Death and Taxes

Ranting about taxes and the unfair tax distribution in the United States. And no, I don’t mean how the upper earners get all the breaks, I mean how the lower class is raping those that earn more.

Before I start bitching, I’m going to make an important distinction. Where normally you would hear “wah wah, the rich get all the breaks”, I’m subbing out the word “rich” for “high-earner”. In today’s economy, the middle class has extended from about $32,000 to $130,000. Even those in the upper echelon are getting taxed and pounded so much that making $200,000 can’t be considered “rich” anymore.

As I said in another post, I consider myself socially progressive and fiscally conservative. That, in my mind, makes me a moderate, closer to the Democrat side only because conservative Republicans today wouldn’t know the definition of “fiscal conservative” if Sarah Palin broke it down into folksy wolksy babble for them.

That said, even this close to the election, I haven’t picked a candidate. What I do know is that I am voting against McCain & Palin for the simple reason that Palin is insane and unqualified to be President, and I honestly think that McCain is going to kick the bucket in the next 2-3 years. I also am a staunch supporter of women’s rights ( not to be confused with batshit insane feminists ), including the right to an abortion and easy access to affordable birth control methods, items that Republicans are always quick to oppose historically. In the McCain/Palin case, Sarah Palin is actually more aggressive in her stance against birth control and abortions, and doesn’t consider abortion clinic bombers ‘domestic terrorists’. ( Naturally the Associated Press is an evil liberal organization just out to destroy Sarah Palin. /michelle malkin )

Does this mean that I’m voting for Obama? Not necessarily. I realize this is the point where Redditors will run back to reddit.com and start the feverish down-vote circlejerk. Oh well

The primary issue I have with Obama and the Democratic party in general is their disdain towards those of us who fall into the ‘high-earner’ category, and their love of jacking up our taxes to carry the lower class. Well, that and their knack for introducing more and more government into the lives of the people, but that’s another rant.

For the sake of making the following numbers more clear, I’m going to lay out some tax ranges and AGI brackets. All these numbers came directly from the IRS and from The Tax Foundation.

The tax brackets I will be focusing on specifically will be the Bottom 50%, the bottom 75% and the Top 11% to 25%. For the most part, the rhetoric will apply to the Top 10% as well, but as you’ll be able to see in a minute, the real problem lies with the 11%-25% bracket.

The brackets are divided up by the percentage of earners with AGI’s that fall into that bracket. The Bottom 75% for example are earners responsible for 75% of the reported AGI data. ( Not to be confused with the percentage of total AGI contributed ).

According to the latest data available ( 2006, although the tax rates are nearly identical for the 2007 dataset ), the income ranges for the different brackets are as follows:

• Top 11% to 25%
• AGI of $64,702 to $108,904
• Bottom 75%
• AGI of $0 to $64,701
• Bottom 50%
• AGI of $0 to $31,987

For the sake of placing a human being to cold numbers, my AGI for 2006-2007 ( and probably ‘07-’08 as well ) falls into the top 15% ( or for this example, the 11%-25% group ). As you’ll see in the next set of numbers, I get taxed out the ass for the simple reason that I earn more than roughly 85% of other Americans. Is it fair? Not if you consider the numbers in the next table:

Tax Brackets adjusted for % of AGI contributed to the whole, and % of taxes paid by bracket

To lay out the numbers above, the 11%-25% group is directly responsible for contributing 21% of the country’s total AGI, and for paying 15.47% of the total income tax.

When considering the ratio, for every 1% of income contributed by the 11%-25% group, 0.74% is taken away in taxes. For the bottom 75% of earners, it’s 0.43%, and the bottom 50% really makes out like a bandit and only pays in 0.23%.

Now ask yourself, is that really fair? When you hear political talking points like ‘the high-earners get all the breaks; the top X percent don’t pay their fair share in taxes;’ and so on, remember the numbers above. Factoring in the entire Top 25% bracket, they are responsible for 68% of the country’s AGI, and 86% of the total income tax bill. Compare that with the bottom 75% only paying in 14% on the tax bill, and you start to see where the real inequality occurs.

I don’t believe we should flip the scale and force the lower / lower middle class to start footing more of the bill. What I do think is that Obama and other Democrats need to really sit down and think of a tax solution that doesn’t force the top 25% of us to foot 86% of the bill. Why do you think the high-earners start arming themselves with accountants and jump through loopholes? Those same loopholes that liberal politicians and the “average Joe” call unfair and unAmerican. You know what I think is unAmerican? Taxing someone more for buying into the American dream.