I would never purposely lie to you. Use hyperbole, cynicism, sarcasm? Absolutely! Deceit is not my style. The fact of the matter is I’ve studied taxes, as a pastime and profession for most of my adult life. From Joseph’s 20% tax on the Egyptians, to the modern U.S. code is a fascinating study.
The premise here is misguided and ill-informed.
We have to take a step back and ask the question, “Does the U.S. Federal government have a progressive tax system?” The answer is Yes and No. It’s a trick question in that there isn’t just one tax system in place. As has been pointed out, there are all kinds of taxes imposed, Income, FICA, Medicare, Fuel, Excise, AMT, and it goes on and on. Heck look at any of your bills as they come in. Cell phone, electric, natural gas, et al have taxes on them. My pet peeves are sales taxes and tolls. I hate them. In looking at these types of taxes some are structured to be progressive, some are not.
If you are trying to determine a person’s tax burden overall (federal, state, local) as a percentage of income, welcome. I’ve tried on more than one occasion to determine that exact thing for my own situation. It makes one very irritated and scream, “I’m taxed enough already.” That’s pretty catchy phrase. Someone should start a movement and use that as a slogan. On the other hand the opposition would just twist it into something perverted. That’s what passes for political debate these days.
The income tax system in and of itself is an attempt at a progressive system. Most of the others are not. The FICA and Medicare systems are HUGELY regressive piles of excrement, and have been that way since inception. It was sold to the public as insurance systems that wage earners pay into and will receive a benefit later. Who pays? Wage earners. Only wage earners. 77 years later, now it’s not fair? Any reform to these systems has always been met with political scare tactics, as if the ones suggesting reform wanted to starve old people, and take away Grandma’s pension. Again what passes for political debate.
My input here is limited to pointing out, that when trying to determine the fairness of it all, you need to compare like things. The math rule, “to compare or combine it must be the same kind” comes to mind. So taking WATU’s fictional California school teacher’s marginal rates of three different tax classifications, not considering any deductions/exemptions etc. and comparing that to a real person’s effective rate is meaningless.
By including the payroll tax (FICA, Medicare, Social Security whatever term you want to use for that) in the comparison to others income and capital gain rates, you in effect are saying that capital gains should be subject to social security tax. That makes no sense at all. Saying that one person isn’t subject to one kind of tax so they need to pay more of another kind of tax in the interest of fairness? Really??? No, it’s just jealousy, or political pandering. But that’s what passes for political debate.
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