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Rising Star
$2M income is considered lower upper class?!
Yet another person inflating class and income.
Chief
In my opinion, high income professionals do bare the brunt of taxes. Taxes are based on income in this country so a high income earner is going to pay a higher percentage of their total wealth because most of their growth is from income. The ultra wealthy typically have appreciation of assets and if they don’t sell they don’t pay. When they do sell they can theoretically live off a very small portion of their wealth so will only pay capital gains (which is a lower than income tax) on a smaller amount of their total wealth growth per year. The wealthy to ultra wealthy are getting a great deal in other words.
Chief
That’s correct. And if they time sales of losses correctly they can reduce their tax burden further.
Chief
https://taxfoundation.org/publications/latest-federal-income-tax-data/
depends on your definition of screwed. wife and I make $600k and we have accountants and financial advisors (same firm) that more then pay for themselves in tax savings alone. it helps that my wife has her own biz.
Rising Star
Top 50% of earners in US pay 97% of the taxes. Make your own conclusions from that 😀
That poor people are using all of their money to buy food and pay rent?
Agreed on those thresholds being questionable but when you’re making enough to be at the top end of the income tax scale but not enough to say, buy your own jet, if you don’t do anything else, you may have a larger tax liability.
But that’s why you have a good financial/investment person and tax person— so you can use all the legal mechanisms to reduce that tax liability. I don’t fit into even the bottom threshold of what OP considers upper middle class and I pay an effective tax rate almost 3 brackets lower mostly by using tax-advantaged savings and investments