Latest Breaking News
In reply to the discussion: Merry 'Cliffmas': Obama, Boehner Deal Dims [View all]mostlyconfused
(211 posts)So increased tax receipts of $1.2 trillion over 10 years, to a government that is racking up deficits of about that much every year. That addresses 10% of the deficit problem. Plans for the other 90%?
Second, I sure hope that 28% cap on itemized deductions is only for very high income earners, because that would absolutely crush middle class and lower income earners who on average deduct a far, far greater percentage of their adjusted gross income than do the wealthy.
Based on 2009 IRS tax data, the most recent year where details are available, the only income brackets in which the average return had a difference between gross income and taxable income that was greater than 28% was among people who earned less than $100,000 per year. The average rich person may deduct a lot more from their return in terms of dollars, but they deduct much less in percentage terms.
In 2009, tax returns where the adjusted gross income was $30K to $40K on average had a taxable income that was 44% lower than that. Returns with adjusted gross between $100K and 200K on average had taxable income that was 27% lower than that. The smallest gap between adjusted gross and taxable income is among the $1+M group, where taxable income was 13-14% lower than their adjusted gross.