How tax breaks help the rich

How tax breaks help the rich

The US has a problem with income inequality. The current tax code makes it worse.

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The gap between the rich and the poor in America looks more like developing countries than other Western nations. Trump and the GOP have proposed tax plans that will give massive tax breaks to the wealthy while it remains unclear if the middle class will get a tax benefit.

Deductions give a greater proportion of tax breaks to people with higher incomes. The same charitable contribution from two different incomes will benefit the higher wage earner, because deductions give tax breaks in proportion with tax brackets. Other countries have eliminated certain tax deductions in favor of tax credits. Credits give breaks in proportion to the amount you give, not the amount you owe.

There are two kinds of income in the US. We tax wage income at a higher rate than income earned in stocks and bonds. That means people who get their income from capital gains and stock market interest pay fewer taxes than the same income of someone who works for a paycheck.

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20 Responses

  1. KasaiLifeTV says:

    I’m okay with this

  2. C. Lincoln says:

    Look up Rich Dad Poor Dad Author’s new book. He covers how you can pay less taxes. Invest in oil exploration, properties and businesses. LOL its a scam… the rich get richer. Amerikkka is a plutocracy where the rich get away with murder, rape and theft.

  3. bobby schutz says:

    You could fix all the “problems” in this video if you drop the richest tax rate to the poorest tax rate. Lel

  4. hengji1 says:

    well the rich does pay a LOT more tax from the first place… and their money didn’t just come out of nowhere either, they work hard for it as well… I am Dan in this sense, but I am happy with what it is. if you dont like the situation you are in, work harder so you are in the highest tax bracket!

  5. Truth Be $old says:

    Just summarizes the importance of working hard AND smart.

  6. Mr. Green says:

    I can make sense of the entire federal tax system in an 8:48 minute video. Agree with me blindly resist I know how the world works

  7. joe .Brown says:

    Why Americana hate there own country?

  8. Peter Smyth says:

    I think how charitable deductions work in the UK is that the amount you payed in tax for that income (or only some of it) can be given to the charity, but not deducted and kept by the donator.

  9. Enemy Crab says:

    907 people think the rich will throw them a bone if they suck their dicks long enough.

  10. Nilesh Lahoty says:

    What kind of dumb video full of inferences! Rich pay at high rate, so when the deductions will happen, the benefit will obviously be higher because of the higher rate!

    You can’t quote relative measure on one side and absolute measure on another. Be consistent. You are forcing your narrative soo much!

  11. Thomas Stewart says:

    Perhaps instead of focusing on making the rich poorer to close the gap, why not try to make the poor richer? Anyone is allowed to invest. I make $10,000 a year and yet I put away $300 a month into the market. I made $4 today from it. Stop focusing on make successful people less successful and instead: learn from them, adapt, and make yourself more successful

  12. Cristiano Ronaldo says:

    The United States has a problem, and it is their citizens by letting things like this happen.

  13. Patrick Kerrigan says:

    What is wrong with income inequality? Everyone is getting richer. The rich are getting richer faster. Who cares?

  14. Man Xue says:

    wow we got 907 out 8907 ppl dislike this video. They must be really rich and have personal interest in this tax cut bill

  15. Muhammed Irshad Khan says:

    Hi. I love your vids, but you are using incorrect case studies.

    Steve gets a higher rate on his deduction because he is getting the same higher rate on his income. Actually, he is getting taxed more proportionately, and he is actually funding Dan in many ways.
    The problem is when Steve bends the rule, and applies the deduction when it was not intended

    Im not American, but generally income earned from ‘trading’ in stocks is never capital, unless you again manage to bend the rules

  16. bettie cox says:

    The Glenstone Museum is open to the public, and it’s wonderful.

  17. Deenal Dhuny says:

    And what did Obama do about it?

  18. Nick Lamb says:

    One interesting thing you can do about charitable donations (personally I think they shouldn’t get any tax deduction anywhere but I’m aware that’s an unpopular position) is what the UK does.

    In the UK when you donate money the _charity_ can get tax money back. Not you, it’s the same for you whether you give £10 or £100, you don’t have that money any more and the tax man won’t give any back. But if you fill out paperwork saying you promise you’re a tax payer (and giving your name, address, etcetera) the charity submits that and gets money back from the taxman.

    The UK has Pay As You Earn so anybody whose normal income is from being paid by an employer to do a job has no tax paperwork, it’s all handled automatically before you get a penny, the charity scheme fits well with that. People who have very different income, like the self-employed, landlords or poker professionals do need to do tax paperwork, but that’s a small minority.

  19. Captain Nemo says:

    Tax cuts can work if applied to every one. (Or have a 1% flat tax.)

  20. Jacob Motichek says:

    Wages are no longer tied to production and inflation, corporate tax rate is still in place, glass steagall was repealed and NAFTA was enacted. This is why their is income inequality. Also, a decrease in education spending. Research Mark Blyth; Scottish Professor of Economics at Brown University, brilliant man.

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