I’m not sure why that’s noteworthy. We have a progressive taxation system with a tax-free allowance and various deductions for things like dependents that reduce taxes at the bottom of the income range. So there is always going to be some number n which is the ratio between the amount of taxes paid by higher income group X and some lower income group Y and... sometimes it’s going to be 7. Is 7 too big? Too small?
Median income tax is about 10k on 65k of income so people in the bottom 50% pay between 0 and 10k on between 0 and 65k of income.
If you’re earning 200k or so you pay a similar amount of tax on the first 65k of your income.
But yes, you pay more tax on the extra 135k you’re making. But that’s okay, because you’re making an extra 135k. You can afford it.
I do understand the concept of progressive taxation.
$65K is an average household income, but there's no way that the average household is paying $10K in federal income tax, that's laugh-out-loud far of the mark.
Let's just say that's a couple married-filing-jointly.
In 2020, you'd take first of all a $24,800 basic deduction. Then you'd pay $4,429 in income tax on the $40,200 taxable income.
If you had two kids, you'd take two Child Tax Credits for $2,000 each and pay $429 in federal income tax.
An average household with two kids pays essentially no federal income tax in 2020.
Even in the absolute worst-case, a single filer pays no more than ~$7,400 on $65,000 of income.
In 2021, thanks to the increase in the Child Tax Credit ($3000 per child or more younger children), the bipartisan Joint Committee on Taxation estimates that the average household will pay no federal income tax at all on income under $75,000 per year.
Sure, but payroll taxes (~7.5% + 7.5% employer contribution) are a thing and that's another ~$5000 (or $10,000 if you include employer contribution) that the household has to pay.
Also as grandparent mentioned, you pay exactly the same amount of taxes on your first $65K as the person making $65K does.
Why would they pay income tax, if the point is to redistribute the money collected back to them?
Seems like instead of collecting $x amount of tax from them in order to give it back in benefits, we could just not have them pay tax (which is the case currently).
The real answer is - raise their wages, and then they will be paying more in federal taxes (just like the upper quartiles are).
USA lower tier professionals (Doctors, Lawyers, Programmers, have a anticompetitive racket - they should all get a 20-30% net haircut in salary, tech should be regulated, we should increase admission to med-school and allow nurse practitioners to serve as doctors, etc.). I say this as someone who benefits greatly from the current system, but also realizes how fucked up it is.
Finance people should be taxed out the wazoo - watching stocks tick up and down on the market is a waste of time and most of them defraud people anyway, estate and wealth tax should be a thing, if they try to denounce citizenship to get away, immediate tax of 50% of [unrealized] profits (we currently do 20%).
Even that wouldn't get us back to how things were in the 1960s, but it would at least be closer, and probably makes things better in the mean time.
I'm not denying that programmers get paid a lot or that our taxes shouldn't be higher but it's a different situation from being a doctor or a lawyer. I have no degree and am entirely self-taught. I would not be able to practice law or medicine without getting one. However, I am a professional software engineer.
Programmers get paid a lot because the market is extremely competitive. Doctors get paid a lot because healthcare in the US is essentially one massive cartel and incredibly inefficient as a result. In most countries, doctors and programmers make similar salaries.
I think the term "software engineer" is sort of meaningless. I know someone who builds ssis packages and while he does know T-SQL, he is relatively unfamiliar with transactions, cannot describe how a balanced tree index works, and will not complete an SQL query without using "nolock".
I have never seen him produce a working program in any dot net language, or for that matter any procedural language except maybe visual basic for applications (excel macros maybe). I think he tried to learn php but gave it up. He also calls himself a software engineer. He makes some good money tho, he's in management.
I rarely see this with other engineering disciplines. Its always the computer programmers lol
Work hard! Don’t worry if we print money and triple the cost of your house and new mortgage! You are in the top 15%! Look you only pay 20% of the taxes, never mind all that money we printed! It’s not a tax!
So you agree with me that one premise was wrong, but you want to double down on your other premises, which are less wrong, but still lack meaningful nuance?
Where did that money go to? To the "socialist" stimulus checks?
The majority of money printed was loaned out to banks and other institutions, which promptly put that money back into the stock market and other investments.
Think about it this way. Would you rather have your investments crash and pay the same taxes, or take the tax increase and also have your investments go up? If you would prefer the second, you benefited from the government's actions.
In fact, I feel the lower class were the ones that the government took from, in the form of impending inflation.
Yeah, it's a loan, when you pay the loan back the money supply actually ends up contracting again and only the residual interest payments are actually added to the economy.
