Fair share in taxes?
I keep hearing the wealthy should pay their fair share.
What do you think would be a 'fair share' of their income in taxes?
20%, 30%, 50%, 80%, 90% or what number? (Total- federal and state income taxes)
Just curious because I hear that phrase so much but don't ever hear a figure attached to it...
No one, particularly a politician, wants to put a number on it because then they would be locked in. Most people don't know what high income wage earners pay in taxes. Wage earners, not people who make their money off of investments. (Your income tax rate is much higher if you earn your money as a wage (W-2) than if you get capital gains and dividends (1098)).
PA has a flat tax rate 3.07% with local taxes of about 1% (much higher in Pgh and Philla.). So I think a federal tax rate of 25% plus the state and local of about 5% for a grand total of 30%. There will still be other taxes, fees, etc. that they will have to pay, just like everyone else.
This is a widely debated topic. The reality is the rate is somewhat irrelevant. Tax rates have no connection to tax revenue. There is a maximum amount of ones economic activity that can be seized by Gov't before economic activity changes.
In 1952 the highest tax rate was 92% and the Federal Gov't collected 18.36% of GDP.
In 1988 the highest rate was 28% and the gov't collected 18.79% of GDP.
Since the creation of the income tax the gov't always collects around 17-18% of GDP (economic activity) Whether or not it is fair or not is a matter of opinion. But history shows that when rates increase substantially people either declare less income our reduce activity.
As of now the actual portion of the tax burden paid (meaning revenues received by the treasury from personal income taxes) breaks down as follows as per 2008 tax receipts. These #'s don't move much from year-year.
The top 0.1% of earners paid 16.4% of all income tax revenue collected.
The top 1% of earners paid 38.02% of all income tax revenue collected.
The top 10% of earners paid 69.94% of all income tax revenue collected.
The top 25% of earners paid 86.34% of all income tax revenue collected.
The top 50% of earners paid 97.30% of all income tax revenue collected.
Essentially the bottom 50% of earners paid about 3% of income tax revenue.
This means that the top 0.1% of earners already pay more than the bottom 80% of earners.
What is or isn't fair is up to each person's opinion. However in my view this is already quite lopsided.
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