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| |-+  U.S. General Discussion (Moderators: True Federalist, Former Moderate, Badger)
| | |-+  The overall tax burden is relatively flat
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Author Topic: The overall tax burden is relatively flat  (Read 298 times)
Jacobtm
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« on: August 02, 2012, 11:29:23 pm »
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Federal income taxes account for just 27% of total government revenue collected in America. And the remaining three-quarters of the tax pie is quite regressive. The middle class may not pay much federal income tax. But they sure pay the payroll tax for Social Security and Medicare, which the rich can mostly skip out on since it only applies to the first $110,000 of wage income. (The Medicare levy, unlike its bigger Social Security counterpart, is not capped). The masses also pay a much greater share of their income in sales and excise taxes than the rich do, because they cannot afford to save.

The fact of the matter is that the American tax code as a whole is almost perfectly flat. The bottom 20% of earners make 3% of the income and pay 2% of the taxes; the middle 20% make 11% and pay 10%; and the top 1% make 21% and pay 22%. Steve Forbes couldn’t have drawn it up any better.

http://www.economist.com/blogs/democracyinamerica/2012/07/taxes-and-rich-0



http://ctj.org/images/taxday2012table.jpg
« Last Edit: August 02, 2012, 11:31:42 pm by Jacobtm »Logged

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Mr. Morden
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« Reply #1 on: August 03, 2012, 12:02:31 am »
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Of course, whether it makes sense to count Social Security and Medicare payroll taxes the same as income taxes in assessing the progressivity of the tax code is open to debate.  Nominally, you're paying into a retirement program.  The reason why the payroll taxes are capped at income of $110,000 is because the benefits one is eligible to draw upon retirement are basically the same for everyone.

What if you computed the progressivity with income of taxes paid into the government minus benefits received from the government?
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opebo
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« Reply #2 on: August 03, 2012, 12:25:45 pm »
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Of course, whether it makes sense to count Social Security and Medicare payroll taxes the same as income taxes in assessing the progressivity of the tax code is open to debate.  Nominally, you're paying into a retirement program.  The reason why the payroll taxes are capped at income of $110,000 is because the benefits one is eligible to draw upon retirement are basically the same for everyone.

What if you computed the progressivity with income of taxes paid into the government minus benefits received from the government?

Well, the problem there is, Mordant, that the right-wing is apparently unwilling to admit that the vast incomes of the wealthy are benefits received from the government.
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Ernest
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« Reply #3 on: August 03, 2012, 01:52:20 pm »

While I wouldn't go as far as opebo, if you're going to start deducting the benefits received from the government, to be equitable you'd need to dedcut things such as the value of corporate limited liability, corporate welfare, etc., that at the individual level primarily benefit the rich, but which are harder to quantify than direct assistance.
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Torie
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« Reply #4 on: August 03, 2012, 02:50:35 pm »
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Notice the dip in the average tax burden for those earning 100K to 200K per year. For some reason, the Dems don't talk much about that cohort do they?
« Last Edit: August 03, 2012, 05:25:34 pm by Torie »Logged

opebo
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« Reply #5 on: August 03, 2012, 03:13:08 pm »
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While I wouldn't go as far as opebo, if you're going to start deducting the benefits received from the government, to be equitable you'd need to dedcut things such as the value of corporate limited liability, corporate welfare, etc., that at the individual level primarily benefit the rich, but which are harder to quantify than direct assistance.

All incomes are created by society as organized by the State, and distributed by the State.
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