You vs the One Percent--How Much Tax People Pay by Income (IRS Data)

Created from Youtube video: https://www.youtube.com/watch?v=TZsdUckkkNEvideo

Concepts covered:federal income tax, top 1%, bottom 50%, Tax Cuts and Jobs Act, tax credits

The video explores the distribution of federal income tax payments among different income groups, focusing on the top 1% and the bottom 50%, using IRS data from 2018. It highlights that the top 1% paid 40.1% of federal income taxes, while the bottom 50% paid only 2.9%, and discusses the impact of tax credits and the Tax Cuts and Jobs Act on these figures.

Table of Contents1.Analyzing Income Tax Contributions Post-Tax Cuts and Jobs Act 2.Impact of Tax Cuts on Income Tax Distribution 3.Understanding Negative Tax Rates and Historical Tax Policy Changes 4.Understanding Federal Income Tax and Wealth Tax Proposals

chapter

Analyzing Income Tax Contributions Post-Tax Cuts and Jobs Act

Concepts covered:income tax distribution, Tax Cuts and Jobs Act, 2018 tax data, top one percent, IRS statistics

Rob Berger discusses the distribution of income tax payments among different income groups, focusing on data from the 2018 tax year. He highlights the impact of the Tax Cuts and Jobs Act, noting that average tax rates fell for everyone, and provides detailed statistics on taxpayer income and tax contributions.

Question 1

Was the adjusted gross income for the top 1% about $540 in 2018?

Question 2

What income qualified for the top 1% in 2018?

Question 3

To qualify in the top 1% in 2018, you needed an adjusted gross income of about _____ dollars.

Question 4

CASE STUDY: You are preparing a report on the distribution of tax burdens across different income groups for a financial publication.

All of the following are true about 2018 tax data except...

Question 5

CASE STUDY: You are an economist analyzing the effects of the Tax Cuts and Jobs Act on federal revenue.

Select two correct outcomes of the 2018 tax cuts.

chapter

Impact of Tax Cuts on Income Tax Distribution

Concepts covered:federal income taxes, top 1%, Trump tax cuts, average tax rates, income distribution

The chapter discusses the share of federal income taxes paid by different income groups over time, particularly focusing on the top 1% and the bottom 50%. It highlights the changes in tax contributions and average tax rates before and after the Trump tax cuts of 2018.

Question 6

In 2018, the top 1% paid 40.1% of federal income taxes.

Question 7

How did the top 1%'s tax share change by 2018?

Question 8

The share of federal income taxes paid by the bottom 50% in 2018 was _____.

Question 9

CASE STUDY: An economist is studying the impact of the 2018 tax cuts on different income groups. They need to compare the share of federal income taxes paid by the top 1% and the bottom 50% before and after the tax cuts.

All of the following are correct comparisons except:

Question 10

CASE STUDY: A journalist is writing an article on the impact of the 2018 tax cuts. They need to compare the federal income tax contributions of the top 1% and the bottom 50% over time.

Select two correct tax contributions from the following:

chapter

Understanding Negative Tax Rates and Historical Tax Policy Changes

Concepts covered:negative tax rate, refundable tax credits, Tax Reform Act of 1986, Child Tax Credit, tax liability

The chapter explains how it is possible to have a negative tax rate due to refundable tax credits, which allow individuals to receive money back from the IRS even if they owe no taxes. It also discusses the historical changes in tax policies, such as the Tax Reform Act of 1986 and the introduction of the Child Tax Credit in 1997, which have contributed to the increase in the percentage of people with no tax liability.

Question 11

The Tax Reform Act of 1986 expanded the zero tax bracket.

Question 12

Why did the bottom 20% have a negative tax rate?

Question 13

The bottom 20% of tax filers have a _____ income tax rate.

Question 14

CASE STUDY: A taxpayer is analyzing how the Tax Reform Act of 1986 and the Child Tax Credit have impacted tax liabilities over time.

All of the following are impacts except:

Question 15

CASE STUDY: A policy analyst is studying the effects of tax policies on different income quintiles.

Select three correct effects on the bottom 20%:

chapter

Understanding Federal Income Tax and Wealth Tax Proposals

Concepts covered:federal income tax, progressive tax, withholding tax, state taxes, wealth tax

The chapter discusses the nuances of federal income tax, highlighting its progressive nature compared to withholding and state taxes. It also touches on the concept of wealth tax and the complexities of defining fairness in tax contributions.

Question 16

Federal income tax rates increase with higher income levels.

Question 17

How does federal income tax differ from withholding tax?

Question 18

Federal income tax is highly _____, meaning rates increase with income.

Question 19

CASE STUDY: A company is evaluating the impact of federal income tax changes on its high-earning employees. The new policy increases the tax rate for incomes above $500,000.

All of the following are true about progressive tax except:

Question 20

CASE STUDY: A policy think tank is assessing the impact of federal income tax and state taxes on different income groups. They aim to understand the overall tax burden.

Select three correct factors affecting tax burden:

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