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The Myth of “Tax Cuts For Billionaires”
The US income tax system is still a progressive tax system, where those with the most income pay not only the most taxes but also the highest tax rates.
I went to the IRS website (You can Google IRS TAX STATS) and found the breakdowns for income taxes paid for several years. Let’s look at 2020, Trump’s last full year in office…
The richest Americans — those with incomes over 2 million dollars in 2020 — paid an effective tax rate of 26.68%.
The middle class — those with incomes between 75,000 and 200,000 dollars — paid an effective tax rate of 10.12%.
The poorest — those with incomes less than 25,000 dollars — paid an effective rate of 1.04%.
How does this compare to, say, Obama’s last year? Let’s look at 2016…
The poorest Americans paid an effective tax rate of 1.7%. Between 2016 & 2020, their effective tax rate went down by almost half, from 1.7% to 1%.
The middle class paid an effective rate of 11.69% in 2016. Their taxes also went down, but not nearly by almost half. They went from an effective tax rate of 11.69% in 2016 to 10.01% in 2020.
And the richest? They got a break too. But a tiny one. Their effective tax rate went from a rate of 27.0% to 26.67%.
Published in General
Truth!
We can rethink it, but simplifying the tax code is counter the selfish interests of 1) politicians and 2) lobbyists.
Politicians have an interest in maintaining complexity so they can sell favors for “campaign contributions” and other bribery.
Lobbyists (and in a perverse manner tax accountants) have an interest in maintaining complexity so they can sell to clients their services in navigating the complexity.
Preach!
When the government robs Peter to pay Paul it helps if Paul hates Peter.
I roll my eyes when I see some pundit declare that raising taxes on the rich and giving money to others is popular. Gee, you think so, Professor? Free booze is popular, too, but declaring that everyone is authorized to steal whatever they want from their local liquor store is not going to lead to happy long-term results.
That’s why you get the government to steal it instead.