Alaska voters go to the polls tomorrow to decide Measure 1, which would change taxation of oil production. A yes vote repeals the More Alaska Production Act (MAPA) tax system championed by Gov. Sean Parnell (R) and...
- Individual Effective Tax Rates in the United States
Individual Effective Tax Rates in the United States
Special Report No. 35
Executive Summary The federal, state, and local governments of the United States impose a wide variety o f taxes on the American people, including taxes on individual incomes, corporate incomes, payrolls, sales, estates, and properties, as well as other miscellaneous taxes, fees, and charges. Accounting for all taxes on the federal and state/local levels, the average taxpayer's effective average tax rate increases as his income increases, producing what is known as a "progressive" tax structure.
In many cases, effective average tax rates differ substantially from statutory tax rates. Statutory tax rates refer to the rates established in tax law. For example, the state of Mississippi imposes a statutory sales tax rate of 7 percent. For a single taxpayer in 1993, the federal government imposed a statutory marginal income tax rate of 15 percent on each additional ("marginal") dollar earned by the taxpayer up to an income of $22,100; 28 percent on the marginal income between $22,100 and $53,500 ; and so on for the other statutory rates of 31, 36, and 39.6 percent.
Effective average tax rates, by contrast, represent the actual tax burden of a taxpayer (whether on a single type of tax or on al l taxes combined) divided by that taxpayer’s total income.
- IRS income data is collected in order to raise revenue as directed by Congress, which means it is not necessarily well-suited for other purposes, like measuring equality in our society.
- The average taxpayer’s...
In his book, Capital in the 21st Century, Thomas Piketty portrays the rich as heirs with privileged access to high rates of return, stating “it is almost inevitable that inherited wealth will dominate wealth...
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