Tax Wealth Like Work - Interactive Calculator

Take a Stand for a Fair Economy

The calculator and video testimonials below show how income from wealth is given preferential treatment in our tax system – a system increasingly tilted in favor of the very rich.

Wealth vs. Work: Special tax breaks for investment income, including capital gains and dividends, reward wealth over hard work, erode the progressivity of our tax system, deepen the racial wealth divide, and deprive our nation of needed funds for national priorities and job creation. Learn more »

Bush Tax Cuts: The Bush income tax cuts, extended through 2012 in the recent Obama-GOP tax deal, flow overwhelmingly to the highest-income households, exacerbate the vast and growing economic disparities, and deepen deficits now being used to justify damaging budget cuts. Learn more »

TAKE THE TAX FAIRNESS PLEDGE:

STEP 1: CALCULATE YOUR CUT

Use the calculator to see how the reduced tax rate for investment income and the Bush tax cuts affect you. All of this information is private and for education purposes only.

STEP 2: TAKE ACTION

Sign the statement of support, or make an even bolder statement by taking the Tax Fairness Pledge, and in doing so, donating some or all of your tax savings to groups involved in economic justice work.

Calculate your Tax Cut

Limitations of the Tax Calculator
This calculator is intended to be educational in value and not to be used as a financial planning tool. Your actual tax savings may be affected by other parts of the tax law, including the child tax credit, EITC, the business tax deductions, educational deductions, and the Alternative Minimum Tax (AMT).

Enter your 2010 taxable income
This includes any dividend and capital gains income, but AFTER your deductions* are taken out. Estimate or enter the figure on line 43 of your 2010 Form 1040 income tax return.

*Standard deductions are $5,700 for single filers, $11,400 for married filing jointly, and $8,400 for head of household.

Enter your 2010 qualified dividends
Estimate or enter the figure on Line 9b of your 2010 Form 1040. Enter "0" if you had no dividend income.

Enter your net long-term capital gains
Estimate or enter the figure on Schedule D, Line 15 of your 2010 Form 1040. Enter "0" if you had no capital gains income.

Results

Total Savings from Income Tax Rate Reductions

Tax Savings from qualified dividends and capital gains rate reductions

The Bottom Line: Your 2010 Tax Break

Your 2010 effective tax rate

Dave

Effective tax rate:

10%

A 20-something Boston resident. Works three jobs, lives entirely off of work income, and struggles to make ends meet.

Dave pays an effective tax rate, relative to his taxable income, of 10%. If all of Dave's income had come from investments rather than wages, he would pay an effective tax rate of 0%.

Filing Single
Total income: $13,000
Taxable income: $8,300
Work income: $8,300
Investment income: $0

Matt

Effective tax rate:

11%

Student/videographer/park maintenance worker from Sunnyvale, California who values doing fulfilling work over income. Calls himself “a normal guy who’s upset about tax fairness in the U.S.”

Matt pays an effective tax rate, relative to his taxable income, of 11%. If all of Matt's income had come from investments rather than wages, he would pay an effective tax rate of 0%.

Filing Single
Total income: $14,000
Taxable income: $9,300
Work income: $9,300
Investment income: $0

Diane

Effective tax rate:

14%

A single mom with one child, Diane works as a receptionist at an office. She lives at home with her mother because she cannot afford the costs of housing and childcare.

Diane currently pays an effective tax rate, relative to her taxable income, of 14%. If all of Diane’s income had come from investments rather than wages, she would pay an effective tax rate of <1%.

Filing Single
Total income: $35,500
Taxable income: $29,300
Work income: $29,300
Investment income: $0

Jackie

Effective tax rate:

17%

Senior Program Advisor at a nonprofit in Kensington Heights, Maryland. Says she’s faring well financially, but has been helping unemployed family members during the economic downturn.

Jackie currently pays an effective tax rate, relative to her taxable income, of 17%. If all of Jackie's income had come from investments rather than wages, she would pay an effective tax rate of 4.5%.

Filing Single
Total income: $54,455
Taxable income: $48,755
Work income: $48,755
Investment income: $0

Joe

Effective tax rate:

16%

Works in a Boston nonprofit as a transportation advocate. Recently married and living comfortably, but struggles to both pay down student debt while trying to accumulate savings.

Joe currently pays an effective tax rate, relative to his family's taxable income, of 16%.If all of Joe's income had come from investments rather than wages, his family would pay an effective tax rate of 3%.

Married, filing jointly
Total income: ‹ $100,000
Taxable income: ‹ $100,000
Work income: ‹ $100,000
Investment income: $0

Noreen

Effective tax rate:

16%

Married mother of an infant daughter. Works as a 5th grade teacher in the public school system where she sees firsthand the negative impact of cuts to the education s.

Noreen currently pays an effective tax rate, relative to her family's taxable income, of 16%. If all of Noreen’s income had come from investments rather than wages, her family would pay an effective tax rate of 3%.

Married, filing jointly
Total household income: ~$100,000
Taxable income: $88,600
Work income: $88,600
Investment income: $0

Nancy

Effective tax rate:

24%

Works in high tech in Silicon Valley, California. Receives restricted stock options and is living comfortably. Still, says, “When the majority of your income comes from a paycheck, it’s hard to get ahead financially.”

Nancy currently pays an effective tax rate, relative to her family's taxable income, of about 24%. If all of Nancy's income had come from investments rather than wages, her family would pay an effective tax rate of 11%.

Married, filing jointly
Total income: ~$200,000
Work income: ~$200,000
Investment income: 0$

Eric

Effective tax rate:

13%*

Eric works as a professor and research psychologist, but his wealth comes from money he inherited and has acquired through investments. Thus, the vast majority of his annual income comes from his investment portfolio, including capital gains and dividends.

Eric currently pays an effective tax rate, relative to his total^* income, of 13%. If Eric’s income had come from work alone rather than investment, he would pay an effective tax rate of 28%.

Data for "typical" year shown.
Married, filing jointly
Total income: ~$500,000
Work income: ~$100,000
Investment income: ~$400,000

Alma

Effective tax rate:

14%

Married with four grown children. Both Alma and her husband worked for a paycheck for much of their lives. Ten years ago they came into significant wealth after starting a medical device company after retiring from their jobs.

Alma currently pays an effective tax rate, relative to her family's taxable income, of about 14%. If all of Alma’s income had come from work rather than investments, she would pay an effective tax rate of 33%.

Married, filing jointly
Total income: $2,000,000
Work income: $0
Investment income: $1,900,000

The top hedge fund managers made more than $1 billion each last year, which was taxed at the 15% capital gains rate. If graphed here, it would rise beyond your screen to roughly three times the height of the U.S. Capitol building.

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Take the Tax Pledge

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Show Your Support

I believe that investment income, including capital gains and dividends, should be taxed at the same rate as regular income earned through work.
I believe that the Bush income tax cuts should be eliminated for higher-income households.

Please sign on to this statement by completing the fields below.

Take the pledge!

This is an important part of your participation, even if you don't plan to give this amount away, since we hope to use the total amounts to create overall statistics about the Tax Fairness Pledge. We never use your personal information without your permission.

Make a bold statement: donate some or all of your tax savings to groups involved in economic justice work.

Total tax savings:

Amount to designate for tax fairness efforts:

Click to go to the Tax Fairness Pledge page where you can designate your tax break to United for a Fair Economy, Responsible Wealth, or a local Tax Fairness Organizing Group. Take the pledge to send a powerful message for tax fairness.