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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: J_F_Shepard who wrote (664716)	8/1/2012 6:57:23 PM
From: TimF	1 Recommendation Respond to of 1577996

marginal rates are meaningless if you don't pay at that rate You do pay at that rate. Earn more money and that's how much of it is taken away from you. The higher the marginal rates get the more they provide a disincentive. If you made $50k, and your tax rate was zero, but taxes became 100% for every dollar past that, you probably don't care to work any overtime, or get a promotion (unless you think it will give you power or status and you care about that, or the job is more interesting), or try to start a business on the side. Of course marginal rates are not 100% for anyone (at least if your only considering taxes, for some low income people, if you include phase outs of benefits, and the start of taxation, they can be very high, even 100 percent or more if someone's at just the right income level, in the right place, and had aggressively taken all the benefits available to them), but half of all the extra money you earn provides a disincentive as well. In terms of these incentives marginal rates are much more important that average rates. In the above hypothetical your average rate at $60K would be only 16 and two thirds percent. Not too excessive, but the 100% marginal rate still means your return on OT is zero. Switch thing around. If you had a 50% rate for the first $50k, and zero after that, your average rate at $60k would be almost 42%, much higher than most people pay, but you would get to keep all the extra money from the OT, your return on the extra work is unaffected by your average rate. In the narrow area of comparing the relative "fairness" of tax burdens, marginal rates don't mean a lot. The rate people pay overall does. But when people make decisions about taking effort or risk or annoyance to generate more income marginal rates are a far more important factor than average rates for any remotely rational person. My preferred statistic is % of AGI.....and the rich therefore do not pay more.....I posted the IRS data. The data you posted shows them paying more. Top 1% pay 24.01%, top 5% pay 20.46%, top 10% pay 18.5%, all tax payers, pay 11.06% That's just of income taxes, but the pattern holds when you consider all federal taxes (and esp. when you consider net transfers to and from the taxpayer and the government including benefits), as the data I posted shows. I know that, but I eliminated the bottom 50% because they essentially pay no taxes anyway. If they pay no taxes, then they get compared as zero (They actually pay 1.85% according to your data). They are part of the averages. You shouldn't just selectively consider groups to try to bolster your case by ignoring some of the data. But if you do eliminate them, and we take your data source rather then all the others I posted, the data still contradicts your claim. op 1% pay 24.01%, top 5% pay 20.46%, top 10% pay 18.5%, top 25% pay 14.68%, top 50% pay 12.50%. I don't know why you highlighted percents 1 to 5 in red, seeming to indicate that your were focusing on them and perhaps ignoring both the richest and the borderline rich, but even your selected group, pays more than the average for the top 50% or for all tax payers. 1-5% pay 16.40%, top 50% pay 12.5% and all taxpayers pay 11.06%. Or using the CBO data for all taxes instead (rather than just looking at the income tax) Or net transfers to the government including government benefits Bottom quintile: -301 percent Second quintile: -42 percent Middle quintile: -5 percent Fourth quintile: 10 percent Highest quintile: 22 percent Top one percent: 28 percent (Note apparently that last bit of data includes state and federal benefits but only federal taxes. If you added state taxes or remove state benefits from the data it would even up slightly, but still show a very strong "progressive" structure.)