Pop Quiz! Who's Winning the Tax Game (and By How Much)?
As the presidential race heats up, one of the most contentious issues continues to be the economy. Whether the subject is the tax code, health care reform or unemployment, it's clear that November's battle will feature two very different visions of America -- and two very different ideas of how to cure the country's economic malaise. With that in mind, we've decided to look at some of America's biggest economic surprises.
Think you know the economy? Take our quiz and find out!
A. 30%
B. 27%
C. 19%
D. 13.9%
Answer: C. Thanks in large part to the exceedingly generous 15% capital gains and dividend taxes, most of the super-rich pay a lower tax rate than middle-class filers making $69,001 per year.
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A. The top 1%
B. The Bottom 20%
Answer: B. Taxpayers in the bottom 20% pay, on average, 8.8% of their income into Social Security. Those at the top pay, on average 1.6% of their income into Social Security.
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A. The top 1%
B. The bottom 20%
Answer: B. Depending on the state, the bottom 20% of earners pay between 6.7 and 1.1 times as much of their paycheck in state taxes.
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A. 28%
B. 50%
C. 62%
D. 71%
Answer: B. While he has become the patron saint of tax cutters, for most of Ronald Reagan's presidency, the top tax rate was much higher than it is today.
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A. 50%
B. 41%
C. 70%
D. 91%
Answer: C. Under President Nixon, there were also up to 33 tax brackets. Today, there are six.
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A. 27%
B. 39%
C. 73%
D. 91%
Answer: D. The first big drop in the top tax bracket -- to 77% -- happened under John F. Kennedy.
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A. $50,000
B. $375,000
C. $5.12 million
D. $10 million
Answer: C. In 2001, the estate tax exemption topped out at $675,000, and the top rate was 55%. Today, the exemption is $5.12 million, and the top rate is 35%. Side note: $5.12 million represents the average yearly earnings of over 103 households – none of whom would get a 100% exemption on their taxes.
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A. 27.3%
B. 49.3%
C. 37.8%
D. 51.7%
Answer: B. The period right before the Great Depression witnessed one of the biggest income distribution gaps in U.S. history.
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A. 25.3%
B. 32.3%
C. 41.7%
D. 50.3%
Answer: B. In the 1950's, America's thriving middle class was flush with cash. Their free spending further increased employment, creating a virtuous economic cycle.
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A. 21.2%
B. 30.7%
C. 37.5%
D. 49.7%
Answer: D. In other words, income distribution in the U.S. today is more unbalanced than it was before the Great Depression.
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Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at@bruce1971.
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