There is a lot of hot air being blown about, claiming that the rich don't pay taxes. That is completely false.
The top marginal rate in 1960 was 91 percent. However, there were so many tax deductions that the effective rate was much lower at 42 percent.
Compare that to today. The richest 1 percent make an adjusted gross income of about $435,000 or more. My wife and I are in that one percent. For 2018, we are paying an effective rate of 30 percent, even though my marginal rate is 37%.
Compare this to a couple that each earn the national average income, thereby having an AGI of $80,000. Their marginal rate would be 12%, but the taxes paid would be $24,500, making their effective rate 16 percent.
Now compare this to a married couple making just over Florida's minimum wage. Their annual income would be about $35,000 a year, and their marginal rate would be 10 percent, resulting in about $3,800 in taxes. That means their effective rate would be just under 11 percent.
I pay a tax rate that is 3 times higher than minimum wage, and in total dollar amount, my wife and I are paying more than 60 times as much.
Don't tell me that we are not paying our fair share.
1 comment:
It's worse than you calculate. The $35,000 a year minimum wage worker has more in benefits than they pay in taxes.
It's the Welfare Cliff. As they work harder, they have less disposable income. Quite the incentive plan. Zero Hedge linked to a derivation that showed "a one-parent family of three making $14,500 a year (minimum wage) has more disposable income than a family making $60,000 a year."
The most insane arguments are that America had a truly great period of growth in the '50s and '60s because the taxes were much higher, not because Europe and Japan were bombed back to the stone age and there was much less competition.
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