sorry, lost the In-Reply-To; for context see:
<http://www.xent.com/FoRK-archive/feb01/2004.html>
Mr. Williams is correct in pointing out that
those figures don't include FICA or Medicare.
Looking at the IRS table, Ms. Schuman appears
to be correct that a payroll tax cut would be
far more effective a stimulus than an income
tax reduction.
We can take the "effective" payroll tax to be
either 15.3% (as it certainly is for the self-
employed) or the more conservative 7.65% share.
Either way, looking at the 1998 figures, the
payroll taxes are either greater than or about
the same order as income taxes were for most
of those returns:
effective cumulative compared
income tax percentage to:
----------- ----------
none 23
under 5 38
under 10 67 7.65%
under 15 89 15.3%
under 20 97
under 25 99
under 30 100
under 35 100
under 40 100
However, FICA and Medicare are both different from
the income tax in that they, at least nominally,
are about providing benefits for those who have
previously paid in*, so I'm not sure we should
compare them to income taxes except when looking
at any effects on take-home pay.
-Dave
* one need not pay in if one gains wealth via
capital or land instead of labor
This archive was generated by hypermail 2b29 : Sun Apr 29 2001 - 20:25:58 PDT