As tax season ends, I thought I’d put some of the rhetoric we hear daily from the Far Left into perspective. The top 25% of all taxpayers pay 87.2% of all Federal Income Taxes.
Take a moment to think about that.
How is this fair in any way, shape, or form? A quarter of us pay almost all of our country’s bills.
The idea that America’s income tax system is biased against the working class is a fantasy. According to official IRS numbers, the top 1% of taxpayers contributed 40.4% of revenue in 2022, and the top 10% paid 72%.
Tax Day has arrived again, and my April 15th condolences go to those who pay the bulk of the nation’s bills. It’s a smaller group than many Americans realize, and those figures bear repeating, as Progressives renew their line that the rich won’t pay their “fair share.”
Compare that with the bottom half of filers who submitted 76.9 million returns in 2022. They paid 3% of income-tax revenue, and their average tax rate was 3.7%.
And those percentages are overstated because “refundable” credits are categorized as spending and aren’t reflected in the IRS data. The Treasury Department’s Office of Tax Analysis estimates that the average income-tax rates are effectively negative for the bottom 40% of earners.
That means they paid zip, zero, and zilch?
This is happening against the backdrop of raising our taxes once again.
Sen. Cory Booker (D. NJ) introduced a bill to raise the top individual tax rate to 43%, from today’s 37%. Sen. Chris Van Hollen (D. MD) has another proposal being considered that raises the top rate to 49%.
Both proposals eliminate income taxes for even more lower class earners. This is happening while our taxation system is already too progressive.
And what would these fine Senators actually consider fair taxation for the top quarter of all taxpayers? Another 10%? Maybe another 12.8% so that we’d pau 100% of our nation’s bills?
If they’d ever had the job of telling a middle class family that they owed another $20K in taxes they didn’t have while trying to put a couple of their children through college, I doubt their tax proposals would even be a thought.
Let me leave you with this…
If you just had to write a check for your taxes so large that it would make a billy goat puke, I feel for you. I wrote one as well.
They say that democracies are built on the backs of the middle class. But the numbers I just provided tell a much different story.
The surprising aspect of the last few tax seasons is the amount of work we now put into even average returns.
Back in the Stone Ages when I started, completing an income tax return was a much simpler task. You’d put in a couple of W-2’s, a 1098, maybe some interest and dividends, and voilà, you were done.
Not anymore.
Now we have Pass Through Entity Tax Credits, Health Insurance Bypasses, and numerous other tax saving measures that appear on a significant number of our returns. And the sad part is that most accountants have never even heard of any of this.
Most of the time, when new clients schedule a complimentary tax planning session with me on Zoom, I review their last few returns and show them how they could have saved a significant amount of money. They then ask a simple question.
“Why didn’t my old accountant do any of this for me and my family?”
In 37 years, I’ve never been able to answer that question.
If you find yourself in this position and think you paid too much in taxes, schedule a complimentary tax planning session with me today. You’ll be glad you did.
We’re all going to get through this. Let’s get through it together.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
www.AccountingSolutionsLtd.com
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