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Middle-income people are most affected by income tax.
The Poor are not the most affected by income tax simply because of the way it's structured: you have to make a lot of money before you're liable for taxes at all.
The Rich are not the most affected by income tax for two reasons. First is the marginal utility of money. Marginal utility is defined as the added satisfaction you get from consuming one more unit of a commodity. Think of it like this: If you wanted to buy a car and you had $1000, you would go on Craigslist and get a car that looks bad and would run for a couple of years, and it would take all your money. If you had $10,000, you could go to a used car dealer and get a good reliable car, but it would probably still take all your money. It would be hard to spend all of $100,000 on a car, and it would be almost impossible to spend all of $1 million on one. Similarly, people who make $30,000 per year (unless they live in very low-cost areas) spend all their money on routine living expenses; people who make $30 million don't do that even if they have the terrible habit of burning down their uninsured mansions and sinking their uninsured yachts a couple times a year. So if you levy a tax of 50 percent on a person who makes $10 million per year, he or she will notice it less than if you levy a tax of 5 percent on a person who makes $100,000 per year.
The other reason is more pragmatic: rich guys can afford to not pay tax. Get out IRS Schedule A (Itemized Deductions). They give you a choice: take the Standard Deduction, which is real high ($11,900 for married filing jointly), or itemize your deductions and use that. You have got to make a ton of money to be able to afford to spend twelve thousand dollars on mortgage interest (not mortgage payments - mortgage INTEREST!), state taxes, medical expenses that come to more than 7.5 percent of your income, gifts to charity, nonreimbursed theft or casualty losses and job expenses that come to more than 2 percent of your income. Rich guys can also invest in tax-free municipal bonds, set up corporations that fence them off from their income in the eyes of the IRS, and otherwise structure their lives with tax avoidance in mind.
Middle-income people make too much money to not pay tax, and not enough money to buy their way out of paying it...so, therefore, The Middle Class is the most affected.
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∙ 10y ago
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Does Tennessee have a state income tax?
Tennessee does have a state income tax but it only taxes certain interest and dividend income. For this reason, most people in Tennessee don't pay any income tax.
If a 15 years old working does his child tax benefit get affected?
Not on your individual income tax return as long as all of the rules are met for you to be able to claim the 15 year old as your qualifying child dependent on your income tax return.
What is Before tax income after tax income?
Before tax income is gross income less allowable deductions and rebates = assessable income. After tax income is assessable income less the applicable income tax
What kind of income tax is based on your taxable income?
Income tax IS based on your income that is why it is called INCOME tax.
Is Payroll Tax considered Income Tax?
Yes. Any tax on income is income tax. Taxes imposed after income, such as sales tax, aren't.
Where can I find an income tax lawyer for a reasonable cost?
Income tax lawyers vary in price. Price can be affected by factors such as location and economy. The best advice is to simply search on the internet or in a phone book for a good income tax lawyer.
Does Tennessee have a state income tax?
Tennessee does have a state income tax but it only taxes certain interest and dividend income. For this reason, most people in Tennessee don't pay any income tax.
If a 15 years old working does his child tax benefit get affected?
Not on your individual income tax return as long as all of the rules are met for you to be able to claim the 15 year old as your qualifying child dependent on your income tax return.
Which tax raises the most revenue for the federal government?
personal income tax
What is Before tax income after tax income?
Before tax income is gross income less allowable deductions and rebates = assessable income. After tax income is assessable income less the applicable income tax
What kind of income tax is based on your taxable income?
Income tax IS based on your income that is why it is called INCOME tax.
CanI receive income tax with 2 kids and no income?
No. As the name implies, income tax and any credits that may go with it is based on some form of income, and in most cases, earned income.
Is Payroll Tax considered Income Tax?
Yes. Any tax on income is income tax. Taxes imposed after income, such as sales tax, aren't.
How do I file my income tax return?
The best and most efficient place to find out about how to correctly fill in your tax return is the Income tax office itself, this will give you the most up to date and correct proceedure.
What are tax rates in which the percentage of tax is the same regardless of the level of income?
Tax rates in which the percentage of tax is the same regardless of the level of income is most likely a proportional tax. This is sometimes also referred to as a flat tax.
What is the property tax that raises the most revenue for local governments?
personal income tax
What is a Fedeal income tax?
A income tax is a tax levied on the income of individuals or business.
