Re:61% of Americans paid no income taxes in 2020
by pseudalopex on Thursday August 19, 2021 @02:54PM
(#28237784)
Part of the point is they don't have to do anything nefarious specifically. Taxing earned income more than investments is a choice. Billionaires aren't especially charitable proportionally as far as I know. It isn't self evident giving to favorite causes should substitute for paying taxes. And you left out the other deductions and credits.
Splitting payroll taxes is just sleight of hand. Changing who pays nominally doesn't change the fact an employer budgets a specific amount for payroll, the government gets a specific portion, and the employee gets a certain portion. The equivalence isn't even controversial in economics. And the article said full compensation including a typical health plan. So the calculation included money they aren't actually being paid too.
> Large charitable donations reduce taxable income.
So they reduce income by having investments and donating money. Sounds pretty nefarious.
> But now add payroll taxes. The worker paid a bit more than $3,400 directly over the course of the year; in addition, the worker’s employer paid an equivalent amount as their share of the worker’s Social Security and Medicare taxes. Government agencies and most economists typically count both contributions — a total of nearly $6,900 in this instance — as a tax that is effectively borne by workers since it’s part of the cost of paying their wages. The logic is that employers consider those costs when hiring and would hire fewer people or pay them less because of the tax burden.
> All in, our worker paid $10,700 in taxes. Taken as a percentage of the worker’s full compensation (including a typical health plan), this comes out to a rate of 19%.
Riiight.. if you include money which they aren't actually paying, then they are paying more.