It's sad that so many people don't understand our tax structure.

[Beaker]

and frustrating as hell I might add.
Most people don't seem to understand how the tax brackets work- they think that someone in the top bracket pays the top rate on all of their income- they don't understand that the millionaire pays the same rate on their first $50,000 of income as the guy who makes $50,000, and so on. And that ignorance makes it easy to convince them that it's an unfair system, and a flat-tax would be better and more equitable.
Try it- ask some people you may know who aren't particularly political if they understand how the graduated tax system we have works- you'd be surprised by the number who don't...

We really do need a way to make sure that more people come to understand how it works...come to think of it, there are a lot of things that the biggest share of the electorate have no clue about- which is why you get results like 70% of the people thinking that the 9/11 hijackers were iraqi.

how do we fight such entrenched ignorance?

[Gulf Coast J]

1. I'm not aware of the tax misperception

But I don't know that many people who aren't that political.

[Lydia Leftcoast]

2. Oh, it's out there all right!

When right wing radio hosts talk about Scandinavian countries, they talk as if millionaires have to pay 90% of their entire income in taxes.

[Beaker]

3. when I was an election judge in 2000-

4 out of the other 5 judges at my precinct didn't understand it- they thought that people in the top bracket paid the highest rate on all of their income.

[seasat]

4. Repubs are especially ignorant on this and economics.

I've debated Repubs on other forums and they can't seem to grasp the concept of the graduated income tax. They also view federal income taxes as the only taxes that people pay. It really blows their mind when you show them CBO studies that list taxes as a percentage of total income. The last study that I saw had the top 20% paying only 33% of their income in total Federal, State (based on my state FL), and Local taxes. Heck the middle bracket was 27% and the bottom bracket was 20%. This was based on Clinton era tax rates. Anyone want to bet that with Shrub's and Brother Jebbie's tax cuts that the top 20% in Florida now pay less as a percentage of total income than the middle?

[Gulf Coast J]

5. Do you have a link to one of those

I've looked all over the place for something that gives an idea of total taxes paid as a percent of income, but have yet to find it.

[papau]

7. Hang in DU for a while and you will see chart - or if you are in a

hurry, go over to irs.com and down load a few spreadsheets

It is fun to see total tax at 19% for both top 20% and bottom 20%, with others paying less.

Then again, I find the 27% overall paid by the top 1% floats my boat.

I guess that is because those new to money liberals usually have no tax planners, no trusts, no non-taxable income,no overseas assets, so when their income hits 1 million they find that they indeed are over 40% for all state, city, federal, payroll, paid. Yet God bless them, they remain liberals!

But flat tax with per person deductible liberals - but that's ok!

:-)

[AP]

16. And remember, IRS only addresses FED INC TAX, which isn't the only tax you

pay.

When you take into account state and local taxes and fees, the rich get even a bigger break.

CA is the state that taxes it's citizens most progressively, andn it's STILL regressive, with tax burdens decreasing the richer you get.

And then, don't forget the difference between corps and individualls. The amount of fed rev corps produce vs individuals has totally inverted in the last 20 years.

[Cleita]

9. Try this.

Page 285 of the pdf file on the IRS site:

http://www.irs.gov/pub/irs-pdf/p17.pdf

Hope this gives you an idea.

[apsuman]

17. Here's the table, but what point does it make?

I get it. I know how the taxe system works.

If I have a taxable income of $311950 I would pay $90514.5 or 29% of my income in federal taxes.

Heres a table

Taxable_______Federal_____Fed Taxes
Income________Taxes_______as % of taxable income
$__311950____$__90515____29.0%
$__500000____$_156332____31.2%
$_1000000____$_331332____33.3%
$_2000000____$_681332____34.0%
$10000000____$3481332____34.8%

Essentially it is a limit, the greater your income the closer to 35% in Federal taxes you will pay.

But what is the point, that 35% is not enough? That the rich people only pay 35% of their income in federal taxes? By the time you tack on federal and state taxes, property taxes, it only goes up.

[Cleita]

20. The point is that they never pay 35% of their whole income.

[dpibel]

6. Yup

Just like they think that the "death tax" consists of the evil gubmint confiscating entire estates.

But your last line is the awful truth. When you have a population with deeply entrenched ignorance, where do you start?

[LeahMira]

8. Why do they think it affects them?

When you have a population with deeply entrenched ignorance, where do you start?

Perhaps by reminding them of the fact that they will never be in a position to worry about what a millionaire has to pay in taxes? At least none will be under the present system. Yet for some reason many believe they are the ones who will be paying some outrageous amount in taxes... if they only work very hard all their lives. Why do they believe this?

[Beaker]

14. another inequity of the system that almost as many fail to realize-

the biggest share of the income of many of the millionaires and above comes from investment income, that is- "capital gains" and is taxed at a lower rate than wages earned by physical labour(something I find to be particularly morally repugnant), all in the name of capitalism...and then the Lil'Dictator has the gall to say that it's "unfair" when the millionaire faces "double taxation" on a small part of the money that his money has earned him(and if he ever has to stoop to actually buying retail and having to pay sales tax- it amounts to "triple taxation"- when will the persecution end:shrug:?!?)

And while we're at it let's just abolish corporate taxes too, since they're just passed on to customers anyway...:eyes:

[priller]

10. Isn't that what the term 'marginal tax rate' refers to?

That is, the 70% or whatever is the "marginal" rate, that is, the tax rate on just the highest amount of income. Which is different from the overall, or "effective" rax rate.

[dpibel]

12. Well this is just wrong!

It's the margarine tax rate we're worried about. That's what makes the big difference.

Ummmm. Right??

[jmowreader]

19. Margarine tax rate? Ugh!

You realize if you ate butter, you wouldn't have to pay that damn marginal tax rate!

[letthewindblow]

11. "The hardest thing in the world to understand is income tax"

Albert Einstein

[ACK]

13. Get the message out!!

Get to the grassroots organizations.

Yell it out to the new media.

Move backwards to the old media like radio and the news.

Don't assume anything.

If the people were just brainwashing sheeple then the nation would not be divided and Gore would not have won the popular vote.

Don't give up.

[AP]

15. Do what I do: support a candidate who understands the issue and takes it

seriously.

[welshTerrier2]

18. the real tax rate

i absolutely agree that most people don't have a clue about tax policy ...

first of all, we start with the hysteria about rates ... "i don't like the "government" reaching into my pocket and blah, blah, blah ..." ... they never seem to connect tax rates to government services ...

secondly, many complain about the absurd complexity and volume of our tax laws ... many of the tax regulations, both good and bad, were designed to achieve some type of societal objective ... in many cases, the original intent was good even if too many antiquated, convoluted laws remain on the books ... for example, the home ownership deduction was alledgedly instituted to stimulate the housing industry ... does it still need to be stimulated?

finally, most people have no idea what percentage of their income ends up subject to federal taxes ... people think they are in the 30% bracket or whatever ... but that's their "marginal tax rate" ... this is the rate that the last dollar they earn is taxed at ... but the "real tax rate" is their average rate ... most people are paying far less than they believe, especially those with large home ownership deductions ... anyway you cut it, your "real tax rate" is the total tax you pay divided by your total income ... so, for example, if you earn $100,000 per year and your tax liability is $18,000, your real rate (i.e. your average rate) is 18% ... it might well be that the last dollar you earned is taxed at 35% or whatever ... that's the rate people complain about but it's not the real rate they're paying ...