Like (I suppose) taxpayers everywhere, I gobbled up James B. Stewart's New York Times story this morning on his personal taxes: Stewart says he paid "24 percent of [his] adjusted gross income in federal taxes," and "49 percent of [his] taxable income in federal income tax" (note the inconsistency in wording--"federal taxes" versus "federal income tax").
Naturally I hauled out our (sic) own return for a comparison, and there are some surprises. I see that we paid about 21.5 percent of adjusted gross in federal income tax. I guess this is the one to compare with Stewart's 24 percent (or is he including, e.g., Social Security as a "tax"?).
Also if I add this up right, we paid only 25 percent of taxable income in federal income tax, versus Stewart's 49 percent--and I haven't a clue why our number is so much lower than Stewart's [But see infra--ed.]. I should have thought that Stewart and we were mostly alike in that most income, in both cases comes from evasion-proof sources like salaries, pensions etc. Idle speculation: is Stewart single? We are married filing jointly, which I assume translates into a lower rate.
Another puzzle: Stewart says he gave 25 percent to charity. This is eye-popping at least in the sense that I thought we were generous but we don't come close to that. Anyway, you would assume that the bigger the slug of charity money the smaller the tax bill, which is another reason why it is hard to figure Stewart's 49 percent.
We also paid another six percent in California state income tax, but no local income tax. I take it poor Stewart pays 13 percent in combined (New York) state and local income taxes; also something called the "unincorporated business tax" which sounds like a very expensive insult.
Yep, I'd sure rather be in the Mitt Romney 13.9 percent bracket. But as I suggest, I'm a little surprised to find that our overall rate is as low as it is. And the truth is, I have never felt myself overtaxed. Sure, the government spends money on all sorts of lunatic adventures that I'd like to stomp in their cradle. But nothing is free and I am with Oliver Wendell Holmes when he says that taxes are what we pay for a civilized society. Well, semi civilized. Some of he time.
Afterthought: Oh, maybe I do get it. If he has huge deductions from AGI, he ends up with a comparatively low taxable income, but a humongous alternative minimum tax.