"Tax Code More Progressive in 2004 than in 2000"

[JayB]

"In 2000, tax returns with an adjusted gross income over $200,000 earned 26.7 percent of all income, and they paid 47.3 percent of all income taxes. That’s a tax-to-income share ratio of 1.79. Four years later in 2004, their share of income had fallen from 26.7 to 25.5 percent, but their share of taxes had risen to 50.0 percent. That brought the ratio up from 1.79 to 1.96 in 2004.

 

The biggest winners were in the $25,000-to-$30,000 range. If the Bush tax cuts are the determining factor, then the logical conclusion is that the new 10-percent bracket and the doubled child credit caused dramatic reductions in tax payment. As a result, the ratio of tax share to income share was cut in half.

 

Two other income groups stand out. People in the $75,000-to-$100,000 group benefited more than the group below earning between $50,000 and $75,000. Most likely, they earned enough to benefit from elimination of the marriage penalty and from cutting the 28-percent rate to 25 percent, but they didn’t make so much that they lost the benefit of the doubled child credit or the new 10-percent bracket. Their share of the nation’s income grew substantially, and their tax share grew by an infinitesimal amount.

 

People making between $200,000 and $500,000 saw their tax share increase even more than the groups above them. That is the effect of the Alternative Minimum Tax, which takes away many of the Bush tax cuts for people in this range. Above $500,000 tax filers don’t “fall into” the AMT because they already owe more under the regular income tax code. "

Link

 

Other Interesting Tidbits

 

 

 

 

 

 

I know that I'd personally rather get all of my compensation in the form of salary, and have the freedom to choose how much coverage I get, have the ability to choose coverage from any insurer in the country without being trapped in a market where the state makes coverage for things like psychiatric care mandatory for all provides, and get a personal tax deduction for my health-insurance premiums instead of the deduction being granted to my employers. This especially sucks for two income couples. Most couples only need to buy coverage through one employer, and most employers are unwilling to increase your base salary in exchange for forgoing coverage through them.

[KaskadskyjKozak]

"In 2000, tax returns with an adjusted gross income over $200,000 earned 26.7 percent of all income, and they paid 47.3 percent of all income taxes. That’s a tax-to-income share ratio of 1.79. Four years later in 2004, their share of income had fallen from 26.7 to 25.5 percent, but their share of taxes had risen to 50.0 percent. That brought the ratio up from 1.79 to 1.96 in 2004.

 

The biggest winners were in the $25,000-to-$30,000 range. If the Bush tax cuts are the determining factor, then the logical conclusion is that the new 10-percent bracket and the doubled child credit caused dramatic reductions in tax payment. As a result, the ratio of tax share to income share was cut in half.

 

Two other income groups stand out. People in the $75,000-to-$100,000 group benefited more than the group below earning between $50,000 and $75,000. Most likely, they earned enough to benefit from elimination of the marriage penalty and from cutting the 28-percent rate to 25 percent, but they didn’t make so much that they lost the benefit of the doubled child credit or the new 10-percent bracket. Their share of the nation’s income grew substantially, and their tax share grew by an infinitesimal amount.

 

People making between $200,000 and $500,000 saw their tax share increase even more than the groups above them. That is the effect of the Alternative Minimum Tax, which takes away many of the Bush tax cuts for people in this range. Above $500,000 tax filers don’t “fall into” the AMT because they already owe more under the regular income tax code. "

Link

 

Other Interesting Tidbits

 

 

 

 

 

 

I know that I'd personally rather get all of my compensation in the form of salary, and have the freedom to choose how much coverage I get, have the ability to choose coverage from any insurer in the country without being trapped in a market where the state makes coverage for things like psychiatric care mandatory for all provides, and get a personal tax deduction for my health-insurance premiums instead of the deduction being granted to my employers. This especially sucks for two income couples. Most couples only need to buy coverage through one employer, and most employers are unwilling to increase your base salary in exchange for forgoing coverage through them.

 

Don't bring facts into the discussion, Jay. It's just not fair!

 

Time for the Demo-Liberals to resume their mantra "tax cuts for the rich" to restore their sense of serenity and self-delusion.

[catbirdseat]

Yes, Jay but ADJUSTED GROSS INCOME is what we are talking about here. The very wealthy now have more ways to hide their income so that the AGI appears to be small. Their true income is much larger. They are taxed on a smaller amount so they pay less tax.

[Dechristo]

For Tax Year 2004

 

Percentiles Ranked by AGI

 

 

AGI Threshold on Percentiles

 

 

Percentage of Federal Personal Income Tax Paid

 

Top 1% - 36.89%

 

Top 5% - 57.13%

 

Top 10% - 68.19%

 

Top 25% - 84.86%

 

Top 50% - 96.70%

 

Bottom 50% - <$30,122 - 3.30%

 

Note: AGI is Adjusted Gross Income

Source: Internal Revenue Service

 

http://www.ntu.org/main/page.php?PageID=6

[Jim]

That is the effect of the Alternative Minimum Tax, which takes away many of the Bush tax cuts for people in this range. Above $500,000 tax filers don’t “fall into” the AMT because they already owe more under the regular income tax code. "

 

The data is presented in a clever way, lumping folks making $200k with those making 10 million. It's the old statistical lumping game. But what interests me in particular is the AMT issue. The next Congress is going to have to deal with this because the Republicans choose not to prior to elections. They are in a bind. Next year the AMT will start snagging folks making as little as $75k, and that will be a big wakeup. The problem of update the code and pushing out the limits to where they should really be is that it will blow a Costco sized hole in the budget projections and lay bare the problems with the Bush tax cuts. What should happen from a fiscal responsibility standpoint is to let the Bush tax cuts die their well deserved death and then raise the limit for the AMT. We really need to make a coures correction. Oh and..

 

The top tax rate -- the income-tax rate on the highest bracket -- is now 35 percent, half what it was in the 1970's. With the exception of a brief period between 1988 and 1993, that's the lowest rate since 1932. Other taxes that, directly or indirectly, bear mainly on the very affluent have also been cut sharply. The effective tax rate on corporate profits has been cut in half since the 1960's. The 2001 tax cut phases out the inheritance tax, which is overwhelmingly a tax on the very wealthy: in 1999, only 2 percent of estates paid any tax, and half the tax was paid by only 3,300 estates worth more than $5 million. The 2003 tax act sharply cuts taxes on dividend income, another boon to the very well off. By the time the Bush tax cuts have taken full effect, people with really high incomes will face their lowest average tax rate since the Hoover administration.

[tvashtarkatena]

My take on the tax code is uh hmmmm

[Dechristo]

we should definitely tax code

[Mr_Phil]

the inheritance tax, which is overwhelmingly a tax on the very wealthy ...

 

Jim here is telling us that poor people don't have multi-milllion dollar estates. I would have never figured this out by myself.

[Jim]

the inheritance tax, which is overwhelmingly a tax on the very wealthy ...

 

Jim here is telling us that poor people don't have multi-milllion dollar estates. I would have never figured this out by myself.

 

For some odd reason you've cut out a parenthetical phrase and added a non sequitur

 

Adolecent humor aside, is there a question or comment lurking here?

[Dechristo]

the inheritance tax hurts the lower and middle-income more than the rich.

[cj001f]

the inheritance tax hurts the lower and middle-income more than the rich.

[KaskadskyjKozak]

the inheritance tax hurts the lower and middle-income more than the rich.

 

It's fundamentally wrong to double-, triple-, and quadruple tax.

 

To all you statists that disagree:

[cj001f]

It's fundamentally wrong to double-, triple-, and quadruple tax

 

bring back the monarchy!

[Weekend_Climberz]

we should definitely tax code

 

Shhhhh....I'm trying to get VB enviro to work on my new machine, if the IRS hears about I'll have to pay up....er I mean, carry on.

[Dechristo]

the inheritance tax hurts the lower and middle-income more than the rich.

 

Although the State gleans more from rich estates, and the rich may be required to divest a portion of the estate's portfolio to pay the tax, the loss of a few 10k - 100k, or the need to take on a mortgage to retain the family home/ranch/farm has a significantly greater impact upon the lower to middle-income, relatively.

[KaskadskyjKozak]

the inheritance tax hurts the lower and middle-income more than the rich.

 

Although the State gleans more from rich estates, and the rich may be required to divest a portion of the estate's portfolio to pay the tax, the loss of a few 10k - 100k, or the need to take on a mortgage to retain the family home/ranch/farm has a significantly greater impact upon the lower to middle-income, relatively.

 

Haven't you learned not to bother Hot Carl with facts?

[Dechristo]

bother is our fodder

[KaskadskyjKozak]

bother is our fodder

 

and now you've made him both hot and bothered...

[tvashtarkatena]

the inheritance tax hurts the lower and middle-income more than the rich.

 

Although the State gleans more from rich estates, and the rich may be required to divest a portion of the estate's portfolio to pay the tax, the loss of a few 10k - 100k, or the need to take on a mortgage to retain the family home/ranch/farm has a significantly greater impact upon the lower to middle-income, relatively.

 

This would only apply to a handful of households in Washington. Most of those affected folks could avoid hardship though proper execution of a living will. The vast majority of folks subject to this tax (and an even greater majority of the revenues collected from it) are wealthy enough to avoid hardship.

 

Whether or not you agree with the estate tax, it is definitely a tax on the wealthy.

[cj001f]

the inheritance tax hurts the lower and middle-income more than the rich.

 

Although the State gleans more from rich estates, and the rich may be required to divest a portion of the estate's portfolio to pay the tax, the loss of a few 10k - 100k, or the need to take on a mortgage to retain the family home/ranch/farm has a significantly greater impact upon the lower to middle-income, relatively.

 

Haven't you learned not to bother Hot Carl with facts?

 

Carl doesn't consider people leaving estates greater than $1.5 million (estates lower than that are exempted as of 2005) lower or middle income

[Jim]

The estate tax is paid by the top 0.27 of tax payers with estates of $2 million or more, $4 million for a couple. And 80% of estate taxes are paid by the top 0.14% of tax payers, with estates larger than $5 million. And these are the numbers after they have take advantage of the generous dodges and shelters available.

 

The family farm sob story is fantasy. The tax opponents can't even come up with a real life example.

Edited November 2, 2006 by Jim

[KaskadskyjKozak]

The estate tax is paid by the top 0.27 of tax payers with estates of $2 million or more, $4 million for a couple. And 80% of estate taxes are paid by the top 0.14% of tax payers, with estates larger than $5 million. And these are the numbers after they have take advantage of the generous dodges and shelters available.

 

The family farm sob story is fantasy. The tax opponents can even come up with a real life example.

 

I get taxed every year in a progressive tax system based on my income.

 

My property is taxed every year for real estate taxes.

 

After years of paying my taxes, I die. The government has no damn business taxing my estate, when I leave it to my family, no matter how big it is.

 

you, comrade!

[Jim]

I doubt you're anywhere near the thresholds for this tax. And there are ample ways to avoid it if you have any savy, or at least the sense to hire a good tax attorney. Taxes and death are unavoidable. Get used to it.

[minx]

The estate tax is paid by the top 0.27 of tax payers with estates of $2 million or more, $4 million for a couple. And 80% of estate taxes are paid by the top 0.14% of tax payers, with estates larger than $5 million. And these are the numbers after they have take advantage of the generous dodges and shelters available.

 

The family farm sob story is fantasy. The tax opponents can even come up with a real life example.

 

I get taxed every year in a progressive tax system based on my income.

 

My property is taxed every year for real estate taxes.

 

After years of paying my taxes, I die. The government has no damn business taxing my estate, when I leave it to my family, no matter how big it is.

 

you, comrade!

 

stupid question from an undereducated taxpayer. if my family member keels over and leaves me 5 million, do I then have to pay federal income tax on that money? i assume so. at least we don't have a state income tax.

[Peter_Puget]

Damn Minx now I wish you were single!