When it comes to formulating tax policy, one of the statistics that plays a major role is the categories of discrete taxpayers. discrete tax laws, policies, and strategies target citizen in different categorizes. Some categories seem to be more hit by economic instability while other categories seem to be more aggressive with avoiding taxes legally. There are three main ways that taxpayers are categorized in terms of the incomes that they earn:
1. The Rich and the Middle Class
2010 Tax Brackets
The categorization of the rich and the middle class has been on the limelight especially with the proposed move by the Obama government to increase the taxes paid by the rich. The Alternative Minimum Tax that was introduced as a parallel taxation model targeted the rich in an effort to ensure that they paid a given minimum tax rate on their incomes. There is still a lot of consider on the taxation of the rich on Capitol Hill but there seems to be a consensus that the top revenue earners should pay some level of tax rate on their income. The so called Warren Buffet Tax that is targeting the rich is named after Warren Buffet, who argued that he paid a lower tax rate than his secretary due to the tax loopholes that favored the rich. However, one of the main areas of contention is determining the threshold of the rich. Currently, this kind - for tax course purposes - includes taxpayers who earn an revenue of over 0,065. This constitutes 20% of taxpayers. However, the Tax course center has sort to have the amount moved to 2,613. Someone else kind that is at times, considered is that of the very rich. This includes the top 1% revenue earners who earn over million a year. These revenue earners earn about 17% of all of U.S. Wages. This group is said to be least affected by recessions and depressions as they have more operate over their incomes.
2. Those who Pay revenue Taxes and Those who do Not
Another categorization of taxpayers is in the middle of those who pay revenue tax and those who do not pay the tax. This has been an area of much consider in the recent past as politicians seek a way send to decree the large government deficit. The argument posed by many tax professionals and tax stakeholders was that the high ration of taxpayers who did not pay revenue taxes only showed that the tax system was not effective. There have been a lot of recommendations and talk about having a tax reform that would address such inefficiencies. Most of the taxpayers who do not pay revenue tax get to avoid paying by applying numerous tax deductions and tax toll ready in the tax law. Though initially set to support the poorer taxpayers, these tax reliefs have turned out to be more political. According to the 2010 tax statistics, 47% of taxpayers did not pay revenue taxes. This means that about a half of the Americans do not pay taxes on their incomes. This has been seen by many as a major contributor to the deficit issues that are being faced by America today.
3. The Poor, the average Earners, and the High revenue Bracket
Finally, the other categorization of taxpayers is straight through the general curve that separates taxpayers into 20-60-20. 20% of the poorer taxpayers earn an annual revenue of ,000 and below. The average earners who lead to 60% of taxpayers earn in the middle of ,001 and 0,065 annually. The final group of rich revenue earners, who catalogue for 20% of the taxpayers earn above 0,065 a year. The 60% average revenue earners were the most hit by the retreat as many were affected by revenue freezes, foreclosures, layoffs, enterprise closure and high unemployment rate. The 20% low revenue earners did not have mortgages and were less affected by unemployment while collective security remains constant even with recession. On the other hand, the very rich seemed to survive good with the retreat with the incomes of those in the top 20% slice of taxpayers, expanding their incomes from 50% to 60% of all incomes made by the whole economy.
conversational tone The 3 different Categorizations of Taxpayers
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