At least we got something useful out of the ACA rather than just tax cuts for the wealthy and political points.
"All taxpayer income groups with incomes of $75,000 and under — that’s about 65 percent of taxpayers — will face a higher tax rate in 2027 than in 2019."
"People with incomes between $10,000 and $30,000 — nearly one-quarter of Americans — are among those scheduled to pay a higher average tax rate in 2021 than in years before the tax “cut” was passed. The C.B.O. and Joint Committee estimated that those with an income of $20,000 to $30,000 would owe an extra $365 next year "
"The law they passed initially lowered taxes for most Americans, but it built in automatic, stepped tax increases every two years that begin in 2021 and that by 2027 would affect nearly everyone but people at the top of the economic hierarchy. All taxpayer income groups with incomes of $75,000 and under — that’s about 65 percent of taxpayers — will face a higher tax rate in 2027 than in 2019."
"The current poverty line for a family of four is $26,200: People with incomes between $10,000 and $30,000 — nearly one-quarter of Americans — are among those scheduled to pay a higher average tax rate in 2021 than in years before the tax “cut” was passed."
"By 2027, when the law’s provisions are set to be fully enacted, with the stealth tax increases complete, the country will be neatly divided into two groups: Those making over $100,000 will on average get a tax cut. Those earning under $100,000 — an income bracket encompassing three-quarters of taxpayers — will not."
"At the same time, Trump has given his peers, people with annual incomes in excess of $1 million dollars, or the top 0.3 percent in the country, a huge gift: The Joint Committee on Taxation estimated the average tax rate in 2019 for this group to be 2.3 percentage points lower than before the tax cut, saving the average taxpayer in this group over $64,000 — more than the average American family makes in a year."
"New estimates by Congress’s official forecasters show Democrats’ tax cuts — included in their March stimulus package — will drive down tax rates on low- and middle-income people so much this year that those earning less than $75,000, on average, will owe nothing in federal income taxes."
"Those making between $75,000 and $100,000 will pay a scant 1.8 percent average tax rate this year, the nonpartisan Joint Committee on Taxation predicts."
"That will shift the relative burden to the wealthy, at least temporarily, with those earning more than $500,000 expected to pay more than two-thirds of all income taxes this year... Those making between $500,000 and $1 million will pay 20.8 percent of their earnings in income taxes. People earning more than $1 million will pay 25.8 percent."
The ones that don't - almost entirely low-income households - spend essentially every penny they earn. Taxing them winds up being more of an economic drag than anything else, and increases need for government assistance. Taxing them is fiscally irresponsible.
> The plan would increase the top tax rate on Americans earning over $435,000 from 37 percent to 39.6 percent.
Democrats have caviar dreams and a tuna fish budget. $2.9 trillion over 10 years doesn’t even cover the FY 2015 budget deficit projected forward, much less any new spending.
Biden’s promise not to raise taxes on upper middle class people (making $100k-400k) is nuts. Half of all personal income, over $5 trillion, is earned by the top 25% that’s not the top 1%: https://taxfoundation.org/summary-of-the-latest-federal-inco....
Other countries heavily tax this group. In Germany, the 42% income tax rate (just a couple of notches below the 45% max) kicks in at 56,000 euros. In Sweden and Denmark, the top income tax rates kick in around 1.5x the median income (well under six figures for us).
It should not be this hard to tax all the SV and Wall Street-adjacent upper middle class people. Most are even Democrats now. They voted for higher taxes. Just do it!
> The Pew Center’s analysis of IRS data showed that in 2014, people with an adjusted gross income, or AGI, above $250,000 paid 51.6% of all individual income taxes, even though they accounted for only 2.7% of all returns filed. These “wealthy” individuals paid an average tax rate (total taxes paid divided by cumulative AGI) of 25.7%.
> By contrast, while people with adjusted gross incomes below $50,000 filed 62% of all individual returns in 2014, they paid only 5.7% of total taxes collected at an average tax rate of 4.3% per person.
> "According to statistical data from the Internal Revenue Service (IRS), the top 1% had an adjusted gross income of $465,626 or higher for the 2014 tax year."
"Doctors, lawyers, and IT people making low six figures" have absolutely nothing to fear. And for the extremely few fortunate people who actually make more than half a million dollars each year, they will easily be able to afford the new taxes.
"In 2020, the bottom half of taxpayers earned 10.2 percent of total AGI and paid 2.3 percent of all federal individual income taxes. The top 1 percent earned 22.2 percent of total AGI and paid 42.3 percent of all federal income taxes."
According to https://taxfoundation.org/publications/latest-federal-income....
The NYTimes article that you link to doesn't really discuss tax benefits that are valuable to the top 0.1% so much as those that are valuable to the upper-middle class: the mortgage interest tax deduction, 529 plans, 401k/IRA deductions, various aspects of our health care law, etc are all extremely valuable to this group but small potatoes to those making $2M+ per year.
"Low-income Americans face higher payroll tax rates than rich Americans. Americans with less than five-figure incomes pay an effective payroll tax rate of 14.1 percent, while those making seven-figure incomes or more pay just 1.9 percent.Low-income Americans face higher payroll tax rates than rich Americans. Americans with less than five-figure incomes pay an effective payroll tax rate of 14.1 percent, while those making seven-figure incomes or more pay just 1.9 percent."
While the absolute numbers for the rich paying a lot more in taxes is true, when looking at effective tax rates, the rich are not actually being taxed enough for there to be equity in taxation.
"Billionaires in the US pay a smaller tax rate than most teachers and retail workers. "
"According to a 2021 White House study, the wealthiest 400 billionaire families in the US paid an average federal individual tax rate of just 8.2 percent. For comparison, the average American taxpayer in the same year paid 13 percent."
The report says that the % of people(tax units) who didn't pay either in 2020 was 20.5%.
The 43.3% was the % of tax units that had a net negative income and payroll taxes (thought I doubt this included the employer side of the tax which for economics purposes falls on the worker). But that was also the Covid year.
Most years it's 25%-22%, which doesn't seem high for the poor, the disabled, and the retired.
"People who make over $200k aren't getting as big a tax break? I don't feel bad about that."
According to the CBO, people who make less than $75k get a tax increase by 2027 (on average). People who make between 75K and 500K get a very small tax deduction on average. Blue state residents get a tax increase almost across the board at >200K<1M. Almost anyone who makes more than a million a year gets a sizeable tax deduction.
"A study by White House economists released on September 23 found that the 400 wealthiest U.S. families paid an average income tax rate of just 8.2 percent from 2010 to 2018."
This has been driving me nuts, I'm glad someone is writing about it. I don't think this is happening to show how much the tax cuts are giving back to people, I can't help but think that the reason only high earners are shown as examples is to paint this legislation as only benefiting high earners. If this is the case it has been broadly successful. Apparently half the country is buying into a narrative that their tax bills are going to go up, and I'm not sure where that idea is coming from. ( https://www.monmouth.edu/polling-institute/reports/MonmouthP... )
If the low income earners were included two things would be clear. 1) Many low income earners don't pay federal income taxes at all, many actually get paid by the IRS instead 2) Low income earners actually still benefit by getting either lower taxes or higher credits.
At this point, there is no way of having a reduction in tax bills that doesn't overwhelming favor the top 50% of earners, because they pay almost all the federal income taxes. In 2015 the top 50% of those that filed tax returns paid over 97% of income taxes (the last table cell at the bottom all the way on the right https://www.irs.gov/pub/irs-soi/15in03etr.xls )
EDIT: Based on experience on this board I knew this post would be downvoted, but I'm not exactly sure why. Please help make me a better contributor by telling me what I did wrong as you downvote, thanks!
The richer you are, the higher the percentage your taxes went down. And that's a higher percentage on more income, too, so if you look at total dollars per income level it's much worse.
What a nonsense article. I expect better from HN, frankly.
It's not as though the wealthy aren't paying their fair share. Breaking down the amount of total federal income taxes by income bracket:
The bottom 40% of tax payers paid less than 5%.
The next 40% paid about 25%.
The next 9% paid about another 30%.
And the top 1% paid the remaining 40%.
Furthermore, returning to 90% tax rates for top earners is going to do a lot more harm to the economy by taking away the wealthy's incentives to work and invest than supposed (and I think dubious) speculation-driven-price-increases.
thats roundabout 45% but yeah. Actually high earners pay less taxes than those stuck in the middle (like 40k to 60k) because after a certain threshold (i think around 60k) your contributions to health care (which is until then around 15% of your income) don't rise anymore (unless you have a very expensive private health care plan but thats on you ;)).
"All taxpayer income groups with incomes of $75,000 and under — that’s about 65 percent of taxpayers — will face a higher tax rate in 2027 than in 2019."
"People with incomes between $10,000 and $30,000 — nearly one-quarter of Americans — are among those scheduled to pay a higher average tax rate in 2021 than in years before the tax “cut” was passed. The C.B.O. and Joint Committee estimated that those with an income of $20,000 to $30,000 would owe an extra $365 next year "
Tax Cuts and Jobs Act of 2017
https://www.nytimes.com/2020/10/31/opinion/republicans-biden...
It's a NYT Opinion piece by a Nobel recipient.
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