POL - Taxes and Income

[PilotMan]

So I came across this graphic today, and I'm wondering what conclusions you come to by looking at it? The idea is that both sides can (and do) make their arguments to support their positions, and it's all in the spin. Here we have the raw numbers.

[sterlingice]

Does that include all monies paid to the government (income taxes, sales taxes, fees, etc) or is it just income taxes?

SI

[PilotMan]

According to the note at the bottom it's federal, state and local income tax.

It came from an article @ the WSJ.

[sterlingice]

Then it's not really a fair picture as pretty much all other fees and taxes are regressive.

EDIT: So, it is fair to say then that all income taxes are close to fairly distributed. The problem with that view, in my mind, is that it's overly simplistic. You can claim that it's fair because income tax is fair. However, all payments into the government are unequally skewed. Never mind the moralistic argument that those who benefit most from society should give back the most to society.

SI

[PilotMan]

I find the average income by income quintile to be amazing, before I even move over to the tax and income breakdown.

[Telle]

I'd also be curious to see what they count as "income".

[Warhammer]

I certainly don't feel like I am a top 10% earner...

[sterlingice]

$150K per year doesn't seem like the top 10%?

Now think about $42K per year as that's average and that half of this country is below it.

SI

[JPhillips]

I wish it was using data from 2010 rather than a projection of 2011.

The income numbers are lower than I've seen in the past, but not dramatically so. Perhaps I've heard of household income and this is using individual income? Even so, in metropolitan areas most people survive on well less than 100k.

The last chart like this showed a closer distribution of tax rates across quintiles, but that chart came before the recession.

[Raiders Army]

What I see is that the rich probably pay less than their fair share of taxes when compared to income and the poor probably pay less than their fair share of taxes when compared to their income and socialist program income. The middle probably pays a fair share, which ends up in a net result of a deficit.

Nothing new here to see.

[Dutch]

Originally Posted by sterlingice

$150K per year doesn't seem like the top 10%?

Now think about $42K per year as that's average and that half of this country is below it.

SI

Assuming that $42K is what our young work force (under 30) and aging workforce vets (retired or near retirement over 60 crowd) makes up that $42K or less crowd (since half of our workforce is listed as under 30 or over 60) then that seems right as well.

If there are folks between 30 and 60 that are under that income bracket, they are being worked over by young, smart hard chargers and a handful of older cats.

Table 16. Labor Force and Employment Status of the Civilian Population 16 Years and Over by Sex and Age: 2010
Age and Sex in the United States: 2009

[sterlingice]

However, it's not that $42K is what half of people make. Half of people make /less/ than $42K while half of people make more than that. So, for every person making $150K, there are 4 people making $15K, or 9(!) making $30K to get us back to the average.

So you've got 4 people around the poverty level or 9 people subsantially below average to sustain that one person's salary. It's just a 1:1 swap of young:old workers to maintain that rate.

SI

[molson]

I've always wondered how older people are accounted for in these kinds of charts. It's a huge group, and a lot of them have zero or almost no income, but their financial situations obviously vary widely based on their savings. Or is "income" defined more liberally for that group, in that the data tries to estimate what they actually live on?

And there's a big difference between being a recent immigrant head of the household making $17k and 28-year old loser with millionaire parents making $17k from part-time doing whatever.

[sterlingice]

Originally Posted by molson

And there's a big difference between being a recent immigrant head of the household making $17k and 28-year old loser with millionaire parents making $17k from part-time doing whatever.

Absolutely. But there aren't /that/ many millionaire parents with loser kids to make up the bottom 20-40% of incomes here. And besides, how many millionaire kids don't have cushy jobs with millionaire parents' companies?

But, that's a lot of people making under $50K per year- probably 3 out of every 5 people in this country. There are a lot of cities (NYC, LA, ~CHI, DC, SF, SD, SEA, BOS) where even with 2 incomes and no kids, that can be tough. Never mind if you have kids or only one parent working or college debt or medical bills or any of a dozen substantially more likely scenarios than loser millionaire kids.

SI

[JPhillips]

NYC median household income is $55,603 and 14% are below the poverty line.

The upper middle class in the U.S. (of which I am one) tend to grossly overestimate the income levels of the average family. I think the problem is that most of us are making good money, but we're spending enough that we're still living paycheck to paycheck. Income level is less important for security than having non-income liquid assets.

[kcchief19]

My initial takeaway is that the top 1 percent earn roughly the same amount as the bottom 60 percent. No wonder we have the class warfare that we have.

My second takeaway is that federal taxes must be doing a decent job of keeping the overall tax burden relatively balanced, only because I know that the ITEP reports also say that state and local taxes are a higher burden on poorest households and pay the highest effective tax rates.