Your 'Fair Share' in the New Tax Rate Regime

The ongoing stir over the rich paying their "fair share" of the tax burden is associated with investor Warren Buffett's claim to have a lower effective tax rate than his secretary. In an opinion for The New York Times last summer, Buffett claimed to have a tax rate of 17.4 percent while the underlings in his office averaged 36 percent. Naturally, it'll strike a lot of folks as unfair if billionaires like Buffett pay at a lower real rate than average working stiffs. But besides the unfairness between the titans at the top, like Buffett, and everyone else, there's another type of unfairness in the federal Individual Income Tax that should also rankle folks, and that's the unfairness seen among folks in the same income bracket. Taxpayers may be covered by the same statutory tax rate, but it's what they pay that matters. Here's an example of this second kind of unfairness: In a 2004 CBO report, the second section of Table 1A shows that the effective tax rate on individual income for the...(Read Full Article)