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only 4% of those making over $100,000 pay anything in payroll taxes.
That doesn't jibe with the IRS data. ALL income levels have a positive effective payroll tax rate, meaning... they PAY. Perhaps they meant the effective payroll tax RATE?
Regarding the quote:
Quote:
But by most other measures, high-income households benefit far more from tax expenditures than those at the bottom. On average, the lowest earners save enough in taxes to buy gas for three months. The highest? They save almost enough to buy three $500,000 Mercedes Benz SLR McLaren Roadsters (one for workdays, one for weekends, and one for truly special occasions such as tax day).
That doesn't make any sense. Define "tax expenditures" and "tax savings."
Also, how is one saving anything if they have to PAY any amount above $0?
1. Housing. Explicit rental payments are subject to taxation
under the FairTax. Implicit rents on existing owneroccupied
housing and farms are not. However, the Fair-
Tax implicitly taxes imputed rent on newly constructed
housing via a prepayment approach that levies the
FairTax on their initial sale.4 Thus, we remove the value
of imputed rent for housing and farm dwellings from the
base. Because purchases of new homes are counted as
investment in new structures in the NIPA accounts, we
add those figures to the base.
Under the FairTax, improvements to single-family
homes and realtors’ fees, which represent payments for
services provided, are also taxable. Those expenditures
are counted as investment and not consumption in the
NIPA tables, and they are added to the FairTax base. It
should be noted that, under the FairTax, there is no tax on
the resale of houses or any other property that was
previously subject to the FairTax or that was owned by a
consumer on the changeover date.
The imputed rent for owner-occupied
housing and farm dwellings is removed because the tax due on the imputed rent will become prepaid when the
property is sold as a new dwelling.
you fail
I disagree that I fail:
The tax due on the rental stream of an existing dwelling was paid at the time of initial sale.
This is a generally accepted principle of accounting to which the AICPA subscribes. Specifically, according to GAAP and the AICPA, the sale price of a rental property is equal to the net present value of the property's future rental stream of income.
Thus it is inappropriate to tax the rents, since the tax has already been paid.
Last June, my colleague Bob Williams posted a TaxVox article that reported 47 percent of American households paid no federal income tax in 2009. Bob was exactly right, but rarely has a bit of data been so misunderstood, or so misused.
Let me explain—repeat actually—what this means: About half of taxpayers paid no federal income tax last year. It does not mean they paid no tax at all. Many shelled out Social Security and Medicare payroll taxes. In fact, only 14 percent of Americans didn’t pay either income or payroll taxes. Some paid property taxes and, it is fair to say, just about all of them paid sales taxes of one kind or another. So to say they pay no taxes is flat wrong.
However, this class warfare-like rhetoric plays to a perception that the income tax is a chump tax: Only hard-working folks like us pay it. The welfare queens don’t. The super-rich don’t. It is a powerful emotional argument. It is also flat wrong.
So who are these folks who pay no federal income taxes? Mostly, they are people who don’t make very much money. Many are elderly: Think a widow living only on Social Security benefits. Others are parents earning less than $20,000. Only about 5 percent are non-elderly households making more than $20,000.
Yikes - I read the article and it's far worse than I thought. Even when payroll taxes are included, 35M households - 23% - pay zero or negative net federal taxes! What kind of way is that to run a country, especially one with gigantic and ever-expanding entitlements? Correct me if I'm wrong, but I'm under the impression that that the average citizens in Canada or Europe actually helps pay for his own entitlements?
Does this include the people who live off of capital gains or are smart enough to write-off almost everything? I think the OP has a point, the top portion and the bottom portion do not pay as much taxes as the middle working class. Sadly the statistics do not account for both ends, it only accounts for one end or the other
How do they do that ???? Ever hear of AMT?
And if 100% of your income is capital gains, you still have to pay FIT.
And get your facts straight. The upper income brackets pay way more FIT than middle income brackets.
only 4% of those making over $100,000 pay anything in payroll taxes.
That doesn't make any sense to me either. That would suggest that 96% of those with an income over $100,000 are self-employed or only have passive income. I wouldn't be surprised if it was quite high, over 50% even. But 96%? I know too many people that are payroll employees with a six-figure income to believe it is that high. Even assuming it was true, the self employed (who make up a significant percentage of those making over 100k) pay "self employment tax" which is a different name for the same thing.
I still don't understand why not paying income tax matters if people already pay other taxes. Income tax is not the only "real" tax. Non-smokers don't pay cigarette taxes. Are they a burden on cigarette smokers?
Last June, my colleague Bob Williams posted a TaxVox article that reported 47 percent of American households paid no federal income tax in 2009. Bob was exactly right, but rarely has a bit of data been so misunderstood, or so misused.
Let me explain—repeat actually—what this means: About half of taxpayers paid no federal income tax last year. It does not mean they paid no tax at all. Many shelled out Social Security and Medicare payroll taxes. In fact, only 14 percent of Americans didn’t pay either income or payroll taxes. Some paid property taxes and, it is fair to say, just about all of them paid sales taxes of one kind or another. So to say they pay no taxes is flat wrong.
However, this class warfare-like rhetoric plays to a perception that the income tax is a chump tax: Only hard-working folks like us pay it. The welfare queens don’t. The super-rich don’t. It is a powerful emotional argument. It is also flat wrong.
So who are these folks who pay no federal income taxes? Mostly, they are people who don’t make very much money. Many are elderly: Think a widow living only on Social Security benefits. Others are parents earning less than $20,000. Only about 5 percent are non-elderly households making more than $20,000.
Repeal the Bush tax cuts then. The Bush's tax cuts doubled the standard deductions, which took many people off the income tax roles.
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The Bush's tax cuts doubled the standard deductions, which took many people off the income tax roles.
