Happy Tax Day.

[Napoleon54]

Happy tax day!!! (sarcasm implied)

Here's some good stats from NPR. LINK

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What America Pays In Taxes

Categories: Government

by Lam Thuy Vo and Jacob Goldstein

See our earlier entries in this series: What America Sells To The World, What America Does For Work and What America Buys.

Last year, the federal government collected $2.3 trillion in taxes. Most of that came from two sources: Individual income taxes and payroll taxes.

All taxes collected in 2011

Source: Tax Policy Center
Credit: Lam Thuy Vo / NPR

Payroll taxes are deducted automatically from your paycheck, and paid in part by employers. Payroll taxes fund Social Security and Medicare.

Individual income taxes are what everybody is scrambling to file right now. Individual income taxes pay for most of what the government does other than Social Security and Medicare.

Quick rundown of the others: Estate tax comes from large inheritances; corporate tax is paid by corporations (obviously); and "other" includes customs duties, excise taxes on products such as gasoline, and everything else.

Here's how federal taxes fall on households across the income spectrum.

Source: Tax Policy Center
Credit: Lam Thuy Vo / NPR

This chart is based on data compiled by The Tax Policy Center in this table. A few somewhat wonky notes on the data:

The income numbers are for total cash income, rather than adjusted gross income. This PDF discusses the distinction between the two.

Taxes paid combines income, payroll, estate and corporate taxes. It assumes that corporate taxes come out of profits that would otherwise have gone to shareholders.

If you leave out corporate taxes, the rate paid by top earners falls significantly. (Most corporate profits go to the top earners.) But tax rates still tend to be higher for those with higher incomes. You can see that trend in this table.

[WhiskeyPapa]

Payroll taxes are deducted automatically from your paycheck, and paid in part by employers.

"In part by employers"? It's actually "mostly by employers". Under the current payroll tax holiday (2011 & 2012) employers pay about 60% of payroll taxes while employees pay about 40%.

[cruelpupet]

I dont know if id take issue with the "in part". While it does make me think it would be less than 50%, saying "mostly by employers" I feel would be less accurate as to me that would imply a larger split than 60/40

[Napoleon54]

I like the second graphic in terms of the so-called Buffet Rule. Those in the middle class paying $3.5k-15k/year (say $10 on average) are complaining that those paying $845k/yr aren't paying enough. Apparently nearly a million dollars in taxes each year, or well in excess of 50x what the middle class pays, isn't enough to be considered a "fair share". Heh.

[cruelpupet]

I like the second graphic in terms of the so-called Buffet Rule. Those in the middle class paying $3.5k-15k/year (say $10 on average) are complaining that those paying $845k/yr aren't paying enough. Apparently nearly a million dollars in taxes each year, or well in excess of 50x what the middle class pays, isn't enough to be considered a "fair share". Heh.

A few problems with looking at that graph like that.

1. Its outlining household income. A single lawyer/doctor/professional of some sort making $100k a year is vastly different than a 3+ person household making 100k on 2 incomes
2. It doesnt take into account wage stagnation on the lower end and massive wage inflation on the upper end.

* I wont claim that the image is 100% accurate, but it gets the general point across.
** My personal experience is limited, but in the 2 major (600+ employee) and one medium (100+ employee) companies Ive worked for, Ive never seen an executive team make a decision big enough to change the companies profits that drastically.

2.1 One could argue that what has helped corporate profits most has been the technological revolution that has vastly increased employee productivity. Many of those advances were made due to research done on the tax payers dime, either directly or though tax breaks.

[Napoleon54]

*shrug* It will always seem odd to me that if one person pays barely anything and another person pays a million, its usually the first person who is the one to complain about fairness. The true motive there is jealousy, not fairness. See my sig.

[Thesifer]

Of course that's an average. Of EVERYONE that earns over 1,000,000 a year. Because someone who makes 1m isn't paying 845k/yr in taxes. But someone who makes 900 million in profits from the stock market or other capital investments even at 15% that number can become rather large. But it's still only 15%, which is the exactly same rate I would pay if I made 5k in the stock market (Assuming my other income puts me in the 15% and not 10% bracket for Capital gains.)

The fact of the matter is, every single person in America pays the same amount on the same amount of income. And that brackets up with income, except in capital gains where Bush set a one size fits all HUGE tax cut for the rich cap.

Look at the top CEOs of major corporations.. Their total income is listed, you'll notice a trend...

A lot of their "Salaries" are around the 500k-1million range. (IF that, some of them are set at $1) The rest of their "income" comes in the form of Stock options, or other shares of ownership in the company. So that all becomes "long-term" gains, and then when they need money for the year, they sell their "Long-term" gains they have had sitting, and pay 15% tax, instead of the tax rate they would have paid (35%) if they received it as income.

If you make 0.1-10k a year, or if you make 100million a year (Income tax, not capital gains) You pay the same percentage on that 10k. Before write-offs etc. And the fact that someone making 10k only would pay no tax, since it would all be removed for taxable income. (As well they shouldn't.)

[Thesifer]

*shrug* It will always seem odd to me that if one person pays barely anything and another person pays a million, its usually the first person who is the one to complain about fairness. The true motive there is jealousy, not fairness. See my sig.

Warren Buffet, jealous. If only he had a few more billion he wouldn't be so jealous of the rich. Matt Damon is jealous too. Those guys just need to get over their jealousy! It's ok that they are the only that can actually help the country, yet the country would like to tax the people that can ill afford a tax increase, and/or cut any program that's meant to help.

[mcs328]

You forget the cost of living for everyone who struggles to afford a home and food who don't have a lot of disposable income to make their living situation better. The difference between 10% of a $million dollars and 10% of $100K is the still 10% but the actual dollar amount is way different. I don't imagine a lot of people can buy a lot of stocks and pay 15% in taxes and live in the stock market to begin with.

I don't trust "job creators" creating actual jobs or have their tax cuts translate into money that will trickle down. I do trust they will directly steal the money out of my pocket by raising prices and kill off "entitlements" that directly affect people hurting the most in effect murdering them without blinking an eye.

But this post is about how much money in taxes are generated in the US. If we are going to go in the direction of the Buffet Rule then this should go into the Political forum.

[LPMiller]

I was going to say that. 10 percent of million is more money then 10 percent of 100k, but it hurts the 100k guy a bit more then the other guy. You can't just look at it as just a dollar amount.

[DarkFury]

I was going to say that. 10 percent of million is more money then 10 percent of 100k, but it hurts the 100k guy a bit more then the other guy. You can't just look at it as just a dollar amount.

Don't even bother trying to explain that...

Some folks only see the number... and not the effect it has on one's standard of living and lifestyle.

[Napoleon54]

I was going to say that. 10 percent of million is more money then 10 percent of 100k, but it hurts the 100k guy a bit more then the other guy. You can't just look at it as just a dollar amount.

IMHO that's pretty much what my sig quote refers to. The ideal expressed in what you said seems to be that everyone should feel the same amount of pain or be brought down to the same level... i.e. everyone should be made equal. That's entirely different from treating people equally (i.e. asking for a similar contribution from all). Is this an accurate assessment of the issue here? At this point I'm not looking to posit right versus wrong, or say who's right and who's not.... just rather trying to establish some kind of agreement as to what the question is.

[LPMiller]

But that's not my argument. My argument is that you can't say, "well, Bob here pays 100k in taxes and you only pay 10,000 so quit your bitching" because it's relative. It's a bad argument.

It's also a bad argument when Bob has more deductions he can take then I can. Thus changing the percentage, which then, does make it unfair, regardless of the dollar amount. I'd be happy with eliminating the deductions, making it a straight percentage. It will still be true though that 10 percent of a million is less painful then 10 percent of 100,000.

[mcs328]

Let's flip this from a tax pov to a raise pov. I rather have a 10% raise of $1 million that 10% of a $100K. We both got the same percentage increase. Yet you got $90K more. After a year, we both lose our jobs. My 10K bonus lets me live in a apt maybe for a year to find another job. Your 90K lets your live in apt for 7-8 years to find another job or buy a condo outright on the FL beach. Let's add some more details. I'm a peon making $100k and you're an exec making a $1 million. Company is going under. Who's the first to go? Continuing...10% of the company is let go to stabilize the company. The peons lost their job. Executive saved the company and get's 30% bonus which would have saved 3 jobs. Now I'm being ridiculous...or am I? *Picks up a newspaper* Nope, "job creators" cuts jobs from own company, gives self a raise and company stocks goes up which he owns and pays less taxes on.

This is my view of what I think is going on. Maybe it's true and maybe it's not. But in November I'm going to vote based on my viewpoint and so will everyone else.