Post by wvhsparent on Dec 28, 2010 12:27:28 GMT -5
Where Do You Rank as a Taxpayer?
by Kevin McCormally, Editorial Director
Thursday, December 23, 2010
Now that Congress has extended the Bush tax cuts for everyone -- rich and poor and everyone in between, ask yourself: How much of the tax burden do you bear today?
No issue seems to get under Americans' skin more -- or command more attention from politicians -- than whether taxes will rise or fall and, frankly, whose ox will be gored. The lame duck session of Congress has been filled with acid debate on this topic as lawmakers battled over what to do with the Bush tax cuts.
In the end, of course, our lawmakers kicked the can down the road a bit -- neither allowing the tax cuts to expire nor permanently extending them. Instead, there's a two year extension of the status quo. That means that, after a brief respite, taxes will be right back in the thick of things.
In the meantime, we have developed a tool to show how the nation's tax bill is distributed among its citizens. Are the wealthy coddled with tax favors? Is the middle class unfairly burdened? Our tool uses the latest IRS data to shine light on such issues. We'll also show you how your own income stacks up against your fellow Americans.
Are you ready to see where you fit in? With our simple calculator (see link above), enter a single number from your 2009 tax return and you'll instantly know the answer.
What the Numbers Show
The latest numbers from the IRS -- based on 2008 tax returns -- show that the top 1% of income earners paid 38.02% of individual income taxes paid. That's a lot, but it's actually a smaller share of the total tax bill than the top 1% paid in 2007. That year they paid 40.42%. We also learn from the IRS that, in 2008, the richest 1% of Americans made 20% of all the adjusted gross income reported. That's almost twice the 12.75% of total income earned collectively by the lowest-earning 50% of workers. Yes, 1.4 million taxpayers earn 20% of all income reported while 70 million share just 12.75%.
But get this: When it comes to taxes paid, an even wider discrepancy shows itself -- in reverse. Compared with that 38% of taxes paid by the top 1% of earners, the bottom 50% pay just 2.7% of the taxes collected.
These income and tax burden breakdowns come from information reported on 2008 individual income tax returns. Income categories are based on adjusted gross income (AGI), which is basically salary plus investment, rental and business income minus investment losses and expenses such as alimony paid, contributions to retirement plans, moving expenses and a few other costs.
(Note that these figures include only federal income taxes. According to one study, 56% of all wage earners pay more in Social Security and Medicare taxes than they do income tax and the percentage of those paying more payroll tax than income tax soars to 86% if you count both the employer and employee share of Social Security and Medicare taxes.)
For historical perspective, back in 1986, the top 1% of earners reported 11% of all income and paid 26% of the income taxes; the lower-earning 50% made 17% of the income and paid 6% of the nation's individual income tax bill.
finance.yahoo.com/taxes/article/111668/where-do-you-rank-as-a-taxpayer?mod=taxes-filing
by Kevin McCormally, Editorial Director
Thursday, December 23, 2010
Now that Congress has extended the Bush tax cuts for everyone -- rich and poor and everyone in between, ask yourself: How much of the tax burden do you bear today?
No issue seems to get under Americans' skin more -- or command more attention from politicians -- than whether taxes will rise or fall and, frankly, whose ox will be gored. The lame duck session of Congress has been filled with acid debate on this topic as lawmakers battled over what to do with the Bush tax cuts.
In the end, of course, our lawmakers kicked the can down the road a bit -- neither allowing the tax cuts to expire nor permanently extending them. Instead, there's a two year extension of the status quo. That means that, after a brief respite, taxes will be right back in the thick of things.
In the meantime, we have developed a tool to show how the nation's tax bill is distributed among its citizens. Are the wealthy coddled with tax favors? Is the middle class unfairly burdened? Our tool uses the latest IRS data to shine light on such issues. We'll also show you how your own income stacks up against your fellow Americans.
Are you ready to see where you fit in? With our simple calculator (see link above), enter a single number from your 2009 tax return and you'll instantly know the answer.
What the Numbers Show
The latest numbers from the IRS -- based on 2008 tax returns -- show that the top 1% of income earners paid 38.02% of individual income taxes paid. That's a lot, but it's actually a smaller share of the total tax bill than the top 1% paid in 2007. That year they paid 40.42%. We also learn from the IRS that, in 2008, the richest 1% of Americans made 20% of all the adjusted gross income reported. That's almost twice the 12.75% of total income earned collectively by the lowest-earning 50% of workers. Yes, 1.4 million taxpayers earn 20% of all income reported while 70 million share just 12.75%.
But get this: When it comes to taxes paid, an even wider discrepancy shows itself -- in reverse. Compared with that 38% of taxes paid by the top 1% of earners, the bottom 50% pay just 2.7% of the taxes collected.
These income and tax burden breakdowns come from information reported on 2008 individual income tax returns. Income categories are based on adjusted gross income (AGI), which is basically salary plus investment, rental and business income minus investment losses and expenses such as alimony paid, contributions to retirement plans, moving expenses and a few other costs.
(Note that these figures include only federal income taxes. According to one study, 56% of all wage earners pay more in Social Security and Medicare taxes than they do income tax and the percentage of those paying more payroll tax than income tax soars to 86% if you count both the employer and employee share of Social Security and Medicare taxes.)
For historical perspective, back in 1986, the top 1% of earners reported 11% of all income and paid 26% of the income taxes; the lower-earning 50% made 17% of the income and paid 6% of the nation's individual income tax bill.
finance.yahoo.com/taxes/article/111668/where-do-you-rank-as-a-taxpayer?mod=taxes-filing