I can understand why the Democrats continue to regurgitate their lies about the tax system in America. Based on the emails and comments I received in response to my post a few days ago. It seems there are many out there who don’t understand how taxes are calculated. Let me try to explain it:

When you see a tax table that shows the rates as follows:

2004 Tax Rates
$0 - $7,000 � 10%
$7,001 - $28,400 � 15%
$28,401 - $68,800 � 25%
$68,801 - $143,500 � 28%
$143,501 - $311,950 � 33%
over $311,951 � 35%

This DOES NOT mean you take your income, figure out which bracket you’re in and then multiply your total income by the rate for that bracket. In fact, that method would mean your tax burden is actually higher than if you calculated the right way.

Here’s how you do it:

$0 - $7,000 � 10%
If your taxable income (total income less decuctions/exemptions) is $7,000 or less, your tax is calculated by multiplying your taxable income by the 10% rate. This is the only bracket where your tax is calculated by a single bracket percentage.

Example:
Taxpayer’s taxable income is $5,000 a year.
Multiply the whole $5,000 x 10% = $500 (total tax liability)

$7,001 - $28,400 � 15%
If your taxable income is $7,001 but not more than $28,400, you would calculate your first $7,000 of taxable income at 10% (see above). Then you would take the leftovers, the amount over $7,000 up to $28,400 and multiply just that portion by 15%.

Example:
Taxpayer’s taxable income is $25,000 a year.
Multiply the first $7,000 x 10% = $700
Multiply the next $18,000 (the amount over the already calculated $7,000) x 15% = $2,700
Then add the two together: $700 + $2,700 = $3,400 (total tax liability)

$28,401 - $68,800 � 25%
If your taxable income is $40,000, you follow the steps above, by calculating your first $7,000 at 10%, your next $21,400 at 15% and anything leftover at 25%.

$68,801 - $143,500 � 28%
If your taxable income is $80,000, you follow the steps above, by calculating your first $7,000 at 10%, your next $21,400 at 15%, your next $40,399 at 25% and anything leftover at 28%.

$143,501 - $311,950 � 33%
If your taxable income is $200,000, you follow the steps above, by calculating your first $7,000 at 10%, your next $21,400 at 15%, your next $40,399 at 25%, your next $74,699 at 28% and anything leftover at 33%.

over $311,951 � 35%
If your taxable income is $80,000, you follow the steps above, by calculating your first $7,000 at 10%, your next $21,400 at 15%, your next $40,399 at 25%, your next $74,699 at 28%, your next $168,449 at 33% and anything leftover at 35%.

Again, you DO NOT take your total income and multiply it by one rate. This is basic tax paying 101, but apparently there are many out there who still don’t get it. If you’re willing to educate yourself, it’s not that difficult to understand. If you’d prefer to buy the lies and remain uneducated, that’s your prerogative. Just don’t complain when you figure out you’ve been lied to because you refused to take a moment to learn the facts.