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:
“And hereby hangs a moral highly applicable to our own trustee-ridden universities, if to nothing else. If we really wanted liberty of speech and thought, we could probably get it—Spain fifty years ago certainly had a longer tradition of despotism than has the United States—but do we want it? In these years we will see.”
—John Dos Passos (1896–1970)
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“As a Tax-Paying Citizen of the United States I am entitled to a voice in Governmental affairs.... Having paid this unlawful Tax under written Protest for forty years, I am entitled to receive from the Treasury of ‘Uncle Sam’ the full amount of both Principal and Interest.”
—Susan Pecker Fowler (1823–1911)
“The United States must be neutral in fact as well as in name.... We must be impartial in thought as well as in action ... a nation that neither sits in judgment upon others nor is disturbed in her own counsels and which keeps herself fit and free to do what is honest and disinterested and truly serviceable for the peace of the world.”
—Woodrow Wilson (1856–1924)
“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)