With todays report that the governments tax deficit was reduced from an anticipated $184 billion to $81 billion due to record levels of money taken from taxpayers, even with record spending, it brings to mind other stories about the growing income in-equality.  I am all for spreading the wealth, so everyone that works can enjoy a better life, but as far as the government is concerned having a few people earn exorbitant amounts while others make very little is better for the government.

The graduated tax means the more money you make, the higher the tax percentage you pay on the higher income. Using the 2007 tax tables, you can calculate the benefits to the current executives hoarding the wealth.    We will use a company with a $1,000,000 payroll to divvy up.

Scenario 1 has the CEO hogging all of the profits and shafting his 4 workers, but this is the best format for the governments coffers. 

Count	Salary	Tax Rate(Max)	Taxes Paid
1	$800,000	35%	$259,074
4	$50,000	25%	$35,695
			$294,769 total taxes

Scenario 2 has the CEO still making a lot, but also paying his same four workers a better $150,000 wage each, which adversely effects the governments kitty.

Count	Salary	Tax Rate(Max)	Taxes Paid
1	$400,000	35%	$119,074
4	$150,000	28%	$144,443
			$263,517 total taxes

The government takes an additional $31,252 by turning a blind eye towards corporate greed.

 

What did you think of this article?

Liked
Disliked
No Opinion