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by Cshelton 3345 days ago
What I meant by the proportion of tax paid is the same at any income level is under a flat tax scenario, leaving out all tax rules today of exemptions/credits.

If the rate is 10%, the proportion of tax is the same, whether you make $10 or $1 million, you are still paying 10% of your income.

Yes, the effective tax rate collected. The reference you provided only supports my claim. It looks like the effective tax rate, which is the actual rate collected by the IRS is around 20% since 1979. I'd have to find it, but if you take the data all the way back to the New Deal, the effective tax rate is around 17%. Most likely due to it being easier to "hide" income back then.

Regardless, the effective tax rate has stayed around 17-22% over almost the last century, despite the large differences in the tax rates at different brackets. Remember, the top rate during the Eisenhower administration was 90%. Yet the effective tax rate average was unchanged.

2 comments

I think the problem here is that your inference that a flat tax rate would be good because the total amount of income taxes collected each year as a percent of total income hasn't change has had no supporting evidence presented, and it's such a leap to most people that they don't even understand that's the argument you're making.

Exactly why do you believe that since the total percentage of income collected hasn't really changed that means a flat tax is a good idea? The reason for a progressive tax is not to raise the total amount of taxes collected, but to change which people it is collected from proportionally. I'm not sure what the total percentage collected has to do with that.

Someone making $10 is going to miss 10% of that a lot more than someone making $100, and they're going to miss 10% of that a lot more than someone making $10,000. And someone making $1MM isn't likely to miss it at all.