Posted by Worker Bee at 1:57am Dec 21 '04(Note, I do not know exactly how this applies to the real world, because I do not know what the current tax rates are)
Okay, so this is basically just random speculation on various progressive tax models... And then the last one shown is a flat tax.
(As I've said before, I'm addicted to statistics. I calculated the rates and such myself, and I'm sure there is a slight mistake here and there on how much money would be left after any given rate, but this is basically accurate)
Let us assume that the wealth distribution is such that:
-The top 10% of Americans hold thirty three percent of the annual income.
---For an average of $3.33
-The next 30% of Americans hold thirty three percent of the annual income.
---For an average of $1.10
-The remaining 60% of Americans hold thirty three percent of the annual income.
---For an average of $0.55
--------------------------------------------
Now, for the sake of simple numbers, let us say that:
- there are exactly one hundred Americans,
-exact total annual income of one hundred dollars.
-(One dollar per American if the money was distributed evenly)
Now let us further suppose that the federal government must collect $25 in income taxes annualy. (25% of total income)
--------------------------------------------
From those facts, one can calculate various outcomes of various progressive taxes.
Example A:
-The top 10% pays 85% of total income taxes
---Tax rate of 64.39%
---Each person would have $1.17 remaining after taxes.
-The next 30% pays 13% of total income taxes
---Tax rate of 9.848%
---Each person would have $0.99 remaining after taxes.
-The bottom 60% pays 2% of total income taxes
---Tax rate of 1.1515%
---Each person would have $0.54 remaining after taxes.
-----------------------------------------------------
Example B:
-The top 10% pays 75% of total income taxes
---Tax rate of 56.2%
---Each person would have $1.45 remaining after taxes.
-The next 30% pays 20% of total income taxes
---Tax rate of 15.15%
---Each person would have $0.93 remaining after taxes.
-The bottom 60% pays 5% of total income taxes
---Tax rate of 3.78%
---Each person would have $0.53 remaining after taxes.
-----------------------------------------------------
Example C:
-The top 10% pays 60% of total income taxes
---Tax rate of 45.4545%
---Each person would have $1.81 remaining after taxes.
-The next 30% pays 30% of total income taxes
---Tax rate of 22.72%
---Each person would have $0.85 remaining after taxes.
-The bottom 60% pays 10% of total income taxes
---Tax rate of 7.5%
---Each person would have $0.50 remaining after taxes.
-----------------------------------------------------
Example D:
-The top 10% pays 45% of total income taxes
---Tax rate of 33.75%
---Each person would have $2.20 remaining after taxes.
-The next 30% pays 35% of total income taxes
---Tax rate of 26.25%
---Each person would have $0.81 remaining after taxes.
-The bottom 60% pays 20% of total income taxes
---Tax rate of 15%
---Each person would have $0.46 remaining after taxes.
-----------------------------------------------------
Example E:
-The top 10% pays 40% of total income taxes
---Tax rate of 30.00%
---Each person would have $2.33 remaining after taxes.
-The next 30% pays 38% of total income taxes
---Tax rate of 28.78%
---Each person would have $0.78 remaining after taxes.
-The bottom 60% pays 22% of total income taxes
---Tax rate of 16.66%
---Each person would have $0.46 remaining after taxes.
-----------------------------------------------------
Example F: (Flat tax)
-The top 10% pays 33% of total income taxes
---Tax rate of 25.00%
---Each person would have $2.49 remaining after taxes.
-The next 30% pays 33% of total income taxes
---Tax rate of 25.00%
---Each person would have $0.82 remaining after taxes.
-The bottom 60% pays 33% of total income taxes
---Tax rate of 25.00%
---Each person would have $0.41 remaining after taxes.
-----------------------------
So...
What does all this mean?
It can mean whatever you want it to mean. I think that probably scenorio B or C or something between those two would be best... But I'm sure other people will have different opinions.
For me it is just easier to visulize with the numbers there in front of me.
And comparing how much the top ten percent, and the bottom sixty percent (over half the country) have after taxes in each of the scenorios... To me is interesting.
And oh yeah. I believe I said American instead of person or whatever up at top. I'm not quite sure why I did that, but at the moment I'm not supposed to be on the computer, so can you all just mentally replace the word "american" with the word "people" or nationality of your choice.
Okay, so this is basically just random speculation on various progressive tax models... And then the last one shown is a flat tax.
(As I've said before, I'm addicted to statistics. I calculated the rates and such myself, and I'm sure there is a slight mistake here and there on how much money would be left after any given rate, but this is basically accurate)
Let us assume that the wealth distribution is such that:
-The top 10% of Americans hold thirty three percent of the annual income.
---For an average of $3.33
-The next 30% of Americans hold thirty three percent of the annual income.
---For an average of $1.10
-The remaining 60% of Americans hold thirty three percent of the annual income.
---For an average of $0.55
--------------------------------------------
Now, for the sake of simple numbers, let us say that:
- there are exactly one hundred Americans,
-exact total annual income of one hundred dollars.
-(One dollar per American if the money was distributed evenly)
Now let us further suppose that the federal government must collect $25 in income taxes annualy. (25% of total income)
--------------------------------------------
From those facts, one can calculate various outcomes of various progressive taxes.
Example A:
-The top 10% pays 85% of total income taxes
---Tax rate of 64.39%
---Each person would have $1.17 remaining after taxes.
-The next 30% pays 13% of total income taxes
---Tax rate of 9.848%
---Each person would have $0.99 remaining after taxes.
-The bottom 60% pays 2% of total income taxes
---Tax rate of 1.1515%
---Each person would have $0.54 remaining after taxes.
-----------------------------------------------------
Example B:
-The top 10% pays 75% of total income taxes
---Tax rate of 56.2%
---Each person would have $1.45 remaining after taxes.
-The next 30% pays 20% of total income taxes
---Tax rate of 15.15%
---Each person would have $0.93 remaining after taxes.
-The bottom 60% pays 5% of total income taxes
---Tax rate of 3.78%
---Each person would have $0.53 remaining after taxes.
-----------------------------------------------------
Example C:
-The top 10% pays 60% of total income taxes
---Tax rate of 45.4545%
---Each person would have $1.81 remaining after taxes.
-The next 30% pays 30% of total income taxes
---Tax rate of 22.72%
---Each person would have $0.85 remaining after taxes.
-The bottom 60% pays 10% of total income taxes
---Tax rate of 7.5%
---Each person would have $0.50 remaining after taxes.
-----------------------------------------------------
Example D:
-The top 10% pays 45% of total income taxes
---Tax rate of 33.75%
---Each person would have $2.20 remaining after taxes.
-The next 30% pays 35% of total income taxes
---Tax rate of 26.25%
---Each person would have $0.81 remaining after taxes.
-The bottom 60% pays 20% of total income taxes
---Tax rate of 15%
---Each person would have $0.46 remaining after taxes.
-----------------------------------------------------
Example E:
-The top 10% pays 40% of total income taxes
---Tax rate of 30.00%
---Each person would have $2.33 remaining after taxes.
-The next 30% pays 38% of total income taxes
---Tax rate of 28.78%
---Each person would have $0.78 remaining after taxes.
-The bottom 60% pays 22% of total income taxes
---Tax rate of 16.66%
---Each person would have $0.46 remaining after taxes.
-----------------------------------------------------
Example F: (Flat tax)
-The top 10% pays 33% of total income taxes
---Tax rate of 25.00%
---Each person would have $2.49 remaining after taxes.
-The next 30% pays 33% of total income taxes
---Tax rate of 25.00%
---Each person would have $0.82 remaining after taxes.
-The bottom 60% pays 33% of total income taxes
---Tax rate of 25.00%
---Each person would have $0.41 remaining after taxes.
-----------------------------
So...
What does all this mean?
It can mean whatever you want it to mean. I think that probably scenorio B or C or something between those two would be best... But I'm sure other people will have different opinions.
For me it is just easier to visulize with the numbers there in front of me.
And comparing how much the top ten percent, and the bottom sixty percent (over half the country) have after taxes in each of the scenorios... To me is interesting.
And oh yeah. I believe I said American instead of person or whatever up at top. I'm not quite sure why I did that, but at the moment I'm not supposed to be on the computer, so can you all just mentally replace the word "american" with the word "people" or nationality of your choice.