Arkaign
Lifer
- Oct 27, 2006
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http://www.cbo.gov/doc.cfm?index=5746&type=0&sequence=1#pt4
Look at effective tax rates from 1979-2001. 2001-present is also there, in a different document.
Effective tax rates for all individuals (quintiles) have gone down, with the lowest quintile at a negative rate, except for the highest quintile. The top 10%, 5%, and 1% have all seen their effective tax rates increase after some fluctuationsthroughout the years.
So your assertion that the rich have a lower effective tax rate is simply false. They are, on average, taxed more. The top quintile pays more than twice the effective rate than others.
It's complicated, let me use a simple example (not actual % of real taxes, but close enough to get the point across) :
Family A makes $100k/year gross, and pays $22k in income taxes, so 22%, leaving them 78k to live on.
Family B makes $1M/year gross, and pays $333k in income taxes, so 33%, leaving them 667k to live on.
So the (B) example definitely pays a lot more in taxes, both in actuality and by %. But in terms of impact on actual lifestyle/family economic health, the (A) family is hurt more. The difference between making it on almost $700k a year vs. $1m a year should be minimal at most, while the difference between $80k and $100k can be quite substantial, particularly if you're trying to stay in a good area of say Boston, NYC, SF, etc.
I'm not saying that the rich need to be taxed more by any means, just that there are logical reasons for a progressive tax system (as well as some drawbacks). If our gov't was more efficient and didn't get into so many boondoggles (Iraq for example, and too many pork-barrel lunatic bills to mention) we could actually lower the tax rate on the wealthy and actually balance our budget.
EDIT : Another good example of how bad flat rates can be for people, I have an aquantaince that is a single mom of two, works two jobs, can hardly afford day care/car payment/rent/etc. Her insurance lapsed, and she got a ticket for over $500. She was able to get it put on deferred to keep it off her record, but the county still wanted the full fine amount to do the deferral, even though she was only without insurance for a few days. To a person making $500k/year, that kind of thing is laughably irrelevant. To a person with perhaps $200/mo outside of critical bills, it's virtually a catastrophe, the kind of thing that makes their children go hungry, and if it's not paid, the person can be sent to jail, bringing all kinds of undue burden on these people.
A sliding scale would work wonders in such areas, but would be ludicrously difficult to implement.
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