Ah. Finally found the article I was looking for
While the figures for income tax alone are a couple years old, it's unlikely that the average distributions have changed much:
In 2009, taxpayers who made $1 million or more paid on average 24.4% of their income in federal income taxes, according to the IRS.
Those making $100,000 to $125,000 paid on average 9.9% in federal income taxes. Those making $50,000 to $60,000 paid an average of 6.3%.
That's why just looking at taxable income isn't very useful. Because the method by which taxes are reduced is by deductions to that taxable income itself. And the averages show that most people deduct significant amounts and therefore pay at rates far lower than can be easily correlated to the taxable income Joph was attempting to use. More to the point, it's pretty unfair to suggest that the relative amount of taxes Romney pays is somehow equated to someone making under $40k. As this data shows, he paid double the income tax rate of the average person earning $100-$125k. Those aren't poor people (and apparently, I'm not taking nearly enough deductions).
Even if we add payroll taxes back in (and ignore the whole holiday reduction thing), the numbers still don't look anything like Joph was trying to imply:
This year, households making more than $1 million will pay an average 29.1% of their income in federal taxes, including income taxes, payroll taxes and other taxes, according to the Tax Policy Center, a Washington think tank.
Households making between $50,000 and $75,000 will pay an average of 15% of their income in federal taxes.
Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5% of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7%.
Again though, the larger point is being lost here. Romney presumably earns most of his money via capital gains. I'm sure he does have income in the form of book sales, paid speeches, and whatnot, but it's probably a smallish portion of his total yearly earnings. And depending on what he's doing with the money (like giving more to charity than he earned in book sales), it's not unreasonable to see that 15% figure. We could have a larger debate about tax deductions and whatnot, but the kinds of comparisons Joph was making are not only inaccurate, but they are misleading and unfair *and* serve only to perpetuate false assumptions within this topic rather than provide any sort of information to anyone.
The fact is that the wealthy on average *do* pay a higher percentage of their earnings in taxes. So the Buffet rule is meaningless bluster. It's making a rule for something that doesn't happen purely in order to make people think that it's needed or relevant. And that's before even considering that we're looking at two different forms of earnings which are supposed to have completely different tax rates. If you want to compare tax rates, you really need to separate regular income from capital gains first, then separate taxes on that regular income from that paid on the capital gains. Then you can look at the percentages. Muddling them together and trying to compare the result to someone else's earnings is not going to allow you to make any sort of intelligent analysis.
Might give you good rhetoric though! Which is why it's done. Edited, Jan 17th 2012 7:41pm by gbaji