Taxes & The U.S. Budget

According to an article on the front page of Yahoo! news, Obama is the first to put tax increases on the table.

The article states the U.S. tax rate is "...far lower than many other industrialized countries..." This statement is not true because the authors, like much of the other mainstream media, do not think through their claims and make open-ended statements. Looking at those who are in the highest income bracket in the United States - those making $186k or more a year (single) in the United States - they are taxed at 35 percent of their income at the Federal level. In addition, they are taxed between 5 and 8 percent of their income at the State level (*see note). This is a total tax of between 40 and 43 percent on the individual. This tax is in fact higher than any industrialized country, contrary to the claim this article makes!

In addition to income taxes, Americans pay several other taxes. Sales tax, levied at the point of purchase of goods can be up to 10%. Capital gains tax levied on stocks/bonds gains for the highest US income bracket is 35%. The list goes on.

A fact is those individuals who are in the highest US income bracket are small business owners. The US governments fails to realize the contribution these people make to society.

To be continued on the next blog...


Note: There are a few states in the United States which do not collect state income tax, including Texas, North Dakota, Massachusetts, Washington State, and Wyoming. It is however the rule rather then the exception that United States citizens are taxed on their income at the state level.