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View Diary: What the rich pay in federal income tax- pales to what the middle pays in state tax (16 comments)

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  •  Not correct numbers. (8+ / 0-)

    If you want to see what all groups pay together in federal taxes, there's data on that.  

    You can look at Effective Federal Tax rates.  Look at this page.  The FIRST chart is all federal taxes combined.  The 1% consistently has paid the highest percentage of their income in all taxes.  

    What happens with someone like Mitt Romney -- the .001% -- is they get most income through capital gains, rather than earned income.  Capital gains are taxed differently, because investment dollars can easily move to the place where they are taxed the least, and a tax too high on capital gains drives investment dollars elsewhere.  

    The uber rich who get their money as earned income -- athletes, for example -- pay more in all federal taxes combined than anyone else.  In 2013, the 1% taxes is back to the Clinton rates on earned income.  

    •  lol. how did i know you would be the first to (3+ / 0-)
      Recommended by:
      salmo, NoMoreLies, unfangus

      respond to me.

      effective tax rates on the poor and middle class is higher than that for the rich. i did the math. Why do people like you always forget that FICA taxes exist, Add in Medical coverage, sales and state tax, etc etc. And before you know it the middle class has lost more than 50% right off the top.

      When the feds cut federal spending on the states- the states need to increase taxes- sales, income etc,  they also must raise fees like toll roads all over texas.

      As the feds cut, states increase taxes- the total effective tax rate on the middle stays the same of increases.

      rmoney should pay the same as every one else, none of this "capital gains drives investment dollars elsewhere" pie in the sky crap as an excuse will fly on this site.

      •  Please read. (5+ / 0-)

        The link I gave you is historical effective federal tax rates -- all taxes, including FICA.  (and remember, starting in 2013, there's an additional .9% Medicare tax on incomes over $200,000, I think).  

        After the fiscal cliff deal, the rates on the top 1% are back to where they were during the Clinton years, so look at the years 1994 - 2000 to get an idea of where we'll be this year.

        For federal taxes, ALL federal taxes combined, the "rich" have always paid significantly more of their income in federal taxes, ALL federal taxes combined, than the poor.  Show me states where the poor pay more, as a percentage of income, than upper incomes in state income taxes. It doesn't happen.  

        You can argue for higher taxes.  But you need to use ACTUAL FACTS.  Yes, the sales tax is not a progressive tax, but people with more money spend more money, and they pay sales taxes on those expensive things they buy.  

        What is true is that the poor may FEEL things like state taxes more, because they have less disposable income.  And that reason -- because taxes can be a bigger burden on the poor because they have less disposable income -- is the primary reason I support a progressive income tax system, rather than some kind of flat tax where all pay the same percentage of their income in income taxes.  We have a system -- have always had a system -- where the wealthy pay more as a percentage of their income than the poor. That's a progressive system.  Yes, there are some exceptions, like a small number of the uber rich who get all their income from capital gains.  They still pay more as a percentage of income than the working poor, who get the EITC to offset the payroll taxes they pay.  

        •  Historical average tax rate, not effective rate (1+ / 0-)
          Recommended by:
          unfangus

          There are many tables on that website with data on effective marginal rates, but that table is labeled historic average tax rate, not effective tax rate.

          Looking at it, it does not look like what you say it is. Is there some reference that says this is the effective rate?

          This chart from the NYT is clearly labeled effective income tax rates, and it does not match the table you cite.  

          Effective income tax rates

          "When strong winds blow, don't build walls, but rather windmills: there is a way to turn every bit of adversity into fuel for improvement." -Nassim Nicholas Taleb

          by Urban Owl on Sat Nov 02, 2013 at 04:12:11 PM PDT

          [ Parent ]

          •  Those are effective rates. Look at the notes (2+ / 0-)
            Recommended by:
            Victor Ward, VClib

            at the bottom.  it's based on CBO data, and explains how those effective rates are calculated.

            You can see the CBO data at the pdf here.

            •  Thanks. (3+ / 0-)
              Recommended by:
              salmo, NoMoreLies, unfangus

              Did you see the Ezra Klein chart below? When you add in state and local taxes, we really do not have a progressive tax system.

              "When strong winds blow, don't build walls, but rather windmills: there is a way to turn every bit of adversity into fuel for improvement." -Nassim Nicholas Taleb

              by Urban Owl on Sat Nov 02, 2013 at 04:29:18 PM PDT

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              •  Two problems with that chart. (6+ / 0-)

                (1) those are 2007 numbers, according to the notes, and (2) It DOES show progressive taxation:  the highest quintile pays the highest percentage of income in federal and payroll taxes combined.  

                According to that chart, those who pay the highest rate are the top 5%.  The top 1% pay a little less than the top 5% primarily because of the effect of capital gains numbers.  

                But as I said, those are 2007 numbers, according to the notes.  Three significant things have happened since then.  (1) The top marginal rate on income over $400,000 ($450,000 for couples) went from 35% to 39.6%.  (2) we've added an additional .9% to Medicare taxes for incomes over $200,000; and (3) we've added a 3.8% net investment income tax.  

                •  Okay, mildly progressive taxation (2+ / 0-)
                  Recommended by:
                  NoMoreLies, unfangus

                  Great. Combined with the lack of inequality-reduction policies, the rich get richer, the poor get benefit cuts, and the middle gets smaller.

                  The fact is that all productivity gains have gone to the top for the past three decades while tax burdens on the top have been  steadily reduced until the recent timid measures you cite. Compared to most post WW2 history, the people at the top pay really low taxes.

                  For progressives, the rising inequality in the United States is a, if not the, major issue. One possible policy implication might be increased progressivity in taxation.

                  Instead, the debate is over how much to cut food stamps.

                  "When strong winds blow, don't build walls, but rather windmills: there is a way to turn every bit of adversity into fuel for improvement." -Nassim Nicholas Taleb

                  by Urban Owl on Sat Nov 02, 2013 at 05:09:01 PM PDT

                  [ Parent ]

                  •  This is not true as of this year (1+ / 0-)
                    Recommended by:
                    VClib
                    while tax burdens on the top have been  steadily reduced until the recent timid measures you cite. Compared to most post WW2 history, the people at the top pay really low taxes.
                    After the fiscal cliff deal, we returned to the Clinton rates on the top about 1% (household -- two incomes -- of $450,000 and up).  According to CBO data on effective federal income tax rates, the Clinton rates were the time when the 1% paid the highest federal income taxes ever, at least since the CBO began compiling the data during the Carter years in 1979.  The CBO data on federal individual income tax rates are the SECOND chart here.  In 1979, pre-Reagan, the top 1% paid an effective federal income tax rate of 22.7%.  In 2000, the top 1% paid an effective federal income tax rate of 24.7%.  By returning to that Clinton top rate (with a few deductions phased out since 2000) you should see this year the top 1% paying, once again, their highest effective federal individual income taxes ever, according to the CBO -- around 24% - 25%.
              •  I think progressivity is over blown (0+ / 0-)

                creating a stable economy should be the goal, and for 50 years, 1938-1988, there were 3 recessions where we saw -2% GDP. During the previous 100 yrs, a downturn every 4.3 year, 28 of 31 downturns saw peak to trough of 20-33%, unemployment of 15-30% lasting 1 to 5 years.

                Since 1988, we've had 3 recessions, one of which went worse than -2% GDP and is now in its 5th year. The 1986 Tax Reform Act removed many of the incentives for domestic inventment, this cost us jobs, combined with the increased outsourcing in the 1980's put us on the path to ultimately destabilizing our economic system/marketplace.

                I would argue that a tax system that meets the dictionary definition of being progressive, may still foster instabilities. SO tax fairness is not quite the right term, having shorter and shallower downturns should be the goal.

                .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

                by Roger Fox on Sat Nov 02, 2013 at 05:03:57 PM PDT

                [ Parent ]

                •  Stability is more complex (2+ / 0-)
                  Recommended by:
                  Roger Fox, kurt

                  This last recession is qualitatively different from earlier postWW2 ones. It is more similar to the Great Depression, in cause and consequences, than anything else.

                  Tax policy can't deliver stability by itself,  although automatic stabilizers in tax and spending can work for the ordinary downturns, limiting length and severity. But not for the liquidity trap scenario of today.

                  Real long-term stability requires that the financial sector be strongly regulated. Banking should be boring, as it was for a long time.

                  But we now have severe and rising inequality, a broken political system, and little chance of having good economic policies.

                  Watching  the discussion of how much to cut food stamps is profoundly depressing.

                  "When strong winds blow, don't build walls, but rather windmills: there is a way to turn every bit of adversity into fuel for improvement." -Nassim Nicholas Taleb

                  by Urban Owl on Sat Nov 02, 2013 at 05:19:06 PM PDT

                  [ Parent ]

      •  By writing a shoddy diary you invite (9+ / 0-)

        criticism. By playing loose and fast with terminology you invite confusion. By combining these qualities you invite coffetalk to correct you.

        And your typos distract from an important subject which you have given short shrift.

        If youre talking about all Federal taxes, then say that, if youre talking about only Federal income taxes, then say that, and be consistent about it.

        If this subject is important enough to you, to write about, then show it by putting some effort beyond what you show here.

        .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Sat Nov 02, 2013 at 04:05:12 PM PDT

        [ Parent ]

        •  you are the one with shoddy info. (1+ / 0-)
          Recommended by:
          unfangus

          In the civilized world, medical coverage is most certainly a tax that must be paid.

          All other western nations deduct medical coverage costs from paychecks. We decided to go and do it in a roundabout way. We pay a for profit insurer for the "privilege" of coverage but it is no different than paying FICA tax- It must be paid and it is regressive.

          As the sequester and austerity kicks in federal deficits begin to drop, much of that money was going to states to pay for security, roads, and education, the states need that revenue, so they raise fees, and sales tax, and income tax to offset that lost federal revenue, again this is a regressive, and most times flat tax.

          when the feds cut something, the states charge more tax to replace that income, in effect the states are helping the feds cut the deficit, but its done in a regressive way.

          total tax burden means total tax burden, you can't just look at federal income tax, effective tax rates for the least of us are killing all of us.

      •  Here's the backup for you (4+ / 0-)
        Recommended by:
        johnny wurster, VClib, chmood, FG

        Ezra did a piece on total tax burden, which is what you are talking about, right? So anything about federal, or just income tax rates or burden is the wrong data.

        This is not your numbers, but then you are adding in things that are not taxes, like insurance, so this is the closest I could find for you:

        EzraKlein Tax Burden

        "When strong winds blow, don't build walls, but rather windmills: there is a way to turn every bit of adversity into fuel for improvement." -Nassim Nicholas Taleb

        by Urban Owl on Sat Nov 02, 2013 at 04:16:08 PM PDT

        [ Parent ]

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