Being Real on Taxes

[Geo]

TFT, I'm talking about effective tax rates on taxable income. If you want Geo you can also do the same calculation on gross income which is what TFT is looking at. You'll still see a sizable difference between your Clinton years and your Bush years.

Whether we are talking Clinton or Bush, my point remains the same-

I pay less in taxes than the % stated in my tax bracket (after deductions, loopholes, etc.)

So when folks say- is it fair to pay 40% I first say what TFT said-
You don't actually pay 40%...

But the actual % you pay is closer if you are at the lower end of the earning continuum (no deductions, no loopholes, etc.)

 

[30ashopper]

Maybe this has gotten off track. Geo was saying he felt he was paying about the same amount of tax ten years ago as he does today, even though he makes a lot more money. I was trying to help him get a feel for exactly what his tax rate was then vs. now. It really makes no difference what income number you base it on. I'm sure that if he was say, making 25K ten years ago and 150K today, even though under Bush tax rates have come down, his tax rate probably still went up signifigantly over the last ten years. (and it's going to go up even more in 2010 thanks to the Democrats in control of Washington.)

 

[30ashopper]

Whether we are talking Clinton or Bush, my point remains the same-

I pay less in taxes than the % stated in my tax bracket (after deductions, loopholes, etc.)

So when folks say- is it fair to pay 40% I first say what TFT said-
You don't actually pay 40%...

But the actual % you pay is closer if you are at the lower end of the earning continuum (no deductions, no loopholes, etc.)

As TFT points out, those tables are marginal rates, not your effective rate.

 

[Geo]

As TFT points out, those tables are marginal rates, not your effective rate.

I don't disagree and this does not negate my point...

 

[30ashopper]

I don't disagree and this does not negate my point...

Maybe I missed something here, I believe your point was that your average tax rate hasn't changed in ten years. I believe you equate that lack of change with the changes in your life - higher income mitigated by dependents, a mortgage, and getting married. This in turn is proof to you that our tax system isn't progressive?

 

[Geo]

Maybe I missed something here, I believe your point was that your average tax rate hasn't changed in ten years. I believe you equate that lack of change with the changes in your life - higher income mitigated by dependents, a mortgage, and getting married. This in turn is proof to you that our tax system isn't progressive?

Hey,

I'm genuinely sorry that I am not articulating myself as well as I'd like...

My point isn't to compare tax I pay now versus 10 years ago. I am not trying to figure out how much I pay (I know how much I pay). And I'm not comparing Clinton vs. Bush tax plans...

I'm trying to say-

1) We don't really pay what our tax bracket is. If I am in 40% tax bracket it does not mean that I give Uncle Sam 40K for every 100K...

2) Folks in lower tax brackets pay closer to the % of their tax bracket than folks do in higher tax brackets (based on having more deductions, creative accountants, etc.)...

3) Many claims our politicians make about the tax we pay (or will pay if "that one" is elected) are intentionally misleading...

 

[poppy]

Hey,

I'm genuinely sorry that I am not articulating myself as well as I'd like...

My point isn't to compare tax I pay now versus 10 years ago. I am not trying to figure out how much I pay (I know how much I pay). And I'm not comparing Clinton vs. Bush tax plans...

I'm trying to say-

1) We don't really pay what our tax bracket is. If I am in 40% tax bracket it does not mean that I give Uncle Sam 40K for every 100K...

2) Folks in lower tax brackets pay closer to the % of their tax bracket than folks do in higher tax brackets (based on having more deductions, creative accountants, etc.)...

3) Many claims our politicians make about the tax we pay (or will pay if "that one" is elected) are intentionally misleading...

Geo I've been with you from the start, you have made yourself very clear.
It's just like we keep hearing about having the second highest corporate taxes in the world but remember Enron used limited partnerships and payed zero taxes for years.

 

[30ashopper]

Hey,

I'm genuinely sorry that I am not articulating myself as well as I'd like...

My point isn't to compare tax I pay now versus 10 years ago. I am not trying to figure out how much I pay (I know how much I pay). And I'm not comparing Clinton vs. Bush tax plans...

I'm trying to say-

1) We don't really pay what our tax bracket is. If I am in 40% tax bracket it does not mean that I give Uncle Sam 40K for every 100K...

2) Folks in lower tax brackets pay closer to the % of their tax bracket than folks do in higher tax brackets (based on having more deductions, creative accountants, etc.)...

3) Many claims our politicians make about the tax we pay (or will pay if "that one" is elected) are intentionally misleading...

Here's the actual data, I'll leave it to everyone out there to decide if this assumption is accurate -

Average pre-tax income by quintile, for housholds with children, 2005 -

Lowest Quintile = 15,800
Second Quintile = 37,200
Middle Quintile = 58,000
Fourth Quintile = 84,500
Highest Quintile = 214,500

The second graph includes all estimated taxes, including employer's share of payroll taxes, a percentage of the corporate tax, and excise taxes on things like smokes and beer.

Source: CBO

 

[scooterbug44]

Based on your quintile graphs, it would seem that the Republican admins charge the rich more and poor less, so to protect your $ you should vote Democrat!

 

[Miss Kitty]

Hey,

I'm genuinely sorry that I am not articulating myself as well as I'd like...

My point isn't to compare tax I pay now versus 10 years ago. I am not trying to figure out how much I pay (I know how much I pay). And I'm not comparing Clinton vs. Bush tax plans...

I'm trying to say-

1) We don't really pay what our tax bracket is. If I am in 40% tax bracket it does not mean that I give Uncle Sam 40K for every 100K...

2) Folks in lower tax brackets pay closer to the % of their tax bracket than folks do in higher tax brackets (based on having more deductions, creative accountants, etc.)...

3) Many claims our politicians make about the tax we pay (or will pay if "that one" is elected) are intentionally misleading...

From what my creative accountant (Mr. K) tells me, the more you make, the fewer deductions you have. Geo...trust me, we pay.