http://graphics7.nytimes.com/images/2003/01/20/business/21DOUBLE.chart.jpg According to this chart, if you divide Americans into 5 groups, the top 1/5 is taxed at 19%. The bottom fifth is taxed at 18%. I think this will be useful info the next time we discuss tax policy. Learn it, love it, live it.
I don't understand that chart Dave. If you make 116,000 a year, you will pay close to that 21,000 number in just federal income taxes. The math just does not add up for me when looking at all of those taxes... Social Security would consume $5000 and state tax (assuming a flat 5%) would take up another $5000 (assuming they were in a 401K). That is very roughly $10,000 alone between those two before we even start looking at federal income taxes, sales tax, property tax, gas tax etc etc etc etc I am just going to assume I am reading this chart completely wrong because I can't make the numbers work to even a certain level of inaccuracy. Andy
You're reading it wrong. That $116,000 figure isn't federal taxable income, it's your total pretax income. If you're pulling in $116,000 pretax, your taxable income is usually going to be a lot less, between exemptions and all variety of deductions.
I will certainly agree it will be less, but even if you knock it down to say $85,000 in taxable income that still puts anywhere between the 27% and 30% income tax bracket (depending on how you file). That should (off the top of my head) roughly equate to around another $10,000. And that is assuming you can knock the $116 down to $85. Now that I think of it, perhaps this is my problem. The average person may have WAY more deductions than I can take and there fore this number can go down pretty far lowering their overall tax burden. Thanx to Dustin and to Dave for the info, very interesting stuff. Andy
I'm sure the chart is also per person so that married filing jointly is two taxpayers. I wonder if children are also included in breaking the taxes down on a per capital basis. It is an interesting chart, though. It seems that transfer taxes are excluded, which means that the estate tax is not included in the mix.
This made me wonder. Do you think this chart includes capital gains, dividends and bank interest taxes? Andy
Is there any parallel to how much money a person makes, and how much he/she smokes and drinks? The alcohol and tobacco taxes are added into this chart.
If I remember correctly, lower classes spend more on tobacco, and higher classes spend more on alcohol.
as a percentage of income (and thus a percentage of taxes paid), the lower classes would pay more for both. btw, look at who compiled this chart...alcohol and tobacco, trying to show that sin taxes are regressive
Where did you get this information? I think they were just one of a few different sources of the data (read the bottom paragraph under the chart), I don't think they compiled the data. Andy
I agree. These were the contacts needed to compile the excise taxes at the state level, I should imagine. Andy - your earlier question on cap gains and investment income. State and fed income tax on those should be in the chart.
you're right. i didn't notice the link was NYTs. just saw the sources of information and thought it was a collective effort. oops