The Pronk Pops Show 973, September 27, 2017, Part 1 of 3 Story 1: The Tiny Timid Trump Tax Reform Resembles Liberal Democratic Party Proposals vs. Fair Tax Less Would Replace All Federal Taxes With A Single Consumption Tax On What You Buy Not What You Earn With A Generous Tax Prebate and Future Government Spending Limited To 90% of Fair Tax Less Revenues — Affordable, Effective, Efficient, Fair, Reasonable, Simple, and Transparent With Progressive Effective Rates Due To A Generous Monthly $1,000 Per Month or $12,000 Per Year Tax Prebate For All Adult American Citizens — American Friendly Not Revenue Neutral — Balanced Budgets With Real Spending Cuts and No More Budget Deficits — Booming Economy With Jobs, Jobs, and Jobs — The Time Is Now or Never For Fair Tax Less — Videos

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The Pronk Pops Show Podcasts

Pronk Pops Show 973, September 27, 2017

Pronk Pops Show 972, September 26, 2017

Pronk Pops Show 971, September 25, 2017

Pronk Pops Show 970, September 22, 2017

Pronk Pops Show 969, September 21, 2017

Pronk Pops Show 968, September 20, 2017

Pronk Pops Show 967, September 19, 2017

Pronk Pops Show 966, September 18, 2017

Pronk Pops Show 965, September 15, 2017

Pronk Pops Show 964, September 14, 2017

Pronk Pops Show 963, September 13, 2017

Pronk Pops Show 962, September 12, 2017

Pronk Pops Show 961, September 11, 2017

Pronk Pops Show 960, September 8, 2017

Pronk Pops Show 959, September 7, 2017

Pronk Pops Show 958, September 6, 2017

Pronk Pops Show 957, September 5, 2017

Pronk Pops Show 956, August 31, 2017

Pronk Pops Show 955, August 30, 2017

Pronk Pops Show 954, August 29, 2017

Pronk Pops Show 953, August 28, 2017

Pronk Pops Show 952, August 25, 2017

Pronk Pops Show 951, August 24, 2017

Pronk Pops Show 950, August 23, 2017

Pronk Pops Show 949, August 22, 2017

Pronk Pops Show 948, August 21, 2017

Pronk Pops Show 947, August 16, 2017

Pronk Pops Show 946, August 15, 2017

Pronk Pops Show 945, August 14, 2017

Pronk Pops Show 944, August 10, 2017

Pronk Pops Show 943, August 9, 2017

Pronk Pops Show 942, August 8, 2017

Pronk Pops Show 941, August 7, 2017

Pronk Pops Show 940, August 3, 2017

Pronk Pops Show 939, August 2, 2017

Pronk Pops Show 938, August 1, 2017

Pronk Pops Show 937, July 31, 2017

Pronk Pops Show 936, July 27, 2017

Pronk Pops Show 935, July 26, 2017

Pronk Pops Show 934, July 25, 2017

Pronk Pops Show 934, July 25, 2017

Pronk Pops Show 933, July 24, 2017

Pronk Pops Show 932, July 20, 2017

Pronk Pops Show 931, July 19, 2017

Pronk Pops Show 930, July 18, 2017

Pronk Pops Show 929, July 17, 2017

Pronk Pops Show 928, July 13, 2017

Pronk Pops Show 927, July 12, 2017

Pronk Pops Show 926, July 11, 2017

Pronk Pops Show 925, July 10, 2017

Pronk Pops Show 924, July 6, 2017

Pronk Pops Show 923, July 5, 2017

Pronk Pops Show 922, July 3, 2017

Pronk Pops Show 921, June 29, 2017

Pronk Pops Show 920, June 28, 2017

Pronk Pops Show 919, June 27, 2017

Pronk Pops Show 918, June 26, 2017

Pronk Pops Show 917, June 22, 2017

Pronk Pops Show 916, June 21, 2017

Pronk Pops Show 915, June 20, 2017

Pronk Pops Show 914, June 19, 2017

Pronk Pops Show 913, June 16, 2017

Pronk Pops Show 912, June 15, 2017

Pronk Pops Show 911, June 14, 2017

Pronk Pops Show 910, June 13, 2017

Pronk Pops Show 909, June 12, 2017

Pronk Pops Show 908, June 9, 2017

Pronk Pops Show 907, June 8, 2017

Pronk Pops Show 906, June 7, 2017

Pronk Pops Show 905, June 6, 2017

Pronk Pops Show 904, June 5, 2017

Pronk Pops Show 903, June 1, 2017

Image result for Donald Trump Plan Tax BracketsImage result for Donald Trump Plan Tax Brackets

Image result for fairtax

Corporations paying fewer taxes

Image result for fairtax

Image result for trump's new tax plan compared with current tax system

 

Part 1 of 3 Story 1: The Tiny Timid Trump Tax Reform Resembles Liberal Democratic Party Proposals vs. Fair Tax Less Would Replace All Federal Taxes With A Single Consumption Tax On What You Buy Not What You Earn With A Generous Tax Prebate and Future Government Spending Limited To 90% of Fair Tax Less Revenues — Affordable, Effective, Efficient, Fair, Reasonable, Simple, and Transparent With Progressive Effective Rates Due To A Generous Monthly $1,000 Per Month or $12,000 Per Year Tax Prebate For All Adult American Citizens — American Friendly Not Revenue Neutral — Balanced Budgets With Real Spending Cuts and No More Budget Deficits — Booming Economy With Jobs, Jobs, and Jobs — The Time Is Now or Never For Fair Tax Less —  Videos


 

The American People Want The FairTax 

Especially The New Improved Version — Fair Tax Less

Demand Fair Tax Less From Your Elected Representatives and President Trump

FairTax: Fire Up Our Economic Engine (Official HD)

Image result for Fair Tax Replaces


Inside the GOP’s tax blueprint

Mulvaney: Impossible to say tax benefit to rich – NEWS TODAY

Mick Mulvaney defends Trump’s Puerto Rico response, tax plan

Treasury secretary on Trump administration’s new tax plan

“IT WOULD BE LIKE HOUDINI!!!” Chuck Todd’s BRILLIANT Takedown of Trump Lackey Steven Mnuchin |News

Newt Gingrich with Martha MacCallum on Donald Trump Tax Reform Plan. #NewtGingrich #TaxReform #POTUS

LIMBAUGH: Trump’s Tax Plan Is NOT A Tax Break For The Rich

Middle Class Will ‘Get Nothing’ In Tax Proposal: Steve Rattner | Morning Joe | MSNBC

What Democrats don’t like about Trump’s tax reform plan

Milton Friedman – Why Tax Reform Is Impossible

🔴 Ep. 287: Pros and Cons of the Trump Tax Plan

Trump pitches tax reform plan to manufacturers

Sen. John Kennedy on Tax Reform

Speaker Ryan Previews Unified Framework for Tax Reform

Trump pushes first tax overhaul since President Reagan

Trump tax reform is very pro-growth: Norquist

Who wins and loses in the GOP’s proposed tax overhaul

President Trump Unveils STUNNING Tax Plan | Full Speech 9/27/17

President Donald Trump unveils his ‘middle class miracle’, a stunning tax plan with three brackets, zero tax on couples’ first $24,000 and a massive corporate rate slash. ‘The largest tax cut in American History.’ MAGA 🇺🇸

Milton Friedman – Is tax reform possible?

Ep. 287: Pros and Cons of the Trump Tax Plan

What Trump’s tax plan could mean for workers and businesses

Trump’s tax plan mirrors Ronald Reagan’s

PRESIDENT TRUMP UNVEILS SWEEPING TAX PLAN

Chuck Schumer SLAMS Trump’s New Tax Reform Plan on his Press Conference 9/27/2017

Inside Politics 09/27/17: TRUMP TAX PLAN COULD COST $5 TRILLION

Rush Limbaugh 09/27/2017 | Trump tax plan isn’t conservative, it’s populist, raises taxes on rich

Hannity: Trump’s tax plan is designed to grow the economy

Analyzing President Trump’s tax plan

Trump Unveils Tax Plan: It’s Mostly Good

Gordon Gray discusses President Trump’s tax plan details jpg

Will Trump’s tax plan deliver the goods on jobs?

What to expect from Trump’s tax plan

Trump Tax Reform Explained

David Stockman: We are heading into an absolute fiscal bloodbath

Keiser Report: America’s Falling Apart (E1123)

$20 Trillion: U.S. Debt Crisis | Peter Schiff and Stefan Molyneux

U.S. Debt Clock

http://www.usdebtclock.org/

Trump’s tax cuts won’t pay for themselves: David Stockman

Congress not likely to tackle tax reform without spending cuts?

Milton Friedman – Why Tax Reform Is Impossible

When Did America Stop Caring About Anything Critical?

When Did America Stop Caring About Anything Critical?

Revenue Neutral

Sen. McConnell to soften on revenue-neutral tax plan: Gasparino

McConnell Seeks Revenue-Neutral Tax Reform This Congress

Rand Paul’s Frustration with “Revenue Neutral” Tax Cuts!


The American People Want The FairTax 

Especially The New Improved Version — Fair Tax Less

Demand Fair Tax Less From Your Elected Representatives and President Trump

FairTax: Fire Up Our Economic Engine (Official HD)

Image result for Fair Tax Replaces

 

FairTax or Fair Tax Less — It Is Time

Bill Gates: Don’t tax my income, tax my consumption

Flat Tax vs. National Sales Tax

Why is the FairTax better than a flat income tax?

Freedom from the IRS! – FairTax Explained in Detail

Congressman Pence – FairTax and FlatTax

Pence on the Fair Tax

Congressman Woodall Discusses the FairTax

Rob Woodall Floor Speech: The FairTax will bring jobs back to America

Rep. Woodall Discusses FairTax with Colleagues on House Floor

The Fair Tax

Congressman King Speaks in Favor of FairTax

Rep. Woodall Discusses FairTax on House Floor

Sen. Moran Discusses FairTax Legislation on U.S. Senate Floor

Why is the FairTax better than other tax reform efforts?

AIRtax-What is It? Replaces income tax and payroll tax with sales tax

Why is the FairTax better than a flat income tax?

What is the FairTax legislation?

Does the FairTax protect privacy and other civil liberties?

How is the FairTax collected?

How does the FairTax affect the economy?

How does the FairTax impact interest rates?

Are any significant economies funded by a sales tax?

Is consumption a reliable source of revenue?

How will used goods be taxed?

What assumptions does the FairTax make about government spending?

Will the FairTax lead to a massive underground economy?

Can’t Americans just cross the border to avoid the FairTax

Will the FairTax drive the economy down if people stop buying?

How does the FairTax impact savings?

How does the FairTax impact the middle class?

How will the FairTax impact seniors?

How will Social Security payments be calculated under the FairTax?

How will the FairTax impact people who don’t file income taxes?

How will the FairTax help people who don’t hire an accountant?

How does the FairTax affect compliance costs?

How does the FairTax impact tax free bonds?

What will happen to cities who depend on tax free bonds?

What is the impact of the FairTax on business?

How does the FairTax impact retailers?

How does the FairTax affect tax preparers and CPAs?

Will the FairTax tax services?

Can I pretend to be a business to avoid the sales tax?

If people bring home their whole paychecks how can prices fall?

What is the Prebate?

How does the “prebate” work?

Is the FairTax truly progressive?

Wouldn’t it be more fair to exempt food and medicine from the FairTax?

How is the FairTax different from a Value Added Tax (VAT)?

Is it fair for rich people to get the same prebate as poor people?

Will the prebate create a massive new entitlement system?

How does the FairTax impact the middle class?

How do we keep exemptions and exclusions from undermining the FairTax?

How does the FairTax impact charitable giving?

Will the FairTax hurt home ownership with no mortgage interest deduction?

Will bartering present a compliance problem under the FairTax?

How does the FairTax affect illegal immigration?

How does the FairTax rate compare to today’s?

Wouldn’t it be more fair to exempt food and medicine from the FairTax?

Is education taxed under the FairTax?

Will government pay taxes under the FairTax?

How can you tax life saving medical treatment?

Will the FairTax hurt home ownership with no mortgage interest deduction?

What will the transition be like from the income tax to the FairTax?

Isn’t it a stretch to say the IRS will go away?

The Fair Tax – It’s Time

FairTax Prebate Explained

The FairTax… For a better America

Is the Fair Tax Act Fair?

Is America’s Tax System Fair?

Sen. Moran Discusses FairTax Legislation on U.S. Senate Floor

Pence on the Fair Tax

#30 The FAIRtax and President Elect Trump

Elvis Presley – It`s Now Or Never 1960

Elvis – It’s Now Or Never (O Sole Mio)

Elvis Presley – My Way (High Quality)

Frank Sinatra .My Way

Trump’s tax plan is ALREADY in trouble with his own party as plan to axe state and local tax deduction comes under fire from Republicans

  • The White House’s tax plan proposes to raise $1 trillion over 10 years by eliminating the deduction for the state and local income taxes people pay
  • That’s drawing howls of protest from Republicans whose states charge high income tax rates
  • Seven states have no income taxes, meaning their citizens wouldn’t be affected
  • But some states charge up to 13.3 per cent on top of federal taxes
  • A family in Los Angeles earning $100,000 would have to fork over roughly an additional $1,800 to Washington if the longstanding deduction goes away
  • Trump is pitching his tax plan to the National Association of Manufacturers on Friday 

As President Trump prepares to sell his tax plan to the nation’s manufacturing lobby on Friday, his best-laid tax plans have already drawn objections from some fellow Republicans who are fuming over the decision to end deductions for state and local income taxes.

The situation will pit the White House against members of Congress from states that pile high income taxes on top of what the federal government takes from paychecks.

High-income Californians, for instance, pay as much as 13.3 per cent of their income to the state in addition to their federal taxes. New Yorkers can pay up to 8.82 per cent.

Just seven U.S. states have no personal income taxes, including Texas, Florida and Nevada.

As President Trump pushes his tax plan, House Ways and Means chairman Kevin Brady (right) says he'll listen to congressmen from states that would be affected most if citizens lose deductions for state and local income taxes

 

 

 

 

 

 

 

 

 

 

 

As President Trump pushes his tax plan, House Ways and Means chairman Kevin Brady (right) says he’ll listen to congressmen from states that would be affected most if citizens lose deductions for state and local income taxes

State income tax rates vary widely; seven states (in gray) don't collect any, and the highest rates (dark blue) can go as high as 13.3 per cent

State income tax rates vary widely; seven states (in gray) don’t collect any, and the highest rates (dark blue) can go as high as 13.3 per cent

Under the Trump tax reform plan, a family earning $100,000 in Los Angeles pays about $6,000 in state and local income taxes. Losing the ability to deduct that expense would cost the hypothetical taxpayers around $1,800.

The GOP is working on a way to pacify legislators whose constituents would wind up paying more.

‘The members with concerns from high-tax states have to be accommodated,’ Illinois Republican Rep. Peter Roskam told The Wall Street Journal. Roskam is a senior member of the powerful House Ways and Means Committee.

‘So, you can imagine a soft landing on this that creative people are putting much time and energy into.’

The White House has shown no sign that it’s willing to budge on eliminating the deduction for state and local taxes since it would bring in about $1 trillion over a 10-year period.

With the prospect of persuading Democrats to go along with a new tax play already slim, the GOP will need every Republican vote it can get.

The Journal reports that the nine states whose citizens use the deduction, measured as a percentage of income, are represented by 33 House Republicans.

If Republicans lose more than 22 votes, Trump’s tax plan is effective dead.

Ways and Means member Peter Roskam, and Illinois Republican, says tax code-writers are finding a 'soft landing' for states that pay the most income tax to their local governments

Ways and Means member Peter Roskam, and Illinois Republican, says tax code-writers are finding a ‘soft landing’ for states that pay the most income tax to their local governments

White House chief economic adviser Gary Cohn briefed the press at the White House on Thursday but wouldn't promise that every middle-class U.S. family would get a tax cut

White House chief economic adviser Gary Cohn briefed the press at the White House on Thursday but wouldn’t promise that every middle-class U.S. family would get a tax cut

APRIL 13, 2016

High-income Americans pay most income taxes, but enough to be ‘fair’?

Corporations paying fewer taxes

 

 

 

 

 

 

 

 

 

 

 

Tax-deadline season isn’t many people’s favorite time of the year, but most Americans are OK with the amount of tax they pay. It’s what other people pay, or don’t pay, that bothers them.

Just over half (54%) of Americans surveyed in fall by Pew Research Center said they pay about the right amount in taxes considering what they get from the federal government, versus 40% who said they pay more than their fair share. But in a separate 2015 surveyby the Center, some six-in-ten Americans said they were bothered a lot by the feeling that “some wealthy people” and “some corporations” don’t pay their fair share.

It’s true that corporations are funding a smaller share of overall government operations than they used to. In fiscal 2015, the federal government collected $343.8 billion from corporate income taxes, or 10.6% of its total revenue. Back in the 1950s, corporate income tax generated between a quarter and a third of federal revenues (though payroll taxes have grown considerably over that period).

Nor have corporate tax receipts kept pace with the overall growth of the U.S. economy. Inflation-adjusted gross domestic product has risen 153% since 1980, while inflation-adjusted corporate tax receipts were 115% higher in fiscal 2015 than in fiscal 1980, according to the Bureau of Economic Analysis. There have been a lot of ups and downs over that period, as corporate tax receipts tend to rise during expansions and drop off in recessions. In fiscal 2007, for instance, corporate taxes hit $370.2 billion (in current dollars), only to plunge to $138.2 billion in 2009 as businesses felt the impact of the Great Recession.

Corporations also employ battalions of tax lawyers to find ways to reduce their tax bills, from running income through subsidiaries in low-tax foreign countries to moving overseas entirely, in what’s known as a corporate inversion (a practice the Treasury Department has moved to discourage).

But in Tax Land, the line between corporations and people can be fuzzy. While most major corporations (“C corporations” in tax lingo) pay according to the corporate tax laws, many other kinds of businesses – sole proprietorships, partnerships and closely held “S corporations” – fall under the individual income tax code, because their profits and losses are passed through to individuals. And by design, wealthier Americans pay most of the nation’s total individual income taxes.

Wealthy pay more in taxes than poorIn 2014, people with adjusted gross income, or AGI, above $250,000 paid just over half (51.6%) of all individual income taxes, though they accounted for only 2.7% of all returns filed, according to our analysis of preliminary IRS data. Their average tax rate (total taxes paid divided by cumulative AGI) was 25.7%. By contrast, people with incomes of less than $50,000 accounted for 62.3% of all individual returns filed, but they paid just 5.7% of total taxes. Their average tax rate was 4.3%.

The relative tax burdens borne by different income groups changes over time, due both to economic conditions and the constantly shifting provisions of tax law. For example, using more comprehensive IRS data covering tax years 2000 through 2011, we found that people who made between $100,000 and $200,000 paid 23.8% of the total tax liability in 2011, up from 18.8% in 2000. Filers in the $50,000-to-$75,000 group, on the other hand, paid 12% of the total liability in 2000 but only 9.1% in 2011. (The tax liability figures include a few taxes, such as self-employment tax and the “nanny tax,” that people typically pay along with their income taxes.)

All told, individual income taxes accounted for a little less than half (47.4%) of government revenue, a share that’s been roughly constant since World War II. The federal government collected $1.54 trillion from individual income taxes in fiscal 2015, making it the national government’s single-biggest revenue source. (Other sources of federal revenue include corporate income taxes, the payroll taxes that fund Social Security and Medicare, excise taxes such as those on gasoline and cigarettes, estate taxes, customs duties and payments from the Federal Reserve.) Until the 1940s, when the income tax was expanded to help fund the war effort, generally only the very wealthy paid it.

Since the 1970s, the segment of federal revenues that has grown the most is the payroll tax – those line items on your pay stub that go to pay for Social Security and Medicare. For most people, in fact, payroll taxes take a bigger bite out of their paycheck than federal income tax. Why? The 6.2% Social Security withholding tax only applies to wages up to $118,500. For example, a worker earning $40,000 will pay $2,480 (6.2%) in Social Security tax, but an executive earning $400,000 will pay $7,347 (6.2% of $118,500), for an effective rate of just 1.8%. By contrast, the 1.45% Medicare tax has no upper limit, and in fact high earners pay an extra 0.9%.

All but the top-earning 20% of American families pay more in payroll taxes than in federal income taxes, according to a Treasury Department analysis.

Still, that analysis confirms that, after all federal taxes are factored in, the U.S. tax system as a whole is progressive. The top 0.1% of families pay the equivalent of 39.2% and the bottom 20% have negative tax rates (that is, they get more money back from the government in the form of refundable tax credits than they pay in taxes).

Of course, people can and will differ on whether any of this constitutes a “fair” tax system. Depending on their politics and personal situations, some would argue for a more steeply progressive structure, others for a flatter one. Finding the right balance can be challenging to the point of impossibility: As Jean-Baptiste Colbert, Louis XIV’s finance minister, is said to have remarked: “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”

Note: This is an update of an earlier post published March 24, 2015.

http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/

Distrust of Senate grows within GOP

A day after the GOP presented a united front around the rollout of President Trump’s tax plan, House Republicans are expressing deep reservations about the Senate’s ability to get the job done.

Lawmakers stung over the failure to pass ObamaCare repeal worry the same fate could befall the tax measure if a handful of senators raise objections.

Donald Trump won with an electoral landside and his three big campaign points were ObamaCare repeal, tax reform and border security. For a handful of senators to derail that agenda is very frustrating,” said Rep. Blake Farenthold (R-Texas).

Rep. Tom Cole (R-Okla.), who is close to the House GOP leadership, says colleagues are frustrated with a handful of senators “overruling the will of the entire House.”

“We do need to see them step up and actually deliver for a change. We have over 200 bills sitting stalled over there. They haven’t been able to deliver on [health care] reform and they all ran on it and now we have a do-or-die moment on tax reform,” he said.

There’s also a sense among House Republicans that their Senate brethren aren’t under the same pressure to get results — perhaps because the GOP’s majority in the Senate is seen as safer in the 2018 midterm elections than the House majority.

“They put our majority in jeopardy with their failure on health care, more than they did their own,” Cole said.

While Republicans have a bigger majority in the House than in the Senate, the political map favors the Senate GOP in 2018.

Republicans only have to defend nine seats next year, and only one — held by Sen. Dean Heller (R-Nev.) — is in a state won by 2016 Democratic presidential nominee Hillary Clinton. Democrats are defending more than 20 seats, including 10 in states won by Trump.

In the House, Republicans represent 23 districts carried by Clinton, just shy of what Democrats would need to win to take back the majority.

Republicans are excited about moving to tax reform, and Trump’s plan received enthusiastic support at a half-day private retreat the House GOP held Wednesday to review it.

The president’s proposals to eliminate the estate tax and the alternative minimum tax received ovations.

But the mood turned more somber when Rep. Bruce Poliquin (R-Maine) stood up to ask if the Senate could be counted on to pass tax legislation, according to people familiar with the meeting.

A spokesman for Poliquin did not respond to a request for comment.

“A lot of House members trust a lot of senators to introduce their own tax reform bills,” said Rep. Steve King (R-Iowa), alluding to how senators seek to show independence by offering their own bills.

House Republicans say they can easily see GOP Sens. Susan Collins(Maine), John McCain (Ariz.) and Lisa Murkowski (Alaska), who all voted against a slimmed-down ObamaCare repeal bill in July, bucking the leadership again.SPONSORED BY NEXT ADVISOR

“I do not understand what motivates John McCain,” King said. “I don’t know what goes on in the minds of folks from Maine.”

Earlier this year, in an illustration of the frustration House Republicans hold for the Senate hold-outs, Farenthold joked about challenging Collins to a duel. He later apologized.

McCain later told The Hill that the health-care bill was doomed because it’s virtually impossible to tackle something as huge as reform as health care on a partisan basis.

“If you’re going to pass a major reform, you got to have bipartisan support,” he said.

Speaker Paul Ryan (R-Wis.) is making the case that Senate Republicans are more likely to come through on tax reform because McConnell and Senate Finance Committee Chairman Orrin Hatch (R-Utah) have already negotiated a tax reform framework with the administration and House leaders.

“What we did differently in this go around is we spent the last four months basically working together, the Senate Finance Committee, the House Ways and Means Committee and the White House, making sure that we’re on the same page,” Ryan told CNBC’s “Squawk Box” on Thursday morning.

Ryan explained that leaders made sure they did “the hard lifting, the tough work ahead of schedule, ahead of rollout.”

But he also acknowledged that House Republicans have just about run out of patience with the Senate after the collapse of health care reform this week.

“We’re really frustrated. Look, we passed 373 bills here in the House — 270-some are still in the Senate,” he said.

Already there are doubts that Senate Republicans will stick to the plan on taxes.

Hatch, who heads the Senate’s tax writing panel, told reporters Thursday afternoon that he would like to keep in place the deduction for state and local taxes, which the administration wants to eliminate to provide revenue for lower rates.

A spokeswoman for the Finance Committee said, “Chairman Hatch recognizes that every major provision within the tax code has an important constituency and consequence.”

http://thehill.com/homenews/senate/352999-distrust-of-senate-grows-within-gop

Key Findings

  • This year, Tax Freedom Day falls on April 23rd, 113 days into the year.
  • Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation’s tax burden.
  • Americans will pay $3.5 trillion in federal taxes and $1.6 trillion in state and local taxes, for a total bill of more than $5.1 trillion, or 31 percent of the nation’s income.
  • Americans will collectively spend more on taxes in 2017 than they will on food, clothing, and housing combined.
  • If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 14 days later, on May 7.

What Is Tax Freedom Day?

Tax Freedom Day® is the day when the nation as a whole has earned enough money to pay its total tax bill for the year. Tax Freedom Day takes all federal, state, and local taxes—individual as well as payroll, sales and excise, corporate and property taxes—and divides them by the nation’s income. In 2017, Americans will pay $3.5 trillion in federal taxes and $1.6 trillion in state and local taxes, for a total tax bill of $5.1 trillion, or 31 percent of national income. This year, Tax Freedom Day falls on April 23, 113 days into the year.

What Taxes Do We Pay?

This year, Americans will work the longest—46 days—to pay federal, state, and local individual income taxes. Payroll taxes will take 26 days to pay, followed by sales and excise taxes (15 days), corporate income taxes (10 days), and property taxes (10 days). The remaining six days are spent paying estate and inheritance taxes, customs duties, and other taxes.

When Is Tax Freedom Day if You Include Federal Borrowing?

Since 2002, federal expenses have surpassed federal revenues, with the budget deficit exceeding $1 trillion annually from 2009 to 2012. In calendar year 2017, the deficit is expected to shrink slightly, from $657 billion to $612 billion. If we include this annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur on May 7, 14 days later. The latest ever deficit-inclusive Tax Freedom Day occurred during World War II, on May 25, 1945.

When Is My State’s Tax Freedom Day?

The total tax burden borne by residents across states varies considerably due to differing tax policies and the progressivity of the federal tax system. This means that states with higher incomes and higher taxes celebrate Tax Freedom Day later: Connecticut (May 21), New Jersey (May 13), and New York (May 11). Residents of Mississippi bear the lowest average tax burden in 2017, with their Tax Freedom Day having arrived on April 5. Also early were Tennessee (April 7) and South Dakota (April 8).

2017 Tax Freedom Day - State Dates

How Has Tax Freedom Day Changed over Time?

The latest ever Tax Freedom Day was May 1, 2000; in that year, Americans paid 33 percent of their total income in taxes. A century earlier, in 1900, Americans paid only 5.9 percent of their income in taxes, so that Tax Freedom Day came on January 22.

Tax Freedom Day Over Time

Methodology

In the denominator, we count every dollar that is officially part of net national income according to the Department of Commerce’s Bureau of Economic Analysis. In the numerator, we count every payment to the government that is officially considered a tax. Taxes at all levels of government—federal, state, and local—are included in the calculation. In calculating Tax Freedom Day for each state, we look at taxes borne by residents of that state, whether paid to the federal government, their own state or local governments, or governments of other states. Where possible, we allocate tax burdens to each taxpayer’s state of residence. Leap days are excluded, to allow comparison across years, and any fraction of a day is rounded up to the next calendar day

https://taxfoundation.org/publications/tax-freedom-day/

Feds Collect Record Taxes Through August; Still Run $673.7B Deficit

By Terence P. Jeffrey | September 13, 2017 | 4:28 PM EDT

(CNSNews.com) – The federal government collected record total tax revenues through the first eleven months of fiscal 2017 (Oct. 1, 2016 through the end of August), according to the Monthly Treasury Statement.

Through August, the federal government collected approximately $2,966,172,000,000 in total tax revenues.

That was $8,450,680,000 more (in constant 2017 dollars) than the previous record of $2,957,721,320,000 in total tax revenues (in 2017 dollars) that the federal government collected in the first eleven months of fiscal 2016.

At the same time that the federal government was collecting a record $2,966,172,000,000 in tax revenues, it was spending $3,639,882,000,000—and, thus, running a deficit of $673,711,000,000.

Individual income taxes have provided the largest share (47.9 percent) of federal revenues so far this fiscal year. From Oct. 1 through the end of August, the Treasury collected $1,421,997,000,000 in individual income taxes.

Payroll taxes provided the second largest share (35.9 percent), with the Treasury collecting $1,065,751,000,000 in these taxes.

The $233,631 in corporate income taxes collected in the first eleven months of fiscal 2017 equaled only 8.6 percent of total tax collections.

The $21,172,000,000 collected in estate and gift taxes equaled only 0.71 percent of total taxes collected this fiscal year.

(Tax revenues were adjusted to constant 2017 using the Bureau of Labor Statistics inflation calculator.)

The Latest: State legislatures ‘dismayed’ by GOP tax plan

WASHINGTON (AP) — The Latest on the Republican plan to overhaul the tax code (all times local):

4:40 p.m.

An organization that advocates for state legislatures says it’s “dismayed” the Republican tax cut proposal unveiled Wednesday would do away with a deduction for state and local taxes paid.

The National Conference of State Legislatures says the deduction has existed in the federal tax code since its inception. The group says “tens of millions of middle-class taxpayers of every political affiliation” would experience a greater tax burden if the deduction were eliminated.

The group says the deduction’s elimination will also impede states in their efforts to invest in education and other public services.

About a third of tax filers itemize deductions on their federal income tax returns. The Tax Policy Center says virtually all who do claim a deduction for state and local taxes paid.

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4:10 p.m.

President Donald Trump is issuing a warning shot to Indiana’s Democratic senator: Support my tax overhaul or I’ll campaign against you next year.

Trump says at a tax event in Indiana that if Sen. Joe Donnelly doesn’t approve the plan, “we will come here and we will campaign against him like you wouldn’t believe.”

But Trump is predicting that numerous Democrats will come across the aisle and support his plan “because it’s the right thing to do.”

The president has made overtures to Democratic senators like Claire McCaskill of Missouri and Heidi Heitkamp of North Dakota in recent weeks. All three are facing re-election in 2018.

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4 p.m.

Small business advocates are split over the draft of the new Republican tax plan.

The National Federation of Independent Business is praising the proposal to tax business income at 20 percent — including sole proprietors whose business income is taxed at individual rates up to 39.6 percent.

The Small Business & Entrepreneurship Council says the plan would simplify business taxes, encourage business investment and increase owners’ confidence.

But the Small Business Majority says the plan wouldn’t help most small companies, and the current top rate is paid by less than 2 percent of those businesses.

And John O’Neill, a tax analyst at the American Sustainable Business Council, says tax reform isn’t as useful to the economy as investing in infrastructure and education.

President Donald Trump is calling the current tax system a “relic” and a “colossal barrier” that’s standing in the way of the nation’s economic comeback.

Trump says at an event in Indianapolis that his tax proposal will help middle-class families save money and will eliminate loopholes that benefit the wealthy.

Trump says the wealthy “can call me all they want. It’s not going to help.” The billionaire president says he’s “doing the right thing. And it’s not good for me, believe me.”

The president says under his plan, “the vast majority of families will be able to file their taxes on a single sheet of paper.”

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3:40 p.m.

President Donald Trump is making the case for a sweeping plan to overhaul the tax system for individuals and corporations. He calls it a “once in a generation” opportunity to cut taxes.

The president says in Indiana that he wants to cut taxes for middle-class families to make the system simpler and fairer.

Trump says his tax plan will “bring back the jobs and the wealth that have left our country.” He says it’s time for the nation to fight for American workers.

He’s praising his vice president, Mike Pence, Indiana’s former governor. Trump says, “it’s time for Washington to learn from the wisdom of Indiana.”

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2:52 p.m.

A budget watchdog group in Washington says the new GOP tax plan could cost $2.2 trillion over the next 10 years.

The Committee for a Responsible Federal Budget admits its estimate is very preliminary since so many details are unclear, but its take is that the plan contains about $5.8 trillion in tax cuts but only $3.6 trillion worth of offsetting tax increases. That $2.2 trillion would be added to the nation’s $20 trillion debt.

That’s more than the $1.5 trillion debt cost that has emerged in a deal among Senate Republicans.

Republicans controlling Congress initially promised that the overhaul of the tax code wouldn’t add to the debt. The group also notes that the $2.2 trillion cost could grow by another $500 billion when interest costs are added in.

_____

1:54 p.m.

President Donald Trump says he’s always wanted to reduce the corporate tax rate to 20 percent — even though he said repeatedly he wanted to see it lowered to 15 percent.

Trump told reporters as he departed Washington for Indiana on Wednesday afternoon that a 20 percent rate was his “red line” and that it had always been his goal.

“In fact, I wanted to start at 15 so that we got 20,” he said, adding: “20′s my number.”

Trump also denies the plan unveiled by the White House and congressional Republicans Wednesday would benefit the wealthy.

He says: “I think there’s very little benefit for people of wealth.”

Under the plan, corporations would see their top tax rate cut from 35 percent to 20 percent.

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1:37 p.m.

A vocal group of the most conservative House Republicans has come out in support of a draft tax plan endorsed by both President Donald Trump and top congressional GOP leaders.

The House Freedom Caucus endorsement is noteworthy because it could ease House passage of a budget plan that’s the first step to advancing the tax cut measure through Congress.

The group says the outline will allow workers to “keep more of their money,” while simplifying the loophole-choked tax code and making U.S. companies more competitive with their foreign rivals.

The group had held up action on the budget measure as they demanded more details on taxes.

_____

11:21 a.m.

President Donald Trump has two red lines that he refuses to cross on overhauling taxes: the corporate rate must be cut to 20 percent and the savings must go to the middle class.

Gary Cohn, the president’s top economics aide, says any overhaul signed by the president needs to include these two elements.

Trump had initially pushed for cutting the 39.6 percent corporate tax rate to 15 percent.

The administration says that the benefits of any tax cut will not favor the wealthy, with Cohn saying that an additional tax bracket could be added to levy taxes on the top one percent of earners if needed.

_____

11:20 a.m.

The Senate’s top Democrat is blasting a new tax cut plan backed by President Donald Trump as a giveaway to the rich.

Sen. Chuck Schumer says Trump’s plan only gives “crumbs” to the middle class, while top-bracket earners making more than a half-million dollars a year would reap a windfall.

The New York Democrat also blasted the plan for actually increasing the bottom tax rate from 10 percent to 12 percent, calling it a “punch to the gut of working Americans.”

Schumer said the plan is little more than an “across-the-board tax cut for America’s millionaires and billionaires.”

The plan, to be officially released Wednesday afternoon, is the top item on Washington’s agenda after the GOP failure to repeal the Obama health care law.

_____

9:53 a.m.

A new Republican blueprint for overhauling the U.S. tax code employs the themes of economic populism that President Donald Trump trumpeted during the presidential campaign to win support from working-class voters.

A copy of the plan to be released later Wednesday says, “Too many in our country are shut out of the dynamism of the U.S. economy.” That’s led to what the plans says is “the justifiable feeling that the system is rigged against hardworking Americans.”

The plan, obtained by The Associated Press, says the Trump administration and Congress “will work together to produce tax reform that will put America first.”

The GOP plan for the first major rewrite of the U.S. tax code in 30 years also says corporations will be stopped from shipping jobs and capital overseas.

_____

9:20 a.m.

President Donald Trump and congressional Republicans are proposing a tax plan that they say will be simple and fair.

In a document obtained by The Associated Press on Wednesday, they outline a blueprint for almost doubling the standard deduction for married taxpayers filing jointly to $24,000, and $12,000 for individuals.

The plan calls for cutting the corporate tax rate from 35 percent to 20 percent. The GOP proposal also calls for reducing the number of tax brackets from seven to three with a surcharge on the wealthiest Americans.

The plan also leaves intact the deduction for mortgage interest and charitable deductions.

The White House and Republicans plan a formal roll out later Wednesday.

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4:26 a.m.

President Donald Trump and congressional Republicans are rolling out a sweeping plan to cut taxes for individuals and corporations, simplify the tax system, and likely double the standard deduction used by most Americans.

Months in the making, the plan meets a political imperative for Republicans to deliver an overhaul of the U.S. tax code after the failure of the health care repeal.

The public reveal of the plan was set for Wednesday. The day before, details emerged on Capitol Hill while Trump personally appealed to House Republicans and Democrats at the White House to get behind his proposal.

https://apnews.com/f609602269d54524aa14e1d9c74ec97c

 

President Trump spoke about his administration’s tax reform plan in Indianapolis on Wednesday.CreditTom Brenner/The New York Times

WASHINGTON — The tax plan that the Trump administration outlined on Wednesday is a potentially huge windfall for the wealthiest Americans. It would not directly benefit the bottom third of the population. As for the middle class, the benefits appear to be modest.

The administration and its congressional allies are proposing to sharply reduce taxation of business income, primarily benefiting the small share of the population that owns the vast majority of corporate equity. President Trump said on Wednesday that the cuts would increase investment and spur growth, creating broader prosperity. But experts say the upside is limited, not least because the economy is already expanding.

The plan would also benefit Mr. Trump and other affluent Americans by eliminating the estate tax, which affects just a few thousand uber-wealthy families each year, and the alternative minimum tax, a safety net designed to prevent tax avoidance.

The precise impact on Mr. Trump cannot be ascertained because the president refuses to release his tax returns, but the few snippets of returns that have become public show one thing clearly: The alternative minimum tax has been unkind to Mr. Trump. In 2005, it forced him to pay $31 million in additional taxes.

Mr. Trump has also pledged repeatedly that the plan would reduce the taxes paid by middle-class families, but he has not provided enough details to evaluate that claim. While some households would probably get tax cuts, others could end up paying more.

https://tpc.googlesyndication.com/safeframe/1-0-10/html/container.html

The plan would not benefit lower-income households that do not pay federal income taxes. The president is not proposing measures like a reduction in payroll taxes, which are paid by a much larger share of workers, nor an increase in the earned-income tax credit, which would expand wage support for the working poor.

Indeed, to call the plan “tax reform” seems like a stretch — Mr. Trump himself told conservative and evangelical leaders on Monday that it was more apt to refer to his plan as “tax cuts.” Mr. Trump’s proposal echoes the large tax cuts that President Ronald Reagan, in 1981, and President George W. Bush, in 2001, passed in the first year of their terms, not the 1986 overhaul of the tax code that he often cites. Like his Republican predecessors, Mr. Trump says cutting taxes will increase economic growth.

Photo

The public portion of the debt equaled 24 percent of the gross domestic product in 1981 when President Ronald Reagan signed a tax cut at his vacation home near Santa Barbara, Calif. In June of this year, the debt equaled 75 percent of economic output. CreditAssociated Press

“It’s time to take care of our people, to rebuild our nation and to fight for our great American workers,” Mr. Trump told a crowd in Indianapolis.

But the moment is very different. Mr. Reagan and Mr. Bush cut taxes during recessions. Mr. Trump is proposing to cut taxes during one of the longest economic expansions in American history. It is not clear that the economy can grow much faster; the Federal Reserve has warned that it will seek to offset any stimulus by raising interest rates.

At the time of the earlier cuts, the federal debt was considerably smaller. The public portion of the debt equaled 24 percent of the gross domestic product in 1981, and 31 percent in 2001. In June, the debt equaled 75 percent of economic output.

The Trump administration insists that its tax cut will catalyze such an economic boom that money will flow into the federal coffers and the debt will not rise. The Reagan and Bush administrations made similar claims. The debt soared in both instances.

Another issue: Both Mr. Bush and Mr. Reagan proposed to cut taxes when federal revenues had climbed unusually high as a share of the national economy.

Mr. Trump wants to cut taxes while revenues are close to an average level.

Since 1981, federal revenue has averaged 17.1 percent of the nation’s gross domestic product, while federal spending has averaged 20.3 percent.

Last year’s numbers were close to the long-term trend: Federal revenue was 17.5 percent of gross domestic product; spending was 20.7 percent.

Martin Feldstein, a Harvard University economics professor and a longtime adviser to Republican presidents, said that the moment was not perfect, but that Mr. Trump should nevertheless press ahead because the changes would be valuable.

“The debt is moving in the wrong direction,” Mr. Feldstein said. “But the tax reform is moving in the right direction.”

Proponents of the plan assert that the largest benefits are indirect. In particular, they argue that cutting corporate taxes will unleash economic growth.

Mr. Trump’s plan is more focused on business tax cuts than the Reagan and Bush plans, and economists agree that this makes economic gains more likely.

The key elements are large reductions in the tax rates for business income: To 20 percent for corporations, and to 25 percent for “pass-through” businesses, a broad category that includes everything from mom-and-pop neighborhood shops to giant investment partnerships, law firms — and real estate developers.

The plan also lets businesses immediately deduct the full cost of new investments.

“You’re going to get a boost in investment,” said William Gale, co-director of the nonpartisan Tax Policy Center. “It’s hard to argue that there won’t be a positive effect.”

But Mr. Gale added that there are reasons to think it would be modest.

The most important is that the economy is already growing at a faster pace than the Fed considers sustainable. “Economy roaring,” Mr. Trump tweeted on Wednesday.

Photo

After President George W. Bush’s 2001 tax cuts, the wealthiest Americans paid 34.7 percent of their income in taxes, while Americans in the middle income brackets paid 16.1 percent. CreditRon Edmonds/Associated Press

Also, interest rates are low, and nonfinancial companies are sitting on $1.84 trillion that they don’t want to spend. “It’s not lack of funds that’s stopping companies from investing,” Mr. Gale said.

And the stimulus would come at the cost of increased federal borrowing. Interest rates might not rise if foreigners provide the necessary money, as happened in the 1980s and the 2000s, but that means some of the benefits also end up abroad.

It’s a venerable principle that lower tax rates encourage corporate investment. But a study of a 2003 cut in the tax rate on corporate dividendsfound no discernible impact on investment. The finding would not have surprised Mr. Bush’s Treasury secretary at the time, Paul O’Neill, who was fired for opposing the plan. “You find somebody who says, ‘I do more R & D because I get a tax credit for it,’ you’ll find a fool,” Mr. O’Neill, a former Alcoa chairman, said at the time.

Mr. Trump’s plan also continues a long-term march away from progressive taxation. The federal income tax is the centerpiece of a longstanding bipartisan consensus that wealthy Americans should pay an outsize share of the cost of government.

But successive rounds of tax cuts have eroded that premise, according to research by the economists Thomas Piketty of the Paris School of Economics and Emmanuel Saez of the University of California at Berkeley. In 1980, the wealthiest Americans paid 59 percent of their income in taxes while the middle 20 percent of Americans paid 24.5 percent. After the Bush tax cuts, the wealthiest Americans paid 34.7 percent of their income in taxes, while Americans in the middle income brackets paid 16.1 percent.

Under President Barack Obama, Congress increased taxation of upper-income households. Mr. Trump is seeking to resume the long-term trend toward flattening the curve. Upper-income households would get large tax cuts; lower-income households would get none.

The exact impact on the middle class is not yet clear. The outline released Wednesday proposes new tax brackets but does not specify income thresholds. It also proposes to replace the current tax deduction for each dependent with a child tax credit — but the administration did not propose a dollar amount for that new credit.

 

The administration said Wednesday that it was committed “to ensure that the reformed tax code is at least as progressive as the existing tax code.” That language, however, applies only to personal income taxes. The proposed reduction of business taxes and the elimination of the estate tax would both disproportionately benefit wealthy Americans.

“I don’t think there’s any way to justify this as a progressive proposal,” said Lily Batchelder, a law professor at New York University who served as deputy director of Mr. Obama’s National Economic Council. “In broad brush strokes, they’re doing nothing for the bottom 35 percent, they’re doing very little and possibly raising taxes on the middle class, and they’ve specified tax cuts for the wealthy.”

 

Tax reform: Trump, GOP mull surcharge on wealthy, doubling standard deduction

President Donald Trump speaks during a meeting with members of the House Ways and Means committee in the Roosevelt Room of the White House, Tuesday, Sept. 26, 2017, in Washington. (AP Photo/Evan Vucci)(<cite>Evan Vucci</cite>)
President Donald Trump speaks during a meeting with members of the House Ways and Means committee in the Roosevelt Room of the White House, Tuesday, Sept. 26, 2017, in Washington. (AP Photo/Evan Vucci)(Evan Vucci)

WASHINGTON (AP) — President Donald Trump and congressional Republicans are considering an income tax surcharge on the wealthy and doubling the standard deduction given to most Americans, with the GOP under pressure to overhaul the tax code after the collapse of the health care repeal.

On the eve of the grand rollout of the plan, details emerged on Capitol Hill on Tuesday while Trump personally appealed to House Republicans and Democrats at the White House to get behind his proposal.

“We will cut taxes tremendously for the middle class. Not just a little bit but tremendously,” Trump said as he met with members of the tax-writing Ways and Means Committee. He predicted jobs “will be coming back in because we have a non-competitive tax structure right now and we’re going to go super competitive.”

Among the details: repeal of the tax on multimillion-dollar estates, a reduction in the corporate rate from 35 percent to 20 percent and potentially four tax brackets, down from the current seven. The current top rate for individuals, those earning more than $418,000 a year, is 39.6 percent.

The goal is a more simple tax code that would spur economic growth and make U.S. companies more competitive. Delivering on the top legislative goal will be crucial for Republicans intent on holding onto their majorities in next year’s midterm elections.

The tax overhaul plan assembled by the White House and GOP leaders, which would slash the rate for corporations, aims at the first major revamp of the tax system in three decades. It would deliver a major Trump campaign pledge.

The outlines of the plan were described by GOP officials who demanded anonymity to disclose private deliberations.

The plan would likely cut the tax rate for the wealthiest Americans from 39.6 percent to 35 percent. A new surcharge on wealthy taxpayers might soften the appearance of the wealthiest Americans and big corporations benefiting from generous tax cuts.

Republicans already were picking at the framework, pointing up how divisions within GOP ranks can complicate efforts to overhaul taxes as has happened with the series of moves to repeal the Obama health care law.

Details of the proposal crafted behind closed doors over months by top White House economic officials, GOP congressional leaders and the Republican heads of tax-writing panels in the House and Senate were set to be released Wednesday. Trump and the Republicans were putting the final touches on the plan when the Democrats were brought in. A senior Democrat saw it as the opening of negotiations.

Trump had previously said he wanted a 15 percent rate for corporations, but House Speaker Paul Ryan has called that impractically low and has said it would risk adding to the soaring $20 trillion national debt.

Trump said Tuesday some of the components included doubling the standard deduction used by families and increasing the child tax credit. He said the majority of Americans would be able to file their taxes on a single page. “We must make our tax code simple and fair. It’s too complicated,” Trump said.

Some conservative GOP lawmakers, meanwhile, dug their heels in on the shape of the plan.

Rep. Mark Meadows, head of the House Freedom Caucus, said he’d vote against tax legislation if it provided for a corporate tax rate over 20 percent, a rate for small businesses higher than 25 percent, or if it fails to call for a doubling of the standard deduction.

“That’s the red line for me,” Meadows said at a forum of conservative lawmakers. He noted he was speaking personally, not as head of the conservative grouping.

Disgruntlement came from Sen. John Kennedy, R-La., over the process of putting together the plan.

“I get that we want to move to 3 percent but I’d like to know how,” Kennedy said referring to Trump’s ambitious goal of annual growth in the economy through tax cuts. “I’m not much into all the secrecy,” he said. “We need to do this by November, and at the rate we’re going I’m not encouraged right now.”

The Democrats, while acknowledging the tax system should be simplified, have insisted that any tax relief should go to the middle class, not the wealthiest. Tax cuts shouldn’t add to the ballooning debt, the Democrats say.

Rep. Richard Neal of Massachusetts, the top Democrat on the Ways and Means Committee, came away from the White House meeting in a negotiating mood. “This is when the process gets kicked off,” Neal told reporters at the Capitol.

The rate for wealthiest taxpayers shouldn’t be reduced, he said. Democrats are concerned by indications from Trump and his officials that “they intend to offer tax relief to people at the top,” he said.

Still, there may be room to negotiate over the Republicans’ insistence on repealing the estate tax, Neal indicated, since “there are other things you can do with it” to revise it short of complete elimination.

http://www.syracuse.com/politics/index.ssf/2017/09/tax_reform_trump_gop_mull_surcharge_on_wealthy_doubling_standard_deduction.html

9 ways Trump’s tax plan is a gift to the rich, including himself

President Trump and congressional Republicans keep saying their tax plan doesn’t help the rich. But that’s not true.

The nine-page outline released Wednesday is full of goodies that will make millionaires and billionaires happy. Republicans say it’s a starting point, but it would have to be turned on its head to be anything other than a windfall for the wealthy. In fact, in nine pages, The Washington Post counts at least nine ways the wealthy benefit, including Trump himself. Here’s our list:

1) A straight-up tax cut for the rich. The top tax rate in the United States is 39.6 percent. Trump and GOP leaders propose lowering that to 35 percent. It’s also worth noting the 39.6 percent tax rate applies only to income above $418,400 for singles and $470,700 for married couples. The outline doesn’t specify what income level the new 35 percent rate would kick in at. It’s possible the rich will get an every bigger tax cut if the final plan raises that threshold.

2) The estate tax goes bye-bye. Trump likes to call the estate tax the “death tax.” At the moment, Americans who pass money, homes or other assets on to heirs when they die pay a 40 percent tax. But here’s the important part Trump leaves out: The only people who have to pay this tax are those passing on more than $5.49 million. (And a married couple can inherit nearly $11 million without paying the tax.)

September 28 at 12:45 PM

Trump frequently claims the estate tax hurts farmers and small-business owners. But as The Post’s Fact Checker team points out, only 5,500 estates will pay any estate tax at all in 2017 (out of about 3 million estates). And of those 5,500 hit with the tax, only 80 (yes, you read that right) are farms or small businesses.

3) Hedge funds and lawyers get a special tax break. The plan calls for the tax rate on “pass-through entities” to fall from 39.6 percent to 25 percent. Republicans claim this is a tax break for small-business owners because “pass-through entities” is an umbrella term that covers the ways most people set up businesses: sole proprietorships, partnerships and S corporations. But the reality is, most small-business owners (more than 85 percent) already pay a tax rate of 25 percent or less, according to the Brookings Institution.

Only 3 percent pay a rate greater than 30 percent. That 3 percent includes doctors, lawyers, hedge fund managers and other really well-off people. Instead of paying a 35 percent income tax, these rich business owners would be able to pass off their income as business income and pay only a 25 percent tax rate. (The tax outline released Wednesday “contemplates” that Congress “will adopt measures to prevent” this kind of tax dodging. But there’s no guarantee that will happen).

4) The AMT is over. Republicans want to kill the alternative minimum tax, a measure put in place in 1969 to ensure the wealthy aren’t using a bunch of loopholes and credits to lower their tax bills to paltry sums. The AMT starts to phase in for people with earnings of about $130,000, but the vast majority of people subject to the AMT earn over $500,000, according to the nonpartisan Tax Policy Center.

Trump himself would benefit from repealing the AMT. As The Post’s Fact Checker team notes, Trump’s leaked tax return from 2005 shows that the AMT increased his tax bill from about $5.3 million to $36.5 million. In 2005 alone, he potentially could have saved $31 million.

5) The wealthy get to keep deducting mortgage interest. Only about 1 in 4 taxpayers claims the mortgage interest deduction, the Brookings Institution says. “Upper-income households primarily benefit from the subsidy,” wrote Brookings scholar Bruce Katz in a report last year. In fact, the wealthy can deduct interest payments on mortgages worth up to $1 million. There have been many calls over the years to lower that threshold, but the Trump tax plan is keeping it in place.

The GOP is doing this even though the tax cuts would add to the United States’ debt, since it doesn’t raise enough revenue to offset all the money lost from the new tax breaks. The outline also calls for the charitable deduction to stay, another deduction used heavily by the top 1 percent.

6) Stockholders are going to be very happy. Trump is calling for a super-low tax rate on the money big businesses such as Apple and Microsoft bring back to the United States from overseas, a process known as “repatriation.” Trump argues companies will use all this money coming home to build new U.S. factories. But the last time the United States did this, in the early 2000s, it ended up being a big win for people who own stocks. Companies simply took most of the money and gave it to shareholders in the form of dividends and share buybacks.

Guess what? Just about everyone (outside the White House) predicts the same thing will happen again. Corporations are even admitting it.

7) The favorite tax break of hedge fund billionaires is still safe. There’s no mention in the tax-overhaul rubric of “carried interest.” Those two words make most people’s eyes glaze over, but they are a well-known tax-dodging trick for millionaires and billionaires on Wall Street. Hedge fund and private-equity managers earn most of their money from their investments doing well. But instead of paying income taxes on all that money at a rate of 39.6 percent, the managers are able to claim it as “carried interest” so they can pay tax at the low capital gains rate of 20 percent.

Trump called this totally unfair on the campaign trail. During the primaries, he said he would eliminate this loophole because hedge fund managers were “getting away with murder.” But that change didn’t end up in the GOP plan.

8) Capital gains taxes stay low. The nine-page document also says nothing about capital gains, the tax rate people pay when they finally sell a stock or asset after holding on to it for many years. At the moment, the wealthiest Americans pay a 20 percent capital gains rate. Trump and Republican leaders aren’t proposing any changes to that, even though it is a popular way for millionaires to lower their tax bill.

9) The Obamacare investment tax goes away. The Affordable Care Act put in place a 3.8 percent surcharge on investment income (known formally as the Net Investment Income Tax). It applies only to individuals earning more than $200,000 a year and married couples earning more than $250,000. There’s no mention of this tax in the outline released this week, but Republicans clearly want to get rid of it. Repealing it was part of the GOP health-care bills that failed to pass Congress in recent weeks. One way or another, Republicans are likely to roll back this tax.

When reporters asked Trump whether the tax plan would help him personally, he quickly said no.

“No, I don’t benefit. I don’t benefit,” Trump said. “In fact, very, very strongly, as you see, I think there’s very little benefit for people of wealth.”

Rep. Kevin Brady (R-Tex.), who was part of the team that worked with the White House to craft the tax-overhaul outline, was asked a similar question on Fox News. He, too, said this plan does little to help the rich.

“I think those who benefit most are middle-class families struggling to keep every dollar they earn,” Brady told Fox News.

But one look at this plan tells a very different story. It gives an outright tax cut to the wealthiest Americans and it preserves almost all of the most popular loopholes they use to reduce their tax bills.

Sen. Patrick J. Toomey (R-Pa.), a strong proponent of tax cuts, was more straightforward this week. He told reporters, “This is a supply-side approach,” another way of saying trickle-down economics.

Read more:

The GOP tax plan, explained in simplest possible terms

Fact-checking President Trump’s tax speech in Indianapolis

The one surefire way to grow your wealth in the U.S.

https://www.washingtonpost.com/news/wonk/wp/2017/09/28/9-ways-trumps-tax-plan-is-a-gift-to-the-rich-including-himself/?utm_term=.bb9dafe36550

The GOP tax plan, explained in simplest possible terms

The big tax code makeover President Trump and Republicans have been promising for months is finally out.

It’s nine pages long. That may sound like a lengthy document, but the final bill in Congress will be hundreds of pages. What the White House released today is a framework. It’s a summary of what top Trump officials and congressional Republican leaders have agreed to so far. The Trump administration says it’s the job of Congress to flesh out the specifics.

Here are the key takeaways:

  • The plan will likely add to America’s $20 trillion debt. There are lots of tax cuts spelled out. There are almost no loopholes eliminated.
  • The rich make out pretty well. The White House vows poor people won’t have to pay more than they do now, but there are few specifics in the plan so far to ensure that.
  • Businesses (both small and large) get major tax cuts.
  • Most people will pay lower taxes, although it’s unclear if the rich get a bigger break than the middle class.
  • There are still a lot of details Congress has to figure out.

What’s in there for the rich?
The wealthy get a tax cut. They will pay only 35 percent on their income taxes (down from 39.6 percent). At the moment, this rate applies to any income above about $418,000. It’s unclear if Congress will tinker with the income level that rate kicks in at. Trump says he would be fine with Congress raising taxes on the rich in the final plan, but he isn’t requiring that they do that.

The bigger tax break for the rich is the elimination of the estate tax, sometimes called the “death tax.” It’s the tax families currently pay when an asset like a house or ranch worth over $5.49 million is passed down to a heir after someone dies. Trump’s plan scraps this tax entirely.

What’s in there for the middle class?
This is the giant question mark. There’s a lot of details left for Congress to fill out. Under the plan, America will have just three tax rates: 35, 25 and 12 percent, but we don’t know yet which rate someone earning $50,000 or $80,000 will pay.

What we do know is the standard deduction (currently $6,350 for individuals and $12,700 for married couples) will nearly double. This means that a married couple earning $24,000 or less or an individual earning $12,000 or less won’t pay any taxes. But the plan also eliminates what’s known as the additional standard deduction and the popular personal exemption. Some filers may end up worse off after these changes.

The plan also promises a “significant increase” to the child tax credit (it’s currently $1,000 per child) and that middle class Americans can keep using the mortgage interest deduction as well as tax breaks for retirement savings (e.g. 401ks) and higher education. But it eliminates the state and local tax deduction, which is used by many in high-tax states like New York and California.

Can I really file my taxes on a postcard?
The “file on a postcard” idea was an exaggeration. The goal now is to get most people’s tax returns down to one page.

What about the working poor?
A senior White House official told journalists Tuesday, “We are committed to making the tax code at least as progressive as the current tax code.” Translation: The poor should not end up paying more than they do now. But it’s hard to check if that’s true because we still don’t have enough details.

In theory, increasing the standard deduction should mean that more Americans pay $0 in taxes, but it depends what happens to a lot of other tax provisions (and whether Congress ends up cutting safety net programs that help the poor to pay for tax cuts). Top Republican officials have not decided what to do with the Earned Income Tax Credit (EITC), which is widely used by the working poor to help them reduce their tax bill and even get a small amount of money back from the government.

What happens to the Alternative Minimum Tax?
The Alternative Minimum Tax (AMT) would go away under the plan. It currently applies mainly to individuals earning more than $130,000 and married couples earning more than $160,00. It was created in the 1970s to prevent wealthier families from taking so many tax breaks that they end up paying little to no taxes, but over the years, the AMT has impacted more and more families.

What happens to big businesses?
America’s large corporations will get a big tax cut. The top rate at the moment is 35 percent, one of the highest rates among developed nations. Most U.S. companies don’t pay that rate, but it is still a starting point. The Trump plan slashes the rate to 20 percent, just below the average of major developed countries the U.S. competes against.

The White House and Congress promised to close some loopholes that businesses currently enjoy, but no one is saying what those are yet. In fact, the only details we have show MORE business goodies, not less. The plan calls for businesses to be able to write off their investments (e.g. the cost of building a new factory) right away instead of crediting a little bit each year for several years. This is supposed to encourage companies to invest more, which will hopefully create more jobs.

What happens to small businesses?
Small businesses also get a tax cut under the plan. At the moment, many small business owners pay whatever their personal income tax rate is, so some end up paying as much as 39.6 percent. Under this plan, most “pass throughs” (code for small businesses) would pay at the 25 percent rate (the exception is if a small businesses earned very little income, they might be able to pay at the 12 percent rate).

There’s concern some rich people, especially hedge fund managers and consultants to the stars, will simply use this as a way to lower their tax bill. Instead of paying at the new 35 percent top income tax rate, they could say all their income is small business income and pay at the 25 percent rate. Trump has promised to fix that problem, but no one is sure how.

How will this plan help growth?
Trump’s big claim is that this tax overhaul will unleash economic growth. The United States has been growing at about 2 percent a year lately, below the historic norm. Trump keeps saying this plan will unleash growth of 3 percent — or more.

Economists, even those who work at Wall Street banks and for big companies, only project a modest boost to growth. Estimates range from 2.1 percent to 2.25 percent.

How much will this add to the debt?
Originally, Republican leaders said they would not add $1 to America’s debt, but that promise appears to be gone. The White House says it will go along with whatever price tag Congress allows. Right now, Senate Republicans have a deal to add $1.5 trillion to the debt over the next decade, so there’s a good chance this tax plan will add to the debt.

What are the pitfalls?
There’s a ton we don’t know yet. Many on the left are concerned this plan gives away too much to the rich and big businesses. Many across the political spectrum are alarmed that it will likely add to America’s already large debt.

https://www.washingtonpost.com/news/wonk/wp/2017/09/27/the-gop-tax-plan-explained-in-simplest-possible-terms/?tid=a_inl&utm_term=.4de9a2bfc9ce

Some tax breaks are for the rich.
Others for the poor. Which are for you?

The Republican tax reform plan is finally out – you can read the full document here. The framework touches on many parts of the tax code, but two critical areas are tax deductions and credits. These reduce how much taxpayers owe, but they affect income groups differently. How could the proposed changes to these policies affect your taxes?

Most beneficial tax deductions and exemptions, 2015

Deductions and exemptions reduce your tax bill by decreasing your taxable income.

Other deductionsState and local taxesCharitable contributionsReal estate taxesEmployee business expensesMedical/dental expensesHome mortgage interestStandard deductionPersonal and dependent exemptions$10,000$25,000$50,000$100,000$500,000Lower incomeHigher income$30,000 to $40,000
DEDUCTION MEAN DEDUCTION*
Personal and dependent exemptions (?) $7,700
Standard deduction (?) $7,100
Home mortgage interest (?) $700
Medical/dental expenses (?) $500
Employee business expenses (?) $400
Real estate taxes (?) $400
Charitable contributions (?) $300
State and local taxes (?) $200
Other deductions $200

* Mean deduction is the total deduction amount received by the income group divided by the number of returns in that group, including those that did not receive the deduction.

Note: Returns for those filing singly and those filing jointly or in other categories are lumped together. Tax returns cannot claim both the standard deductions and itemized deductions. Total deductions and exemptions can exceed adjusted gross income, but the excess does not affect taxes owed, as taxable income cannot drop below zero.

Taxpayers – except the highest earners – are currently eligible for tax “exemptions” to reduce their taxable income. In 2016, Americans could take a $4,050 personal exemption from their income (double if filing as a married couple), and then get additional exemptions for dependents.

After exemptions taxpayers can further reduce their taxable income by taking tax deductions. 69 percent of taxpayers in 2015 took the “standard deduction,” a fixed amount that is currently $6,300 for (most) taxpayers filing singly.

https://www.washingtonpost.com/graphics/2017/politics/tax-breaks/?utm_term=.09de159b6eeb

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The remaining taxpayers – mostly in higher income groups – “itemized” their tax returns, meaning they chose to take advantage of more specific tax deductions based on their expenses. The deductions came out to more than they would have gotten through the standard deduction.

Here’s what the Republican’s tax reform framework would change about deductions:

  • Republicans want to nearly double the standard deduction to $12,000 for those filing singly and $24,000 for those filing jointly. At the same time, the framework calls for the repeal of exemptions, consolidating these different parts of the tax system.
  • The framework aims to simplify the tax code by gutting many itemized deductions, although charitable contributions and mortgage interestwould be retained. That makes the state and local taxes deduction (SALT) a major target. SALT lets you deduct state and local income or sales taxes you owe from your federal taxable income and largely benefits blue states with higher taxes.

Most beneficial tax credits, 2015

Tax credits are subtracted directly from taxes owed.

Prior-year minimum tax creditGeneral business creditResidential energy creditsForeign tax creditChild care creditOther creditsAmerican opportunity creditNonrefundable education creditChild tax creditAdditional child tax creditEarned income credit$10,000$25,000$50,000$100,000$500,000Lower incomeHigher income$30,000 to $40,000
CREDIT MEAN CREDIT*
Earned income credit (?) $500
Additional child tax credit (?) $300
Child tax credit (?) $200
Nonrefundable education credit (?) $100
American opportunity credit (?) $100
Other credits $0
Child care credit (?) $0
Foreign tax credit (?) $0
Residential energy credits (?) $0
General business credit (?) $0
Prior-year minimum tax credit (?) $0

* Mean credit is the total credit amount received by the income group divided by the number of returns in that group, including those that did not receive the credit.

Note: Returns for those filing singly and those filing jointly or in other categories are lumped together.

Credits can reduce federal income taxes owed down to zero, but “refundable” credits can reduce them even more, allowing some taxpayers to receive a net gain from the federal government after filing.

Here’s what the Republican’s tax reform framework would change about credits:

  • The plan calls for an expansion of the child tax credit, increasing its value from the current $1,000 max and making it available to more income groups. The framework also proposes an additional $500 non-refundable credit for “non-child dependents.”
  • Like with deductions, the framework calls for the repeal of “numerous other” credits to simplify the tax code but does not specify which policies will be targeted.

Just part of the picture

Of course, the tax policies we’re looking at above are just part of U.S. federal tax code. Actual income tax rates are central to tax reform proposals; the Republican tax reform framework would reduce the seven income brackets currently used to just three, lowering rates for many but increasing them for some in the lowest bracket. It also calls for the repeal of the estate tax.

The plan also proposes a large decrease in the corporate tax rate from 35 to 20 percent, among many other changes to the business tax code.

https://www.washingtonpost.com/graphics/2017/politics/tax-breaks/?utm_term=.09de159b6eeb

The Internal Revenue Service has recently released new data on individual income taxes for calendar year 2014, showing the number of taxpayers, adjusted gross income, and income tax shares by income percentiles.[1]

The data demonstrates that the U.S. individual income tax continues to be very progressive, borne mainly by the highest income earners.

  • In 2014, 139.6 million taxpayers reported earning $9.71 trillion in adjusted gross income and paid $1.37 trillion in individual income taxes.
  • The share of income earned by the top 1 percent of taxpayers rose to 20.6 percent in 2014. Their share of federal individual income taxes also rose, to 39.5 percent.
  • In 2014, the top 50 percent of all taxpayers paid 97.3 percent of all individual income taxes while the bottom 50 percent paid the remaining 2.7 percent.
  • The top 1 percent paid a greater share of individual income taxes (39.5 percent) than the bottom 90 percent combined (29.1 percent).
  • The top 1 percent of taxpayers paid a 27.1 percent individual income tax rate, which is more than seven times higher than taxpayers in the bottom 50 percent (3.5 percent).

Reported Income and Taxes Paid Both Increased Significantly in 2014

Taxpayers reported $9.71 trillion in adjusted gross income (AGI) on 139.5 million tax returns in 2014. Total AGI grew by $675 billion from the previous year’s levels. There were 1.2 million more returns filed in 2014 than in 2013, meaning that average AGI rose by $4,252 per return, or 6.5 percent.

Meanwhile, taxpayers paid $1.37 trillion in individual income taxes in 2014, an 11.5 percent increase from taxes paid in the previous year. The average individual income tax rate for all taxpayers rose from 13.64 percent to 14.16 percent. Moreover, the average tax rate increased for all income groups, except for the top 0.1 percent of taxpayers, whose average rate decreased from 27.91 percent to 27.67 percent.

The most likely explanation behind the higher tax rates in 2014 is a phenomenon known as “real bracket creep.” [2] As incomes rise, households are pushed into higher tax brackets, and are subject to higher overall tax rates on their income. On the other hand, the likely reason why the top 0.1 percent of households saw a slightly lower tax rate in 2014 is because a higher portion of their income consisted of long-term capital gains, which are subject to lower tax rates.[3]

The share of income earned by the top 1 percent rose to 20.58 percent of total AGI, up from 19.04 percent in 2013. The share of the income tax burden for the top 1 percent also rose, from 37.80 percent in 2013 to 39.48 percent in 2014.

Top 1% Top 5% Top 10% Top 25% Top 50% Bottom 50% All Taxpayers
Table 1. Summary of Federal Income Tax Data, 2014
Number of Returns 1,395,620 6,978,102 13,956,203 34,890,509 69,781,017 69,781,017 139,562,034
Adjusted Gross Income ($ millions) $1,997,819 $3,490,867 $4,583,416 $6,690,287 $8,614,544 $1,094,119 $9,708,663
Share of Total Adjusted Gross Income 20.58% 35.96% 47.21% 68.91% 88.73% 11.27% 100.00%
Income Taxes Paid ($ millions) $542,640 $824,153 $974,124 $1,192,679 $1,336,637 $37,740 $1,374,379
Share of Total Income Taxes Paid 39.48% 59.97% 70.88% 86.78% 97.25% 2.75% 100.00%
Income Split Point $465,626 $188,996 $133,445 $77,714 $38,173
Average Tax Rate 27.16% 23.61% 21.25% 17.83% 15.52% 3.45% 14.16%
 Note: Does not include dependent filers

High-Income Americans Paid the Majority of Federal Taxes

In 2014, the bottom 50 percent of taxpayers (those with AGIs below $38,173) earned 11.27 percent of total AGI. This group of taxpayers paid approximately $38 billion in taxes, or 2.75 percent of all income taxes in 2014.

In contrast, the top 1 percent of all taxpayers (taxpayers with AGIs of $465,626 and above) earned 20.58 percent of all AGI in 2014, but paid 39.48 percent of all federal income taxes.

In 2014, the top 1 percent of taxpayers accounted for more income taxes paid than the bottom 90 percent combined. The top 1 percent of taxpayers paid $543 billion, or 39.48 percent of all income taxes, while the bottom 90 percent paid $400 billion, or 29.12 percent of all income taxes.

Figure 1.

High-Income Taxpayers Pay the Highest Average Tax Rates

The 2014 IRS data shows that taxpayers with higher incomes pay much higher average individual income tax rates than lower-income taxpayers.[4]

The bottom 50 percent of taxpayers (taxpayers with AGIs below $38,173) faced an average income tax rate of 3.45 percent. As household income increases, the IRS data shows that average income tax rates rise. For example, taxpayers with AGIs between the 10th and 5th percentile ($133,445 and $188,996) pay an average rate of 13.7 percent – almost four times the rate paid by those in the bottom 50 percent.

The top 1 percent of taxpayers (AGI of $465,626 and above) paid the highest effective income tax rate, at 27.2 percent, 7.9 times the rate faced by the bottom 50 percent of taxpayers.

Figure 2.

Taxpayers at the very top of the income distribution, the top 0.1 percent (with AGIs over $2.14 million), paid an even higher average tax rate, of 27.7 percent.

573 $442 $1,015 $458 $1,473 $318
1982 $1,876 $167 $398 $207 $605 $460 $1,065 $478 $1,544 $332
1983 $1,970 $183 $428 $217 $646 $481 $1,127 $498 $1,625 $344
1984 $2,173 $210 $482 $240 $723 $528 $1,251 $543 $1,794 $379
1985 $2,344 $235 $531 $260 $791 $567 $1,359 $580 $1,939 $405
1986 $2,524 $285 $608 $278 $887 $604 $1,490 $613 $2,104 $421
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987 $2,814 $347 $722 $316 $1,038 $671 $1,709 $664 $2,374 $440
1988 $3,124 $474 $891 $342 $1,233 $718 $1,951 $707 $2,658 $466
1989 $3,299 $468 $918 $368 $1,287 $768 $2,054 $751 $2,805 $494
1990 $3,451 $483 $953 $385 $1,338 $806 $2,144 $788 $2,933 $519
1991 $3,516 $457 $943 $400 $1,343 $832 $2,175 $809 $2,984 $532
1992 $3,681 $524 $1,031 $413 $1,444 $856 $2,299 $832 $3,131 $549
1993 $3,776 $521 $1,048 $426 $1,474 $883 $2,358 $854 $3,212 $563
1994 $3,961 $547 $1,103 $449 $1,552 $929 $2,481 $890 $3,371 $590
1995 $4,245 $620 $1,223 $482 $1,705 $985 $2,690 $938 $3,628 $617
1996 $4,591 $737 $1,394 $515 $1,909 $1,043 $2,953 $992 $3,944 $646
1997 $5,023 $873 $1,597 $554 $2,151 $1,116 $3,268 $1,060 $4,328 $695
1998 $5,469 $1,010 $1,797 $597 $2,394 $1,196 $3,590 $1,132 $4,721 $748
1999 $5,909 $1,153 $2,012 $641 $2,653 $1,274 $3,927 $1,199 $5,126 $783
2000 $6,424 $1,337 $2,267 $688 $2,955 $1,358 $4,314 $1,276 $5,590 $834
The IRS changed methodology, so data above and below this line not strictly comparable
2001 $6,116 $492 $1,065 $1,934 $666 $2,600 $1,334 $3,933 $1,302 $5,235 $881
2002 $5,982 $421 $960 $1,812 $660 $2,472 $1,339 $3,812 $1,303 $5,115 $867
2003 $6,157 $466 $1,030 $1,908 $679 $2,587 $1,375 $3,962 $1,325 $5,287 $870
2004 $6,735 $615 $1,279 $2,243 $725 $2,968 $1,455 $4,423 $1,403 $5,826 $908
2005 $7,366 $784 $1,561 $2,623 $778 $3,401 $1,540 $4,940 $1,473 $6,413 $953
2006 $7,970 $895 $1,761 $2,918 $841 $3,760 $1,652 $5,412 $1,568 $6,980 $990
2007 $8,622 $1,030 $1,971 $3,223 $905 $4,128 $1,770 $5,898 $1,673 $7,571 $1,051
2008 $8,206 $826 $1,657 $2,868 $905 $3,773 $1,782 $5,555 $1,673 $7,228 $978
2009 $7,579 $602 $1,305 $2,439 $878 $3,317 $1,740 $5,058 $1,620 $6,678 $900
2010 $8,040 $743 $1,517 $2,716 $915 $3,631 $1,800 $5,431 $1,665 $7,096 $944
2011 $8,317 $737 $1,556 $2,819 $956 $3,775 $1,866 $5,641 $1,716 $7,357 $961
2012 $9,042 $1,017 $1,977 $3,331 $997 $4,328 $1,934 $6,262 $1,776 $8,038 $1,004
2013 $9,034 $816 $1,720 $3,109 $1,034 $4,143 $2,008 $6,152 $1,844 $7,996 $1,038
2014 $9,709 $986 $1,998 $3,491 $1,093 $4,583 $2,107 $6,690 $1,924 $8,615 $1,094
Year Total Top 0.1% Top 1% Top 5% Between 5% & 10% Top 10% Between 10% & 25% Top 25% Between 25% & 50% Top 50% Bottom 50%
Table 4. Total Income Tax after Credits, 1980–2014 ($Billions)
Source: Internal Revenue Service.
1980 $249 $47 $92 $31 $123 $59 $182 $50 $232 $18
1981 $282 $50 $99 $36 $135 $69 $204 $57 $261 $21
1982 $276 $53 $100 $34 $134 $66 $200 $56 $256 $20
1983 $272 $55 $101 $34 $135 $64 $199 $54 $252 $19
1984 $297 $63 $113 $37 $150 $68 $219 $57 $276 $22
1985 $322 $70 $125 $41 $166 $73 $238 $60 $299 $23
1986 $367 $94 $156 $44 $201 $78 $279 $64 $343 $24
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987 $369 $92 $160 $46 $205 $79 $284 $63 $347 $22
1988 $413 $114 $188 $48 $236 $85 $321 $68 $389 $24
1989 $433 $109 $190 $51 $241 $93 $334 $73 $408 $25
1990 $447 $112 $195 $52 $248 $97 $344 $77 $421 $26
1991 $448 $111 $194 $56 $250 $96 $347 $77 $424 $25
1992 $476 $131 $218 $58 $276 $97 $374 $78 $452 $24
1993 $503 $146 $238 $60 $298 $101 $399 $80 $479 $24
1994 $535 $154 $254 $64 $318 $108 $425 $84 $509 $25
1995 $588 $178 $288 $70 $357 $115 $473 $88 $561 $27
1996 $658 $213 $335 $76 $411 $124 $535 $95 $630 $28
1997 $727 $241 $377 $82 $460 $134 $594 $102 $696 $31
1998 $788 $274 $425 $88 $513 $139 $652 $103 $755 $33
1999 $877 $317 $486 $97 $583 $150 $733 $109 $842 $35
2000 $981 $367 $554 $106 $660 $164 $824 $118 $942 $38
The IRS changed methodology, so data above and below this line not strictly comparable
2001 $885 $139 $294 $462 $101 $564 $158 $722 $120 $842 $43
2002 $794 $120 $263 $420 $93 $513 $143 $657 $104 $761 $33
2003 $746 $115 $251 $399 $85 $484 $133 $617 $98 $715 $30
2004 $829 $142 $301 $467 $91 $558 $137 $695 $102 $797 $32
2005 $932 $176 $361 $549 $98 $647 $145 $793 $106 $898 $33
2006 $1,020 $196 $402 $607 $108 $715 $157 $872 $113 $986 $35
2007 $1,112 $221 $443 $666 $117 $783 $170 $953 $122 $1,075 $37
2008 $1,029 $187 $386 $597 $115 $712 $168 $880 $117 $997 $32
2009 $863 $146 $314 $502 $101 $604 $146 $749 $93 $842 $21
2010 $949 $170 $355 $561 $110 $670 $156 $827 $100 $927 $22
2011 $1,043 $168 $366 $589 $123 $712 $181 $893 $120 $1,012 $30
2012 $1,185 $220 $451 $699 $133 $831 $193 $1,024 $128 $1,152 $33
2013 $1,232 $228 $466 $721 $139 $860 $203 $1,063 $135 $1,198 $34
2014 $1,374 $273 $543 $824 $150 $974 $219 $1,193 $144 $1,337 $38
Year Total Top 0.1% Top 1% Top 5% Between 5% & 10% Top 10% Between 10% & 25% Top 25% Between 25% & 50% Top 50% Bottom 50%
Table 5. Adjusted Gross Income Shares, 1980–2014 (percent of total AGI earned by each group)
Source: Internal Revenue Service.
1980 100% 8.46% 21.01% 11.12% 32.13% 24.57% 56.70% 25.62% 82.32% 17.68%
1981 100% 8.30% 20.78% 11.20% 31.98% 24.69% 56.67% 25.59% 82.25% 17.75%
1982 100% 8.91% 21.23% 11.03% 32.26% 24.53% 56.79% 25.50% 82.29% 17.71%
1983 100% 9.29% 21.74% 11.04% 32.78% 24.44% 57.22% 25.30% 82.52% 17.48%
1984 100% 9.66% 22.19% 11.06% 33.25% 24.31% 57.56% 25.00% 82.56% 17.44%
1985 100% 10.03% 22.67% 11.10% 33.77% 24.21% 57.97% 24.77% 82.74% 17.26%
1986 100% 11.30% 24.11% 11.02% 35.12% 23.92% 59.04% 24.30% 83.34% 16.66%
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987 100% 12.32% 25.67% 11.23% 36.90% 23.85% 60.75% 23.62% 84.37% 15.63%
1988 100% 15.16% 28.51% 10.94% 39.45% 22.99% 62.44% 22.63% 85.07% 14.93%
1989 100% 14.19% 27.84% 11.16% 39.00% 23.28% 62.28% 22.76% 85.04% 14.96%
1990 100% 14.00% 27.62% 11.15% 38.77% 23.36% 62.13% 22.84% 84.97% 15.03%
1991 100% 12.99% 26.83% 11.37% 38.20% 23.65% 61.85% 23.01% 84.87% 15.13%
1992 100% 14.23% 28.01% 11.21% 39.23% 23.25% 62.47% 22.61% 85.08% 14.92%
1993 100% 13.79% 27.76% 11.29% 39.05% 23.40% 62.45% 22.63% 85.08% 14.92%
1994 100% 13.80% 27.85% 11.34% 39.19% 23.45% 62.64% 22.48% 85.11% 14.89%
1995 100% 14.60% 28.81% 11.35% 40.16% 23.21% 63.37% 22.09% 85.46% 14.54%
1996 100% 16.04% 30.36% 11.23% 41.59% 22.73% 64.32% 21.60% 85.92% 14.08%
1997 100% 17.38% 31.79% 11.03% 42.83% 22.22% 65.05% 21.11% 86.16% 13.84%
1998 100% 18.47% 32.85% 10.92% 43.77% 21.87% 65.63% 20.69% 86.33% 13.67%
1999 100% 19.51% 34.04% 10.85% 44.89% 21.57% 66.46% 20.29% 86.75% 13.25%
2000 100% 20.81% 35.30% 10.71% 46.01% 21.15% 67.15% 19.86% 87.01% 12.99%
The IRS changed methodology, so data above and below this line not strictly comparable
2001 100% 8.05% 17.41% 31.61% 10.89% 42.50% 21.80% 64.31% 21.29% 85.60% 14.40%
2002 100% 7.04% 16.05% 30.29% 11.04% 41.33% 22.39% 63.71% 21.79% 85.50% 14.50%
2003 100% 7.56% 16.73% 30.99% 11.03% 42.01% 22.33% 64.34% 21.52% 85.87% 14.13%
2004 100% 9.14% 18.99% 33.31% 10.77% 44.07% 21.60% 65.68% 20.83% 86.51% 13.49%
2005 100% 10.64% 21.19% 35.61% 10.56% 46.17% 20.90% 67.07% 19.99% 87.06% 12.94%
2006 100% 11.23% 22.10% 36.62% 10.56% 47.17% 20.73% 67.91% 19.68% 87.58% 12.42%
2007 100% 11.95% 22.86% 37.39% 10.49% 47.88% 20.53% 68.41% 19.40% 87.81% 12.19%
2008 100% 10.06% 20.19% 34.95% 11.03% 45.98% 21.71% 67.69% 20.39% 88.08% 11.92%
2009 100% 7.94% 17.21% 32.18% 11.59% 43.77% 22.96% 66.74% 21.38% 88.12% 11.88%
2010 100% 9.24% 18.87% 33.78% 11.38% 45.17% 22.38% 67.55% 20.71% 88.26% 11.74%
2011 100% 8.86% 18.70% 33.89% 11.50% 45.39% 22.43% 67.82% 20.63% 88.45% 11.55%
2012 100% 11.25% 21.86% 36.84% 11.03% 47.87% 21.39% 69.25% 19.64% 88.90% 11.10%
2013 100% 9.03% 19.04% 34.42% 11.45% 45.87% 22.23% 68.10% 20.41% 88.51% 11.49%
2014 100% 10.16% 20.58% 35.96% 11.25% 47.21% 21.70% 68.91% 19.82% 88.73% 11.27%
Year Total Top 0.1% Top 1% Top 5% Between 5% & 10% Top 10% Between 10% & 25% Top 25% Between 25% & 50% Top 50% Bottom 50%
Table 6. Total Income Tax Shares, 1980–2014 (percent of federal income tax paid by each group)
Source: Internal Revenue Service.
1980 100% 19.05% 36.84% 12.44% 49.28% 23.74% 73.02% 19.93% 92.95% 7.05%
1981 100% 17.58% 35.06% 12.90% 47.96% 24.33% 72.29% 20.26% 92.55% 7.45%
1982 100% 19.03% 36.13% 12.45% 48.59% 23.91% 72.50% 20.15% 92.65% 7.35%
1983 100% 20.32% 37.26% 12.44% 49.71% 23.39% 73.10% 19.73% 92.83% 7.17%
1984 100% 21.12% 37.98% 12.58% 50.56% 22.92% 73.49% 19.16% 92.65% 7.35%
1985 100% 21.81% 38.78% 12.67% 51.46% 22.60% 74.06% 18.77% 92.83% 7.17%
1986 100% 25.75% 42.57% 12.12% 54.69% 21.33% 76.02% 17.52% 93.54% 6.46%
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987 100% 24.81% 43.26% 12.35% 55.61% 21.31% 76.92% 17.02% 93.93% 6.07%
1988 100% 27.58% 45.62% 11.66% 57.28% 20.57% 77.84% 16.44% 94.28% 5.72%
1989 100% 25.24% 43.94% 11.85% 55.78% 21.44% 77.22% 16.94% 94.17% 5.83%
1990 100% 25.13% 43.64% 11.73% 55.36% 21.66% 77.02% 17.16% 94.19% 5.81%
1991 100% 24.82% 43.38% 12.45% 55.82% 21.46% 77.29% 17.23% 94.52% 5.48%
1992 100% 27.54% 45.88% 12.12% 58.01% 20.47% 78.48% 16.46% 94.94% 5.06%
1993 100% 29.01% 47.36% 11.88% 59.24% 20.03% 79.27% 15.92% 95.19% 4.81%
1994 100% 28.86% 47.52% 11.93% 59.45% 20.10% 79.55% 15.68% 95.23% 4.77%
1995 100% 30.26% 48.91% 11.84% 60.75% 19.62% 80.36% 15.03% 95.39% 4.61%
1996 100% 32.31% 50.97% 11.54% 62.51% 18.80% 81.32% 14.36% 95.68% 4.32%
1997 100% 33.17% 51.87% 11.33% 63.20% 18.47% 81.67% 14.05% 95.72% 4.28%
1998 100% 34.75% 53.84% 11.20% 65.04% 17.65% 82.69% 13.10% 95.79% 4.21%
1999 100% 36.18% 55.45% 11.00% 66.45% 17.09% 83.54% 12.46% 96.00% 4.00%
2000 100% 37.42% 56.47% 10.86% 67.33% 16.68% 84.01% 12.08% 96.09% 3.91%
The IRS changed methodology, so data above and below this line not strictly comparable
2001 100% 15.68% 33.22% 52.24% 11.44% 63.68% 17.88% 81.56% 13.54% 95.10% 4.90%
2002 100% 15.09% 33.09% 52.86% 11.77% 64.63% 18.04% 82.67% 13.12% 95.79% 4.21%
2003 100% 15.37% 33.69% 53.54% 11.35% 64.89% 17.87% 82.76% 13.17% 95.93% 4.07%
2004 100% 17.12% 36.28% 56.35% 10.96% 67.30% 16.52% 83.82% 12.31% 96.13% 3.87%
2005 100% 18.91% 38.78% 58.93% 10.52% 69.46% 15.61% 85.07% 11.35% 96.41% 3.59%
2006 100% 19.24% 39.36% 59.49% 10.59% 70.08% 15.41% 85.49% 11.10% 96.59% 3.41%
2007 100% 19.84% 39.81% 59.90% 10.51% 70.41% 15.30% 85.71% 10.93% 96.64% 3.36%
2008 100% 18.20% 37.51% 58.06% 11.14% 69.20% 16.37% 85.57% 11.33% 96.90% 3.10%
2009 100% 16.91% 36.34% 58.17% 11.72% 69.89% 16.85% 86.74% 10.80% 97.54% 2.46%
2010 100% 17.88% 37.38% 59.07% 11.55% 70.62% 16.49% 87.11% 10.53% 97.64% 2.36%
2011 100% 16.14% 35.06% 56.49% 11.77% 68.26% 17.36% 85.62% 11.50% 97.11% 2.89%
2012 100% 18.60% 38.09% 58.95% 11.22% 70.17% 16.25% 86.42% 10.80% 97.22% 2.78%
2013 100% 18.48% 37.80% 58.55% 11.25% 69.80% 16.47% 86.27% 10.94% 97.22% 2.78%
2014 100% 19.85% 39.48% 59.97% 10.91% 70.88% 15.90% 86.78% 10.47% 97.25% 2.75%
Year Total Top 1% Top 5% Top 10% Top 25% Top 50%
Table 7. Dollar Cut-Off, 1980–2014 (Minimum AGI for Tax Returns to Fall into Various Percentiles; Thresholds Not Adjusted for Inflation)
1980 $80,580 $43,792 $35,070 $23,606 $12,936
1981 $85,428 $47,845 $38,283 $25,655 $14,000
1982 $89,388 $49,284 $39,676 $27,027 $14,539
1983 $93,512 $51,553 $41,222 $27,827 $15,044
1984 $100,889 $55,423 $43,956 $29,360 $15,998
1985 $108,134 $58,883 $46,322 $30,928 $16,688
1986 $118,818 $62,377 $48,656 $32,242 $17,302
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987 $139,289 $68,414 $52,921 $33,983 $17,768
1988 $157,136 $72,735 $55,437 $35,398 $18,367
1989 $163,869 $76,933 $58,263 $36,839 $18,993
1990 $167,421 $79,064 $60,287 $38,080 $19,767
1991 $170,139 $81,720 $61,944 $38,929 $20,097
1992 $181,904 $85,103 $64,457 $40,378 $20,803
1993 $185,715 $87,386 $66,077 $41,210 $21,179
1994 $195,726 $91,226 $68,753 $42,742 $21,802
1995 $209,406 $96,221 $72,094 $44,207 $22,344
1996 $227,546 $101,141 $74,986 $45,757 $23,174
1997 $250,736 $108,048 $79,212 $48,173 $24,393
1998 $269,496 $114,729 $83,220 $50,607 $25,491
1999 $293,415 $120,846 $87,682 $52,965 $26,415
2000 $313,469 $128,336 $92,144 $55,225 $27,682
The IRS changed methodology, so data above and below this line not strictly comparable
2001 $1,393,718 $306,635 $132,082 $96,151 $59,026 $31,418
2002 $1,245,352 $296,194 $130,750 $95,699 $59,066 $31,299
2003 $1,317,088 $305,939 $133,741 $97,470 $59,896 $31,447
2004 $1,617,918 $339,993 $140,758 $101,838 $62,794 $32,622
2005 $1,938,175 $379,261 $149,216 $106,864 $64,821 $33,484
2006 $2,124,625 $402,603 $157,390 $112,016 $67,291 $34,417
2007 $2,251,017 $426,439 $164,883 $116,396 $69,559 $35,541
2008 $1,867,652 $392,513 $163,512 $116,813 $69,813 $35,340
2009 $1,469,393 $351,968 $157,342 $114,181 $68,216 $34,156
2010 $1,634,386 $369,691 $161,579 $116,623 $69,126 $34,338
2011 $1,717,675 $388,905 $167,728 $120,136 $70,492 $34,823
2012 $2,161,175 $434,682 $175,817 $125,195 $73,354 $36,055
2013 $1,860,848 $428,713 $179,760 $127,695 $74,955 $36,841
2014 $2,136,762 $465,626 $188,996 $133,445 $77,714 $38,173
Source: Internal Revenue Service.
Year Total Top 0.1% Top 1% Top 5% Between 5% & 10% Top 10% Between 10% & 25% Top 25% Between 25% & 50% Top 50% Bottom 50%
Table 8. Average Tax Rate, 1980–2014 (Percent of AGI Paid in Income Taxes)
Source: Internal Revenue Service.
1980 15.31% 34.47% 26.85% 17.13% 23.49% 14.80% 19.72% 11.91% 17.29% 6.10%
1981 15.76% 33.37% 26.59% 18.16% 23.64% 15.53% 20.11% 12.48% 17.73% 6.62%
1982 14.72% 31.43% 25.05% 16.61% 22.17% 14.35% 18.79% 11.63% 16.57% 6.10%
1983 13.79% 30.18% 23.64% 15.54% 20.91% 13.20% 17.62% 10.76% 15.52% 5.66%
1984 13.68% 29.92% 23.42% 15.57% 20.81% 12.90% 17.47% 10.48% 15.35% 5.77%
1985 13.73% 29.86% 23.50% 15.69% 20.93% 12.83% 17.55% 10.41% 15.41% 5.70%
1986 14.54% 33.13% 25.68% 15.99% 22.64% 12.97% 18.72% 10.48% 16.32% 5.63%
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987 13.12% 26.41% 22.10% 14.43% 19.77% 11.71% 16.61% 9.45% 14.60% 5.09%
1988 13.21% 24.04% 21.14% 14.07% 19.18% 11.82% 16.47% 9.60% 14.64% 5.06%
1989 13.12% 23.34% 20.71% 13.93% 18.77% 12.08% 16.27% 9.77% 14.53% 5.11%
1990 12.95% 23.25% 20.46% 13.63% 18.50% 12.01% 16.06% 9.73% 14.36% 5.01%
1991 12.75% 24.37% 20.62% 13.96% 18.63% 11.57% 15.93% 9.55% 14.20% 4.62%
1992 12.94% 25.05% 21.19% 13.99% 19.13% 11.39% 16.25% 9.42% 14.44% 4.39%
1993 13.32% 28.01% 22.71% 14.01% 20.20% 11.40% 16.90% 9.37% 14.90% 4.29%
1994 13.50% 28.23% 23.04% 14.20% 20.48% 11.57% 17.15% 9.42% 15.11% 4.32%
1995 13.86% 28.73% 23.53% 14.46% 20.97% 11.71% 17.58% 9.43% 15.47% 4.39%
1996 14.34% 28.87% 24.07% 14.74% 21.55% 11.86% 18.12% 9.53% 15.96% 4.40%
1997 14.48% 27.64% 23.62% 14.87% 21.36% 12.04% 18.18% 9.63% 16.09% 4.48%
1998 14.42% 27.12% 23.63% 14.79% 21.42% 11.63% 18.16% 9.12% 16.00% 4.44%
1999 14.85% 27.53% 24.18% 15.06% 21.98% 11.76% 18.66% 9.12% 16.43% 4.48%
2000 15.26% 27.45% 24.42% 15.48% 22.34% 12.04% 19.09% 9.28% 16.86% 4.60%
The IRS changed methodology, so data above and below this line not strictly comparable
2001 14.47% 28.17% 27.60% 23.91% 15.20% 21.68% 11.87% 18.35% 9.20% 16.08% 4.92%
2002 13.28% 28.48% 27.37% 23.17% 14.15% 20.76% 10.70% 17.23% 8.00% 14.87% 3.86%
2003 12.11% 24.60% 24.38% 20.92% 12.46% 18.70% 9.69% 15.57% 7.41% 13.53% 3.49%
2004 12.31% 23.06% 23.52% 20.83% 12.53% 18.80% 9.41% 15.71% 7.27% 13.68% 3.53%
2005 12.65% 22.48% 23.15% 20.93% 12.61% 19.03% 9.45% 16.04% 7.18% 14.01% 3.51%
2006 12.80% 21.94% 22.80% 20.80% 12.84% 19.02% 9.52% 16.12% 7.22% 14.12% 3.51%
2007 12.90% 21.42% 22.46% 20.66% 12.92% 18.96% 9.61% 16.16% 7.27% 14.19% 3.56%
2008 12.54% 22.67% 23.29% 20.83% 12.66% 18.87% 9.45% 15.85% 6.97% 13.79% 3.26%
2009 11.39% 24.28% 24.05% 20.59% 11.53% 18.19% 8.36% 14.81% 5.76% 12.61% 2.35%
2010 11.81% 22.84% 23.39% 20.64% 11.98% 18.46% 8.70% 15.22% 6.01% 13.06% 2.37%
2011 12.54% 22.82% 23.50% 20.89% 12.83% 18.85% 9.70% 15.82% 6.98% 13.76% 3.13%
2012 13.11% 21.67% 22.83% 20.97% 13.33% 19.21% 9.96% 16.35% 7.21% 14.33% 3.28%
2013 13.64% 27.91% 27.08% 23.20% 13.40% 20.75% 10.11% 17.28% 7.31% 14.98% 3.30%
2014 14.16% 27.67% 27.16% 23.61% 13.73% 21.25% 10.37% 17.83% 7.48% 15.52% 3.45%
  1. For data prior to 2001, all tax returns that have a positive AGI are included, even those that do not have a positive income tax liability. For data from 2001 forward, returns with negative AGI are also included, but dependent returns are excluded.
  2. Income tax after credits (the measure of “income taxes paid” above) does not account for the refundable portion of EITC. If it were included, the tax share of the top income groups would be higher. The refundable portion is classified as a spending program by the Office of Management and Budget and therefore is not included by the IRS in these figures.
  3. The only tax analyzed here is the federal individual income tax, which is responsible for more than 25 percent of the nation’s taxes paid (at all levels of government). Federal income taxes are much more progressive than federal payroll taxes, which are responsible for about 20 percent of all taxes paid (at all levels of government), and are more progressive than most state and local taxes.
  4. AGI is a fairly narrow income concept and does not include income items like government transfers (except for the portion of Social Security benefits that is taxed), the value of employer-provided health insurance, underreported or unreported income (most notably that of sole proprietors), income derived from municipal bond interest, net imputed rental income, and others.
  5. The unit of analysis here is that of the tax return. In the figures prior to 2001, some dependent returns are included. Under other units of analysis (like the Treasury Department’s Family Economic Unit), these returns would likely be paired with parents’ returns.
  6. These figures represent the legal incidence of the income tax. Most distributional tables (such as those from CBO, Tax Policy Center, Citizens for Tax Justice, the Treasury Department, and JCT) assume that the entire economic incidence of personal income taxes falls on the income earner.

[1] Individual Income Tax Rates and Tax Shares, Internal Revenue Service Statistics of Income, http://www.irs.gov/uac/SOI-Tax-Stats-Individual-Income-Tax-Rates-and-Tax-Shares.

[2] See Congressional Budget Office, The Budget and Economic Outlook: 2017 to 2027, Jan. 2017, https://www.cbo.gov/sites/default/files/115th-congress-2017-2018/reports/52370-outlook.pdf.

[3] There is strong reason to believe that capital gains realizations were unusually depressed in 2013, due to the increase in the top capital gains tax rate from 15 percent to 23.8 percent. In 2013, capital gains accounted for 26.6 percent of the income of taxpayers with over $1 million in AGI received, compared to 31.7 percent in 2014 (these calculations apply for net capital gains reported on Schedule D). Table 1.4, Publication 1304, “Individual Income Tax Returns 2014,” Internal Revenue Service, https://www.irs.gov/uac/soi-tax-stats-individual-income-tax-returns-publication-1304-complete-report.

[4] Here, “average income tax rate” is defined as income taxes paid divided by adjusted gross income.

https://taxfoundation.org/summary-latest-federal-income-tax-data-2016-update/

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