We need urgent reform of both Corporate and individual tax codeExperts and politicians opine we need lower corporate tax rates to be globally competitive .Yes but it cannot be done in isolation , we need to ensure all corporations pay the lower tax rate ,that special tax concessions are ended and multi nationals pay taxes at the lower rate on earnings relative to their income in the USA.On individual tax we also need to end special concessions ,carried interest comes to mind.In addition increase tax rate on dividend income to global levels .This resulting increase in Federal tax revenue should be used to reduce tax rates for those earning less than $100000All this will mean increased consumer demand from small business and the middle class, more jobs and less income inequality .Also a better environment for foreign investment in the USA
I am no high roller and believe you me, I am paying 55%.
It wouldn't change a thing, but at least it'd be more honest if this 'democracy' what it has been for some time: a corporocratic plutocracy.
A revolution is long overdue.
The average tax rate of all households who actually pay income taxes is not 11%. Remove the 40% of households who don not earn enough to pay income tax, and the average tax rate is significantly higher. Try dividing 11% by 60% to get some idea of where the true average lies. I can do it for you if your math skills match your comprehension.
So how is it then that the average tax rate for all households is 11%? Clearly most of the wage earners are not paying anywhere near their top tax rate but of course it's only the high rolling investor types who have to pay more. Maybe this author should actually earn his living by doing some real research?
If you don't like the "double taxation", then skip the benefit of the corporate structure.
A regular tax rate for investments would be fair IF the gains were indexed against inflation. Right now, an investment that merely tracks inflation (and thus doesn't actually grow at all in real terms) incurs taxes when the investment is sold. This is clearly illogical.The lower tax rate for investments is a flawed solution, but just getting rid of that without indexing capital gains would be very unfair.
I seem to recall that St. Reagan's original tax reform act in 1986 treated all income the same, and that the Democrats changed that.
Because those of us in the middle generally pay a lot more than18%. I pay about 1/3 in federal, state and city.
Copley -- please do the math. 40% of all taxpayers pay ZERO income tax, because of their poverty, etc., the column states. Obviously, that brings the overall average way down -- to 11%. The point is that if you eliminate that 40% from the total, most of the other 60% are paying a higher rate than the super-rich. That isn't fair, is it? Cheers.
Jonathan is correct, the AMT, which was intended to discourage taxpayers from using tax free and other taxed advantaged investments to avoid income tax, now applies to taxpayers even if they have no investments at all. All tax incentives for higher income wage earners to make charitable contributions are virtually eliminated.
Why on earth should we expect people like Boy George Bush to pay taxes on his windfalls like when The Saudi Bin Laden Group, dba Harken Oil, buys his failure of an oil company? Or when his $65K investment, and the use of eminent domain, in the Texas Rangers, returns tens of millions?Why should the five Romney boys, handed a combined $100 million by their thieving, pension stealing, failed candidate of a father, pay their fair share?
Your comment fails to grasp the issues. There is a difference between effective rates and marginal rates. As the piece points out, the average effective rate is lowered by the fact that it includes all households, not just those with income that is sufficient to generate a return, In other words, all the hero income/zero tax households are lowering the average. The ones getting killed here are the middle class who pay high marginal AND effective rates since they earn good money but it's classed as ordinary income. The folks in the tier above them take advantage of both lower rates for investment income and the benefits of professional tax planning strategies that would cost a middle class household its entire income.
Things will be different after the revolution.
About capital gains tax:There is absolutely no justification that unrealized capital gains at death are untaxed.Consider a person with a 401k /403B plan.All his capital gain accumulation is taxed as ordinary income upon withdrawal.Consider a fat cat who buys a stock and holds it.His long term capital gain is taxed at the lower capital gains rate.Why the double standard.In both cases the holding grows tax free.That the 401K/ 403B is with pre tax income is a justification is not valid.TIAA's AFTER tax annuity has all the capital gain accumulation taxed as ordinary income upon withdrawal.The favorable treatment of capital gains is just a tax dodge enjoyed mainly by the rich.The top .1% receive half the capital gain income.
Politicians, regardless of party, basically are in the business of soliciting contributions for the next campaign. Those who give the most receive the most favoritism. They, in essence, are the customers, and the customer is always right.
If it's so wrong to tax capital gains at a lower rate than ordinary income, perhaps you can explain why:CanadaFranceGermanyHong KongThe NetherlandsNew ZealandBritainand nearly every other developed country tax capital gains at a lower rate than ordinary income, or not at all?
And their Tea Party backers probably don't read at all - education is not a big thing in most of those Gerrymandered Red States.
Yes, Jim, but what a tradeoff. You used to live in New York. Now you live in Texas. Most of us are unwilling to lower our standards THAT much.