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Total Tax Rate means social security, Medicare and all other taxes not just income tax. So yes you can have a tax rate higher than 25%. Since these taxes have lower rates for higher income individuals this is where a lot of the failures to properly calculate tax burden comes from.
Another common misconception is that the top income earners pay 80%+ of taxes. They don't, they pay the vast majority of income tax, but that's only about half of the total US tax revenue. When you look at true total tax burden the top income earners pay about the same burden of taxes as the middle class. Sure there are less of them, but that si not the point. It's the middle class that fuels their business, buys their goods and keep the wheels of the economy turning. The poor, middle and upper middle classes pay slight more of the US total tax revenue than the wealthy.
Comment: #1
Posted by: Matt
Mon Jan 31, 2011 7:10 AM
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