These aren’t exactly things you didn’t know about the top 2% income earners in America but they seem to be things people frequently forget when they demonize the top 2% just for being successful.
They Are Your Neighbors
One in every fifty people belong to the 2% but not everyone looks wealthy or even shows off their wealth. You might be surprised to realize that you know a few people who are in the top 2% and even more surprised that you don’t think of them as evil creatures that are greedy.
They could be your neighbors or anyone for that matter. There are plenty of people in the top 2% who don’t show off money at all and drive around in moderate cars and live in moderate houses. You may also be surprised to learn that the people you see showing off fancy cars and fancy houses may not be in the top 2%.
Contrary to popular belief the top 2% don’t all gather in areas designated for rich people, they are scattered all among us and have many “disguises”. Besides, rich people don’t want to live next to other rich people, they like their space. Chances are you know a few top 2% income earners and they are normal people just like yourself who maybe worked a bit harder and had a different philosophy on life. Perhaps they were just more motivated or took some chances that you might not have. Their children go to school with your children and so on.
Your Job Relies on Them
Sorry to disappoint you but almost everyone who has a job is employed by a top 2% income earner. Half of the jobs in the US belong to large corporations, it’s not necessary to point out these are owned and operated by people in the top 2%.
The remaining jobs belong to small businesses which employ less than 500 people. A lot of people think that a lot of small businesses and small business owners don’t make more than 250k. Well…they are correct, but unfortunately, the small businesses that make more than 250k employ 93% of the people who work for small businesses.
So let’s do the math. 100% of 50% of the people who work for large corporations are employed by the top 2% and 93% of the remaining 50% of the people who work for small businesses are employed by the top 2%. So what does that come out to then? About 96.5% of people with jobs in America are employed by the top 2% income earners? Then wouldn’t it make sense that if we start taxing them or wishing they’d leave the country or what’s actually been happening for awhile, them being forced to push jobs overseas due to taxes and regulations here, that we might be destroying our jobs here at home?
So if it’s safe to say that 96.5% of the people are paid by the top 2%, that businesses, in general, only stay in business because the businesses customers, well at least 96.5% of them are paid by the top 2%? Perhaps even the remaining 3.5% of the population that’s in business that doesn’t fit into the top 2% is reliant on the people the top 2% pay to buy their products? You see, it’s all connected.
The Government Wouldn’t Be Able To Function
The top 1% of income earners pay over 36% of the income tax revenue collected. The top 5% account for over 58%. It is estimated that the top 2% make up about 50% of the total income tax collected.
If you are collecting half of your tax revenue from the top 2% and then collecting the rest of the tax revenue from 96.5% of the people who are employed by the top 2%, wouldn’t it make sense that without them the government would have almost no revenue and wouldn’t be able to function?
No Military to defend ourselves. No education grants to make education available to those seeking to better themselves. No police, no roads, and no fire department. No medicaid, no food stamps, no unemployment benefits, and no welfare.
None of it. These things are paid for by the productivity of the top 2%. So while they are demonized and people take a stance against this group of people, it’s often overlooked that they are the biggest contributors to our lifestyles and society as we know it. We owe them thanks and praise not anger and resentment.
Their Money Came From Hard Work and Service To Others
When people talk about the top 2% they give examples of people who are actually in the top .1%. Big time figures like Warren Buffet or Donald Trump whom are just making a mockery of the tax system jumping through tax loopholes and only paying 17% tax rates…OH MY!!! But everyone else that’s in the top 2% is just a normal person like yourself. But let’s focus on those big figures.
You may think it’s not fair they pay 17% but what you fail to see is they pay the same rates on the first 250k as everyone else would. Most of their money comes from long term capital gains that are taxed at a rate of 15% so when you make a billion dollars and only 250k is taxed at a higher rate or most of your money comes from capital gains, yes it does drive your tax rate down. If you change capital gains taxes then you’ll hurt people who live off their 401ks etc, but you cry out, “tax them more”.
First off, it doesn’t take a genius to figure out that 14% of a billion dollars is 140 million dollars. Did you or anyone you know pay 140 million dollars in taxes? What makes one person responsible for paying more than 140 million dollars? If anything, it would be more than fair that after a certain income, you pay no taxes. I mean seriously, if you expect a single person to pay more than 140 million dollars in taxes, you’re honestly bat shit crazy. I don’t care if they make more money, they make more money because they earned it. Making more money is simply a representation of providing a service or product to a greater number of people. These people should be thanked for their contribution, not told they don’t pay enough.
So then people like to demonize Paris Hilton or people “born” into money, but at some point, someone earned that money. Whether they are a descendant of the Hiltons or the Fords, or some other family. That money was originally earned somewhere. There is hardly anyone who has a lot of money that didn’t earn it. If you’re complaining about professional sports players or people on TV, then stop watching them, they get paid that much because they provide entertainment value to a mass number of people or cause that business or venture to make money by serving a great number of people. The more people you reach and serve with your ideas, products, and services, the more money you will make. These people are responsible for revolutionizing our current society. Without people like Bill Gates and Steve Jobs, computers and cell phones wouldn’t be where they are today. We all benefit from these services and are willing to pay a nominal fee for them. That’s how these people got all of their money. It didn’t come out of thin air.
Summary:
There’s always going to be a top 2%, the question is how successful do you want them to be. The more successful they are the easier your life is and the more opportunities that are available to everyone. Wealth redistribution doesn’t work because it strips the incentive of the top 2% for doing what they do. As you can see already in our current economy we’ve already started shipping jobs over seas and our companies here are moving there because of taxes and regulations. Not many people are willing to give up half of their time working to pay for taxes. Who would want 20 hours of every 40 hour work week to be just to pay for something that someone tells you that you owe? I’ve seen people who come close to 250k just stop working and start taking more vacations so they don’t hit the higher tax rates. When you increase taxes, progressively especially, there’s less incentive to climb through the tax brackets through hard work. People inherently pay more in taxes at the same rates the more money they make, this is something I never understood with our tax code. But the results are apparent, we have near 20% real unemployment at the time of this article and have been continuously shipping jobs over seas and running ourselves into debt problems since the income tax was introduced in early 1900s.
Resources:
http://web.sba.gov/faqs/faqIndexAll.cfm?areaid=24
https://www.thomasvan.com/taxes/ever-wonder-who-pays-taxes-and-who-doesnt
http://www.davemanuel.com/2010/11/04/what-percentage-of-federal-income-taxes-do-rich-people-really-pay/
In your summary you say they take more vacations to stay out of the higher tax bracket. That’s real patriotic. If they would pay better wages to the people who are making them the money in the first place wouldn’t that build a stronger economy that would allow taxes for everyone to go down? We’re supposedly one nation under God, not everyone for themselves. So, who are the ones who really don’t want to work? Whoever wrote this article needs to study up on economics. The 2% got to where they are today with help from someone. Apparently they never heard of pass it on. You’re summary only proves that greed is alive and well. I own my own business and I’m on call 24/7 and I’m sure the 2% is too. So don’t try to justify the 2% according to the tax rate. If that were true, we should have had more than enough jobs to go around after the Bush tax cuts. We were bleeding jobs under tax cuts, while under Clinton when he raised taxes we had a surplus and jobs were being created. The jobs didn’t start going overseas until the republican congress passed NAFTA. President Clinton says till this very day he wished he wouldn’t have signed it. Do you not pay any attention to recent history? All the CBO numbers are available online. Maybe you should try google.
I’m speaking from my observations. My logical point is that the higher you increase taxes the less incentive people have to work beyond a threshold. When you combine the top tier tax brackets with social security and state and other taxes it can get up to 60% of someones income that is at the bottom end of the 2%. I’ve seen people cut back hours intentionally to stay below a tax bracket. It’s not just in the 2% either, I’ve seen people try to stay in the 15% brackets as long as they could. NAFTA is from 1994, we’ve been losing high paying jobs for about 50 years now which is what I think where the misunderstanding is. Our quality of life is going down the drain because the higher paying production jobs are being replaced by service sector jobs which pay significantly less as we sell Chinese and other imported goods here instead of producing them.
There are other intricacies and ways the numbers don’t tell the full story. If you lower taxes you create more incentive to work, nobody wants to donate 20+ hours of their 40 hour work week toward the “greater good”, but people are interested in paying their fair share meaning that if I donate 20 hours of my income, then so does everyone else, and that doesn’t happen. Some people don’t donate any hours and still get money back at end of year.
All of my numbers are pulled from the CBO and other government sources.
Keep in mind policy changes take time to go into effect, there is staggering evidence that suggests the downfall during the Bush Era has everything to do with the policies implemented from the Clinton era, the tax cuts were put in place to stop the down fall of the economy which it did, without it we would have lost even more jobs.
Clinton took over a weak economy that just came off a bubble in 89 and left the economy as the dot com stocks busted in early 2000 right as President Bush took over, meaning the entire economy from the stock market on down was about to crash and be on a down fall, he was handed a failing economy. This was propped up by the housing bubble so the full effects were not felt until that bubble crushed and President Obama got handed the problems from the Clinton Era policies.
This information is all publicly available, try google or use common sense. If you don’t understand an economic policy and its effects then break it down to it’s very simple level. If you’re telling me that you would continue busting your ass after having to donate 24 hours of your 40 hour work week to other people who weren’t donating any time at all, then I believe the term for you is socialist, that’s great of you, but what I’m telling you is that this mindset is a very small minority not shared by others. Even God only recommends you donate 10% of your earnings.
This guy is a typical Democrat. Give Democrat Clinton credit for raising taxes. Blame Republican Congress for Nafta.
In reality Clinton did nothing positive when he had a Democratic Congress. His only positive accomplishments occured when pushed by a Republican Congress.
I am considered the to be in the top 2%, yet I seem like a maybe above average American. They key to staying in the top 2% is to save and invest your money, instead of blowing it.