Averages over all taxpayers -- those with fewer or no children, and unmarried -- are much lower. My blog has cites to sources with all the details.
The percentage reduction in taxes is huge because it is in fact the case that, increasingly, the bottom half of the income distribution has no positive Federal income tax liability. (The bottom 40% has on average a negative liability.) The Bush proposal advances this trend. This fact has begun to irk some on the right, witness the flap occasioned by the Wall Street Journal 'lucky ducky' editorial.
Payroll tax is simple -- just multiply wages by 15.3%. (that includes the employer's half; employee only is 7.65%.)
mbs
-----Original Message----- From: owner-lbo-talk at lists.panix.com [mailto:owner-lbo-talk at lists.panix.com]On Behalf Of Michael Pollak Sent: Saturday, January 11, 2003 7:51 AM To: lbo-talk at lists.panix.com Subject: Re: The Bush Defense
> > Using the example of a married couple with two children and income of
> > $40,000, he said his plan would reduce their federal income tax bill
> > to $45 from $1,178, a savings of $1,133.
>
> Okay, so what's the catch?
Ah, I think I've got it: a couple this poor doesn't pay much income tax, only a 1000 bucks, 2 1/2 % of its income. But it probably does pay a decent amount in payroll taxes, none of which will be touched under this proposal. Anyone have a guess how much such a couple would pay in payroll taxes?
Michael