| | | Hi Bruwin,
That is a simplified example - which is OK.
It neglects the earned income tax credit- which essentially rebates all taxes paid and more for low income earners:
That's why over 50 % of people never pay a penny in taxes!
It also neglects to mention the earned income tax alternative - Which insures that high income earners pay a minimum above normal deductions, whichever is greater. Plus add the Obamcare tax on top of a thresh hold earned of another 4.3%!
What Is the Alternative Minimum Tax (AMT)?The Alternative Minimum Tax (AMT) is a separate tax system that requires some taxpayers to calculate their tax liability twice—first, under ordinary income tax rules, then under the AMT—and pay whichever amount is highest. The AMT has fewer preferences and different exemptions and rates than the ordinary system.
How Is the Alternative Minimum Tax (AMT) Calculated?The AMT eliminates or reduces the value of tax preferences taken under the ordinary system. Taxpayers add certain deductions back into their income to figure out their Alternative Minimum Taxable Income (AMTI).
Next, the AMT allows an exemption of $72,900 for singles and $113,400 for married couples filing jointly to be excluded from the tax . However, exemptions phase out at 25 cents per dollar once AMTI hits $518,400 for single filers and $1,036,800 for married taxpayers filing jointly in 2020.
After calculating their AMTI and applying the exemption, taxpayers (single and married filing status) are taxed at a rate of 26 percent on AMTI below $197,900 and 28 percent on AMTI above $197,700 . After addressing foreign tax provisions, taxpayers calculate their tentative tax amount under the AMT. Taxpayers then pay either their ordinary individual income tax liability or their AMT liability, whichever is greater.
These two tax addendums assure that our tax system is progressive.
It reimburses low income earners to receive more than they actually put in annually.
It also insures that high income earners pay the most via a very progressive tax system - especially so if it is taxed at personal income rates (40.3 % of your personal income).
Sell a business that you built over your lifetime and you'll learn these details of WHAT IS FAIR!)
That is why the upper income earners (over $500,000. per year alone pay 21 % of the country's income taxes).
These huge credits and additional taxes are seldom mentioned by those politicians pontificating about "people not paying their fair share".
If they are going to preach to me and invoke guilt, at least be truthful and cover all the facts!
In fact, it invokes my fury that they misrepresent the reality of our tax system.
For all Americans to pay a flat tax on the consumption of goods they choose to incur during the course of living is simply fair. It makes sure that all we Americans have skin in the game of being an American.
It prevents tax cheating from under the table tax avoidance scams like:
Barter for like kind services
Cash side jobs for which no 1099 was issued when the transaction value of labor exceeded $600.00.
Note to file: The addition of 87,000 additional IRS representatives, is NOT intended to audit those who obtain the services of tax professionals who apply these tax laws.
Why do you think Janet Yellen wants to get your checking account monthly transactions reported to the IRS?
IT IS NOT TO AUDIT THOSE WHO MAKE LESS THEN 7,200 A YEAR!
It is not to audit those who make over $500,000 a year either - those who make that much, that I know, do not want IRS trouble. They're busy making big bucks and just want to pay their fair share.
Biden's perspective is a complete red herring. It wont change the wealthy's tax return a penny. It's the low to middle income earner who cheats and gets away with it for years, who has the interest and penalties to worry about or start to really pay THEIR FAIR SHARE!
JMHO, but those very wealthy I know: DO NOT WANT IRS problems - just a fact of life I've noticed.
Just facts folks - JUST THE FACTS!
Bob |
|
