Dropping Like a Rock

As of late, a big focus in the news has been on many of the incredibly rich corporations who have paid little, if any, corporate income tax over the past few years. But, as Joshua Holland points out today on AlterNet, it's not just corporations who have watched their tax bills shrink!

So, on this tax day, let's take a look at the way federal tax rates for different income levels have changed since 1981 (using this handy calculator and adjusted for inflation to 2010 dollars).

If you make $20,000, your federal income taxes have gone up! You would have paid $2,498 in 1981, and this year you would pay $2,575.

If you make $50,000, your federal income taxes would have declined by 19 percent, from $10,710 to $8,625.

If you make $100,000, you'd be paying 33 percent less today than in 1981.

Someone making a really good living that brought in $250,000 would pay 47 percent less – that person's federal income tax bill dropped from $126,953 in 1981 to $67,398 today.

If you brought in a half-million dollars, your tab would have dropped by 49.5 percent, saving you around $150,000. It's about the same decrease for someone making a cool million.

These figures only consider taxable income, and the super-wealthy avoid paying their share of taxes through a variety of loopholes that decrease their adjusted income – the amount subject to taxes. But looking just at the rate-changes, a person making $10 million would have seen his or her tax bill drop by 50.4 percent...

This last paragraph is very important. While individuals and families at the low end of the income scale only can make use of the standard deduction and exemptions, individuals and families at the higher ends can shield vast amounts of income through itemized deductions and other strategies. In the end, this means that, not only have the poor and middle class seen their tax rate rise, but they also pay tax on a larger portion of their overall unadjusted income. It is a double whammy!!

And that doesn't even tell the whole story. The poor and middle class also pay a higher marginal tax rate for social security. And this same regressive structure is also mirrored in most states with an income tax. When you add in sales and property taxes, the poor and middle class, not the rich, are the ones shouldering a great burden.

And what do Congress and state legislatures across the country want to do to reward us for propping up the country? They want to give the rich MORE tax breaks AND eviscerate the government services you and I pay for and depend on...while, maybe, increasing OUR taxes a bit more!