Quote:
Originally Posted by Solecismic
The top federal tax rate right now is 43.4%. In the '90s, it peaked at 39.6%. So I'm not sure this is an easy assessment. The lowest quintile is paying less than 2% now, which is one-fourth of what it was a decade ago. Are you arguing that we should focus tax increases on the lower half? Seems fairer in some ways, but I think even a die-hard Republican would blanche a little at that approach.
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You're mixing rates in a confusing way there. The top marginal tax rate is 39.6%, but some self-employed taxpayers may have an additional Medicare surcharge and there could be an additional investment surcharge. But the number of people subject to the 43.4% marginal rate is extremely limited -- a fraction of 1 percent.
The lowest marginal rate is 10%, but the 2% rate you quote is an effective tax rate. No one facing a 43.4% marginal rate pays that much.
In fact, it's entirely possible that you could be in the 43.4% marginal tax bracket and pay less than 2% effective tax. This is where the Buffet proposal comes in -- that his effective tax rate is lower than the effective tax rate of the people who work for him.