The Pankian Metaphor 3145

in my original post,

i postulated that you could have numbers for both types of distribution scenarios ... one is distribution showing pecent of income paid for taxes by group and the other distribution showing percent of total federal income taxes paid by different groups. i then gave a couple references that had numbers for one type of distribution ...

again from the above (for one of the types of distributions):

This can be illustrated by one concrete example, In 2000, the Clinton Treasury Department released data indicating that a tax reduction proposal then under consideration in Congress was skewed, but the JEC staff reconstructed the data to produce was was not disclosed: the proportion of taxes paid by each income fifth would in fact be unchanged.

For example, the top fifth paid 65 percent of federal taxes before the tax relief legislation, and would pay 65 percent of total taxes after this legislation took effect.

... snip ...

so the referenced House report gives information on one of the two methods of calculating tax payment distribution. So the issue now is attempting to find same actual statistics regarding the actual percent of income paid in taxes by total income distribution.

Back to the opening statement in my original post

so more use of search engine:

A Comparison of Tax Distribution Tables: How Missing or Incomplete Information Distorts Perspectives:

One of the discussion in the above reference is not about real data from distribution tables .... but about hypothetical distribution tables based on buttumptions regarding future events.

However, the above reference does go into some detail about both kinds of tax calculation distributions. In the first page or two of search engine responses for tax, distribution, analysis, shares; the above seems to be most comprehensive in the treatment of the subject.

There is also the issue of what is met by income and tax rate.

somebody invested $1m in normal bonds and earned an 8percent interest or $80k. For calculation simplicity, they paid a marginal tax rate of 4percent interest. In this situation, they also show $40k after tax revenue but have paid zero tax on that revenue. Nominally, in both cases, the parties have identical $40k after tax income on identical investment of $1m. However, in one case, somebody has paid 50percent tax rate and in the other case, the person paid zero tax. Is it "fair" or "unfair" that one of the examples (having the exact same after-tax income and the same exact total investment) paid no tax??

So one of the things that AMT (alternate minimum tax) calculations is trying do is try and pump up both the actual tax individuals pay as well as percent tax paid (almost regardless of the type of income). I have some recollection that some of the original arguments in support of AMT whether their actual after-tax income was fair or not fair).

This can also create quite a bit of conflict in some of the objectives behind tax code legislation ... in one case promoting investment in those same investments. The obvious response is that a smart investor should be taking all such factors into account when making investment decisions.