Re: Super Rich in America
- From: "Allan Smith" <netsmith@(wherever).com>
- Date: Thu, 6 Apr 2006 10:21:35 -0400
BG,
Want the numbers? I'm not talking income and taxes here, instead, let's look
at net worth. There are two numbers - the threshold to enter the percentile,
and the average of the percentage range.
Top 1% $3,352,100 $10,204,000
Next 4% (uncalculated) $1,441,000
Next 5% $475,600 $623,500
Next 10% $257,700 $344,900
Next 20% (uncalculated) $161,300
Next 20% (uncalculated) $61,000
Bottom 40% (Negative wealth) $1,100
If you have $475,000 in net worth (including only the equity in housing),
you're in the top 10%. $257,700 puts you in the top 20%. The top 2% is
generally regarded as starting at around $2.2 mil, and holds about 97% of
the wealth in America. The top 1% holds 38% of the country's wealth.
In 2001, there were 2.2 million Americans with net worth of $1 mil and
above, and 228 with $1 billion and above. Below is how the tax cuts benefit
the 228 far more than the 2.2 million.
The top 15 multi-billionaires are shareholders in companies like Microsoft,
Berkshire Hathaway, Oracle, Dell, Macromedia, and Mars Candy. As such, their
dividends and capital gains are taxed at much lower rates than is individual
income.
That might seem to benefit the others with around a million or so as well,
but the majority of them hold their financial worth in tax-deferred
instruments such as IRAs, 401Ks, Annuities, and Private Retirement Accounts.
Granted that capital gains and dividends are not subject to tax until
withdrawn, but they are taxed as earned income when they are withdrawn. As a
result, these capital gains and dividends do _not_ enjoy the new tax breaks,
they only enjoy the tax-deferral they always have, and the withdrawals only
benefit from the (probably temporary) 0.5% to 2% lower tax on adjusted gross
income.
Thus, Bill Gates can sell $50 million or so worth of stock, realize only the
gains, and pay a considerably lower tax rate than a Microsoft retiree will
pay by selling Microsoft stock in his IRA to take an annual distribution.
Whatever gains and reinvested dividends that the employee has accrued over
the years will be taxed at full earned-income rates.
Over our 42 years, Lynda and I have lived by an old uncle's advice - "It's
not what you earn, but is what you keep, and how well you use it". Because
of investing and compounding, the relatively small amount we were able to
save in our first 7 years is now half our net worth, and each year it
returns many times the total amount originally saved. Some of it benefits
from the lowered rates on cap gains and dividends, but most (83%) does not.
Allan
"Big Gun" <none@xxxxxxxx> wrote in message
news:kfd832tn46k2c97kjdcpnehjg9ur9b3mb9@xxxxxxxxxx
On Wed, 05 Apr 2006 10:29:51 -0400, trudogg <trudogg@xxxxxxxxxxxxxx>
wrote:
Americans with annual incomes of $1 million or more, about
one-tenth of 1 percent all taxpayers, reaped 43 percent of all the
savings on investment taxes in 2003....The analyses show that more
than 70 percent of the tax savings on investment income went to the
top 2 percent, about 2.6 million taxpayers.
This just gives us more incentive to be in that top 2%.
--
Life's tough.
It's tougher if you're stupid.
John Wayne
.
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