We have seen a lot of letters and comments about Paul Ryan and his wanting "to raise taxes on the lower and middle incomes", so let's take a look at the numbers and see what this means.
For this exercise we take a family of 4 using the standard deductions of $25,000 married filing jointly and the $3,500 per individual deductions, for a total of $39,000 in deductions as outlined in Paul Ryan's "Roadmap for America's Future".
A family of 4 making $30,000 after taking their standard $39,000 in deductions would have a $0 tax liability. The difference with the current tax code is the elimination of the Earned Income Credit and this family would no longer be eligible to "get more Federal taxes back than they paid in".
A family making $60,000 would have a tax bill of $2,100. A 3.5% tax rate. About $40 per week.
A family making $100,000 would have a tax bill of $6,100. A 6.1% tax rate. About $117 per week. A family making $250,000 would have a tax bill of $37,750. A 15.1% tax rate.
A family making $500,000 would have a tax bill of $100,000. A 20.5% tax rate. That evil CEO pulling in that cool $1 million salary would have a tax bill of $225,250. A tax rate of 22.5%.
The Ryan Plan also calls for the elimination of the capital gains tax. Since the majority of Mitt Romney's income is in the form of capital gains, most of his income would be tax free. It is estimated his tax rate would be in the 1 percent range for his $21.6 million income. It should also be noted that Mitt Romney does not agree with this part of the Ryan plan and thinks the capital gains tax rate should stay at its current of 15 percent.
Now you have some numbers to help you make a more informed decision.
Gavin T. Ferringer
Submitted by Virtual Newsroom