Dispelling the Tax Myth

[rebeccajo 14]

http://www.taxfoundation.org/research/show/250.html

There's a load of interesting charts in this study.

The last one is very interesting. It shows the percentage of adjusted gross income that taxpayers in different income groups pay out in income taxes.

Simple speak - it's the percent of your income that goes away after all your deductions are taken.

[Niels Bohr 72]

A very informative site.

[one...two...tree 2,762]

RJ, that table is too good not to share here, so I took a screen shot of it so people who won't bother to click the link can see for themselves.

[one...two...tree 2,762]

[rebeccajo 14]

"In sum, between 2000 and 2006, pre-tax income for the top 1 percent of tax returns grew by 34 percent, while pre-tax income for the bottom 50 percent increased by 22 percent. All figures are nominal (not adjusted for inflation)."

Steven, can you get the last chart in the article?

[w¡n9Nµ7 §£@¥€r 123]

Interesting, the share of federal taxes paid by the top 10% went up from 49% to 71% in 26 years; the share of the bottom 50% went down from 7% to 3% over the same period.

[rebeccajo 14]

Interesting, the share of federal taxes paid by the top 10% went up from 49% to 71% in 26 years; the share of the bottom 50% went down from 7% to 3% over the same period.

Yes, but it's not that simple. The charts are kind of awkward to read.

You're looking at Table 6. If you look at the top 1%, their percentage share had doubled. If you look at people who make up the 2% to 5% of top earners, their share has gone up only around 2.5% (these people are "Joe the Plumber" as according to Table 7, you can enter that percentage of earners with around $153K in AGI).

[dalegg 143]

Interesting, the share of federal taxes paid by the top 10% went up from 49% to 71% in 26 years; the share of the bottom 50% went down from 7% to 3% over the same period.

Well, why stop there?

[rebeccajo 14]

Interesting, the share of federal taxes paid by the top 10% went up from 49% to 71% in 26 years; the share of the bottom 50% went down from 7% to 3% over the same period.

Well, why stop there?

It ain't that simple.............

[w¡n9Nµ7 §£@¥€r 123]

Right.

[dalegg 143]

Interesting, the share of federal taxes paid by the top 10% went up from 49% to 71% in 26 years; the share of the bottom 50% went down from 7% to 3% over the same period.

Well, why stop there?

It ain't that simple.............

It never is... but if I understand correctly, pretty soon it won't be the top 5% putting up 40% of the income taxes, it will be more like the top 2.5%.

By the way, what myth did this dispell?

Edited October 31, 2008 by dalegg

[rebeccajo 14]

Interesting, the share of federal taxes paid by the top 10% went up from 49% to 71% in 26 years; the share of the bottom 50% went down from 7% to 3% over the same period.

Well, why stop there?

It ain't that simple.............

It never is... but if I understand correctly, pretty soon it won't be the top 5% putting up 40% of the income taxes, it will be more like the top 2.5%.

By the way, what myth did this dispell?

You have to look closely, but what you can see is that Joe the Plumber is really re-distributing his wealth upward instead of downward.

From 87 (when the definition of AGI changed) to 2006, the top 1% of earners saw their percentage of AGI decrease by 3.62%. The 2-5% earners saw their percentage of AGI decrease by only .65%. Overall for the Top 5% of earners, the percentage of AGI paid out in taxes fell 1.42%. So it's pretty clear that the top 1% of earners saw not only the largest tax decrease, but when you lump them into the 5% of earners discussed this campaign season, it's also clear that Joe the Plumber is paying part of Bill Gate's share.

[w¡n9Nµ7 §£@¥€r 123]

Bill Gates is such a super cool dude though, he deserves it.

[rebeccajo 14]

Bill Gates is such a super cool dude though, he deserves it.

[dalegg 143]

Interesting, the share of federal taxes paid by the top 10% went up from 49% to 71% in 26 years; the share of the bottom 50% went down from 7% to 3% over the same period.

Well, why stop there?

It ain't that simple.............

It never is... but if I understand correctly, pretty soon it won't be the top 5% putting up 40% of the income taxes, it will be more like the top 2.5%.

By the way, what myth did this dispell?

You have to look closely, but what you can see is that Joe the Plumber is really re-distributing his wealth upward instead of downward.

From 87 (when the definition of AGI changed) to 2006, the top 1% of earners saw their percentage of AGI decrease by 3.62%. The 2-5% earners saw their percentage of AGI decrease by only .65%. Overall for the Top 5% of earners, the percentage of AGI paid out in taxes fell 1.42%. So it's pretty clear that the top 1% of earners saw not only the largest tax decrease, but when you lump them into the 5% of earners discussed this campaign season, it's also clear that Joe the Plumber is paying part of Bill Gate's share.

I don't think it was ever a myth that those paying the most taxes weren't getting the largest tax break. It seems like common sense to me.

Edited October 31, 2008 by dalegg