Unexpectedly Intriguing!
April 30, 2009

President Barack Obama and the Democratic Party majority in the U.S. Congress are committed to allowing the federal income tax relief first passed in 2001 to expire after 2010, which will result in nearly everyone's tax rates in the U.S. rising when they do. Our question today: Which taxpayers are going to get shafted the most when that happens?

It's very likely not who you think it is:

What If Tax Collections after Current Law Tax Rates Expire After 2010 (in 2006 USD)

To create the chart above, we used our model of the distribution of U.S. household incomes from 2005, multiplying the aggregate incomes by the tax rates that would apply under current law and after 2010. From this chart, we see that those earning between $30,650 and $154,800 will be providing most of the increased revenue the government hopes to collect.

We'll note that we used the income thresholds that apply for taxpayers filing as Single, which means that we're overestimating the amount of taxes that would be actually be collected. We justify doing so because we're more interested in the magnitude of the change from applying the different tax rates, which provide a very clear picture of the income ranges from whom the government will be collecting most of the expected increase in tax revenue resulting from the higher tax rates.

Or, as we prefer to think of them, "the rich."


About Political Calculations

blog advertising
is good for you

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations.com

Thanks in advance!

Recent Posts


This year, we'll be experimenting with a number of apps to bring more of a current events focus to Political Calculations - we're test driving the app(s) below!

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

Visitors since December 6, 2004:

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button


The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.

Other Cool Resources

Blog Roll

Market Links
Charities We Support
Recommended Reading
Recommended Viewing
Recently Shopped

Seeking Alpha Certified

Legal Disclaimer

Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.