Poll Reveals Most Americans Don't Know They Got a Tax Cut, page 1

I'll do a Clinton and say, "It depends on what 'taxes' means." And that's a fact. Your income taxes did not go down at all. The rates remain the same, indexed for inflation. So when people say their taxes did not go down at all, they are absoutely correct because they are assuming that "taxes" means "income taxes."

What Obama did is lower what you pay into the social security fund (FICA) by a couple of percent, from 7.65% to 5.65%, which results in a net increase in your take home pay by 2% (Duh!). Your employer pays the same rate of 7.65% regardless. But remember that social security is going bankrupt, so effectively he just shortened the time we have before it does, not a particularly smart move, in my opinion, and one that will require a fix before too many more years when Obama is not President any longer. When Obama says, "I cut taxes," he means he temporarily cut FICA contributions, which are credited to your account, not income taxes. Social Security used to send you a yearly accounting of this, showing the credits you had earned and what you had paid in, but they axed this in a "cost saving move."

The "Bush tax cuts," on the other hand, are real cuts to the income tax, and after a fight in Congress, they will remain in place for awhile longer. When they are allowed to "expire" you will see a real tax increase, which will be spun as not a real increase at all, but just an expiration of a previous temporary cut.

Just as a little side bonus, 97% of Americans pay LESS tax (income tax) that Mitt Romney. The release of Mitt Romney's tax returns, which indicate that he paid an average tax rate of 14 percent after deductions, has once again prompted a great deal of confusion over marginal and average tax rates. For a moment, let's set aside the issue that most of Mr. Romney's income is in the form of capital gains and dividends, which are taxed at 15 percent rather than at the highest marginal rate of 35 percent, and look at the difference between marginal and average (or effective) tax rates.

The reason is because we pay 10% on the first $17,000 of income, 15% on the income between $17,000 and $69,000, and 25% from $69,000 to $139,350, etc until we get to 35% for anything above $379,150. (These are all for MFJ: married filing jointly.) So when you add all that up, do all the deductions for personal exemptions and whatnot, you pay tax on a lot less than you actually make. And the average overall rate is: 11%. Also bear in mind that 47% of American households pay zero income tax at all. The 11% is for the half of the country that actually pays income taxes.

So you (the generic you) pay 11%. Romney pays 14%, and I paid 17% last year because I had zero capital gains, but I had to pay taxes on my social security payments, half of which I already paid taxes on, so it's double taxation. In fact, here's a list updated 2010, so it's probably for 2009: AGI=Adjusted Gross income.

100%: 139,960,580 returns paid taxes of $1,031,512mil for 100% AGI for 100% of taxes
Top 1%: 1,399,606 returns paid $392,149mil for 20.70% AGI for 38.02% of taxes
Top 5%: 6,998,029 returns paid $213,569mil for 34.73% AGI for 58.72% share
Top 10%: 13,996,068 returns paid $721,421mil for 45.77% AGI for 69.94% of taxes
Top 25%: 34,990,145 returns paid $890,614mil for 67.38% AGI for 86.34% of taxes
Top 50%: 69,980,290 returns paid $1,003,639mil for 87.25% AGI for 97.30% of taxes
Bottom 50%: 69,980,290 returns paid $27,783 mil for 12.75% AGI for 2.59% of taxes.

So much for the "1%" which is slightly over a million returns anyway. I'm more concerned for the top 10%, who paid almost 70% of the taxes. And you want more? No.