Sunday, September 18, 2011

Our Moderately Progressive Tax Rate

For my conservative friends who have been telling me that the poorer half of Americans pay no taxes:

According to Citizens for Tax Justice, the lowest 20 percent of income earners (those with an average cash income of 12,500 a year) are paying about 16.2 percent of their income in taxes. The next 20 percent (those with an average cash income of 25,300 a year) are paying 20.7 percent of their income in taxes. The top 1 percent (with an average cash income of 1,254,000) are paying more but still just 30 percent of their total income. But if you go a step above that and calculate the tax rate for the 400 richest Americans in 2008, you find that they only paid 18.1 percent of their income in taxes. That is less than those making an average of 25,300 a year.

6 comments:

Anonymous said...

If you listen closely, what you friends are probably saying is that the poorer half pay no federal income taxes. This is a great example of a straw man argument. I am kind of surprised to hear it from a professor.

gruntled said...

The straw man is that my conservative friends say the poor pay no taxes, having themselves missed the distinction between income tax and all taxes. I have heard this argument often enough that I believe it is coming from some common source - apparently carried on Fox News.
That is why I posted this information.

Brendan said...

There's a strange kind of beauty to people inadvertently illustrating the fallacy they accuse someone else of committing. Thanks, Anonymous.

Jimmy K. said...

I listen to Fox as well as other channels and have never heard anyone there confuse federal tax rates with other tax rates. I do however hear lots of class warfare rhetoric on the Obama news channels.

Anonymous said...

I agree - Fox is careful to mention that they pay no federal income taxes. And what is this example supposed to prove? Even if you took 100% from those top 400 Americans, you would have put no dent in the financial problems that America is facing.

Cameron Mott said...

The point would be fairness I suppose.

If creating jobs is the rational for continuing their 4+% tax holiday then they don't deserve it because they are not creating jobs. They are not job creators anyway, demand is the job creator and the middle and lower class majorities create demand it seems to me.