Do Top Earners Pay Too Little?
Taxpayers earning more than $1 million a year pay an average U.S. income tax rate of nearly 19 percent, according to the Tax Policy Center. The top individual tax rate is 35 percent. Loopholes and other deductions help lower that rate so that most Americans pay a much lower effective rate. A middle-income earner making between $50,000 and $75,000 pays an average 5.7 percent effective rate, while a low-income worker making between $10,000 and $20,000 pays no income tax. Effective rates vary wildly within income groups, however, with some people paying far less than average and some far more.
Critics say this underscores the need for a minimum tax….
via Dems Lay Trap for GOP with Buffett Rule.
Comment:~ I would say this underscores the need to scrap the income tax model which ends up with “some people paying far less than average and some far more” and to impose a flat value-added tax (consumption tax) of around 15%. Impact on the poor could be reduced through subsidies — not tax exemptions which are an administrative nightmare — of basic foodstuffs and other necessities.
Interesting that the proposed “Buffett Tax” would only raise $47 billion if imposed on taxpayers earning more than $1 million. Less than 4 percent of the annual $1.2 trillion federal budget deficit that it is supposed to solve.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.