Question about cumulative tax rates

[yewberry]

Hi all-

I'm trying to track down some stats about cumulative taxes (including income, payroll, excise, sales & property) across income populations.

I read an assertion (couple of years old) that the poorest quintile of Americans pays a cumulative rate of 18%; the middle quintiles pay 14, 16, and 17% respectively; the richest fifth pay 19%. The source given is the Consumer Expenditure Survey by the Bureau of Labor Statistics. Well, I've looked at the CES results and I can't this breakdown anywhere.

Anyone know where I should be looking?

Thanks for any input!

[FloridaPat]

1. Not sure where you should look, but I believe the facts are wrong

on some of that. The poor would pay around 8% for payroll and 4-10% for sales tax. Probably don't pay income tax. The middle would start at 18%. Then add income taxes and state income taxes and you're talking around 38-50%. The rich would pay less because payroll taxes stop at $90,000 this year and they would have more deductions.

If you add the other half of payroll taxes that the corporations pay, add another 8% to those numbers.

Don't know how the government can come up with those numbers. Doesn't anyone look at their own check books?

[yewberry]

2. Could well be.

The original assertion came from the Ivins/Dubose book, "Bushwhacked," and she usually uses good information. At least I thought so.

Thanks for your response!

[stevebreeze]

3. try citizens for tax justice

they have stats on both federal and state taxes broken down into income quintiles, top 5% and top 1%.
CTJ.org

[happyslug]

4. Lets look at some taxes

Social Security is 7% starting with the FIRST DOLLAR EARNED. Your Employer Matches that 7% (Total of 14%). Every economist will tell you that the employer match is really a tax on the employee's income and should be treated as such.

Second you have your 2.1% Unemployment tax which like Social Security starts with your first dollar earned AND is paid by your employer but most economist consider this a tax on the Employee not the employer.

Thus before you ever talk about local taxes, state taxes and the Federal Income Tax you have people paying 7% of their income to Social Security and having their employer pay another 9.1% of their income as taxes. While technically you are only paying 7% of your income in taxes, the Federal Government is collecting as taxes an amount equal to 16.1% of your income.

If you have a local Wage tax (Such as in my home state of Pennsylvania) you paying 2% from the first dollar earned. The same with the Pennsylvania Income tax, which also starts at the first dollar and is a flat rate of 3.07%.

Thus in Pennsylvania any employee pays combined Social Security, Local and State Income tax rate from the first dollar earned of 12.07%. The taxes collected based on his or her income is 21.07% (Remember the Social Security employer match AND the Unemployment tax both paid by the employer BUT based on the employee's income).

In other states this will vary based on the State Income tax and the local wage tax.

For list of State Tax Rates see:
For Income Taxes see:
http://www.taxadmin.org/fta/rate/ind_inc.html

For Sales Taxes see:
http://www.taxadmin.org/fta/rate/sales.html

[FloridaPat]

5. In Florida the unemployment tax is only on the first $7,000 earned.

[happyslug]

6. Unemployment tax set by by Federal Law and I misspoke it is

It is 6.2%
http://assembler.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00003301----000-.html
On the First $7000
http://assembler.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00003306----000-.html

But the state can set up a system where an Employer can pay less. Varies from state to State and employer to employer based on lay off history. For more details see:
http://www.smallbusinesscenter.sbresources.com/SBR_template.cfm?DocNumber=P07_1294.htm

It has been a Long while since I did Unemployment TAXES, I regret I used the wrong figures above.

[seasat]

7. Here's what you're looking for for Federal

Effective Federal Tax Rates

This includes all sources of income and all federal taxes from Fica to corporate.

[FogerRox]

8. you are looking at effctive tax rates and that looks about right for a few

years ago-