You want to talk real numbers? Ok.
In 2005, the top 1% paid 23% taxes, on average. So, in the example, it is more like $500K x 23% = $115K
Also, you forgot a tax that hits the $42K guy much harder than the $500K guy - SS. 7.65% for the $42k guy = $3213. But, for the $500K guy, where the 6.2% stops at $96K (2007), that's:
$96K * 7.65 + $404K * 1.45% = $14010.
So, with fed and SS, $42K guy pays $7105.
$500K guy pays $115K + $14K = $129K. So, the numbers go down to 12x income and 18x taxes. Progressive tax - seems fair.
BUT...when you figure in other taxes - local sales on basic items and services, gas, etc - these also hit the smaller guy harder, because he spends a higher percentage of income on these items (exception is again Shaq). Additionally, the $42K guy is much more likely to be using credit cards - another tax, with usury up to 30% and higher...
So, the bottom line is, rich people don't pay much more percentage than the $42K guy, who struggles with paying for food and housing, never mind the impossible vacation home, traveling, college for the kids, etc.
Time that $42K guy got some breaks. |
