Teabagging? Seriously?

So, our acquaintances over at Fox News are hyping Teabagging, also known as anti-tax Tea Parties. Other than a Lipton plot to sell lots of tea, this "movement" doesn't make much sense. Except for 1991 and 1992 (when the top tax rate was 31%) today's top tax rate of 35% is the lowest since the 1920's! Now, we're no teabagging experts, but we believe the first instance of this back in 1773 was not overhyped. Taxes, like the saying goes, are as inevitable as death and the amount Americans are paying is very low. In other countries, the tax rates can go up to around 60% (such as Sweden and Denmark). In a recent Gallup poll, 48% of Americans say that the pay "about the right amount in taxes," while only 46% say they pay too much. This is a reversal from most of the past 50 years where a vast majority (about 60%) of Americans feel they pay too much. We just don't see how this is a "movement" that has any real footing.

Run for the hills! The Revenuers!

Tomorrow is Tax Day and this is the time of year many folks are freaking out. Especially this guy. From our friends at mental_floss, here are a couple of interesting tax related tidbits to keep you from freaking out.

1. 5 Tax Laws You Shouldn't Have to Worry About.
2. 9 Big Names Who Lived Above the (Tax) Law.

Don't worry, you have over 24 whole hours left!

538.com and Other Musings

Our friends of at 538.com (and by friends, I mean people who I have never met) have been keeping us busy here at Puggling. They have in depth statistical analysis of a wide variety of topics, which are both very entertaining and informative. One of the most enlightening posts recently posed an interesting question on the $1,000,000 tax bracket. Basically, Nate Silver of 538.com posits that over time, the highest income tax bracket has been steadily trending lower over time in real dollars. This is also in combination with the top marginal tax rate trending lower. It is a very interesting read and I recommend people check out his blog.

One very interesting facet that this does not take into consideration is the rate at which some other types of income are taxed. Currently the maximum tax bracket on dividends is 15%. Today, an individual making $50,000 and someone making $500,000 a year both have the dividends on their investments taxed at the same rate. Adding another step in the dividend tax schedule, taxing dividends at 20-25% for those in the top tax bracket, would still encourage investments by the wealthy because dividends would still be an advantageous way of generating cash and also give the government a boost in income. While those who would fall into these top brackets most likely would not be pleased, the extra income to the government could go a long way on staving off potential ill effects of massive deficits (provided it is used in conjunction with current spending levels and not as an excuse to spend more).