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CBO: Fed tax rates hit historic low

lpast

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The average tax rates for American households reached a historical low in 2009, according to a report issued by the non-partisan Congressional Budget Office.
Indeed, federal taxes for American households averaged 17.4 percent in 2009, a historical low over the 1979 to 2009 period.


The tax paid by households ranged from 1 percent in poorest fifth of Americans, to 23.2 percent in the wealthiest fifth. The much-talked-about top one percent of the United States paid a 28.9 percent average federal tax rate.
Meanwhile, average before-tax income fell drastically between 2007 and 2009, a clear sign of the recession that struck the United States due to the 2008 financial crisis.
Those with the most income were hit the hardest: the four lowest income quintiles’ before-tax average income dropped by five percent or less. But among the richest 20 percent, before-tax income dropped by 18 percent; in the top one

CBO: Fed tax rates hit historic low - Tim Mak - POLITICO.com




 
The problem is NOT too little federal taxation, but too much federal spending. Obama has raised federal spending 20% over that of Bush, yet cut taxation at the same time, resluting in the HUGE federal deficit of 40%. Federal taxation discussions seem to always ignore the FICA (SS/Medicare) payroll tax, which is levied (at a 7.65% nominal rate, or really at 15.3%) on all GROSS income from wages, from the first $1 yet only up to $110K.

Link: http://www.ssa.gov/oact/cola/cbb.html

Another way to look at the FIT picture is who actually PAYS it: http://wiki.answers.com/Q/What_percentage_of_federal_income_tax_is_paid_by_the_wealthy

http://www.davemanuel.com/2010/11/0...deral-income-taxes-do-rich-people-really-pay/
 
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I submit my opinion is its a combination of both...we need to end the bush tax cuts and cut spending reasonably...end tax loopholes that allow the richest corporations to pay zero in federal taxs. We need to make it expensive to outsource jobs and employ communist chinese....the rich need to get some patriotism and stop making our enemies rich at the expense of americans..
 
I submit my opinion is its a combination of both...we need to end the bush tax cuts and cut spending reasonably...end tax loopholes that allow the richest corporations to pay zero in federal taxs. We need to make it expensive to outsource jobs and employ communist chinese....the rich need to get some patriotism and stop making our enemies rich at the expense of americans..

Raising taxes is not the answer to revenue or economic issues.

We do need a simpler tax structure that corporations can't take advantage of, and by that I mean writing laws to exempt themselves and creating laws to hurt competition. Because we have the highest corporate tax rate in the world, except possibly Japan, we have capital leaving this country, save for the mega-corporations that have taken advantage of the tax code. The wrong thing to do would be to raise taxes on all the businesses including the mega-corps.
 
I submit my opinion is its a combination of both...we need to end the bush tax cuts and cut spending reasonably...end tax loopholes that allow the richest corporations to pay zero in federal taxs. We need to make it expensive to outsource jobs and employ communist chinese....the rich need to get some patriotism and stop making our enemies rich at the expense of americans..

You do realize that ending the "Bush" tax cuts is a 50% FIT rate increase for the bottom income bracket. But if you insist.
 
The Clinton era tax rates worked pretty well and oddly the Bush cuts didn't do much good and Obusha's further reductions haven't done much good either.

Our problems are much deeper than spending and tax rates. If anything, our problem is a)globalization and our lack of competitiveness and b) our excessive population and our inability to provide jobs for everyone.

((this is a comment, not a point))
 
The tax paid by households ranged from 1 percent in poorest fifth of Americans, to 23.2 percent in the wealthiest fifth. The much-talked-about top one percent of the United States paid a 28.9 percent average federal tax rate.

I can see the scene from LEAVE IT TO BEAVER now -

Theodore Cleaver: "Gee Wally, we learned from Miss Landers in school that the rate for the rich was 35%. Thats a whole bunch of really rich folks paying a full ten points or more below that. How is that possible Wally? "

Wally Cleaver: "well Beav, its complicated and involves stuff like deductions, and different forms of income treated differently and stuff."

Eddie Haskel: "Wise up squirt. Its the Golden Rule and them that has the gold makes the rules. Thats what I am going to do in a few years. Screw all you working stiffs. i'm not working for my money and pay taxes. My money is going to work for me and you chumps can pay what I won't."

Theodore: (innocently) "That's not being very patriotic Eddie."

Eddie Haskel: (laughing derisively) " They really got you fooled don't they squirt. Patriotism is for chumps and suckers."

Wally: " Thats enough Eddie. Knock it off."



Sadly, this is real and not TV.
 
Raising taxes is not the answer to revenue or economic issues.

We do need a simpler tax structure that corporations can't take advantage of, and by that I mean writing laws to exempt themselves and creating laws to hurt competition. Because we have the highest corporate tax rate in the world, except possibly Japan, we have capital leaving this country, save for the mega-corporations that have taken advantage of the tax code. The wrong thing to do would be to raise taxes on all the businesses including the mega-corps.

I agree. The 16th amendment simply allows the federal gov't to tax INCOME from all sources, and the 14th amendment commands EQUAL protection under the law. The vast majority of 80K+ pages of FIT law is NOT about that simple mission, but about deductions, credits and exclusions based on how that income was LATER spent, or PURE social engineering nonsense (illegal under the 14th amendment). This nonsense should end IMMEDIATELY, and a federal income tax system with only TWO numbers should be adopted, a "standard" deduction (universal and the SAME dollar amount for all returns) and SINGLE taxation rate (percentage) for ALL income above that amount. This system would allow a REASONABLE base amount of income to be "shielded" and all of the rest taxed FAIRLY at a single rate. INCOME taxation SHOULD be simply about raising necessary funds for the federal gov't and NOT about punishments and rewards for how we the people decide to spend that income. USA, USA, USA...
 
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I can see the scene from LEAVE IT TO BEAVER now -

Theodore Cleaver: "Gee Wally, we learned from Miss Landers in school that the rate for the rich was 35%. Thats a whole bunch of really rich folks paying a full ten points or more below that. How is that possible Wally? "

Wally Cleaver: "well Beav, its complicated and involves stuff like deductions, and different forms of income treated differently and stuff."

Eddie Haskel: "Wise up squirt. Its the Golden Rule and them that has the gold makes the rules. Thats what I am going to do in a few years. Screw all you working stiffs. i'm not working for my money and pay taxes. My money is going to work for me and you chumps can pay what I won't."

Theodore: (innocently) "That's not being very patriotic Eddie."

Eddie Haskel: (laughing derisively) " They really got you fooled don't they squirt. Patriotism is for chumps and suckers."

Wally: " Thats enough Eddie. Knock it off."



Sadly, this is real and not TV.

Gee Wally: What Percentage of Federal Individual Income Taxes Do Rich People Really Pay?


Yep Beave it is REALLY like this:

Top 5% (Income Split Point $159,619) paid 58.72% of Federal Individual Income Taxes
Top 10% (Income Split Point $113,799) Paid 69.94% of Federal Individual Income Taxes
Top 25% (Income Split Point $67,280) Paid 86.34% of Federal Individual Income Taxes
Top 50% (Income Split Point $33,048) Paid 97.30% of Federal Individual Income Taxes
Bottom 50% (Anyone Making Less Than $33,048) Paid 2.7% of Federal Individual Income Taxes
 
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The Clinton era tax rates worked pretty well and oddly the Bush cuts didn't do much good and Obusha's further reductions haven't done much good either.

Our problems are much deeper than spending and tax rates. If anything, our problem is a)globalization and our lack of competitiveness and b) our excessive population and our inability to provide jobs for everyone.

((this is a comment, not a point))

The Clinton era federal spending worked pretty well too, at 19% of GDP instead of Obama's 25.3% of GDP. Hmm...
 
Gee Wally: What Percentage of Federal Individual Income Taxes Do Rich People Really Pay?


Yep Beave it is REALLY like this:

Top 5% (Income Split Point $159,619) paid 58.72% of Federal Individual Income Taxes
Top 10% (Income Split Point $113,799) Paid 69.94% of Federal Individual Income Taxes
Top 25% (Income Split Point $67,280) Paid 86.34% of Federal Individual Income Taxes
Top 50% (Income Split Point $33,048) Paid 97.30% of Federal Individual Income Taxes
Bottom 50% (Anyone Making Less Than $33,048) Paid 2.7% of Federal Individual Income Taxes

Your data says absolutely NOTHING about what I posted. NOTHING. If the top rate is 35%, why then do the rich pay so much less? That was the point of my post.

But nice attempt at moving the goal posts to a different filed in a different state. ;) Maybe somebody else would let you get away with it. But not me.
 
Your data says absolutely NOTHING about what I posted. NOTHING. If the top rate is 35%, why then do the rich pay so much less? That was the point of my post.

But nice attempt at moving the goal posts to a different filed in a different state. ;) Maybe somebody else would let you get away with it. But not me.

Taxes are much much more complitated than a simple break down like that. For example Ronmey enjoys his comparatively lower tax rate because of the type of money that he earns and because that is taxed differently. Unlike most Americans Ronmey doesn't have ordinary income, as in he doesn't earn wages or a salery at job, he's not employed by anyone nor is he self employed. Ronmey makes his money from capital gains, which is returns on investments and sale of investments at higher prices than what he bought them for. Basically he makes his money not by earning a wage, but by buying/sellings and investing in companies or their stock, bonds, etc.

Capital gains are taxed differently, and at a lower rate than ordinary income. This was done to encourage investment as a way to stimulate the economy, it was thought that if a lower tax rate was offered people would invest more.

Now of course its not that simple either, there are all kinds of rules and I'm sure Ronmey as well as other wealthy individuals have different kinds of incomes as well. But thats an example of how a wealthy person can end up paying a lower tax rate on all their income than a middle class person
 
Taxes are much much more complitated than a simple break down like that. For example Ronmey enjoys his comparatively lower tax rate because of the type of money that he earns and because that is taxed differently. Unlike most Americans Ronmey doesn't have ordinary income, as in he doesn't earn wages or a salery at job, he's not employed by anyone nor is he self employed. Ronmey makes his money from capital gains, which is returns on investments and sale of investments at higher prices than what he bought them for. Basically he makes his money not by earning a wage, but by buying/sellings and investing in companies or their stock, bonds, etc.

Capital gains are taxed differently, and at a lower rate than ordinary income. This was done to encourage investment as a way to stimulate the economy, it was thought that if a lower tax rate was offered people would invest more.

Now of course its not that simple either, there are all kinds of rules and I'm sure Ronmey as well as other wealthy individuals have different kinds of incomes as well. But thats an example of how a wealthy person can end up paying a lower tax rate on all their income than a middle class person

Which is why we should simply tax those sort of earning as normal income according to the normal rate schedules and stop the discriminatory and preferential rates given to capital gains which mainly benefit the rich.

This is simply The Golden Rule in action.
 
Which is why we should simply tax those sort of earning as normal income according to the normal rate schedules and stop the discriminatory and preferential rates given to capital gains which mainly benefit the rich.

This is simply The Golden Rule in action.

I do agree that change could be in order, those reduced rates for capital gains were not meant to last forever anyway. But at the same time I can see wanting to get people to investment and for many people it would be taxing the same money twice. You earn the money at your job, pay taxes on it then as ordinary income, then invest part of that money and pay taxes on it again.

Perhaps two different rates one of those whos primary income is capital gains, which would be taxed at a normal rate, and a reduced one for those who's primary income is ordinary income but do some investing as well?
 
I do agree that change could be in order, those reduced rates for capital gains were not meant to last forever anyway. But at the same time I can see wanting to get people to investment and for many people it would be taxing the same money twice. You earn the money at your job, pay taxes on it then as ordinary income, then invest part of that money and pay taxes on it again.

Perhaps two different rates one of those whos primary income is capital gains, which would be taxed at a normal rate, and a reduced one for those who's primary income is ordinary income but do some investing as well?

You are paying taxes on two different piles of money. The first was what you earned from wages. The second was your PROFIT from investment - which is NEW money upon which you have never been taxed.
 
Raising taxes is not the answer to revenue or economic issues.

That is not exactly true. Raising taxes does bring in more revenue under normal economic growth. It can also fix economic issues, like overheating of the economy and such.

We do need a simpler tax structure that corporations can't take advantage of, and by that I mean writing laws to exempt themselves and creating laws to hurt competition.

Wow you are the first right winger that has said this... did hell freeze over?

Because we have the highest corporate tax rate in the world, except possibly Japan, we have capital leaving this country, save for the mega-corporations that have taken advantage of the tax code. The wrong thing to do would be to raise taxes on all the businesses including the mega-corps.

GAHHHHH and you ruin it. You do NOT have the highest corporation tax, you have one of the lowest. On paper yes, the tax rate is high, but the reality is most corporations either pay very very little or dont pay anything at all. In fact the % of corporation taxes of GDP is one of the lowest in the industrialised world... and it has been falling since Bush got in office a decade ago.
 
I submit my opinion is its a combination of both...we need to end the bush tax cuts and cut spending reasonably...end tax loopholes that allow the richest corporations to pay zero in federal taxs. We need to make it expensive to outsource jobs and employ communist chinese....the rich need to get some patriotism and stop making our enemies rich at the expense of americans..

If Obama could ever put aside his "Bush Tax Cut" slogan and go straight to real reform of the tax code he and democrats would have a real issue.
 
Your data says absolutely NOTHING about what I posted. NOTHING. If the top rate is 35%, why then do the rich pay so much less? That was the point of my post.

But nice attempt at moving the goal posts to a different filed in a different state. ;) Maybe somebody else would let you get away with it. But not me.

Perhaps math and tax law is not your strong suit, in my example I will use 2011 tax rates. 35% is ONLY paid on the ORDINARY INCOME portion of the AGI in the TOP bracket, not on capital gains, interest or dividend income. Say Joe Rich makes $400K, with $100K of that received as stock dividends, the rest as ordinary wage income, then his top bracket (35%) ordinary income is ZERO (since only AGI over $379,150 qualified), the $100K dividend income is taxed at 15% then, assuming average single person deductions of 18% of the remaining $300K as AGI, that leaves about $250 to tax as ordinary income (NOTHING in the top bracket). The remainder of his AGI is taxed as follows: 10% up to $8,500 ($850), 15% up to $34,500 ($3,900), 28% up to 174,400 ($39,172) and 33% up to $379,150 ($24,615) for a total FIT bill of $83,573 or 20.89% of that $400K gross income.
 
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I submit my opinion is its a combination of both...we need to end the bush tax cuts and cut spending reasonably...end tax loopholes that allow the richest corporations to pay zero in federal taxs. We need to make it expensive to outsource jobs and employ communist chinese....the rich need to get some patriotism and stop making our enemies rich at the expense of americans..

Cut spending reasonably, but slash tax cuts and loopholes to the bone. Amazing how some never want to cut spending in a hard way. Did you know that US combined corp income tax rate is the highest in the world?
 
Cut spending reasonably, but slash tax cuts and loopholes to the bone. Amazing how some never want to cut spending in a hard way. Did you know that US combined corp income tax rate is the highest in the world?

I say end all tax deductions (except for charitable contributions), end corporate taxes, have income and capital gains taxed exactly the same, have the first $10,000 income/capital gains/both at 0% and the rest (no matter how large) at one set rate.


I am tired of the rich who live on capital gains getting a huge tax savings BUT I am also sick of the rich that work for their money being penalized for being successful.

ALL Americans who make over $10G's should have the same tax rate...no matter their income.
 
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The average tax rates for American households reached a historical low in 2009, according to a report issued by the non-partisan Congressional Budget Office.
Indeed, federal taxes for American households averaged 17.4 percent in 2009, a historical low over the 1979 to 2009 period.


The tax paid by households ranged from 1 percent in poorest fifth of Americans, to 23.2 percent in the wealthiest fifth. The much-talked-about top one percent of the United States paid a 28.9 percent average federal tax rate.

Meanwhile, average before-tax income fell drastically between 2007 and 2009, a clear sign of the recession that struck the United States due to the 2008 financial crisis.
Those with the most income were hit the hardest: the four lowest income quintiles’ before-tax average income dropped by five percent or less. But among the richest 20 percent, before-tax income dropped by 18 percent; in the top one percent, income fell 36 percent.

Further, those who made the most income also paid the greatest amount in taxes.


CBO: Fed tax rates hit historic low - Tim Mak - POLITICO.com





Did you read this article before posting it? It just seems.... incongruent with your general approach.
 
I say end all tax deductions (except for charitable contributions), end corporate taxes, have income and capital gains taxed exactly the same, have the first $10,000 income/capital gains/both at 0% and the rest (no matter how large) at one set rate.


I am tired of the rich who live on capital gains getting a huge tax savings BUT I am also sick of the rich that work for their money being penalized for being successful.

ALL Americans who make over $10G's should have the same tax rate...no matter their income.

that would work since dividends would no longer be taxed twice
 
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