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What you'd have to do is get rid of the tax credits and the zero bracket amount which in the past included the standard deduction and personal exemptions. The current zero bracket amount is about the same income as the poverty level for a household of two, which is in effect saying that subsistence at the lowest level of society is not subject to tax because there's nothing there to tax but possibly old savings. It becomes self-defeating at that point to tax since they would qualify faster for government programs like food stamps, housing aid, Medicaid, real estate tax relief, etc.
One might have a more accurate representation of income tax burdens once you take out the subsistence level from the various income level percentiles. The bottom 25 percent make effectively zero income when adjusted for that level of income considered poverty.
Joe Q. Rockefeller makes $1M, mostly in investments, pays 29% and has to live on $700k.
Joe Q. Middleclass makes $60k, mostly in salary, pays about 21% and has to live on $47k.
Joe Q. Underclass makes $20k, mostly at minimum wage, pays 0% and has to live on $20k.
https://www.forbes.com/sites/moneywi.../#362d9c902395
"The average annual income of the top 1 percent of the population is $717,000, compared to the average income of the rest of the population, which is around $51,000. The real disparity between the classes isn't in income, however, but in net value: The 1 percent are worth about $8.4 million, or 70 times the worth of the lower classes."
The tax rate on $717,000 is $150,689.50 plus 37% of the amount over $500,000. So 717,000 minus 150,689 equals 566,311. Tax rate of 37% on $217,000 is 80,290. So if you bring home $717,000 and pay taxes of 230,979.50, you will end up with (only) 486,020.50 if my figures are correct.
Of course, this doesn't account for things like IRAs, tax shelters, deductions, etc.
But I will tell anyone reading this, as someone who won't be filing taxes because what I get annually isn't even enough to warrant a tax return, I'd far, far rather get that $717,000 a year and pay those taxes. I think I could manage to live on what's left over.
What about the rest of you?
And think of this: if you only lived on half that amount and saved half, without investing it or anything, you could save a million dollars in just 4 years. How many people here have been able to save a million dollars for retirement in just 4 years?
Still think the 1% have it hard?
I think instead of griping that rich people don't pay their fair share, you should be saying thank you.
Income tax is only part of it, they are still paying sales or goods taxes, property taxes through them or through landlords, Social Security tax, and Medicare Tax.
People under ~40k have enough credits and deductions to clear not having to pay income tax. We can always get rid of deductions if we want everyone to pay. Or do we want to accept that at least a minimum level of income is required to survive and not tax it. If we do tax it, will we just be increasing our tax needs to hire more police and prisons as these people rob or attack those with more.
Hard moral argument. Arguably one should reinvest in the society they live in. However, 0% is a bit greedy since they don't. It shouldn't be 0%, but it likely should be low. Even $50/person just living in the country suggested by mathjak would be $50 x 300mil+ people.
I am all for a flat tax no deductions. Wealthy will still pay more. No corporate tax necessary.
But there are social programs needed to maintain the strength, health, education and protection of the Union. No Deficit allowed, but tax rate is adjustable to account for the budget. Everyone has a skin in the game is motivated to need certain services.
Edit: We can all ***** about government services in unison.
so the price of being successful is to have more of it taken away and given to others .
That’s exactly it Jak!
Would you rather that EVERYONE pay the same taxes, say $12K, which is about the taxes paid for every tax payer? ($3 trillion taxes collected divided by 250 million adults - quick quick math - you get the point)
There is no stupider proposal that sounds like a good idea than a flat income tax. It would lop the taxes of the top 5% by an immense amount, to start with.
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