United States
According to Congressional Budget Office estimates, the federal tax system is a progressive tax system for earners all but the richest 1% of Americans. According to the study, the lowest earning 20% of Americans (24.1 million households earning an average of $15,900 in 2005) paid an effective federal tax rate of 3.9%, when taking into account income tax, social insurance tax, and excise tax. The highest earning 5% (5.8 million households earning an average of $520,200 in 2005) paid an effective federal tax rate of 21.5%. However, the highest earning 1% of Americans (1.1 million households earning an average of $1,558,500 in 2005) paid an "effective" federal tax rate of 21.3%.
Investor and multi-billionaire Warren Buffett has criticized the US tax code as highly regressive, citing himself as anecdotal evidence: Buffett stated that with an income of over $46 million, he pays a tax rate of 17.7%, whereas his receptionist pays a tax rate of 30%.
Buffett's critique focuses on significantly lower tax rates applied to certain forms of investment income including capital gains. However, progressive or regressive taxation often must be considered as part of an overall system since tax codes have many interdependent variables.
The marriage penalty, particularly on those engaged in Shared Earning/Shared Parenting Marriage, creates a regressive tax system in the United States, so much so that economist Justin Wolfers has said that there is strong disincentive to have children within marriage or to marry at all. The National Bureau of Economic Research has also reported a study showing "that two earner couples--the horses that pull our economic plow--pay for the second job with taxes that are far beyond the well known marriage penalty."
The issue includes not only regressive tax, but also progressive benefits, where two-earner couples and single people are subsidizing one-earner/one-nonearner parent couples in a number of ways. For example, in Social security and Medicare, two-earner couples pay for their own benefits through employment taxes, while one-earner couples receive an extra, unfunded benefit of 50% or more in Social Security (a total of 150% or more) and 100% or more in Medicare (a total of 200% or more).
Read more about this topic: Regressive Tax
Famous quotes related to united states:
“What the United States does best is to understand itself. What it does worst is understand others.”
—Carlos Fuentes (b. 1928)
“I thought it altogether proper that I should take a brief furlough from official duties at Washington to mingle with you here to-day as a comrade, because every President of the United States must realize that the strength of the Government, its defence in war, the army that is to muster under its banner when our Nation is assailed, is to be found here in the masses of our people.”
—Benjamin Harrison (1833–1901)
“... it is probable that in a fit of generosity the men of the United States would have enfranchised its women en masse; and the government now staggering under the ballots of ignorant, irresponsible men, must have gone down under the additional burden of the votes which would have been thrown upon it, by millions of ignorant, irresponsible women.”
—Jane Grey Swisshelm (1815–1884)
“So here they are, the dog-faced soldiers, the regulars, the fifty-cents-a-day professionals riding the outposts of the nation, from Fort Reno to Fort Apache, from Sheridan to Stark. They were all the same. Men in dirty-shirt blue and only a cold page in the history books to mark their passing. But wherever they rode and whatever they fought for, that place became the United States.”
—Frank S. Nugent (1908–1965)
“Madam, I may be President of the United States, but my private life is nobody’s damn business.”
—Chester A. Arthur (1829–1886)