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:
“The Federated Republic of Europe—the United States of Europe—that is what must be. National autonomy no longer suffices. Economic evolution demands the abolition of national frontiers. If Europe is to remain split into national groups, then Imperialism will recommence its work. Only a Federated Republic of Europe can give peace to the world.”
—Leon Trotsky (1879–1940)
“What lies behind facts like these: that so recently one could not have said Scott was not perfect without earning at least sorrowful disapproval; that a year after the Gang of Four were perfect, they were villains; that in the fifties in the United States a nothing-man called McCarthy was able to intimidate and terrorise sane and sensible people, but that in the sixties young people summoned before similar committees simply laughed.”
—Doris Lessing (b. 1919)
“In the United States the whites speak well of the Blacks but think bad about them, whereas the Blacks talk bad and think bad about the whites. Whites fear Blacks, because they have a bad conscience, and Blacks hate whites because they need not have a bad conscience.”
—Friedrich Dürrenmatt (1921–1990)
“It was evident that, both on account of the feudal system and the aristocratic government, a private man was not worth so much in Canada as in the United States; and, if your wealth in any measure consists in manliness, in originality and independence, you had better stay here. How could a peaceable, freethinking man live neighbor to the Forty-ninth Regiment? A New-Englander would naturally be a bad citizen, probably a rebel, there,—certainly if he were already a rebel at home.”
—Henry David Thoreau (1817–1862)
“An inquiry about the attitude towards the release of so-called political prisoners. I should be very sorry to see the United States holding anyone in confinement on account of any opinion that that person might hold. It is a fundamental tenet of our institutions that people have a right to believe what they want to believe and hold such opinions as they want to hold without having to answer to anyone for their private opinion.”
—Calvin Coolidge (1872–1933)