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45% of households pay no income tax at all. I'm not saying taxes are fair or balanced or anything like that. I'm just responding to your claim that the tax code

45% of households pay no income tax at all. I'm not saying taxes are fair or balanced or anything like that. I'm just responding to your claim that the tax code is progressive by a "very slim margin". https://www.marketwatch.com/story/45-of-americans-pay-no-federal-income-tax-2016-02-24 https://www.marketwatch.com/story/45-of-americans-pay-no-fed...

krastanov 9y ago
I thought that "progressive" and "regressive" refer to what percentage tax you pay given what bracket (in dollars, not in percentile) you are. I would have thought that the 45% mentioned in the article is proof of how many Americans are poor, not that the tax plan is progressive. Even with a moderately regressive income tax the rich will be paying more total tax even though they are paying a smaller percentage of their income as tax. Therefore you can not make any conclusions about the fairness of a tax by saying that the top 20% of earners pay 80% of the total amount of income tax (it would have been absolutely crazy if this was not the case, unless everybody had the same income). As such, I do not see how this article can be used to say anything about whether the tax is progressive or regressive (and as you mentioned, whether it is fair altogether).
- camiller 9y ago
  They are not well defined terms and are meant more to evoke an emotional response. Progressive does mean that you pay at an increasing rate the higher your income is. A flat percentage tax (example everyone pays 18% no loopholes) should be neither progressive or regressive but most US liberals would still call it regressive because it would be if you consider the current rates as a baseline. A truly regressive plan would actually decrease rates as you went higher in income. Neither Federal or any state that has income taxes has a truly regressive tax schedule. Edit: I suppose if you figure in sales taxes into overall tax burden you could call some states regressive. But that is not a feature of their income tax rates.
- ameister14 9y ago
  Yes, and the top earners pay 396% more of their income than the bottom as far as federal income tax is concerned - this is traditionally understood to mean it's highly progressive as a system.
camiller 9y ago
45% of households pay no or negative income tax at all. Remember some of them get more back than they would have paid, so negative taxes paid. in 2014 the top 1% of income earners earned 20.6% of all income and paid 39.5% of income taxes collected. the bottom 50% earned 11.2% of income and paid 3.45% of income taxes. https://files.taxfoundation.org/20170201091804/TaxFoundation-FF540.pdf https://files.taxfoundation.org/20170201091804/TaxFoundation...
Retric 9y ago
Only if you ignore Social Security and Medicare which add up to 15.3% income taxes paid by all working people making federal taxes more regressive than you might think.
TheCoelacanth 9y ago
Federal income tax rates are highly progressive, but the total tax burden paid to all levels of government is only slightly progressive (and actually slightly regressive above the 99th percentile of income). WaPo published an article showing the total tax burden by income. The bottom 20% pay an average of 17.4%. It gradually increases to around 30% for the 80-99th percentiles then actually drops down to 29% for the top percentile. [1] [1] https://www.washingtonpost.com/news/wonk/wp/2012/09/19/heres-why-the-47-percent-argument-is-an-abuse-of-tax-data/ https://www.washingtonpost.com/news/wonk/wp/2012/09/19/heres...

krastanov 9y ago

I thought that "progressive" and "regressive" refer to what percentage tax you pay given what bracket (in dollars, not in percentile) you are. I would have thought that the 45% mentioned in the article is proof of how many Americans are poor, not that the tax plan is progressive. Even with a moderately regressive income tax the rich will be paying more total tax even though they are paying a smaller percentage of their income as tax. Therefore you can not make any conclusions about the fairness of a tax by saying that the top 20% of earners pay 80% of the total amount of income tax (it would have been absolutely crazy if this was not the case, unless everybody had the same income). As such, I do not see how this article can be used to say anything about whether the tax is progressive or regressive (and as you mentioned, whether it is fair altogether).

camiller 9y ago
They are not well defined terms and are meant more to evoke an emotional response. Progressive does mean that you pay at an increasing rate the higher your income is. A flat percentage tax (example everyone pays 18% no loopholes) should be neither progressive or regressive but most US liberals would still call it regressive because it would be if you consider the current rates as a baseline. A truly regressive plan would actually decrease rates as you went higher in income. Neither Federal or any state that has income taxes has a truly regressive tax schedule. Edit: I suppose if you figure in sales taxes into overall tax burden you could call some states regressive. But that is not a feature of their income tax rates.
ameister14 9y ago
Yes, and the top earners pay 396% more of their income than the bottom as far as federal income tax is concerned - this is traditionally understood to mean it's highly progressive as a system.

camiller 9y ago

45% of households pay no or negative income tax at all. Remember some of them get more back than they would have paid, so negative taxes paid. in 2014 the top 1% of income earners earned 20.6% of all income and paid 39.5% of income taxes collected. the bottom 50% earned 11.2% of income and paid 3.45% of income taxes. https://files.taxfoundation.org/20170201091804/TaxFoundation-FF540.pdf https://files.taxfoundation.org/20170201091804/TaxFoundation...

Retric 9y ago

Only if you ignore Social Security and Medicare which add up to 15.3% income taxes paid by all working people making federal taxes more regressive than you might think.

TheCoelacanth 9y ago

Federal income tax rates are highly progressive, but the total tax burden paid to all levels of government is only slightly progressive (and actually slightly regressive above the 99th percentile of income). WaPo published an article showing the total tax burden by income. The bottom 20% pay an average of 17.4%. It gradually increases to around 30% for the 80-99th percentiles then actually drops down to 29% for the top percentile. [1] [1] https://www.washingtonpost.com/news/wonk/wp/2012/09/19/heres-why-the-47-percent-argument-is-an-abuse-of-tax-data/ https://www.washingtonpost.com/news/wonk/wp/2012/09/19/heres...