It has been said throughout history that middle class pays more income tax than the upper class, but is it true? It is always assumed that the middle class pays more tax, but the upper class pays about 39.6% of the income tax according to the tax bracket shown in figure 1.1 The middle class pays about 15% of income tax. Income tax is a tax that the government imposes on financial income.Though the rich may pay more tax due to the income earned by them, but the poor and the middle class are highly affected by the income taxes due to the their gross income. The topic between the middle class paying more income tax than the upper class has been an issue for decades. Based on a survey conducted by Gallup website on tax burden political parties tend to lean one way or another when it comes to income tax as it may benefit them. The median income in the United States in the year 2012 was about $51,017, leaving about 15% of the population to be considered in the Poverty.2
According to figure 1, which is 2013 Tax Bracket provided by the IRS, it is shown that the middle class only pays about 15% of the tax, and the upper class pays about 39.6% of the tax. Though middle class may pay less, but it is still very effective to them as their gross income is smaller than the upper class. A single Filer who earns between $8,926 and $36,850 pays 15%, and a single filer who earns $400,001 and up pays about 39.6%. The rich pays more, but it does not affect them because they are not dependent on wages or salaries like middle class is. Upper class mostly earns their income from businesses and entrepreneurs, but the middle class population earns from working under a
Patel 2 management, while earning a minimum wage. The rich earns more m...
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On a federal level, middle class does not pay more income tax, but on a local and state level, where regressive taxes are enforced middle class pays more taxes than the upper class as their income is lower than the rich. My thesis failed due to the evidence provided through the research. It has been said that throughout history middle class pays more income tax than the upper class but based on the research, middle class only pays about 15% of the income tax while the top 1% pays about 39.6% of the federal tax. Some of the argument about the middle class paying more taxation may be true but the overall middle class does not pay more than the upper class. Through research it is also explained that the politicians tend to lean towards a certain party. The rich earn more money therefore the tax bracket does not affect them as much as it does to the middle class.
According to Gregory Mantsios many American people believed that the classes in the United States were irrelevant, that we equally reside(ed) in a middle class nation, that we were all getting richer, and that everyone has an opportunity to succeed in life. But what many believed, was far from the truth. In reality the middle class of the United States receives a very small amount of the nation's wealth, and sixty percent of America's population receives less than 6 percent of the nation's wealth, while the top 1 percent of the American population receives 34 percent of the total national wealth. In the article Class in America ( 2009), written by Gregory Mantsios informs us that there are some huge differences that exist between the classes of America, especially the wealthy and the poor. After
America is divided into two main groups, rich or poor. There is some grey area among these groups which is referred to as the middle class. The problem with the middle class is that most people think they belong in the middle class because they do not want to associate themselves with neither rich nor poor; there are stigmas attached to each side of the spectrum.
Robert Reich is on a mission to change the economic status of America. In his documentary Inequality for All he illuminates some of the loopholes in the US Government laws, as well as confirm and justify the increasing hardship the middle class is facing. He starts the discussion with the Suspension Bridge Effect. In the year 1978, the average American middle-class worker made about 48,302 dollars a year, while the average wage for the top one percent was 390,000 dollars a year. Fast forward to more recently 2010, the average middle-class worker wage drops to 30,000 dollars while the top one percent rises to about one million. Emmanuel Saez and Thomas Piketty studied the IRS tax data from as far back as 1928. They found
One person may see that the increase taxation on the poor and the decrease taxes on the wealthy is not an issue because the wealthy pay a lot of taxes already. However, many people don’t realize the fact that, yes, the wealthy are paying a lot of taxes because they make more money, but they can afford to pay more. Recently, in a CNN article, more than forty millionaires want their taxes to increase, which proves the fact that the wealthy have plenty of money to give back to the community. In addition, their just going to keep getting wealthier and wealthier by the
A plethora of research studies exist on the topic of wealth inequality in America. There is no question that the top one percent of earners consume a large portion of wealth in this country while the other 90 percent of earners share the left-overs. Some of the related questions that I found during the course of my research are 1) Why are wealth and income distributions so vastly disproportionate? 2) Can America bridge the wealth gap? 3) If so, how? 4) Has the wealth gap increased over time? 5) Are there public policies that influence wealth inequality? And, 6) Is America’s middle-class growing poor? Those are just a few of the many questions that circulate the discussion on wealth inequality in America. However, the two
In the United States there are four social classes : the upper class, the middle class, the working class, and the lower class. Of these four classes the most inequality exists between the upper class and the lower class. This inequality can be seen in the incomes that the two classes earn. During the period 1979 through the present , the growth in income has disproportionately grown.The bottom sixty percent of the US population actually saw their real income decrease in 1990 dollars. The next 20% saw medium gains. The top twenty percent saw their income increase 18%. The wealthiest one percent saw their incomes rise drastically over 80%. As reported in the 1997 Center on Budget's analysis , the wealthiest one percent of Americans ( 2.6 million people) received as much after-tax income in 1994 as the bottom 35 percent of the population combined (88 million people). But in 1977 the bottom 35 percent had about twice as much after tax income as the top one percent. These statistics further show the disproportional income growth among the social classes. The gr...
Income inequality in the United States, as of 2007, has reached levels not seen since 1928. In 1928, the top one percent received nearly 24% of all income within the United States (Volscho & Kelly, 2012). This percentage fell to nearly nine percent in 1975, but has risen to 23.5% as of 2007 (Volscho & Kelly, 2012). Meanwhile, in 2007 (see
Some say that the upper class deserve to be on top because they've worked hard to get there. And others say that the upper class only saving money fo their own family is the reason there's a middle class in the first place.
Everyone is France that is classified as “middle-class” pays the same tax, no matter what if their income is on the lower or higher end, promoting social equality within a certain tax bracket. However, the part of their system that is undemocratic is that the rich pay a much higher percent of their income, and people that have very low income do not pay income tax. The United States’ system is similar on the latter, but they have more broken down tax brackets that have the lower part of “middle class” citizens pay a lower percentage than the higher
...e the rich have increased. The fact that wages have dropped dramatically for the working class says that the rich are more important than the middle working class.
The American middle class is defined as a social class in the United States. It is the class of people in the middle of a social hierarchy. There are people in the United States middle class as well as other countries and this class of people has specific issues and interests that they are concerned with. Issues such as the health care reform, the financial reform, making college affordable, and housing. By dealing with these specific issues, the middle class has to vote, making them the middle class voters. In the middle class, there are four sections and all three make up the middle class. And in that middle class are the middle class voters, a small chuck of it. The middle class has been considered as homogenous, but with that different
Participants in the middle class are not necessarily living the American Dream but a lot of them are living comfortably. In some studies almost 90 percent of Americans have self-identified to be in the middle class stratum. (Conley 2015) Unfortunately, the average American believes that they are better off than they actually are. Many of the people who self-identify as middle class actually fall into the working class. How would one separate the two classes? The white-collar office worker usually describes the middle class while the working class is described as the manual labor worker. However, in the recent years the working class has as a whole sort of gained a new stratification and become an expanded part of the middle class.
According to Accounting Theory: Contemporary Accounting Issues by Evans, accountants have developed two alternative approaches to accounting for income taxes, which are the cash method and the allocation method. The cash method is described as a simple and direct approach. The amount of income taxes actually paid for the year is reported on the Income Statement. The amount comes from the firm's income tax return and fit is not adjusted in any way. Therefore, the firm's actual transaction to record its income tax liability is the basis for the amount of the income tax expense reported on the Income Statement. The allocation method is a bit different. The actual amount of tax that is paid in the year is ignored when it comes to reporting income tax expense on the Income Statement. The amount of income tax expense reported on the Income Statement is based on the on the income tax rate that the firm pays, which is applied to the amount of pretax income. This makes the Income Statement perfectly consistent with the before-tax income. Using the allocation method makes it look like all items on the Income Statement based on the same method.
Birdsall, Graham, and Pettinato states that middle class is “the backbone of both the market economy and of democracy in most advanced societies” (Banerjee and Duflo 3). Everyone has freedom to decide what they do, where they live, and who they get married. However, there is an aspect that people are fell into when they are born, social classes. The social hierarchy of America consists of three classes, they are upper, middle, and lower class. The vast majority of Americans fall into the category of the middle class. Because of their buying power, the middle class greatly influences the American economic system. The term middle class gets thrown around too much and it is time that a more concrete definition is introduced.
According to Caroline Fairchild from the Huffington Post, the middle class incomes are on the decline. In 1968, the middle class earned about 53.2 percent of national income. This number has now fallen to 45.7 percent. Super PACs became a concern as more individual donors willingly wrote up enormous checks to support their particular candidates. As a result, this gave prominence to the growing political inequality, as well as highlighting the rich’s ability to have their words have much more weight over the average citizen in America.