How we pay taxes - Atlantic

[travelover]

Interesting article showing historical data on where the budget comes from and where it goes, in mostly graphical format.

How We Pay Taxes: 11 Charts - Derek Thompson - The Atlantic

 

[JOHNNIE36]

travelover, I started to review all the graphs and got a headache. Had to stop but will resume tomorrow sometime. Very interesting stats. Thanks for the thread.

 

[samclem]

Travelover,
Thanks for the link. Like most discussions of taxes, this one came pre-loaded with the author's viewpoint. It's entirely bogus to use historic tax rates on high income earners as a means to discuss tax burden on these individuals. In the "old days" the top tax rate exceeded 90%, but there were so many loopholes and special treatments that virtually no one paid it. Not so today.

But this chart from his article does talk about tax burden:

​

It was good of him to include it. I wish he'd said if it was income tax or all taxes, especially after calling out others for failing to make that distinction. (I suspect this is FIT alone)

Since he used the conventional quintile income breakdown frequently, it would have been useful for readers to have seen where these fall in real numbers. For 2011:
0-20% of households: $0 - $20,259
20-40%: tops at $38,514
40-60%: tops at $62,433
60-80%: tops at $101,576
80% to 100%: $101,577 and above.

 

[ERD50]

travelover, I started to review all the graphs and got a headache. Had to stop but will resume tomorrow sometime. Very interesting stats. Thanks for the thread.

I got a headache and stopped after a short while. I didn't see enough background/context to make sense of the numbers. In the section "DO AMERICANS PAY A LOT OF TAXES?", I don't think they are comparing ALL forms of taxes to other countries, are they? My local property taxes are far above my Fed Income tax, are they counting that (which could be very different in other countries), sales tax, etc?

And you don't have to be 'poor' to pay little/no Fed Income Tax. When I had two kids in college, my FIT was $14 due to all the credits. It's a crazy system.

-ERD50

 

[RockyMtn]

Don't even have to look at it....pay too much...get too little for what I pay.

 

[travelover]

I didn't post this to start a political discussion, thought as Samclem noted, any graphs come with some interpretation which is subject to bias.

Personally, I was surprised at how much of the budget comes from payroll taxes. When I was w*rking, I just kept my head down, slaved away, saved what I could and did not pay attention to the trends.

 

[keegs]

Thanks for sharing this.

 

[Midpack]

I thought it was interesting, though I also question the graph on what people pay in taxes by country. It doesn't appear that state & local income taxes, property taxes, sales taxes or all the other taxes/fees (gas, cigarettes, alcohol, hotel taxes, etc.) were included. The US is famous for spreading taxes and fees far and wide to make it hard for people to know what they're paying overall. And presumably other countries have other taxes, VAT for example. Looking at federal income taxes and "employee social security" only may/not look the same as taxes all up...lazy journalism?

 

[anethum]

Thanks for sharing this. I found the graphs quite interesting, though I'm not sure how useful it is to compare countries unless all taxes residents pay are included. In the federal system in the USA, a substantial percentage of taxes people pay go to their states/counties/cities.

Nevertheless, several of the graphs were fascinating. I especially like the first one showing the way the various sources of federal revenue have changed on a percentage basis from 1950 to the present. I also liked the last one showing who has benefited from various recent tax breaks. It's astonishing that fully 55.5% of the tax savings from the lower capital gains rate in 2011 went to just the top 0.1% by income, and 75.1% of those same savings went to the top 1%. The exclusions from taxes were the only category which broadly benefit all income bands.

 

[haha]

Thanks for sharing this. I found the graphs quite interesting, though I'm not sure how useful it is to compare countries unless all taxes residents pay are included.

These polls are always done for a political reason, most of this type of poll are done to soften resistance to higher taxes on Americans. So from the pov of those doing and publicizing the polls, they are very helpful.

Ha

 

[ERhoosier]

These polls are always done for a political reason, most of this type of poll are done to soften resistance to higher taxes on Americans. So from the pov of those doing and publicizing the polls, they are very helpful.

Ha

+1

Even within the US you read these kind of biased articles comparing tax rates among states. Obviously there's an agenda when an author points out one state's "low" income tax rate saying there's room to raise it compared to surrounding states. But then neglects to mention that state's high taxes in other areas (sales, property, etc). Bottom line is that various gov'ts make better use of their overall tax revenues than others, and far too often the price for gross gov't inefficiencies (or even corruption) is paid by the citizens in higher overall tax burdern.

 

[Hamlet]

Yup, I think any chart that included FICA would look quite a bit different. I'm pretty sure that the bottom quintile wouldn't actually be negative if you included FICA.

It was good of him to include it. I wish he'd said if it was income tax or all taxes, especially after calling out others for failing to make that distinction. (I suspect this is FIT alone)

 

[imoldernu]

I thought it was interesting, though I also question the graph on what people pay in taxes by country. It doesn't appear that state & local income taxes, property taxes, sales taxes or all the other taxes/fees (gas, cigarettes, alcohol, hotel taxes, etc.) were included. The US is famous for spreading taxes and fees far and wide to make it hard for people to know what they're paying overall. And presumably other countries have other taxes, VAT for example. Looking at federal income taxes and "employee social security" only may/not look the same as taxes all up...lazy journalism?

+1

Back in the working years, I had a friend who lived in Germany. He complained that he was paying 55% in taxes. As I recall, when I added my RE taxes, cars, etc. as above, my taxes were very close to that.

As far as Income taxes... this was totally accidental, but since retiring 24 years ago, Federal Income Taxes have zeroed out.. probably because we're not wealthy. This coming year will be the first, as deferred IRA's and Federal Bonds will begin to be used.

........
ha ha said:

These polls are always done for a political reason, most of this type of poll are done to soften resistance to higher taxes on Americans. So from the pov of those doing and publicizing the polls, they are very helpful.

Oh yes... math and charts... tricky little devils, eh? Kinda like the same "news" on different TV networks! "Statistics Spin".

 

[Midpack]

Yup, I think any chart that included FICA would look quite a bit different. I'm pretty sure that the bottom quintile wouldn't actually be negative if you included FICA.

Not sure which chart you're referring to but I think "payroll taxes", "employee social security" and "social insurance taxes" on various charts are US FICA...

As to the bottom quintile, I was surprised to know that some people actually have negative income tax liabilities or net payments from government, not tax refunds but actual payments. Not all of them would pay into FICA (retired seniors, disabled, unemployed, etc.), and some may receive net payments that more than offset FICA. Evidently 39% of those who don't owe FIT also don't pay FICA, the chart below identifies some groups. Beyond that I don't know (or care) about the details. More if you want to know http://www.taxpolicycenter.org/UploadedPDF/1001547-Why-No-Income-Tax.pdf

 

[keegs]

Foreign countries also levy regional/provincial and local taxes and as mentioned some also do a VAT. And typically, energy is taxed at a much higher rate elsewhere.

And on the spending side, the US defense budget dwarfs most others.

 

[travelover]

..........

And on the spending side, the US defense budget dwarfs [-]most[/-] all others.

FIFY