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
I consider my family and I to be in the middle class category and from being in the middle class, and the facts that are provided, the middle class is slowly declining as the time goes on. I believe that a lot of people go beyond the middle class to the upper middle class or people go below the middle class to the poor category. I’ve found a graph from Forbes that compares the rates of all classes from 1979 to 2014. From observing the graph my initial hypothesis was right. The middle class has declined by 6.8% between the years 1979-2014.
Let's take it back to the past in regards to wealth distribution in this country. The fact is that the economy boomed from the end of WWII into the 1970's. “Incomes grew rapidly and at roughly the same rate up and down the income ladder, roughly doubling in inflation-adjusted terms between the late 1940s and early 1970s” (CBPP). Through the 70's economic growth slowed, and the wealth gap widened. Middle-class families were now considered lower class. People relied on the government to help them out with welfare programs. The middle-class class was weakened and the gap grew and grew. There were periods of positive fluctuation, however the middle-class simply never regained it's status that was held in more prosperous times in the past.
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
“Strong support for a flat tax extends across income groups (62 percent) among those making less than $30,000 a year and 73 percent among those making more than $110,000 a year”(2014 Reason Foundation). According to most websites and commentary blogs they say that a majority of supporters for the flat tax would be from higher income homes.But as shown in the quote not only would higher income homes support it ,but more than half of the 30,000 and below homes would also support.So not only do we need the flat tax but the citizens want a flat tax,give them what they want.The public can also agree that it is not the government’s responsiblities to reduce the differences in income between people with high incomes and those with low incomes,therefore calling for a flat tax to replace our own progressive tax.Even a little more than half(52%) of Democrats asked if they would agree with a flat a tax ,Democrats are also most likely to appose a flat tax becasue they believe in taxing the rich more than 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...
Between the end of World War II and the late 1970s, income inequality in the U.S. was reduced; but since 1970s, the situation with wealth distribution has changed. Data from tax returns in 1976 show that the top 1 percent of households received 8.9 percent of all pre-tax income. In 2008, the top 1 percent’s share had more than doubled to 21.0 percent.
If everyone paid the same percentage rate on their income, the poor would wind up paying a greater total amount of their income than the rich.
What comes into my mind when thinking on how to categorize those people that belong in the middle class, I look at such things as education, race, family, income, gender and how many people are in your household. I look at it as those people who are making between $40,000 and about $85,000 to be in the middle class while the next step would be the upper middle class and then to the upper class. Maybe I am wrong here, but like I said before, everyone wants to have that “I am middle class” attitude. The most recent Census Bureau survey data shows that the share of households with incomes of $75,000 or more has doubled in the past 24 years. Other studies, however, discover that more people who depart the middle class move down than up, at least temporarily.
Income inequality has affected American citizens ever since the American Dream came to existence. The American Dream is centered around the concept of working hard and earning enough money to support a family, own a home, send children to college, and invest for retirement. Economic gains in income are one of the only possible ways to achieve enough wealth to fulfill the dream. Unfortunately, many people cannot achieve this dream due to low income. Income inequality refers to the uneven distribution of income and wealth between the social classes of American citizens. The United States has often experienced a rise in inequality as the rich become richer and the poor become poorer, increasing the unstable gap between the two classes. The income gap in America has been increasing steadily since the late 1970’s, and has now reached historic highs not seen since the 1920’s (Desilver). UC Berkeley economics professor, Emmanuel Saez conducted extensive research on past and present income inequality statistics and published them in his report “Striking it Richer.” Saez claims that changes in technology, tax policies, labor unions, corporate benefits, and social norms have caused income inequality. He stands to advocate a change in American economic policies that will help close this inequality gap and considers institutional and tax reforms that should be developed to counter it. Although Saez’s provides legitimate causes of income inequality, I highly disagree with the thought of making changes to end income inequality. In any diverse economic environment, income inequality will exist due to the rise of some economically successful people and the further development of factors that push people into poverty. I believe income inequality e...
Inequality as previously mentioned is a subject that gets debated when brought up and in any debate there is two sides. In class we have discussed both side of the story of inequality, and it has give me a better perspectives of income inequality. When discussion income inequality, we brought up the concept of the economic pie in which states that the economic pie is a reference to the way income gets distributed among the lower, middle, and higher class of America. So the concept of the economic pie states that the rich is getting richer, so they are
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
Tax cuts are only benefiting the richest people, and will widen the inequality gap between the rich and the poor. A recent report from the Congressional Research Service states, “as the top tax rates a...
Middle class is defined in different ways by different people. For example, Easterly describes middle class “as those lying between the 20th and 80th percentile on the consumption distribution” (Banerjee and Duflo 5); or Birdsall, Graham, and Pettinato says this class “as those between 75 and 125 percent of median per capita income” (Banerjee and Duflo 7). In America, people are divided into classes by many factors. The most popular factors are income and education. For income, people in this class make less money than upper class. Pew 's analysis in the article of Philip Bump says that middle class “holds less aggregate income than the upper class”; this is true. However, people in this class have better jobs and salaries than poor class. The working poor tend to have less stable jobs than their middle class brothers. Because of the temporary nature of these jobs, they have a