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Show Utah Foundation Tax burden shared byall If all taxable income remaining after payment of Federal Taxes was confiscated con-fiscated for persons with a gross income of $100,000 or more, the added revenue produced (16.1 billion) would operate the Federal Government for less than 13 days at the 1978 spending rate. This was one of the facts reported by Utah Foundation, Foun-dation, the private tax research organization, in a report designed to correct popular misconceptions about the Federal income tax. The report notes that many Americans consistently con-sistently underestimate the amount of Federal taxes paid by those in the higher income brackets, and suppose that the solution to government's continual need for increased revenue can be found in collecting more taxes from those with high incomes. The Foundation report lists the following facts which were drawn from a recently-released" Federal Internal Revenue Service analysis of 1976 Federal income tax returns: - Of the 5,549 tax returns reporting adjusted gross incomes of $500,000 or more in 1976, all but six (0.1 percent) paid a Federal income tax. The average tax for the 5,543 taxpayers in this high-income group was $506,929, or 65 percent of their taxable income. Deductions and exemptions have a far greater effect in reducing the tax burden for persons in the lower income brackets than they do for persons in the upper income brackets. Taxable income amounted to only 18 percent of adjusted gross income in the under $5,000 income bracket, but was equal to 79 percent of adjusted gross income in the $100,000 and over income bracket. Furthermore, credits against the tax liability amounted to 27.8 percent in the case of individuals in-dividuals with a gross income in-come below $5,000 and only 2.6 percent in the case of individuals with incomes of $100,000 or more. -The top 50 percent of the taxpayer returns filed for 1976 those with adjusted gross incomes of $9,561 or more) accounted for 93.1 percent of all Federal income in-come taxes paid. Conversely, Con-versely, the bottom 50 percent of the returns filed accounted for less than 7 percent of the Federal income in-come taxes collected. - The lower 25 percent of the taxpayers contributed less than Vfe of 1 percent of total Federal income taxes paid. Moreover, several million low-income individuals in-dividuals have been removed form the tax rolls altogether during recent years because of legislative changes benefiting those with low incomes. - Although Federal income tax rates raie all the way from 14 percent to 70 percent, per-cent, approximately 70 percent of the tax revenue is generated at rates of 25 percent or less. As a result, a uniform tax rate of 21.2 percent would produce the same amount of revenue as is now received from the steeply progressive Federal tax rates. -During the 1976 tax year 84.5 million individuals filing Federal tax returns throughout the United States paid a total of $142 billion in income taxes, or an average of $1,678 per return. In Utah 466 thousand individuals paid $625 million in Federal income taxes, for an average of $1,341 per return. - Because of generally lower income levels and greater deductions and exemptions, the percentage of income going for Federal taxes in Utah is below that of the nation as a whole. In the 1976 tax year, total Federal income taxes paid in Utah amounted to 11.4 percent of adjusted gross income, compared with 13.5 percent throughout the U.S. - The people of Utah have less supplementary income from non-wage or salary sources. Salary and wages accounted for 86.1 percent of total adjusted gross income in Utah during the 1976 tax year. Throighout the United States, salary and wages made up 83.5 percent of the total adjusted gross income reported on all Federal tax returns. |