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Byrnison · 10-23-2007, 11:45 AM

Quote:

Originally Posted by shakran

We instead need a fair taxation system that taxes people equally on their ability to pay. Someone pulling in millions of dollars a year can afford to pay quite a bit more than someone pulling in 40,000. They're benefiting from the American financial system, they should pay in to it as well. Balance out the tax burden, we'd end up with more money in government coffers, which would lead to better public services.

I hesitate to jump into a Tilted Politics discussion

, but I too am curious as to Ace's question as to what tax rates at what income levels would be best, and more so why do you see it that way? Shakran's post got me curious about the tax burden question, and what I found was:

Source: http://www.taxfoundation.org/news/show/323.html
<strong>Table 4.</strong> Before and After the Bush Tax Cuts, by Income Group</p><table border="1" cellpadding="0" cellspacing="0" width="90%"><tbody><tr><td colspan="2" width="418"><div align="center"><strong>Before Bush Tax Cuts</strong></div></td><td colspan="3" width="329"><div align="center"><strong>After Bush Tax Cuts</strong></div></td></tr><tr><td width="285"><div align="center"><strong></strong></div></td><td width="133"><div align="center"><strong>Share of Tax Liability</strong></div></td><td width="135"><div align="center"><strong>Tax Reduction for 2004</strong></div></td><td width="102"><div align="center"><strong>Share of Tax Liability</strong></div></td><td width="92"><div align="center"><strong>Share of Tax Cuts</strong></div></td></tr><tr><td width="285">Bottom 20%, $0 to $14,415</td><td width="133"><div align="right">0.50%</div></td><td width="135"><div align="right">$1,976,256,511 </div></td><td width="102"><div align="right">0.30%</div></td><td width="92"><div align="right">1.20%</div></td></tr><tr><td width="285">Second 20%, $14,415 to $25,499</td><td width="133"><div align="right">2.30%</div></td><td width="135"><div align="right">$7,177,358,834 </div></td><td width="102"><div align="right">1.90%</div></td><td width="92"><div align="right">4.20%</div></td></tr><tr><td width="285">Third 20%, $25,500 to $41,640</td><td width="133"><div align="right">5.90%</div></td><td width="135"><div align="right">$15,905,120,495 </div></td><td width="102"><div align="right">5.20%</div></td><td width="92"><div align="right">9.40%</div></td></tr><tr><td width="285">Fourth 20%, $41,641 to $68,295</td><td width="133"><div align="right">12.60%</div></td><td width="135"><div align="right">$29,559,373,144 </div></td><td width="102"><div align="right">11.60%</div></td><td width="92"><div align="right">17.50%</div></td></tr><tr><td width="285">Top 20%, $68,296 and above</td><td width="133"><div align="right">78.70%</div></td><td width="135"><div align="right">$114,633,332,724 </div></td><td width="102"><div align="right">81.00%</div></td><td width="92"><div align="right">67.70%</div></td></tr><tr><td width="285">Total Tax Liability for all taxpayers</td><td width="133"><div align="right">100.00%</div></td><td width="135"><div align="right">$169,251,441,709 </div></td><td width="102"><div align="right">100.00%</div></td><td width="92"><div align="right">100.00%</div></td></tr><tr><td width="285"></td><td width="133"></td><td width="135"></td><td width="102"></td><td width="92"></td></tr><tr><td colspan="2" width="418"><p align="center"><strong>Top 20%</strong></p></td><td colspan="3" width="329"><div align="center"><strong>Top 20%</strong></div></td></tr><tr><td width="285">First Half of top 10%, $68,296 to $97,685</td><td width="133"><div align="right">11.90%</div></td><td width="135"><div align="right">$26,272,937,254 </div></td><td width="102"><div align="right">11.20%</div></td><td width="92"><div align="right">15.50%</div></td></tr><tr><td width="285">Second Half of Top 10%, $97,685 to $136,162</td><td width="133"><div align="right">10.80%</div></td><td width="135"><div align="right">$18,560,111,502 </div></td><td width="102"><div align="right">10.80%</div></td><td width="92"><div align="right">11.00%</div></td></tr><tr><td width="285">Top 20-5%, $68,296 to $136,162</td><td width="133"><div align="right">22.80%</div></td><td width="135"><div align="right">$44,833,048,756 </div></td><td width="102"><div align="right">22.00%</div></td><td width="92"><div align="right">26.50%</div></td></tr><tr><td width="285">Top 5-1%, $136,163 to $335,474</td><td width="133"><div align="right">18.90%</div></td><td width="135"><div align="right">$25,482,868,099 </div></td><td width="102"><div align="right">19.70%</div></td><td width="92"><div align="right">15.10%</div></td></tr><tr><td width="285">Top 1%, $335,475 and above</td><td width="133"><div align="right">37.10%</div></td><td width="135"><div align="right">$44,317,415,869 </div></td><td width="102"><div align="right">39.30%</div></td><td width="92"><div align="right">26.20%</div></td></tr><tr><td width="285">Total Tax Liability for Top 20% of Taxpayers</td><td width="133"><div align="right">78.70%</div></td><td width="135"><div align="right">$114,633,332,724 </div></td><td width="102"><div align="right">81.00%</div></td><td width="92"><div align="right">67.70%</div></td></tr></tbody></table>

Source: http://www.taxfoundation.org/publications/show/250.html
(below years snipped to try to save space)
Table 4.</strong> Total Income Tax after Credits, 1980-2005 ($ Millions) </p><table border="1" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td width="5%"><p align="center"><font size="1">Year </font></p></td><td width="8%"><p align="center"><font size="1">Total </font></p></td><td width="8%"><p align="center"><font size="1">Top 1% </font></p></td><td width="8%"><p align="center"><font size="1">Top 2-5% </font></p></td><td width="8%"><p align="center"><font size="1">Top 5% </font></p></td><td width="8%"><p align="center"><font size="1">Top 6-10% </font></p></td><td width="8%"><p align="center"><font size="1">Top 10% </font></p></td><td width="8%"><p align="center"><font size="1">Top 11-25% </font></p></td><td width="8%"><p align="center"><font size="1">Top 25% </font></p></td><td width="8%"><p align="center"><font size="1">Top 26-50% </font></p></td><td width="8%"><p align="center"><font size="1">Top 50% </font></p></td><td width="8%"><p align="center"><font size="1">Bottom 50% </font></p></td></tr><tr><td width="5%"><p align="right"><font size="1">2003 </font></p></td><td width="8%"><p align="right"><font size="1">747,939 </font></p></td><td width="8%"><p align="right"><font size="1">256,340 </font></p></td><td width="8%"><p align="right"><font size="1">150,257 </font></p></td><td width="8%"><p align="right"><font size="1">406,597 </font></p></td><td width="8%"><p align="right"><font size="1">85,855 </font></p></td><td width="8%"><p align="right"><font size="1">492,452 </font></p></td><td width="8%"><p align="right"><font size="1">134,928 </font></p></td><td width="8%"><p align="right"><font size="1">627,380 </font></p></td><td width="8%"><p align="right"><font size="1">94,647 </font></p></td><td width="8%"><p align="right"><font size="1">722,027 </font></p></td><td width="8%"><p align="right"><font size="1">25,912 </font></p></td></tr><tr><td width="5%"><p align="right"><font size="1">2004 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">831,890 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">306,902 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">168,322 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">475,224 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">92,049 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">567,273 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">138,642 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">705,915 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">98,556 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">804,471 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">27,419</font> </p></td></tr><tr><td><p align="right"><font size="1">2005 </font></p></td><td><p align="right"><font size="1">934,703 </font></p></td><td><p align="right"><font size="1">368,132</font></p></td><td><font size="1"><p align="right"><font size="1">189,627 </font></p></font></td><td><p align="right"><font size="1">557,759 </font></p></td><td><p align="right"><font size="1">99,326 </font></p></td><td><p align="right"><font size="1">657,085 </font></p></td><td><p align="right"><font size="1">146,687 </font></p></td><td><p align="right"><font size="1">803,772 </font></p></td><td><p align="right"><font size="1">102,256</font></p></td><td><p align="right"><font size="1">906,028 </font></p></td><td><p align="right"><font size="1">28,675</font> </p></td></tr></tbody></table><p>Source: Internal Revenue Service </p>

A few things to consider based on these numbers:
1) Pre combined tax cut (2004), the top 5% income group shouldered (18.9 + 37.10)*(.787) = 44.02% of the total tax liability
2) Post tax cut(2005), the top 5% shouldered (19.7 + 39.3)*(.81) = 47.78% of the total tax liability
3) The tax cut of the top 5% amounted to (15.1 + 26.2)*(.677) = 27.9%, yet their tax burden still increased and total revenue from all income tax increased.

Again, to echo a facet of Ace's question, if a combined 47.8% tax liability for the top 5% of income earners is not enough, then what is? And why?
Secondly, do you agree that the "wealthy" are the ones that create jobs, or is it another group?