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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: neolib who wrote (160005)	10/25/2008 1:54:14 PM
From: GraceZ	Read Replies (2) \| Respond to of 306849

Spreading the tax base can't have any other effect but to raise taxes for the lower half because they pay so little, taxes are heavily weighted to the top 20% of households. The only way to lower the amount of taxes paid by everyone is to lower the amount of spending! Just look at how little household income you need to get in that top 20%, 100k. Remember that the majority of households in the top 5th are two income households, so these household income figures mean two people go off to work only to have the government sock it to them because they are "rich": census.gov Table H-1. Income Limits for Each Fifth and Top 5 Percent of Households All Races: 1967 to 2007 (Households as of March of the following year. Income in current and 2007 CPI-U-RS adjusted dollars28/) ______________________________________________________________________________ Lower limit of Upper limit of each fifth (dollars) top 5 Number __________________________________________ percent Year (thous.) Lowest Second Third Fourth (dollars) ______________________________________________________________________________ Current Dollars 2007 116,783 $20,291 $39,100 $62,000 $100,000 $177,000 If you have an AGI of $46K then you paid about $7.5K in tax just for FICA. If not, you aught to be in jail at some point Obviously the guy making the median of 46k AGI pays more than the average I cited, it's an average which is brought down by the fact that the bottom 5th pays less than zero. I guess I always assume people understand what the word "average" means. Your calculations forget that we now have a negative tax rate, with the EIC. Someone in the bottom quint can recieve more in that refund than they paid in FICA payments which strongly eat into the average share that the bottom owes. EIC can be used up to 30k in income but is phased out between 12k and 30k. Over 30-35 million households are eligible in 2008. The maximum benefit is over $3,000, much higher than the average payroll contribution that quintile pays in (around $917 in 2004) This is what you are missing: FICA taxes have no effective deduction. Not true. If you had ever filled out an SE form you know that half your SE payment is deductible. This is because the employer half is always deductible. Here is a balanced view of how taxes are divided in terms of which quint pays which. Keep in mind this is 2004 and factored before the latest expansion of the EIC which will get even larger regardless of the candidate who gets elected: taxfoundation.org