Comparing Marginal Tax Rates Including Payroll Taxes: 2009

by Catherine Mulbrandon

in Comparing Tax Rates by Income, VE Infographics

Updated April 13, 2010: I don’t think my original labels were clear so I tried to fix it with new labels and I reorder the graphs.

This is a new infographic illustrating the marginal federal tax rate applied to different salaries. It shows the difference between the combined rate levied on an employee (Income + SSN + Medicare marginal tax rate) and the additional rate levied on the employer, i.e. the payroll tax (SSN + Medicare tax) I am using the same examples that I created in the previous six graphics looking at the average tax rate.

Post Revisions:

There are no revisions for this post.

Tagged as: Area Graph, IRS, Tax Rates, United States

Pingback: Marginal Tax Rates | Craig Cheslog
http://www.WeMatter.com Mike Liveright

Two thoughts…

1) As I remember it, the employer also pays an equivalent ammount of Payroll tax, and we are always being reminded that businesses never pay taxes, only people. So perhaps you might add the additional taxes paid by the business as a “Phantom” payroll tax to this. (Or am I mistaken)

2) I assume that the rate at $400,000 is carried on to any income, but it would be more illustrative if you showed that by “splitting” the graph and then showing an Infinite income rate.
http://www.WeMatter.com Mike Liveright

One other thought, I noted from the http://www.visualizingeconomics.com/2008/04/06/top-400-taxpayers-sources-of-income-1992-2005/ , chart that roughtly 50% of the income of the Richest comes from Capital Gains. As I remember it, assuming long term, that is taxed at 15% This means that the “marginal” tax rate for the combination would be roughly 15*0.5+38*0.5, or about 29% on income, for the Richest. and on the Poorest, including the employer portion of Payroll tx is about 25%, Is this sort of right?
Pingback: Daily Links for April 8th through April 9th | Akkam's Razor