Some basic taxation concepts I read today from Tax Foundation:
(1) Average Tax Rates -- the total tax paid divided by taxable income (the amount of income subject to tax after deductions and exemptions), measures the overall share of income paid in taxes, or the individual, household, or business’ tax burden.
Example: A single taxpayer with $45,000 in gross income pays approximately $3,700 in income taxes. This results in an average tax rate of 8.2 percent.
3,700 ÷ 45,000 = .082, or 8.2% ATR
(2) Marginal Tax Rates -- the amount of additional tax paid for every additional dollar earned as income.
For example, a 10 percent marginal tax rate means that 10 cents of every next dollar earned would be taken as tax. A rich person facing an effective marginal tax rate of 55 percent does not owe 55 percent of all income in tax, government would take 55 cents of the next dollar earned.
https://taxfoundation.org/taxedu-case-study-average-marginal-tax-rates/
These numbers I got from "The Concise Encyclopedia of Economics" (2008), subject on "Marginal tax rates" by Alan Reynolds. Philippines taxes also started in socialistic rate of 70% in the 1970s to 35% in the late 80s and 90s, down to 32% around 1997.
The following numbers also from Tax Foundation. Scandinavian economies Sweden and Finland have 70%+ tax rates. Still socialistic. Switzerland has a cool rate of 46%.
Figure 1 Top Effective Marginal Tax Rates in 2019 and Their Composition
https://taxfoundation.org/taxing-high-income-2019/
See also:
Tax Cut 34, Bidenomics and reversal of Trump tax cut, April 10, 2021
Tax Cut 35, Why oil taxes should be small or zero, November 18, 2021
Tax Cut 36, WTA's Asian Taxpayers regional forum 2022, October 06, 2022.
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