The Homa Files

I’ve been doing some data searching to understand all of the gibberish being spouted about tax rates (from both the left and the right).

Here’s the scoop.

Below is a graph showing the actual taxes paid (per the IRS site) divided by AGI (adjusted gross income) across income ranges (the way the IRS reports them).  Below the graph is the tabular data.

Note that:

Rates are ‘average’ at 11.8% between $100,000 and $200,000.

The rates move up quickly to about 20% of AGI in the range between $200,000 and $500,000

Then – and this is where things get interesting — starting at about $750,000 in income, the % of AGI paid in taxes hits about 25% and hangs there. 

• Note: On the table you can see that there’s a very small dip in the percentage for folks reporting more than $10 million – probably because of a high proportion of cap gains and dividends.

Again, these numbers are right off the IRS site … they’re not confused by tax tables or annoying reports that Warren Buffet pays less than his secretary.  They’re not zero as ‘progressives’ would lead us to believe …  and they’re not 100% as ‘conservatives’ would lead to believe.  The fact-based answer: 25%.

So what?

Reasonable people can differ (a little) on what rate constitutes a person’s “fair share”.

My view: 25% sounds about right.

What do you think?

This entry was posted on April 26, 2011 at 6:40 am and is filed under Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.