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December 7, 2007

Pays Less In Taxes Than His Maid

-- by Dave Johnson

Lost jobs, destruction of communities, loss of pensions, falling wages -- where does the money go? Watch this video and see for yourself.

War on greed, from Brave New Films:

It could be titled" "Why we don't have health insurance and where out pensions went."

And he pays less in taxes than his maid.

Posted by Dave Johnson at December 7, 2007 2:52 PM

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"And he pays less in taxes than his maid."

Err, the actual quote includes "percentagewise" which changes things slightly.

He certainly pays more tax in total amount than his maid. His average tax rate (ie, the proportion of his total income that he pays in tax) is probably higher than that of his maid.

His marginal tax rate is less than that of his maid, certainly, but that's a rather different thing than "he pays less tax than his maid".

Unfortunately, even that last isn't really quite true: the US corporate tax system (unlike almost any other worldwide)insists on the corporate income tax being paid on profits before the distribution of a dividend. That dividend then gets taxed again at the 15% rate. (Everyone else does one or the other, taxes either the profits or the dividends.) Add the corporate income tax rate to the dividend tax rate and you're geting close to 50% as a marginal tax rate: and there aren't many maids out there who face that sort of marginal tax rate now, are there?

It's good propaganda as a film, but that is what it is, propaganda, not an examination of the facts. Nothing wrong with propaganda either, just don't confuse it with facts.

Posted by: Tim Worstall at December 9, 2007 6:13 AM

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