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 lies behind facts like these: that so recently one could not have said Scott was not perfect without earning at least sorrowful disapproval; that a year after the Gang of Four were perfect, they were villains; that in the fifties in the United States a nothing-man called McCarthy was able to intimidate and terrorise sane and sensible people, but that in the sixties young people summoned before similar committees simply laughed.”
—Doris Lessing (b. 1919)
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—Henry David Thoreau (1817–1862)
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—Friedrich Dürrenmatt (1921–1990)
“... the yearly expenses of the existing religious system ... exceed in these United States twenty millions of dollars. Twenty millions! For teaching what? Things unseen and causes unknown!... Twenty millions would more than suffice to make us wise; and alas! do they not more than suffice to make us foolish?”
—Frances Wright (1795–1852)
“The popular colleges of the United States are turning out more educated people with less originality and fewer geniuses than any other country.”
—Caroline Nichols Churchill (1833–?)