking for more significance. Her first pregnancy stopped her education, and besides, she liked staying home with cute babies. She doesn't know where the SO is, so there's no child support. She's working at Wendy's for $7.00 an hour--$14,800/year. She's not unhappy; she likes the work--has flexible hours, regular customers she knows by face and order, and can walk to work, although she has a "beater" car. She's a whiz at e-Bay and picks up a little cash by hitting the garage sales on her day off. She's worked at a dry-cleaners but the fumes bothered her, and at Tim Horton's, but the scheduling didn't suit, and has waitressed at family restaurants like Applebee's and Bag of Nails earning more, but she likes the management here. She occasionally dates the men she meets on the other side of the counter.

Then there's Tanika. She's divorced and her husband has decided to find himself in the entertainment world, but borrows more money than he sends. He drinks or smokes what is left after he's paid under the table at various clubs when his group performs. Each time she talks to him, he's just about to land the big break. Tanika's no dummy. She's always been told that education is the key to a better life. With help from her parents and various scholarships, and some state aid, she has finally completed the Kent State program in Library Science. Although she's relieved to have landed a job in the public library of a nice suburb of Columbus for $16.40 an hour in a tight job market, she does have to work some evenings and occasional week-ends, and has no flexibility to trade hours. Also, she's got some whopping school debts to repay, and she's maxed out several credit cards. Her dad keeps her car repaired and running. Her mom invites her and the kids over for dinner often, and babysits when Tanika works evenings and week-ends. The library is so busy, she knows none of the people who pass through. Social life is zilch, nada, nyet and she's too pooped to even take the kids to the pool. Her day off is a school day, so she volunteers at the Lutheran Food Pantry.

As you might have surmised, Melanie is better off than Tanika, plus she could have the satisfaction of knowing she is keeping a small army of government workers busy!

She is eligible for a piece of the Earned Income Tax Credit ($40+ billion), which is a cash supplement to wages of the "working poor," and at her income that's an additional $4,536 a year.

At various times she has received help from Temporary Assistance to Needy Families because of the dead-beat dad thing until her eligibility ran out. Between jobs, she stayed on unemployment benefits as long as she could--one time almost 3 years. Although she much prefers working, she never felt a sitter did as good a job with the kids as she could do herself.

She receives a housing voucher ($16 billion), which is much more pleasant than having to live in "the projects," and although there are others in her complex--actually many--no one seems to notice. In fact, she and Tanika's family don't live far from each other and the kids play together at the pool.

In addition to food stamps, which add about $100 a week to her grocery budget* ($35 billion through USDA), her children are eligible for the National Student Lunch Program, the Breakfast Program, the after school snack program, and the summer lunch program--plus she gets her own meals at Wendy's. In fact, they're all packing on a few extra pounds--no one is going hungry, that's for sure. The NSL and SBP (from the Ohio Department of Education via the USDA) also provide these services to runaways, homeless and migrant children, but Melanie is a pretty stable gal with good values, she's "always paid her own way," so there's not much danger of that. If she runs out towards the end of the month because the cable bill was due, she can get 3 days of food at the Lutheran Food Pantry.

Melanie would have to pay a pretty high co-pay for company health benefits, so she keeps passing on that during sign up periods, but she's eligible for SCHIP (as is Tanika who is making under $40,000 but has never applied**), and it provides some coverage like dental, prescription and special lab work she couldn't get through an employers' health program.

A few months ago Melanie's boyfriend got religion and called her, wanting to do right by her and the children and make it all legal--white dress, church, flowers, etc. But she turned him down. Even if he got a job at another Wendy's their combined income would throw off her eligibility, and financially, her kids would much much worse off. She's happy where she is--who needs to marry?

Melanie and Tanika are fictitious; the programs are not.

*In Ohio a family of three would be eligible for about $100 a week in food stamps, the gross eligibility being $21,600 of family income.

**An October 2007 study found that 68.7 percent of newly uninsured children were in families whose incomes were 200 percent of the federal poverty level or higher.