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The second problem with looking purely at state and local taxes is that taxpayers can deduct state and local taxes from their federal taxes. So some of that tax burden shifted to the middle and lower class at the state level is given back by the federal government. The federal tax system, in other words, rebalances or cancels out some of the regressive structure of the state and local taxes.
In other words, saying the tax system is upside down based on state and local taxes is like studying the estate tax or mansion tax and saying millionaires pay all the taxes in America.
Taxpayers earning $100,000 or more a year pay 71.6% of the nation’s share in individual federal income taxes, according to the latest data from the Internal Revenue Service (IRS) from 2011.
These data do not include corporate income taxes, or taxes on capital gains or dividends, or payroll taxes for Social Security and other programs.
$100K-Plus Earners Pay 72% of Federal Income Taxes
As a matter of FACT, the top 50% of this country pay 97.1% of the Income Taxes to the Federal Government.
originally posted by: Wildbob77
I think that this is a matter of language.
The rich pay a lower tax rate on capitol gains. But the rich pay most of the taxes.
I think that I read somewhere that the bottom 50% of American earners don't pay any income tax. However if you include sales tax, they may indeed be paying a higher tax rate than the tax rate on capital gains.
If you're in the 10% or 15% tax bracket for ordinary income, then your long-term capital gains rate is 0%. If you're in the 25%, 28%, 33%, or 35% tax bracket, then your long-term capital gains rate is 15%. If you're in the 39.6% tax bracket, then your long-term capital gains rate is 20%.Aug 16, 2015