You are so right. He quoted the marginal rate for the lower incomes and effective rate for the higher income. That is done many times and is so misleading.
Originally Posted by Buzz
Well, I am not a tax accountant so I could certainly be doing something wrong! . No attempt to mislead, I promise.
Originally Posted by caryalsobrook
But the site I cited ($2 words here) referenced the marginal rate in both cases. In 1985 there are only 6 tax brackets, but in 2011 there are 15 so the dollar numbers are not the same but I did my best to find comparable numbers to compare rates.
And I do realize the $25,000 guy in 1985 is probably earning more doing the same work in 2011 and I did not make any attempt to adjust $25,000 to today's figure. I thought we could all understand that my examples were to demonstrate a principle, not fill out a tax return. Another frustrating danger in trying to be brief. My bad.
So the principle is that if circumstances in your life remained the same and your earnings (buying power) kept pace with inflation, and we are talking about earned income, not capital gains, etc., etc., etc. ... keeping everything as constant as possible ... the % of your earnings that go to pay federal taxes is less today than in 1985. I could be wrong. So, using the charts in the link I provided, please show me the error of my ways.
(You did find how to scroll down to past years in that chart, right? There is a separate scroll bar on the righthand edge of the chart.)
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