Look, I used your data for the bottom 50% of households to check your claim that that group only paid 5% of FICA taxes. Nonsense.
I admitted to you that the data in that table is flawed and I told you why, do I have to tell you why again or did you not read my explanation the first time?
It is easy to check for yourself that the data is flawed, just multiply the average payroll tax payments on the top 20% by the number of individuals it is suppose to cover, 58.2 million. You come up with a payroll tax figure that greatly exceeds the FICA receipts for that year. So even without using the data on the low end you can see that something isn't right.
Now you seem to want to weasel around on what wage earners are, what households are, and what other "transfer taxes" do to negate FICA.
I don't weasel around what is wages and what is passive income, the tax code does and always has ever since this wonderful thing called social insurance was created. You failed to see why it makes sense to have a distinction, I guess that should have been my first clue I'm dealing with someone who doesn't understand why SS exists in the first place. That's why I think you should go back and study the original debates surrounding its inception. It is instructive in just how far government gets from their original good intentions with these programs.
Other transfer taxes have NO effect whatsoever on FICA.
What other transfer taxes? I can't get what you mean by this.
FICA is FICA.
Yes! This is what I've been saying. It is entirely separate from Federal income tax as much as you desire to try to mix it in with it when it suits you.
If you want to claim that EIC is designed to offset FICA, fine, but FICA is still FICA and the working poor pay it starting at $1 one,
Do they really pay it if they get a tax refund greater than the amount they paid? If I pay 40k in withholding and get 45k in a refund, would you say I paid 40k in Federal tax or -5k?
You are the one who wants to lump FICA in with Federal income tax payments, which low income earners clearly do not pay in any great amount, as proof that they contribute some higher percentage of their meager incomes to the Federal government.
If you look at total burdens including FICA and every other type of tax you'd see that your perfect progression up the income scale is already there. Even with FICA we still have a very progressive tax system, getting even more progressive as the top 1% pays an ever larger share of the federal income tax even with the lower marginal tax rates now in place. They pay a larger percentage of federal tax now than they did in 2000. No one disputes this, they just try to obscure this inconvenient truth by confusing FICA with Federal taxes, as you have done.
My point is simply that tax rates on the wage earning lower tiers are in fact 15.3% higher than generally claimed.
15.3% higher than what? You still believe that everyone who makes 12k a year pays $1836 to the feds? Someone somewhere does, but most don't. They only end up paying that if they happen to live in a household with someone who tips them up past the cut off for EIC or they are a dependent. Maybe that is what is paid out of their paycheck added to the employer portion but that is certainly not their actual tax burden after their EIC refund which even people without dependents are eligible to receive at that income level. On average they pay far less, around 3% of income in the bottom bracket and 7.2% in the next lowest bracket. This certainly wasn't true when I was younger, when I first started filing as an independent contractor back in 1987, FICA couldn't be avoided or refunded in any way. Them days have been gone for a long time. I think the first EIC return I helped file was back in 1992 or so. |
