From the get go the whole tax bracket thing gets confounded by what set of figures one chooses to bolster an argument. The consistent slam against the rich is that they do not pay their fair share because they pay at a lower tax rate.
So just what is fair?
Percentages are great tools for any argument. You can put any spin on it you want.
From this point on I am using figures based on the last year of truly complete data (2009). The figures can be found on numerous sites, including the IRS if you want to do the digging for yourself. Anyone with more up to date, complete figures, let me know, and feel free to provide them.
This is what I have found:
The average tax rate for all taxpayers is 11.06%.
In the top 1% of income earners the average tax rate is 24.01%. It consists of taxpayers who earned $343,972 or more. This group paid 36.7% of all income taxes paid by all taxpayers. It comprises 16.9% of the AGI for all taxpayers.
For those in the subset of 1% and 5% of top income earners the average tax rate is 16.40%. It consists of taxpayers who earned $154,643 or more but less than $343,972. This group paid 22% of all income taxes paid by all taxpayers. It comprises 14.8% of the AGI for all taxpayers.
For those in the subset of 5 - 10% of the top income earners the average tax rate is 11.40%. It consists of taxpayers who earned $154,643 or more but less than the group above. This group paid 11.8% of all income taxes paid by all taxpayers. It comprises 11.5% of the AGI for all taxpayers.
For those in the subset of 10 - 25% of the top income earners the average tax rate is 8.23%. It consists of taxpayers who earned $112,124 or more but less than the group above. This group paid 17.0% of all income taxes paid by all taxpayers. It comprises 22.6% of the AGI for all taxpayers.
For those in the subset of 25 and 50% of the top income earners the average tax rate is 5.58%. It consists of taxpayers who earned $66,193 or more but less than the group above. This group paid 11.0% of all income taxes paid by all taxpayers. It comprises 20.7% of the AGI for all taxpayers.
For those in the subset of the bottom 50%, those with incomes less than $32,396, the average tax rate is 1.85%. Share of income tax paid by this group is 2.3%. It comprises 13.5% of the AGI for all taxpayers.
An average is just that. Some pay more and some pay less. As a group however, those who earn more, do pay more in taxes, and at a higher average rate.
So just what is fair? Somebody tell me. How should the actual burden be split among people?
Your figures appear to come from the Tax Foundation which has had past board members from largely big oil companies and presently have members with strong ties to the GOP. So I take the argument with a healthy grain of salt.
ReplyDeleteThe whole averaging of tax rates across segments seems like it can be very skewed. Example, you would not come up with an average American's annual salary by mixing a group of teachers, restaurant waitstaff, police, bankers, and then throw A-Rod and Tiger Woods into the mix.
Those earning less than $120k in salary/wages/tips pay FICA which raises the tax burden more, and then we have those who claim SS and Medicare is an "entitlement". Well, if I've paid in these taxes for so many years in order to qualify for the benefits when the time comes, yeah, I feel entitled to get it back out again. They were designed as insurance plans back in the day.
So long as the wealthiest people in this country are allowed to buy politicians to design the tax code, the rich will pay far less than the rest of us as a percentage of income. 15% out of $30k is a lot worse than 35% out of $1 million to the poor sod who has to figure out how to pay for housing, food, etc...
What argument do you take with a grain of salt? That is but one of many sites that use the figures, which are compilation of data from the government. The figures speak for themselves. Unless you are disputing the figures?
DeleteA-Rod and Tiger Woods aren't thrown in with waitstaff, police and teachers, although I am sure they are with a few bankers. the simple fact is someone has to make that minimum amount in the bracket to be in the bracket.
Every salary/wage/employment earnings are taxed up to the same $120K +/- for social security. The cap was put in place because there is a max one can actually collect per year from social security.
I did not imply, state or otherwise infer anything about social security benefits. the primary reason behind the problems with Social Security is the misuse over the years to pay out expanded benefits for purposes added on. I fail to see the logic behind the argument, or any relevance to the piece.
The reality is not everyone in every income bracket pays at the same rate. The $30k wage earner who cannot itemize will pay more than the one that can. The $120K wage earner with no deductions will pay more than more than one with more exemptions.
For everyone out there in love with the "Buffet Rule" you might just want to read up on the local history of where "Berkshire Hathaway" got its start and what was done to the local company that provided the capital for the empire.
Believe it or not, I agree with a graduated tax rate, but I also agree with the concept that everyone pays their fair share concept.
No one should be entitled to a free ride. Want fair. Break it down into seven levels. Start at 5% and work your way up to 35%. But everyone pays something.
We obviously disagree on what constitutes fairness.
Because someone has more than me should never be a reason for me to expect they should be required to simply dip into their wallet and hand over the money.
Sooner or later this country is going to run out of people willing to pull that wagon, because it is simply not going to be not worth the effort.
Seriously Dawn?
ReplyDeleteLet's see, after reading your comment I can now safely ascertain that I am: Dumber than a 1st grade math geek; even dumber than that in fact, and a stooge to boot, because I work against my own best interest and follow blindly the super rich; and, I am no better than those who allowed the tragedy at Penn State to occur.
If I only had a brain, I would see the light.
Sorry, but I have been at it for far too long to let cheap shots about my intelligence and integrity influence me.
As tempting as it is to take the discussion to that level, I won't.
As to addressing the points in your post, FICA is a percentage tax on income up to the max. $120k paid by all up to that max. of earnings from wages, salaries, self-employment.
It is capped at $120k because the max. payout is based on that max. income contribution. I don't get this being an onerous tax that everyone complains about, other than you have no choice but to pay it. You are paying in because hopefully you live long enough to get it back.
Outside of fact it is a crummy pension, it is nonetheless a pension. Your contribution is a set percentage based on your earnings. the more you put in, up to the max., the more you get, up to the max. Explain to me how FICA is unfair, other than you want someone to contribute more.
You want people to pay more than they can get back, be my guest and knock your socks off. But every proposal I have seen, with any valid chance, would tie in contributions at higher income levels to higher payouts when one collects.
I absolutely see no fair basis to require someone to contribute to any "pension" any amount greater than a projected benefit. If you think it is fair that someone making more than $120K should pick up the pension burden for someone else well, let's just agree to disagree on that one. I simply am not ready to take this Country to that next level of socialism, however.
(to be continued)
continuing on ...
DeleteAs to state income tax, real estate taxes, sales taxes, personal property taxes, taxes, excise taxes, these are paid in all most each and every instance when a person pays them because they are state and local imposed taxes.
A tried and true method to attempt to cloud the federal taxation issue admittedly though.
Thankfully, my brain isn't quite addled enough to fall for it.
How does one adjust the federal tax rate to reflect the fact that someone in Massachusetts pays income taxes when someone in Florida does not? Or the sales tax is higher in one community or county or state than another?
They are local matters, not federal, unless you want to make them that.
I am more than happy to listen to the solution on this one, but to date, and over the decades the same red herring arguments have been made, all I have ever heard was how unfair it is, not how to solve it in any workable manner.
Perhaps we should turn over everything to the federal government. Just one set of taxes, and allow our national leadership to simple bestow its largess upon us in proportion to how it sees fit.
Maybe you can convince our state leaders to redistribute the tax burden it imposes on the state level, and you can get some sort of graduated tax rate implemented on the local level.
I am sure there wouldn't be much of a problem with getting some people to take an increase in their tax bill so their next door neighbors do not have to pay the same. I bet plenty of people out there will voluntarily fork over more state income tax so someone else doesn't have to pay more.
As I asked in the post, and as I will ask again, just what is fair? Somebody tell me. How should the actual burden be split among people?
Just what is it everyone should be paying?
It is easy to say they can afford it, so let them pay more. Pretty simple argument actually. You don't even have to be a math geek for that one.
But being apparently much dumber than a 1st grade math geek, I am having some trouble with the actual equation.
I want to know what everyone's fair share should be.
You didn't answer the questions.
Give me a proposal, I am apparently very easy to convince.
The record clearly speaks for itself. I am more than willing to let people read what has been written and make their judgments based on what has been written.
ReplyDeleteAs to the rights of the majority in this great Country, the same will be soon decided by the votes won in the general election as allotted through the electoral college. The saddest part about that is wondering whether the victor actually remember that the minority has rights too?
I think I have been pretty clear and consistent as to how I see the outcome given the nature of the information as of today.
Nonetheless, I have repeatedly asked, and I believe I have the right to ask, and I will once again ask:
Just what is fair? Somebody tell me. How should the actual burden be split among people?
Just what is it everyone should be paying?
You have once again provided no answers.
You have every right to fight against a plan you do not agree with. Just as I have every right to ask what specifically is your plan.
Is it really too much to ask to have someone spell out just what everyone's fair share is suppose to be?
I take issue with the initial statement offered, that all taxpayers pay an average 11.06% as a tax rate. This implies that the average is calculated across the entire spectrum of AGI (hence I use the analogy about trying to use averaging to discuss what Americans must be earning as an average)--the disparity from the top to the bottom skews the average, and using median figures are suggested to be more accurate assessment. Even within the segments, there is a pretty wide disparity so averaging is pretty skewed.
ReplyDeleteBut then, as Mark Twain warned, "There are lies, damned lies and statistics."
Take issue with anything you want. Unless you can show me that the "statistics" are wrong, all you continue to do is avoid answering the question.
ReplyDeleteI have asked, repeatedly, that someone tell me what is fair. Give me an answer other than the rich should pay more, and then I am happy to continue the debate.
Until then, save us both the time and effort of having to play out this little exercise of me asking the same question, and you avoiding an answer.
I think it would be fair that if somebody has the money to regularly get their hair and nails professionally done, they give their child $2.50 for a school lunch, instead filling out the form to get it at a reduced rate, or free.
ReplyDelete"Poor" doesn't mean, I don't have what you have. Although that's what some think. I'm not only referring about neighbor to neighbor. How many young people, in their early 20's, feel the need to have the same 'things' their parents have 'right now', even though their parents worked 30 years to have what they have?
If people don't take a look at what they've got, instead of what they want, then it won't matter who pays what, or what's fair, the system won't keep up with supplying the minimum even for the poorest.