Free Ebook.

Enter your email address:

Delivered by FeedBurner

« How to Succeed at Your Job | Main | 14 Ways to Save on Holiday Gifts »

October 07, 2008


Feed You can follow this conversation by subscribing to the comment feed for this post.

Paying taxes and giving to charity are not the same thing. Anyone who even suggests it is should get slapped. Self rationalization to the extreme.

But, from personal experience, I can't tell you how many people I know (predominately liberals) who don't give to charity who feeling guilty justify their behavior along such lines and then think advocating for greater government spending for the poor makes up for their lake of charity.

And yes I know there are probably charitable liberals. But the numbers who I know match the taxes make me feel better about me description above is unfortunately staggering.

Paying taxes and giving to charity are not the same thing. Anyone who even suggests it is should get slapped. Self rationalization to the extreme.

But, from personal experience, I can't tell you how many people I know (predominately liberals) who don't give to charity who feeling guilty justify their behavior along such lines and then think advocating for greater government spending for the poor makes up for their lake of charity.

And yes I know there are probably charitable liberals. But the numbers who I know match the taxes make me feel better about me description above is unfortunately staggering.

They are not the same thing, but when the Government forces me to fund their charity organizations that takes away my ability to donate to the organizations I think are best. So you can argue that its not giving because I am forced to pay taxes, but it takes away my ability to give to good places because I am forced to pay for ones that may or may not be doing anything beneficial.

Instead of slapping me, maybe you should give me my tax dollars back and see what I do with them. I would like to help out, but hate that the government if forcing inefficient use of my funds.

Don't slap me unless you give me the option to check a box on my tax return that allows me not to fund the multitude of giveaway programs that the Federal government has implemented. These programs are so far away from the essential missions of government that the funding can only be classified as compulsory charitable giving.

Historically, didn't people tithe to the church because the church was the defacto head of state? And doesn't the bible say that tithing is expected? And doesn't that challenge the idea that any type of giving is then not exactly "voluntary"?

And it looks to me FMF, like you contradict yourself. You say a person that doesn't give isn't a bad person, but they are also not a generous person. Maybe "not generous" isn't quite the same as "not bad", but it's close enough for me.

But not nearly as judgemental as Jack. Don't slap me unless you expect to get slapped back.

Taxing may be the same as historically biblical tithing, but I don't think either are the same as philanthropy. I thought that tithes to the church helped keep the church running, as how taxes to the government keep it in operation.

There are issues of "public goods" (not sure if this is the right term) but where a service needs to be funded for the sake of the community, even if individual members don't use the service. So I pay for public schools, even though I don't have kids, and we all pay for emergency services, even though most people don't use them.

The churches, I thought, had the same set up: in addition to operating expenses, there are programs that, although not used by individual members, serve the greater good of believers out there. So building new churches, smaller outreach ministries, go to the running of the church as an institution.

I thought that philanthropy or charity steps aside of that: funding programs that don't relate to the operation/overhead of your group. So if your church gets the tithe, that's not the same as donating money to the homeless shelter.

Generosity is giving more than is socially or legally required. If your church mandates that you give them 10%, then doing so isn't generosity, it's compliance. But when you give 15%, then you're being generous. It's not a requirement to be generous though. :)

Paying takes does include charity but it's obviously not technically "giving", more like forced taking by the government. A sizable amount of the US budget also goes to third world countries in the form of aid. The difference is that you don't get to choose where your money goes and giving gives you that choice.

Anyway, we shouldn't pretend that we're not judging those who don't give ("not generous"). There are many selfish reasons to give (social reward, superiority feeling, tax write off, etc.) that have nothing to do with generosity and I could make the case against your "generosity" if I wanted to but it requires too much energy.

As rwh mentioned the tithe isn't that much difference from the tax: It's a payment to an organization is exchange for services, not that much different from a tax.

It's sad that this subject is always fraught with judgment, usually on the side of the "generous" giver, but that's human nature I suppose. It's all just a social game of "I'm better than you" anyway. Everyone seems to have a hand out and a guilt trip behind that hand. Give or don't give but like Jesus says, whatever you do is a private matter. Once you wear it on your sleeve it's not actually charity any longer, it's just conspicuous oneupmanship.

There's a difference.

But first, it's unfortunate that people want to politicize this topic. As a proud liberal, I'll gladly give you your checkbox to remove your taxes from social programs you don't like if I get a checkbox to remove my taxes from subsidizing wars of choice for oil that don't make us safer in America and distract us from capturing and killing the people who attacked us on 9/11. The latter will surely free up more money for charitable giving stateside.

That said, this is not how the world works, and we have elections to put people in place to settle this dispute for us. So go vote next month, it's one of the primary responsibilities of citizenship in a free society.

But in my circles of liberal friends, I have NEVER heard anyone say "I give through my taxes." NEVER. What I do think you are more likely to hear (though I don't hear it myself in our circles) is "I give at the office." A good friend of ours is a social worker. She lives very frugally, but is not paid very well. She is paying off student loans. I doubt she has any capacity for monetary charitable giving. Yet she spends 50-60 hours a week with no overtime "doing unto the least of these"- mostly working with children and adults who are victims of domestic violence.

Is she not giving enough back?

Personally, our household has spent more time giving through volunteerism than monetarily in recent years. We are trying to maintain the former while upping the latter. We have set up a charitable giving savings account at ING Direct, and we have a plan to give 2% of our pre-tax earnings away this year. The hope is that we will be able to increase this by 1% a year until we hit a 10% giving rate based on pre-tax income.

While there is waste in government, and it should be rooted out and eliminated where possible, much of government is quite effective. But taxes are the dues we pay to live in a civilized society, and to provide goods and services that markets cannot or will not effectively promote or provide broadly. (clean air, rural telephone/mail service, national defense)

Charitable giving is correctly described above as voluntary. Dues payments are not.

Great post. I see paying taxes and giving as very different activities. I do both but I try to minimize one and maximize the other.

If one is trying to live a frugal life, giving generously can be a big help. Not only does it remind you of how little you really need to get by and how very little many others have, but it also prevents you from being able to keep up with the proverbial Joneses. If you are giving generously out of your disposable income and saving responsibly you will absolutely not be able to spend as much on houses, vacations, cars, or anything else as another person living on the same salary who does not give. I find that realizing and accepting this can help dull my desire to consume.


According to the National Taxpayers Union website (, the latest data from 2006 shows the top 5% of income earners now account for 60.14% of all taxes paid. Over the past few years, the share paid by the top 5% keeps inching up (i.e., the "rich" add more in proportion to the bottom 95%). You wouldn't know this if you listened to Obama and his talk of "fairness", or Biden and his talk of "patriotism", but I digress...

The fact is, giving voluntarily is connected to the heart. Its just plain good for you. And you can do so much more for the world with your directed giving than legions of Washington bureaucrats will do with your taxes. That's my 2 cents.

Hey, if people dislike the fact that I bothered to mention the political allegiences of the people whom I deal with, fine. But I'm reporting facts, folks. Maybe not in your sector of the economy or among your friends. I work in a segment of an industry that is primarily made up of people making low to mid six figures and some seven figures, two-thirds would report as liberal, and yes I have heard this attitude many a time. I am not making this stuff up. Go look up any of the scientific studies and you will find ample evidence backing up my anecdotal stuff. Making judgments is only a bad thing when the judgments are wrong. And notice that I didn't judge those who don't bother to give to charity. I simply said don't tell me that you don't give money to charity because you paid your taxes. That's the attitude I called self rationalization to the extreme.

Anon is certainly right that one can be charitable with time and talent as well as money. But most would suggest that charity involves monetary giving, particularly if you make a lot of it.

Don't be fooled by those tax percentage statistics from Paul. The reason the top 5% income earners are paying a larger percentage of taxes is that the overall disparity in incomes has outpaced the tax cuts to the top 5%.

"I simply said don't tell me that you don't give money to charity because you paid your taxes. That's the attitude I called self rationalization to the extreme"

And to be very clear, I'm referring to characterizing paying of taxes as a charitable act. Look, if you don't feel you have the ability to give money to charity after taxes fine. If you make a low or middle income, I'd probably not bother to think twice about your judgment call, even if I'd disagree with it. But if your household makes a combined 500K and you live in one of the toniest suburbs, you drive a mercedes, throw your kids lavish birthday parties, and otherwise brag about your money, but then turn out to not give much of anything to charity yet never find a moment not to advocate for increasing the welfare state, I'm bound to have an opinion.

David, I'm at a loss how your post at all disputes the facts Paul posted. Whether you think it's a good thing or a bad thing, he is correct that the vast majority of taxes are paid by a small minority.

If you really want to do something about income disparity, then apply a progressive tax on businesses based on the highest wages they pay to their employees.

I'm saying Paul's comment is a distortion. If the top 5% make more than they did 10 years ago, but the bottom 95% makes less (which is, in fact, the case), then of course a greater percentage of the "tax burden", as a percentage of the total dollars, will come from the top 5%. Paul was claiming that somehow, things have been getting less fair for the top 5%, when in fact the top 5% have had big tax cuts from Bush from the last 7 years, and have seen their incomes increase. Now, say what you will about what sort of tax system is "fair" or "unfair", but the reason the tax burden has been "inching up" for the top 5% is that the top 5% are much richer, in comparison to the bottom 95%, than they used to be. So Biden & Obama's claim that things are getting less fair for the working middle class actually makes some sense. They make less money now, so they pay less taxes. That doesn't mean they have more money than they used to. The top 5% do, however, and that's why they pay more taxes.

Paying taxes is not the same as charity since it is not voluntary. Plus a large portion of the money does not go to help those in need. It funds programs that we all benefit from. Taxes also return direct benefits to those taxed since we all benefit from national defense, good roads, etc.

I also think that tithing isn't exactly the same as giving since it goes to the organization you belong to, is often not considered optional and it returns direct benefits to the person paying the tithe. Sounds more like "dues" than charity to me.

But of course any giving to any worthy cause is a good thing.


"Over the past few years, the share paid by the top 5% keeps inching up"

The effective tax rate for the top 5% over the past few years up til 2006 which is the most recent data are:

1999 = 24.18%
2000 = 24.42%
2001 = 23.68%
2002 = 22.95%
2003 = 20.74%
2004 = 20.67%
2005 = 20.78%
2006 = 20.68%

So the tax rate of the top 5% has not changed for the past few years and was going down from 1999 to 2003. If they are paying more in taxes thats simply because they are making more money.


IRS data at:,,id=129270,00.html

This is quite an interesting discussion. I would agree that giving/donating by nature is voluntary. That is a key difference with mandatory taxes. However, what makes it interesting is that your taxes are redirected to charitable causes and those in need. As toughmoneylove said, you could argue that is compulsory charitable giving. I think more people would feel that way as their taxes increased. For example if they paid 50+% in taxes.

Another interesting part of this is: Are you taking the tax write off from your charitable contributions? Is so, then you feel good that you are "donating/giving" but you actually got some of that back on tax write offs. Maybe you shouldn't take any tax write off for charitable contributions.

Ok my take: Giving is voluntary. If you don't want to give or can't give, don't do it. There is nothing wrong with that. Giving really benefits the giver more than the receiver anyhow.

For ALL tax payers the effective federal tax rate went up:
2003 = 11.90%
2004 = 12.10%
2005 = 12.45%
2006 = 12.60%

For the top 1% of tax payers the effective tax rate went DOWN:

2003 = 24.31%
2004 = 23.49%
2005 = 23.13%
2006 = 22.79%

So in the last few years the people making the most money are paying a lower tax rate while as a whole the rest of us are paying a higher tax rate.


David says "If the top 5% make more than they did 10 years ago, but the bottom 95% makes less"

The top are making more, but the bottom are making more also. Incomes have been going up across the board. Yes the top has been going up faster, but don't just assume that the bottom is going down because of it (that is just a bad assumption).

And for Jim saying "Plus a large portion of the money does not go to help those in need."

The latest stats I have seen say that for every dollar the 'rich' put in, they get about 10 cents of benefits back, whereas the low income receive over $8 of benefits for each dollar they put in. I don't think the rich are receiving no benefits, but its no where near the amount low incomes are receiving. Is that charitable?

Or better yet can I call myself charitable if I vote for someone who promotes these government sponsored plans?

So, if you equate paying taxes with giving, because a certain portion of your tax dollars are spent on charitable-type causes, then what happens if our taxes a) are allocated differently or b) are reduced (not likely, I know)?

If you claim that you're giving to charity because 50% of your tax dollars go to social programs, and the next administration changes that percentage to 25%, are you going to make up the difference by increasing your actual charitable giving that year?

If the proportions remain the same, but your taxes decrease, do you increase your charitable giving to make up for the total amount of dollars that you felt you "gave" before?

Do you determine what portion of your income you feel should go to those causes, and make sure that it happens, whether the goverment takes it for redistribution to those causes, or not?

In some churches, tithing is mandatory. In other churches, there is no tithe, and all contributions are voluntary. Giving levels are entirely dependent on the generousity of the believer in those cases. How the money is subsequently spent by the church is irrelevant; some churches spend more on feeding the poor, foreign missions, addiction recovery, building new facilities, or whatever they've decided is appropriate. If, as a member, you don't agree with the way money is spent, you can always attend a church that matches your desires in this area. There's a ton of choices available in this day and age.

Regarding choosing a profession that is not well-compensated because it serves others as a substitute for charitable giving, doesn't exactly seem like giving to me. There are plenty of people in professions that could claim this: social workers, teachers, police, firefighters, pastors, counselors, etc. I am certain that a number of them also give generously to charitable causes, in addition to helping people all day long at their jobs.

Kurt, fair enough, in real dollar terms you're correct, but wages for those bottom 95% are not matching inflation, even when your inflation measure is one of the very conservative CPI measures.

Kurt, When I say "Plus a large portion of the money does not go to help those in need." I am talking about money spent on things like overhead or paying the national debt. That money isn't directly helping people in need. I would also argue that security spending for military, border control, customs, etc. is not a charitable cause. Security does of course provide a benefit to us all but I wouldn't call it charity exactly.

I certainly agree that the US govt. does help people in need and the rich subsidize the poor in this respect. But I wouldn't call taxes "giving" since it is not voluntary.

As for the 'rich' only getting 10¢ for every $1 they put into taxes, I suspect that is a measurse of direct financial return. I doubt it covers the indirect and numerous benefits that the rich and all of us get from all that the US govt. does. For example, how do you measure the dollar value return of the national defense, and isn't that value higher for someone who is 'rich' and has much more to protect?


This is an easy one as Jesus already gave us the answer. Take a look at Luke 20:20-26. Does anyone remember the following quote: Give to Ceasar what is Ceasar's and to God what is God's.

As to the ongoing tax debate, I think the government has done a great job in diverting what should be the real debate. When looking at the data, it is clear that the top 5% of income earners are paying the greatest share of Federal income tax. I find it silly then that the blame goes towards this income group versus the real culprit (the Federal Government) for spending too much money.

I would say that most of us don't "give" taxes. Taxes are taken from us. What most of us call giving is something we do out of a heart of helpfulness.

I agree that our taxes do fund organizations that help people, but true giving should be done with a heart that is bent toward helping others.

I agree with your logic, David and Jim. Your math is perfectly correct. The data points to today's top 5% as having a higher portion of America's total income than before. That said, why the concern that this is unfair? Did these rich folks cheat the rest of us? Would we rather live in a country with free market opportunities, or a country with socialism? Are we afraid to compete?

My concern over rising taxes is it feeds an inefficient and ineffective government that is in the mode of overspending to buy votes to stay in power. We have ceded too much of our power to Uncle Sam. I feel much better about the money I donate to private charities to build orphanages and feed the poor.

In talking about tithes there are some misconceptions out there. Within a Church, people treat the terms Tithes and Offerings as synomyms. They are not. A tithe is the standard 10% that is expected of all Church members. Anything above that is considered an offering, or gift. One is expected, the latter appreciated. That is whty, if you pay attention during collection, you will hear many Churches call it, "His tithes and our offerings." Just a little FYI :)

Paul, I never said that it is unfair that the rich make a lot of money. I don't see David arguing that point either. I was pointing out that their tax contributions have increased simply because their income has increased. Thats all fair to me.


One commenter stated, "Quite a sizeable amount of money goes to third world countries in the form of aid." Also, quite a sizeable amount of money goes to third world countries in the form of war.

It would be one thing if government programs actually served those who needed help. But most of our government programs go either to destruction, or to helping those who really don't need help -- like $850 billion to the bankers who destroyed their system and our economy at the same time.

Personally, I want a choice. I want to be able to choose whom I give my money to.

Also, to address some of the other comments about the top 5% and all, I used to advocate a mostly flat tax. But then I see how many benefits the ultra-rich get through their cronyism with the government officials, and I've changed my mind. We need a progressive system, not to sock the rich for just being rich, but to compensate for all the troubles the ultra-rich has put us through, and how much they are costing the rest of the taxpayers.

For those who take the view the top 5% or 1% pay the most taxes, that is true, but what is also true is their increasing share of the national wealth equals or exceeds their increasing share of the tax burden:

So it stands to reason that wealthy people would increase their monetary giving at a higher rate than regular people, because their income and wealth are also increasing at a higher rate than everyone else.

Paul: You asked: "Did these rich folks cheat the rest of us?" Well, it looks like these rich folks did:

And to the comment that rich receive far less back per dollar of taxes than poor, isn't that an endorsement of a good tax plan, because it mimics what charities do?

I'm all for charitable giving. What I didn't like about FMF's original position is he seems to make assumptions based on tax return data. I spent last Saturday washing cars for 4 hours to help my daughter's school music program. I coached my daughter's softball team last summer. My wife gives generously of her time and talents to help our neighborhood association. We host team dinners for our older daughter's sports teams. None of these things show up on a tax return.

I think it's a mistake to judge someone's level of charitable giving based on something easily checked, like a tax return. That's a place where public people are most likely to leave a record, precisely because there are people watching.

But I agree whole heartedly with the comment that giving helps the giver more than the receiver. We should all strive to give more. We're moving soon and have lots of old beanie babies. Anybody want them?

I lost 24% of my net worth this past year, did I "give"? Sounds like FMF touched the 3rd rail on this topic.

Geez, haven't you guys ever heard of tax deductions for charitable contributions?

Anyway, to me, this conversation is kind of irrelevant. Giving to charity is an extremely personal matter, so a person shouldn't have to defend whether they choose to give, choose not to give, choose to donate time instead of money, or believe taxes to be a form of giving. Giving anonymously is the most admirable form of charity.

"At this festive season of the year, Mr. Scrooge," said the gentleman, taking up a pen, "it is more than usually desirable that we should make some slight provision for the Poor and destitute, who suffer greatly at the present time. Many thousands are in want of common necessaries; hundreds of thousands are in want of common comforts, sir."

"Are there no prisons?" asked Scrooge.

"Plenty of prisons," said the gentleman, laying down the pen again.

"And the Union workhouses?" demanded Scrooge. "Are they still in operation?"

"They are. Still," returned the gentleman, "I wish I could say they were not."

"The Treadmill and the Poor Law are in full vigour, then?" said Scrooge.

"Both very busy, sir."

"Oh! I was afraid, from what you said at first, that something had occurred to stop them in their useful course," said Scrooge. "I'm very glad to hear it."

-- "A Christmas Carol", Charles Dickens

While it's true that much tax money goes to help the less fortunate, there is a very key difference between tax payment and true charitable giving. Jesus tells us as much in Matthew 22:21 when he instructs us to render unto Caesar. The message is clear. We are to pay our taxes willingly, but as Christians and Sons of God we are called to a giving that is much higher than that, and it goes beyond money. We are called to give our time, our talents, our energy, our blood, our sweat, our tears (and yes, our money, too) to the aid of God's Kingdom and the world in which we live.


I view my social security (as a 20s, high-income earner) as pure charity. My employer and i put in 13 FREAKING GRAND this year alone into the worst Ponzi scheme ever. Pure charity.

dogatemyfinances, if you're interested in the ponzi scheme to end all ponzi schemes then research the Federal Reserve and the creation of money out of debt. Your mind will be blown and Social Security will seem like the incredibly small beans it is. Income tax was created the same year the Fed was created, 1913, and it's not a coincidence. Social Security is the crumb from the table of the rich.

The beginning of this gives a standard overview based on the Fed's own documents but there are MANY other references that say the same thing:

The vast majority of millionaires in this country are not the wallstreet executives that are villified in today's media. Instead, they are typically the small business owners such as plumbers, heating and airconditioning contractors, store owners, etc.

Secondly, why are the top 5% earners becoming more wealthy? Because they invest back into their businesses and grow them (employing more people) while those that have less wealth save and invest less of what they make. Are national savings rate is pathetic. No wonder there is such a wealth disparity. We have to drive new cars, get the latest electronics, fashions, etc. And before someone starts bring up some case for lower income groups, I am talking about the average American who feels entitled to the latest things, a bigger house, etc.

"Secondly, why are the top 5% earners becoming more wealthy? Because they invest back into their businesses and grow them (employing more people) while those that have less wealth save and invest less of what they make."

Oh, God, it breaks my heart that people actually believe this. The top 5%, the top 1%, the top .1% of earners in this country are not your local plumber carefully and thriftily building his five-plumber business. They are ludicrously wealthy people primarily operating in the domain of finance. I don't think people outside that world can even conceive the incredible attention that goes into gaming the system there.

For instance: many hedge funds structure regular compensation so that it technically qualifies as a long-term capital gain (without the actual risk involved that the differential rate is supposed to compensate for). People making tens of millions of dollars (and sometimes quite a lot more) are being taxed at fifteen percent on that income--lower than their secretaries or janitors. See here:

I understand why people want to believe that people at the top of the pyramid come by their wealth through the same kind of labor people who are not do, that those people are playing on a level playing field. They just aren't. Check out the insane levels of compensation paid out by the big five investment banks last year, even as they were accumulating the positions that ultimately torpedoed them all. Not exactly "merit pay."

Sarah, in a parallel universe would you be interested in my proposal of marriage? ;-)

Understanding the fundamental inequities in our society and the machinations that make this so is not leftism but populism. The people at the top of the pyramid DO actually come by their wealth through labor but it's OUR labor.

"The top 5% of wage earners pay 57% of taxes. (IRS 2004)

Nope, nice spin but not true. (And not true in TWO ways.) Try again.

Interesting! I think that commenter just talked me out of feeling guilty for not increasing my charitable giving from 5% to 10%. I don't believe that the government should sponsor or run charitable giving - I think private companies and non-profits should (the money is infinitely better managed out of the hands of the government). But since I don't have the option of only paying taxes that go for new roads and the military and education, I'll consider part of my tax burden to be charitable giving. Whether voluntary or not, who cares??? It's all giving, and it's all going to (largely) the same place (poor people).


Your focus is on a few versus the broad market. There are plenty of sources out there that will show you that you are wrong. The vast majority of millionaires are business owners. Stating otherwise shows that you lack the ability to really do the homework. If you need a simple book as a start, I suggest you read "The Millionaire Next Door".

By the way, how many hedgefund managers do you think are out there?


Here is a link:

Notice that 2/3rds of all millionaires are self-employed (small business owners)

Care to come back with some statistics of your own?

2/3 of millionaires =/= top 5 percent. The two numbers tell different stories. One counts the number of people doing something, the other counts the weight each individual contributes to the total (number average vs. weight average.) The only way that the two ways of counting would be equal is if each millionaire contributed the same amount to the total -- if each millionaire were the same.

Off topic, but how is a business "small" when it makes enough of a profit that the owner is a millionaire?

Anonymous, I doubt your average "small business" millionaire is among the top 5% of earners. It's been a while since I read it, so I'm open to correction, but aren't the people in the Millionaire Next Door millionaires in terms of net worth (including house and years and years of retirement savings), which is very achievable for most of us, rather than earning more than 95% of other people every year, which isn't?

Here is another great article:

Notice the large number of people that no longer pay Federal taxes. With either Obama or McCain, that number will grow to 43 or 44%. Then notice towards the bottom that of the 138 million tax filers, only 11% are paying more into the government than what they receive back in services. As we continue to play the games of class envy, we also continue to erode the base of taxpayers.

What Guinness and Anna said. Speaking of doing the homework, if you genuinely don't understand that, you really need to do some basic review of statistics and finance.

(Also, "self-employed" does not necessarily equal "small business owner.")

Consider the information here as well:

We have concentrated wealth in an unprecedentedly tiny number of hands in this country in the last twenty years. Yes, there are relatively few hedge fund managers out there even compared to, say, corporate executives. Thus it's extra shocking that they hold so much wealth in their hands. Three hedge fund managers took home over $1 billion each in compensation for 2006 and I believe the numbers were even higher in 2007.

Books like The Millionaire Next Door are helpful in the sense they can encourage people to be thrifty and work hard, which is likely to be helpful to anyone in any financial walk of life. To the extent, however, that they suggest that the very rich are "just like us," only carefully investing their salaries into their little businesses that just happened to grow, they're spreading a harmful myth.

Sorry, hedge fund compensation last year:


Hedge fund managers are still a small percentage of the overall 1%/5% top income earners. Get real. That is like taking a person from public housing, making minimum wage and saying that they are representative of the entire lower/middle income class.

I noticed that you just blasted right by the article in which there is a larger growing base of people that no longer pay federal income tax and also that only 11% of tax filers actually pay as much or more than they get back in services. We continue to shift towards a smaller base of taxpayers. That spells for disaster.

One final question. Let's say I have an annual earned income of $350,000 a year. How much should I pay each year in total taxes so that you would feel that it is "fair"? Put it this way: How much should I be able to keep?


" The top 5%, the top 1%, the top .1% of earners in this country are not your local plumber carefully and thriftily building his five-plumber business. They are ludicrously wealthy people primarily operating in the domain of finance"

THe top 5% of income earners are 6.7 million people and the top 1% includes 1.3 million workers. Thats a ton of people and they certainly aren't all CEO's and hedge fund managers.

The total number of people employed in the finance realm as tracked by the BLS is 6.0 million. And the bottom 90% of those people make less than $100k a year. From IRS data, to be in the top 5% of wage earners you have to have adjusted gross income over $150k.

So not even 10% of the top 5% of wage earners are in the field of finance.

Theres probably about as many physcians and surgeons in the top 5% of wage earners as there are people employed in the finance sector.


BLS wage data:
IRS data:

The comments to this entry are closed.

Start a Blog


  • Any information shared on Free Money Finance does not constitute financial advice. The Website is intended to provide general information only and does not attempt to give you advice that relates to your specific circumstances. You are advised to discuss your specific requirements with an independent financial adviser. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise. All posts are © 2005-2012, Free Money Finance.