http://www.straightdope.com/classics/a5_139.html
Let me explain. Following the 1986 tax reform, the average income tax paid by somebody in the $50,000-$75,000 bracket indeed went down, and I mean way down–$1,100. The total tax take for that bracket went up $7.6 billion because there were many more taxpayers in that range in 1987.
Ha, you say, Cecil was using statistics to lie! Uh-uh. Fact is, taxes for virtually all tax brackets went down. Yet the total tax collected went up. How was this miracle accomplished? By eliminating many popular tax deductions. This forced millions of Americans into higher brackets, so they paid more tax. Example: elimination of the IRA deduction. If you and your spouse (a) both worked, (b) made a total of more than $50,000, and (c) had previously both taken the maximum IRA deduction, in 1987 your taxable income increased $4,000 even if your real income stayed the same. Assuming two kids, $53,000 in joint income, and $9,000 in deductions in both '86 and '87, your taxes went up $862.
Taxes went up for most affluent Americans. In 1987 they reported an additional $300 billion in income, of which maybe two-thirds stemmed from closed loopholes. As a result, people making from $50,000 to $1 million paid an extra $24 billion in tax. OK, nobody’s bleeding for a $500,000-a-year lawyer. But look who paid less tax: those making under $50K (average tax cut: $5 to $867) and those making $1 million and up (average cut: $214,000). Like I say, some reform.
Ok, did the Tax Reform Act of 1986 lower the taxes for Americas overall?
Cecil says an extra $300 billion income for affluent Americans of which 2/3 was from clossed loopholes. Where does of the other 1/3 come from?
What was the effect of this Tax Reform on the economy? If Americans really had to pay more in income tax, how does this equal improving the economy through tax cuts, if this didn’t really cut taxes? Did this reallly cut taxes?
Does anybody know where I can get the full text of this bill?
*Originally posted by Major Kong *
Cecil says an extra $300 billion income for affluent Americans of which 2/3 was from clossed loopholes. Where does of the other 1/3 come from?
Everyone else who are not affluent.
What was the effect of this Tax Reform on the economy? If Americans really had to pay more in income tax, how does this equal improving the economy through tax cuts, if this didn’t really cut taxes? Did this reallly cut taxes?
Does anybody know where I can get the full text of this bill?
Have you tried Google ?