From the New York Times:
The C.B.O.’s most recent calculations of federal tax rates show a highly progressive system. (The numbers are based on 2004 data, but the tax code has not changed much since then.) The poorest fifth of the population, with average annual income of $15,400, pays only 4.5 percent of its income in federal taxes. The middle fifth, with income of $56,200, pays 13.9 percent. And the top fifth, with income of $207,200, pays 25.1 percent.
At the very top of the income distribution, the C.B.O. reports even higher tax rates. The richest 1 percent has average income of $1,259,700 and forks over 31.1 percent of its income to the federal government.
One might wonder how Mr. Buffett gets away with a tax rate of only 17.7 percent, while a typical millionaire is paying so much more. Most likely, part of the answer is that Mr. Buffett’s income is made up largely of dividends and capital gains, which are taxed at only 15 percent. By contrast, many other top earners pay the maximum ordinary income tax rate of 35 percent on their salaries, bonuses and business income.
Buffett points out that his receptionist has a 30% tax rate while he has a 17.7% one, stating that he isn't paying enough. I contend that Buffett isn't paying too little, but his receptionist is definitely paying too much. I think if God only asks 10% of our income, then the government is way out of line asking for 17% or 30%.
If we returned to the system devised by the founders (which relied on tariffs and sales taxes) and used until the income tax of 1913, perhaps we could get rid of all this bloated, wasteful spending that isn't authorized by the constitution.
You can't call a nation with a $3 trillion budget a nation with a small government, and thats what our country was designed to have.
You also can't call it "fair" to have one American paying at one rate and another American paying at another rate. Every citizen should be treated equally and charged an equal tax rate, not penalized for their industriousness or good fortune. Progressive tax rates, which "stick it to the rich" are the product of Marxism and totalitarian governments, not free and limited governments.
HT to the National Center for Policy Analysis.
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