Yesterday I was told that 42% of people did not pay taxes. I commented back that everybody paid at least 15.3% because of Social Security (FICA) and Medicare Taxes. These are just another tax because they are not placed in a dedicated pool and are used to reduce the deficit. I count the employer contribution as a tax on wage earners as they could be given to the wage earner if not sent to the government.
This raised the question of who paid the most tax if SS and medicare were counted in. The taxes stop at $102000 of income so lets compare that marginal tax rate to that of a $1 million earner. Using a tax calculator for the income tax shows that the $102,000 wage earner pays an average of 34.9% and an incremental rate of 43.3% in total taxes versus an average of 34.1% and an incremental rate of 35% for the $1 million earner as detailed below: