Seventy thousand ways you are a lawbreaker: 1. Income Tax Code Now Spans 70,000 Pages The income tax system in the United States is a sprawling mass of provisions spread across dozens of volumes and has been called everything from a disaster to an abomination. Thats how the Tax Foundation begins its report Putting a Face on Americas Tax Returns. The report discloses that it takes Americans up to 7 billion work hours each year to complete the paperwork required by the IRS, and it costs individual and corporate taxpayers more than $165 billion annually to comply with the income tax code. In 1913, the federal income tax started as four pages of forms and instructions. Today, the tax code spans more than 70,000 pages. A year before the United States entered World War II, excise taxes on such items as gasoline and cigarettes were the largest source of revenue for the federal government, followed by Social Security payroll taxes, then corporate income taxes. Today, individual income taxes are the top source of revenue, expected to amount to $1.38 trillion this year, followed by social insurance taxes ($1.02 trillion), corporate income taxes ($380 billion), and excise taxes ($93 billion). Contrary to some claims that high-income households are not paying their fair share of income taxes, the average tax rate for the top 1 percent of earners is actually twice what it is for the rest of Americans, the report states. While only about 14 percent of taxpayers earn more than $100,000, they pay the vast majority of all income taxes in America today. About half of all tax filers earn less than $30,000 a year — 26 percent earn less than $15,000, and 21 percent make between $15,000 and 30,000. Just 3 percent of filers earn between $200,000 and $499,000, and only 1 percent make $500,000 or more. Taxpayers earning less than $100,000 a year account for 18 percent of all income taxes, while those earning more than $100,000 pay more than 80 percent of the taxes. Those earning $1 million or more annually make 11 percent of all income, but pay 23 percent of income taxes, while those earning between $200,000 and $1 million account for 17 percent of income and 32 percent of income taxes. Filers making $30,000 or less receive more back from the IRS than they pay in income taxes due to the Earned Income Tax Credit and other preferences. They account for 11 percent of income and minus-6 percent of income taxes paid. Looked at another way, the top 1 percent of earners pay 37.4 percent of income taxes, the top 10 percent pay 70.6 percent, and the bottom 90 percent pay 29.4 percent. The bottom 20 percent of earners receive $8.13 in federal spending for every dollar they pay in federal taxes. The top 20 percent receive $0.25. The Tax Foundation calls the tax code steeply progressive and highly redistributive.
Posted on: Sun, 20 Jul 2014 12:43:11 +0000
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