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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127258  
Subject: Re: How low can we go? Date: 9/19/2012 3:33 PM
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CCinOC:

foo1bar wrote: <<<IF that were a true fact, I'd agree with you. However, it isn't. 40% pay zero income tax. Payroll taxes are still paid by the vast majority of those people.>>>

"I see this as a distinction without a difference. INCOME taxes are the major source of revenue of this country.

The practical reality is that too many "citizens" aren't paying the main source of revenue this country needs to pull itself out of the ditch."


Not surprised by your response.

The bottom 50% have less than 13% of total AGI (per Tax Foundation - http://taxfoundation.org/article/summary-latest-federal-indi...) and which is less than the 17-20% of total AGI by the Top 1%.

Taxing the bottom 50% at 50% marginal rate would not come close to fixing the budget problem. And in order to reqire more of the bottom 50% to pay income tax, you would need to elimiate the standard deduction (or itemized deductions) and personal exemptions, among other things.

The reality is that in general unless your AGI puts you in the top 5%, your are probably not paying proporationally more in FIT then the percentage of income you earned (and especially not significantly more) - Compare Tables 5 & 6 in my prior link.

The second top 5% - those between 5% and 10% for TY 2005 - 2009
reported 10.70%, 10.66%, 10.61%, 11.03% & 11.47% of total AGI
and paid 10.63%, 10.65%, 10.59%, 11.22% & 11.81% of Total FIT.

For those in the Top 25% but not the top 10% (AGI roughly between 65k and 110k [numbers vary by year], those numbers are:

Income Sh. 21.08%, 20.84%, 20.66%, 21.62% & 22.62%
FIT Share 15.69%, 15.47%, 15.37%, 16.40% & 16.83%

The reality is that the bottom 50% pay so little bacause they make so little income, and trying to squeeze them for more seems particularly counter-productive. If anyone thinks it is so great to be in that category, they can always stop working and try to enjoy life with little or no income.

Regards, JAFO
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