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by jameshart
1868 days ago
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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. |
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$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.