Taxes and Washington Misinformation

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Taxes and Washington Misinformation

Postby Jack Flash » 01 Jun 11, 9:58 am

Hearing some politicians talk about taxes, one might be convinced the United States has one of the highest tax rates in the world. But the reality is the federal tax rate, broadly measured, is the lowest it has been in 60 years.

The reason for the discrepancy has to do with statutory tax rates vs. effective tax rates. In other words given the number of exceptions and deductions, very few people, if any pay the statute rate.

Federal taxes will be 14.8 percent of the nation's economic output this year, according to a recent estimate from the Congressional Budget Office. That's compared to a postwar annual average rate of 18.5 percent.

In addition, the top rate on unearned income (dividends and capital gains) of 15 percent is not subject to Social Security, Medicare, Medicaid, or Unemployment taxes. It does however, qualify for exemptions and deductions thus bringing the effective rate for the wealthy well below the national average generally paid by the middle class.

For American corporations, the tax situation could not be sweeter. The U.S. enjoys the lowest corporate tax burden of any of the member nations of the Organization for Economic Cooperation and Development. In addition certain benefits, exemptions, and set asides (Corporate Welfare) are written into the tax code to benefit businesses.

Politicians who insist that Americans are overtaxed use the statutory tax rate. This rate can be made to seem even larger if combined with state and local statutory tax rates.

The more relevant measure, economists say, is the effective rate.

In other words; the well to do are not subsidizing the poor, corporations are not paying for the bulk of the nation's infrastructure, but the middle class is paying most of the bills.
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Re: Taxes and Washington Misinformation

Postby cerina » 01 Jun 11, 10:23 am

It takes so long to wade through all the :bs: put out by governments that not many people know the truth underneath. :?
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Re: Taxes and Washington Misinformation

Postby Jack Flash » 01 Jun 11, 10:30 am

... and of course after politicians make a big fuss about Americans being overtaxed, they go on to write tax reductions for special Interest groups. But they never seem to find the time to do anything about reducing taxes for the average American.


Don't mind me - I just had to pay my quarterly taxes :roll:
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Re: Taxes and Washington Misinformation

Postby cerina » 01 Jun 11, 11:38 am

I'd never have guessed. :lol:
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