Taxes are the Same for Everyone: Marginal Rates vs. Millionaires and Billionaires

I was watching some of the coverage of the ongoing fiscal cliff mess and I heard one of the people being interviewed talking about how the “Bush tax cuts” are going to be extended for 98% of Americans. This. Is. So. Wrong. I’d like to assume that the people on TV informing the nation know that they’re wrong or that they’re misleading, but I don’t know — maybe they don’t know. Regardless, they’re unintentionally perpetuating myths that have long since been debunked.

To flesh this out: it’s not that once you make a certain amount of income, your rate is completely different for all the money you make, NO! The USA has marginal tax rates, so the first $250,000 you make will get taxed at one rate and any money you make above that gets taxed at a different rate. So, when pundits or talking heads or anyone talking about this fiscal cliff mess tells you that the Bush tax cuts are being extended for 98% of Americans (or any number less than 100%) — they’re wrong.

Published by Jeremiah Stanghini

Jeremiah's primary aim is to provide readers with a new perspective. In the same vein as the "Blind Men and the Elephant," it can be difficult to know when one is looking at the big picture or if one is simply looking at a 'tusk' or a 'leg.' He writes on a variety of topics: psychology, business, science, entertainment, politics, history, etc.

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