There are 135.7 million taxpayers in the USA. 1.3 million are in the top 1%. 6.8 million are in the top 5%, and 13.6 million are in the top 10%. This groups share of total income is 22%.
The Top 1% earns about 21% of total US income. They make $388,806 or higher, with an average tax rate of 22.80%, and turn in a share of taxpayer money about 40%.
The Top 5% earns $153,542 or higher and pays 60% of taxes, with an average tax rate of 20.7%. The groups share of total income is 36.7%.
The Top 10% earns $108,904 or higher and pays 70.68% of all taxes, with an average rate of 18.9%. The groups share of total income is 47.%.
The 40% below that make between $32k and $108k and result in 28% of all tax income.
The bottom 50% of income earners (67 million), contribute 3% of tax income and make less than $32k.
History of Tax Rates
1915 - Bottom rate: 1%, Top rate: 7%.
WWI - 4% and 73%.
1925-1932 - 1% and 25%
1942-1945 - 19% and 88%
1965-1981 - 14% and 70%
1981 12% and 50%
1987 11% and 38.5%
1993-2000 15% and 40%
2003-2008 10% and 35%
Thoughts on this? Between 1971 and 1981 there were 15 brackets of income and associated tax rates. Since 1993 there's been 5 or 6, depending on the year. Reagan lowered the highest earners rate from 70% to 38.5%. Bush came in and raised taxes on the lowest earners from 11% to 15% and lowered the highest earners rate from 38.5% to 31%. Clinton kept the low end rate unchanged, but increased the highest earners from from 31% to 39.6%.
Implications
I would guess that at least three of my four brothers (and perhaps all), fall into the Top 10% of all tax earns, as I'm sure they make family incomes of $109k or above. My guess is that Sam's family (one brother), is right about at that level, and while I'm not sure Alex is there yet (another brother), his earning potential is the highest of all going forward. They belong to a group that earns 47% of all income in the US. There's 13.6 million of Americans in this group.
Now, the Top 5% of people make $153k or more. They earn 36.7% of total income, which means that the bottom 95% make less than $153k and earn 63.3% of all income.
Conclusions
As this is the political season, lets revisit Obama's plan to cut taxes on the bottom 95% of taxpayers. This would mean that the group that earns 63% of income would pay less in taxes. This is the stratified middle class that earns less than $153k. so Obama should say that those families earning less than $153k will see a tax break and small businesses earning less than $250k will receive a tax break.
Corporate tax rates? For companies earning $18.3 million a year or more, the corporate tax rate is currently 35%.
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Let's create a hypothetical: Let's pretend the Republicans get what they've wanted all this time. We'll go Libertarian and get rid of all federal taxes. First off, why stop there? Is it fair to have no federal taxes but impose state and local taxes? Okay, that was just an aside.
So, let's pretend we have no federal taxes. Well, first off, the only way any kind of government will be able to pay for itself is to have it's lawmakers and insitutions supporting them paid for. So, this means without federal taxes coming in to pay for them, it has to come from the states. So, not only do states no longer get subsidies or transfer payments, they have to be strong enough to give money back to the federal government. More than that, what about the military? Who's going to pay for that if there are no federal taxes? We'd have forget about making pledges of assistance too.
So, with everything at the state level, state taxes would have to go up dramatically. Essentially, you'd be taking whatever you'd be paying to the federal government and pay it to the state government instead. So, this is really a clerical switch more than anything. No doubt, governors would have more power, but what else? For one, there could be no federal grants to students hoping a leg up to go to college. All of these kinds of issues (and many more), ignore the fact that there is hardly parity among the states. Some states make much more than others and sure they'd like this deal, but what about all the others? The ironic thing in all this? Those states that benefit most by having a federal government and need government assistance most are Republican states.
The Top 1% earns about 21% of total US income. They make $388,806 or higher, with an average tax rate of 22.80%, and turn in a share of taxpayer money about 40%.
The Top 5% earns $153,542 or higher and pays 60% of taxes, with an average tax rate of 20.7%. The groups share of total income is 36.7%.
The Top 10% earns $108,904 or higher and pays 70.68% of all taxes, with an average rate of 18.9%. The groups share of total income is 47.%.
The 40% below that make between $32k and $108k and result in 28% of all tax income.
The bottom 50% of income earners (67 million), contribute 3% of tax income and make less than $32k.
History of Tax Rates
1915 - Bottom rate: 1%, Top rate: 7%.
WWI - 4% and 73%.
1925-1932 - 1% and 25%
1942-1945 - 19% and 88%
1965-1981 - 14% and 70%
1981 12% and 50%
1987 11% and 38.5%
1993-2000 15% and 40%
2003-2008 10% and 35%
Thoughts on this? Between 1971 and 1981 there were 15 brackets of income and associated tax rates. Since 1993 there's been 5 or 6, depending on the year. Reagan lowered the highest earners rate from 70% to 38.5%. Bush came in and raised taxes on the lowest earners from 11% to 15% and lowered the highest earners rate from 38.5% to 31%. Clinton kept the low end rate unchanged, but increased the highest earners from from 31% to 39.6%.
Implications
I would guess that at least three of my four brothers (and perhaps all), fall into the Top 10% of all tax earns, as I'm sure they make family incomes of $109k or above. My guess is that Sam's family (one brother), is right about at that level, and while I'm not sure Alex is there yet (another brother), his earning potential is the highest of all going forward. They belong to a group that earns 47% of all income in the US. There's 13.6 million of Americans in this group.
Now, the Top 5% of people make $153k or more. They earn 36.7% of total income, which means that the bottom 95% make less than $153k and earn 63.3% of all income.
Conclusions
As this is the political season, lets revisit Obama's plan to cut taxes on the bottom 95% of taxpayers. This would mean that the group that earns 63% of income would pay less in taxes. This is the stratified middle class that earns less than $153k. so Obama should say that those families earning less than $153k will see a tax break and small businesses earning less than $250k will receive a tax break.
Corporate tax rates? For companies earning $18.3 million a year or more, the corporate tax rate is currently 35%.
-------
Let's create a hypothetical: Let's pretend the Republicans get what they've wanted all this time. We'll go Libertarian and get rid of all federal taxes. First off, why stop there? Is it fair to have no federal taxes but impose state and local taxes? Okay, that was just an aside.
So, let's pretend we have no federal taxes. Well, first off, the only way any kind of government will be able to pay for itself is to have it's lawmakers and insitutions supporting them paid for. So, this means without federal taxes coming in to pay for them, it has to come from the states. So, not only do states no longer get subsidies or transfer payments, they have to be strong enough to give money back to the federal government. More than that, what about the military? Who's going to pay for that if there are no federal taxes? We'd have forget about making pledges of assistance too.
So, with everything at the state level, state taxes would have to go up dramatically. Essentially, you'd be taking whatever you'd be paying to the federal government and pay it to the state government instead. So, this is really a clerical switch more than anything. No doubt, governors would have more power, but what else? For one, there could be no federal grants to students hoping a leg up to go to college. All of these kinds of issues (and many more), ignore the fact that there is hardly parity among the states. Some states make much more than others and sure they'd like this deal, but what about all the others? The ironic thing in all this? Those states that benefit most by having a federal government and need government assistance most are Republican states.
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