Friday, March 26, 2010

Who Pays the Taxes?

The rich like to complain about the percentage of taxes paid by those at the top, while avoiding mentioning what percentage of income and wealth they have.

Has the following comment:

Devin said in reply to ilsm...
"The 15% that gets 85% of the income is paying less than 70%"

Oh, but it's worse than that. We all know that social security receipts are treated just like any other revenue, and have been financing govt operations since at least the 80s. Currently SS receipts are more than income tax receipts. And since SS is capped at ~$106k, that means the top 15% cannot mathematically be paying more than about 30% of SS taxes. Which means the top 15%, earning 85% of the income, is only paying about 50% of the taxes.

I so rarely see it mentioned that our tax code actually becomes regressive once income gets up to the SS cap (currently ~$106k). The increase in tax rates above $106k never makes up for the tax savings that are enjoyed by exceeding the cap. No wonder upper-middle class people are so pissed. Individuals earning between about $50k and $100k actually pay the highest marginal tax rates of anybody in the country, and those at the upper end of that range pay the highest effective tax rates.

Reply Mar 26, 2010 at 08:43 AM


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