The income tax system is only superficially progressive. Two examples:
1) Everyone's earned income below about $105K has an additional 12.1% tax called Social Security. Half of that is disguised as the employer contribution, but it still has an impact on the economic activity available to poorer people in terms of wages offered, and even the number of jobs offered. Social Security benefits are paid from the general fund, and Social Security taxes are paid into the general fund. This is a regressive tax. The only distinction is the benefits you eventually draw are somewhat determined by your contributions.
2)The truly rich (I'm not talking about couples in expensive metropolitan areas earning $250K) have the luxury of great discretion in regards to when, how, and even IF they take income.
...and we haven't even talked about the underground economy, which by definition does not pay income tax.
1) Everyone's earned income below about $105K has an additional 12.1% tax called Social Security. Half of that is disguised as the employer contribution, but it still has an impact on the economic activity available to poorer people in terms of wages offered, and even the number of jobs offered. Social Security benefits are paid from the general fund, and Social Security taxes are paid into the general fund. This is a regressive tax. The only distinction is the benefits you eventually draw are somewhat determined by your contributions.
2)The truly rich (I'm not talking about couples in expensive metropolitan areas earning $250K) have the luxury of great discretion in regards to when, how, and even IF they take income.
...and we haven't even talked about the underground economy, which by definition does not pay income tax.
...and let us not forget all the tax cheats, the greatest of whom got a Presidential pardon. http://en.wikipedia.org/wiki/Marc_Rich