How Could The Government Possibly Raise Taxes For Only The Wealthy? Stupid Question, But I Don't Get It?

Question

The news has gone on & on, here & there, about how Obama will raise taxes for the millionaires.

Call me stupid, I don't know too much about this subject, but aren't we all taxed the same percentage?

An easy-to-understand explanation would be great. I'm 18 & although I own a small company...I have a PCA (Public Certified Accountant) to help with my finances/taxes.

Thank you my dears. This really irked my interest.

Answer 1

We have a "progressive" income tax system.  The more you make, the more you pay.

90+% of Bush's tax cuts went to the upper 10% of income earners.  

Like the bank robber when asked "Why do you rob banks"? responded "because that is where the money is" the only real way to increase revenue is to increase taxes on the rich.  The rich have done very well the past 8 years.  The poor and middle class......not as much.

Answer 2

No.  We are not all taxed the same percentage.  It is a "progressive" scale.  The first so many $'s are tax-tree, the next so many $'s are taxed at 15%, then next so many $'s are taxed at 25%, etc.

Answer 3

No.  There are a few different tax brackets.  Low income people actually can pay negative tax after various credits.  10% is the first bracket and it can go all the way up to 35%.

Answer 4

The more you make, the higher the tax rate.

Answer 5

I don't believe that they get taxed any more than the poor.  There are write-offs galore for the business owners, not to mention the cap on Social Security deductions (which I think shouldn't be capped).  Heaven forbid that one should lose there millions to have to find out how tough it is to live on minimum wage.

Answer 6

everyone is not taxed at the same rate, and because of progressive taxation, there are different tax-brackets based on taxable income. If you make over 250k, you pay 33% in income taxes, not to mention the other taxes out there.

We also have:

Payroll Tax (Social Security/Medicare)- 7.5% With cap at $97.5K (employer match, so in essence, 15% tax)

Estate Tax

Sales Tax

Capital Gains Tax

Dividend Tax

and many more..

The reason for the progressive taxation ( the more money you make, the higher percentage taxes you pay) is the idea of the redistribution of wealth. The idea is to take from the rich and give to the poor.

Obama supports redistribution of wealth and will raise taxes on higher tax brackets, as well as capital gains and dividend taxes to make room for his government programs, like universial healthcare.

Answer 7

Well, no, we are NOT all taxed the same percentage.  The first so many dollars aren't taxed, the next so many are taxed at 10%, then 15%, then 25%, then 28%,, then 33%, then the highest at $35%.

Answer 8

As the above person noted, there are variable tax rates.  When you reach a certain level, you tax rate increases.  By increasing only the upper tax rates, you would in effect put a heavier burden on folks making more money (hence the term taxing the rich).

The philosophy behind this is that every one spends about the same dollar wise on staples such as food and basic housing.  Therefore, money spent on a gallon of milk is a higher percentage of income for lower income people then higher income people ($4 to Bill Gates is not the same as $4 to you or me).  The rich therefore have more disposable income and can better afford to pay for social services to help to less-well off and society in general.