The most progressive tax code of developed democracies is...

[rwh11385]

The United States.

For anyone who wants to claim that it is "unfair" to the middle class or that the rich have it too good and should "pay their fair share", they ought to read up on reality: http://reason.com/archives/2012/04/1...american-style

Contrary to common belief, the American tax system is more progressive than those of most industrialized democracies. A 2008 report by the Organization for Economic Cooperation and Development (OECD), titled “Growing Unequal,” gave two different estimates of the progressivity of tax systems in 24 industrialized countries. One ranking found that the U.S. has the most progressive tax structure; in the other Ireland beat America by a nose. France, which has a notoriously generous welfare state, ranked 10th out of 24 in both of the OECD progressivity indexes.

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Bartlett calculated that the “average [European] worker making an annual income in the $40,000 to $50,000 range is in the top marginal tax bracket.” A comparison of France and the U.S. is revealing: The top marginal income tax rate in the U.S. is 35 percent and kicks in at $379,000. In France the top rate is 41 percent and kicks in at $96,000.

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European countries generally have lighter taxes on capital as well, another regressive feature.

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Finally, the U.S. tax code allows large deductions and personal exemptions for low-income households, distributing social benefits in the form of policies such as the child tax credit and the earned income tax credit. These adjustments increase progressivity.

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These social spending figures should not be confused with the amount a government spends to help poor people. Many tax breaks disproportionately benefit the middle class, not the least well off. The same is also true for spending; only 14 percent of the U.S. budget goes to lower-income Americans.

Which raises the issue of fairness. Basic principles of fairness tell us that people with roughly the same income should pay roughly the same amount of taxes. Unfortunately, the amount of taxes Americans pay today has little to do with how much money they make and more to do with how many kids they have, whether they rent or own a house, which state they live in, and whether they make their money in the form of wages or capital gains. This system is not only unfair; it is also highly inefficient, as the disparities encourage taxpayers to shift their income and investment around to reduce their tax burden.

http://blog.american.com/2012/04/this-chart-shows-just-how-progressive-the-u-s-tax-code-already-is/

http://www.cato.org/publications/congressional-testimony/increasing-progressivity-us-taxes-shrinking-tax-base

Even aside from the uniquely generous U.S. tax credits, the OECD study found the ratio of taxes paid to income received among the top 10 percent was by far the highest in the U.S. at 1.35, compared with 1.1 for France, 1.07 for Germany, 1.01 for Japan and 1.0 for Sweden.

By 2007 the average tax rate fell to minus 6.8 percent for the poorest quintile. From 1979 to 2007, the average tax rate fell by 110% for the second quintile, by 56% at the middle, 39% for the fourth quintile, and by 15% for the top 1%.

http://www.mrctv.org/videos/fareed-zakaria-shocker-us-tax-code-too-progressive-rich-pay-more-other-countries

Fareed Zakaria Shocker: U.S. Tax Code Too Progressive, Rich Pay More Than In Other Countries

[tjts1]

You buried the headline.

Which raises the issue of fairness. Basic principles of fairness tell us that people with roughly the same income should pay roughly the same amount of taxes. Unfortunately, the amount of taxes Americans pay today has little to do with how much money they make and more to do with how many kids they have, whether they rent or own a house, which state they live in, and whether they make their money in the form of wages or capital gains. This system is not only unfair; it is also highly inefficient, as the disparities encourage taxpayers to shift their income and investment around to reduce their tax burden.

[z31maniac]

Yeah, lets raise the capital gains rate. That never has affected tax revenue to the Feds.

[mrsleeve]

"Buffet rule". Was blocked in the senate today.

the rich need to pay their fair share dammit ..............................

[rwh11385]

"Buffet rule". Was blocked in the senate today.

the rich need to pay their fair share dammit ..............................

Good riddance. Obviously the ignorant masses will complain. And be pissed they can't vote themselves more money.

If they did pay their fair share, they'd certainly be paying less...

Oh well, people don't really care to pay much attention to facts:

http://www.policymic.com/articles/3701/who-really-benefited-from-the-bush-tax-cuts

In sum, the tax cuts enacted by Reagan and Bush have benefited the poor and middle class more than the wealthy. Their taxes have been cut more drastically than wealthy Americans, and many have been taken off the tax rolls altogether. In 2009, a majority of Americans paid no federal income tax. The poor and middle class also pay a far lower percentage of the total revenue pie now. Despite across the board tax cuts, revenues have remained essentially constant.

In 1979, the total effective federal tax rate (including payroll taxes, excise, capital gains, estate, and corporate taxes) was 8% for the poorest Americans and 18.6% for middle income earners. Thanks to the Reagan and Bush tax cuts, those rates fell 50% and 23%, respectively. The top one percent of earners had their total effective tax rate fall 21%over the same time period.

The tax code has also become more progressive. As indicated above, the top 1% of earners now pay an effective income tax rate of 19%, nearly six times the percent paid by middle income earners (3.3%). In 1979, the differential between the rate paid by the top one percent was less than three times that of middle class earners.

Not surprisingly, the wealthy are also paying more of the tab now than they did 30 years ago. In 1980, the top 5% of income earners paid 37% of all income tax revenue, while the bottom 50% paid 7%. By 2009, the top 5% of earners paid a whopping 59%, while the bottom half of earners paid just 2.25% of the total pie.

The wealthy also pay more than their representative income would dictate. According to the most recent data available from the IRS, the top 1% earned 17% of the total income in 2009. Meanwhile, they paid 37% of all the taxes paid. The bottom half of earners took in 13% of the 2009 total taxable income, yet paid just 2.25% of the total tax revenue.

But haven’t all these tax cuts blown a hole in our budget? The answer is no. Despite across the board tax cuts, revenues remained at or near historic levels as a percentage of GDP until the financial collapse in 2007. In fact, tax revenue as a percentage of GDP was exactly the same in 1979 as it was in 2007: 18.5%.

[2761377]

'fairness' and that which does the most good for the most people are not necessarily the same thing. the idea that they are is leftist ideology.

[mrsleeve]

Heeter. Your scarasm meeter was pegged out I hope on the last line of my last post

[rwh11385]

Heeter. Your scarasm meeter was pegged out I hope on the last line of my last post

Yeah, I read it as sarcasm, just wanted to re-iterate both of our actual views before transitioning to how them "bush tax cuts for the rich" really benefited the rest more. I didn't want it to seem like I was saying Good riddance to rich paying their 'fair' share or have potential confusion.

[joshh]

I just really like the idea of paying taxes on my taxes....after I've already been taxed.

[mar1t1me]

Good riddance. Obviously the ignorant masses will complain. And be pissed they can't vote themselves more money.

If they did pay their fair share, they'd certainly be paying less...

I rarely see any consideration of how the rich benefit disproportionately from tax-payer funded infrastructure in conducting their businesses.

It's ever more clear that staying rich is what the rich do best. Corporate profits are at a 60 year high, but job creation is not. One does not necessarily follow the other.

[priapism]

The whole "pay their fair share" argument is rather blunted by the fact that capital is mobile. If a state raises taxes, it becomes worth it for someone who's wealthy to move to another state. If a country raises taxes it becomes less attractive a place to emigrate to. "Fairness" is a nice concept, but it's a competitive world, and people vote with their wallets, same as they do for any other product or service. You go places where you get more for your money.

Efficiency is the key here, but something the class warfare-ists don't mention because it's not about that--it's about punishing those who make more than you. Admit it.

[rwh11385]

I rarely see any consideration of how the rich benefit disproportionately from tax-payer funded infrastructure in conducting their businesses.

It's ever more clear that staying rich is what the rich do best. Corporate profits are at a 60 year high, but job creation is not. One does not necessarily follow the other.

All this post is full of is misguided rhetoric. . .

Rich staying rich? Millionaire club membership is very volatile and dynamic, with many people moving up and down, businesses going boom or bust and values greatly changing.

Corporations need to create a job for each person, regardless of supply of worker skills or abilities? No. Companies make products or provide services as they can to serve customers, not absorb workers and pay them if they don't benefit.

This is AMERICA! Self-employment and entrepeunership are available options here. Did Bill Gates, Steve Jobs, or Mark Zuckerberg wait for someone to create a job for them? Did they get rich on the benefit of public infrastructure?the tired claim that the Rich get rich from public goods and should pay more ignore that they pay a lot already and examples don't always meet how all business models operate.

Corporations face the highest tax rates in the developed world, and if those evil rich company owners need to be punished for their businesses being here they will just move. Look at Sears wanting to relocate from IL. Lots of states are willing to offer tax benefits to bring their operations in. The same happens across national borders. Don't democrats want the US to competitive??

[rwh11385]

The whole "pay their fair share" argument is rather blunted by the fact that capital is mobile. If a state raises taxes, it becomes worth it for someone who's wealthy to move to another state. If a country raises taxes it becomes less attractive a place to emigrate to. "Fairness" is a nice concept, but it's a competitive world, and people vote with their wallets, same as they do for any other product or service. You go places where you get more for your money.

Efficiency is the key here, but something the class warfare-ists don't mention because it's not about that--it's about punishing those who make more than you. Admit it.

Exactly. How much corporate taxes are collected if a company relocates to a place like Singapore? Or state income tax if they move to another state?

[herbivor]

'fairness' and that which does the most good for the most people are not necessarily the same thing. the idea that they are is leftist ideology.

I thought that was right wing ideology. I'm confused, what are RWNJs considering fair again, that we all pay the same percentage? I don't see how that's fair, mathematically proportionate yes, but fair, uh not even close.

[rwh11385]

I thought that was right wing ideology. I'm confused, what are RWNJs considering fair again, that we all pay the same percentage? I don't see how that's fair, mathematically proportionate yes, but fair, uh not even close.

Even Sweden thinks it is fair for the people who earn 10% of income to pay 10% of the taxes.

And even them evil "Bush" tax rates "for the rich" didn't change the rates paid by quintile that much:



I think it's extreme irony for people to be complaining about the fairness of a tax code that puts more of the burden on the rich than any other developed country, errr, I mean the fairness for the middle class and that the rich have it too good. Might have a case the other way around...

Quintile --- % of Taxes Paid / % of Total Income
Bottom --- 33.3%
Second --- 60.0%
Third --- 70.5%
Fourth --- 82.1%
Top --- 127.7%

If there is anything more ironic, I'd be shocked, but compared to the other nations in the study... American's middle class has it a lot better off and politicians are still catering to them and promising to not increase the tax burden on them. At the same time those rich people 'ought to pay their fair share' , but do the most in the developed world.