Where are You on the Inverted Income Tax Pyramid?

April 14, 2009 by  
Filed under Taxes

This being April 14 – and with Mr. ToughMoneyLove having to write a big check to the IRS tomorrow – I feel the need to share this link to a piece written by Ari Fleischer about our inverted income tax pyramid.

Here is a teaser quote from the article:

When you make almost 26% of the income and you pay only 0.6% of the income tax, that’s a good deal, courtesy of those who do pay income taxes. For the bottom 40%, the redistribution deal is even better. In 2001, these 43 million Americans, who earn less than $30,500, made 13.5% of the nation’s income but paid no income tax. Instead, they received checks from their taxpaying neighbors worth $16.3 billion. By 2005, those checks totaled $33.3 billion.

Please read the rest – and then shake your head in despair and desperation.


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Comments

6 Responses to “Where are You on the Inverted Income Tax Pyramid?”
  1. Retiredat40 says:

    There is just one little item that they always forget to mention and that is that the top 1% has 90% of the nation’s wealth. I’ll trade with them any day if they’d like my lower tax rate.

    The govt knows that you can’t get blood from a turnip. You gotta tax those that have it. And they’ve got plenty of it and despite all this unfair taxation, the margin just keeps getting bigger.

  2. SJ says:

    Awesomeeee…

    The counter argument would be a marxist approach right =)?

  3. Ahead of the curve? says:

    What about the fact that these lower income taxpayers do in fact pay a significant amount of taxes in the form of state sales taxes, state property taxes, Federal ocial security and medicare taxes? These taxes take a big bite out of the lower income salary. In fact if you compare ALL TAXES paid (including the Federal income tax) I suspect you’d find a bit more sympathy for those lower income types. In fact the earned income tax credit (pure socialism in many people’s opinion) actually has done a significant amount to pull lower income children and lower income earners out of poverty.

  4. Ahead of the curve? says:

    Taken from a Time magazine blog refuting this piece: “If you define “burden” as the percent of your income that goes to income taxes, it has actually gone down over the past decade for those at top 10% of the income distribution (as it has for every segment of the income distribution). The effective federal income tax rate for the top decile was 16% in 2006, the most recent year for which data is available, down from 18.3% in 1996—and 18.2% in 1980, before the dawn of the Reagan revolution. It went even lower in the Reagan years, bottoming out at 15.4% in 1985. The percentage of all income taxes paid by those in the top 10% has gone up over the years, but this has little to do with tax rates. It’s because the percentage of income going to the top 10% has been rising, to 41.6% in 2006 from 36.5% in 1996 and 30.6% in 1980. (These numbers are all from the Congressional Budget Office.) So Fleischer real complaint appears to be with rising income inequality. Right?”

  5. Rick Beagle says:

    This is a whine article completely written in a state of disgust after doing your income taxes right? If being poor is such a good deal, then give up your lucrative salary and become a poor day laborer. Then, you can do that happy dance every April 15th! Don’t let that whole worrying about food on the table, medical concerns and the plethora of other issues involving money interrupt your “low tax” dance.

    Get a grip, and pay your taxes.
    Rick Beagle

  6. Rick Beagle says:

    By the way, you realize that you made an excellent case for why the concentration of the wealth and the policies that encourage that trend are a bad idea? If you concentrate the wealth, you concentrate the taxes… duh.

    People on the lower end of the scale do not want to be there and most are working to improve their lot (many of those are people just starting out). I spent a large number of years in this category both as a member of the military and as a student in college (my own lost decade). I will be damned if I apologize to anyone for being poor during this time frame….

    Peace.
    Rick Beagle

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