Taxes on wages You - More than 1% --- Anyone receiving wages and have enough income that is taxed after exemptions and deductions. (I don't know what the lowest possible effective tax rate with real wages.)
You - 0% --- Anyone receiving wages and don't have enough income to taxed taking exemptions and deductions.
Rmoney - No Taxes
Social Security and Medicare taxes You - 15.3% (7.65% directly from you - 7.65% from your employer *The employer portion is still considered an employee expense by employers) (The tax is only on the first $110,100)
Rmoney - No Taxes --- It is only applied to wages
Capital Gains and Dividends In General
You - 15% --- If you are lucky to receive enough to make a difference
Rmoney - 15% maximum --- Returns will be manipulated to reduce this by any means possible.
Personal Exemptions (2010) You and a spouse - $3,650 each -- $7,300 total --- $3,650 additional for each child
Rmoney and Ann - $3,650 each -- $7,300 total
Standard Deduction or Itemized Deductions (2010) You (standard deduction married filing jointly) - $11,400
You (standard deduction head of household) - $8,400
You (standard deduction single) - $5,700
Rmoney and Ann (itemized deductions) --- $4,519,140
Those with low income are most likely to take the standard deduction instead of itemized deductions.
$26,000 -- Amount of income tax exempt for a family of 4 taking only the standard deduction
28% of households had income $25k or less
35% of individuals had income $25k or less
23% of households had income $25k to $50k
36% of individuals had income $25k to $50k
Average deductions for households with $200,000 or more in taxable income is $64,000 (Does not include the personal exemptions)
How many have itemized deductions totaling more than the wages of low to middle income wage earners?
Whenever anyone complains about the 47% not paying taxes the question to throw back at them is how much were their itemized deductions.