4 ms·
One thing that’s not really appreciated is that the US has a very progressive income tax. In aggregate the top 10% account for 70% of federal income tax receipt
by dcolkitt 6y ago
One thing that’s not really appreciated is that the US has a very progressive income tax. In aggregate the top 10% account for 70% of federal income tax receipts at an average effective rate of 22%. The bottom 50% of households account for only 3% of federal income tax receipts, paying an effective rate of 4%.
European economies manage to collect a higher tax base as a percent of GDP. Some of this comes from higher taxes on the very wealthy. But the vast majority comes from much higher tax rates on the middle class, particularly the upper middle class- those around the 75th percentile. This is done three ways.
One middle class tax bracket rates are higher. In France, the 25k-35k bracket pays a 30% tax rate. The US equivalent is 12%. Two is having top rates start at much lower levels. In France, the top rate of 45% starts at 158k, versus the US top rate of 37% which starts at 518k. Finally a sizable percent of taxes are captured through regressive VAT taxes.