[FoRK] How far will the dollar fall?

[Kevin Elliott]

On Apr 22, 2008, at 12:14 PM, Michael Cummins wrote:

> So if the effective tax rate on the rich is nearly zero in the US,  
> how can
> the US Treasury report that top 5% of all wage earners pay 53.8% of  
> all
> individual income taxes?
>
> http://www.taxfoundation.org/blog/show/341.html
>
> Where is the truth hiding?

The truth is that people have a very skewed definition of "rich" that  
is completely disconnected from reality.  It is probably true that  
there is some number of very wealthy people who have very low tax rate  
because of details in the tax code etc.  At a guess, this number is  
probably somewhere between 1000-10,000 people in the US.   IMHO, the  
problem with trying to "do something" about those people is that the  
"loopholes" in question exist for very good reasons, and that closing  
would probably hurt far more people than it helps.  It's like the  
estate tax- the problem with the estate tax is pretty simple- it costs  
to much money to administer, doesn't raise any money, and the people  
who are most likely to be hurt by it are the people who AREN'T really  
rich- the really rich have diverse assets, and the luxury of reworking  
those assets to get around the problem (not the mention the fact that  
slapping the survivors of someone's death with a big tax bill is a  
pretty crappy thing to do).

As the statistical data clearly shows, the overwhelming tax burden is  
paid by a relatively small percentage of the population- basically all  
of the taxes in this country are paid by people making more than  
$62,000 in adjusted income.  Of course the regressive nature of Social  
Security and pretending it's not a tax muddies the water.  Whining  
about the rich is stupid political pandering at it's most ridiculous...

The data is nicely table-fied here http://www.taxfoundation.org/taxdata/show/250.html