Undercurrent

I don't really see the relevance of that observation if the objective is to support or refute the statement, "Making divedend income tax-free preferentially benefits high income earners." Surely the relevant statistic in dividend income averaged ofver all returns in a given income bracket, rather than just those that get dividend income. Otherwise, you're not taking into account at all that most low-income earners don't even have dividend income to consider.

m.

Arrowman

OK, again qualified by the fact that I am not aware of the detail of the proposed policy - what we have here, is
- government proposes to make investment dividends tax free.
- higher income people on average get more dividends than lower income people, in dollar terms.
- but dividends form the same, or higher, proportion of income for lower income people.

Suppose I earn $100K, including $1K in dividends. And my neighbour earns $50K including $500 in dividends (pretty much what the table says, in round numbers). So if the tax rate was, say, 50% for both of us (I stand corrected on the actual US tax rates - this is just for illustration) - I get another $500, or 0.5% of my income. My neighbour gets another $250, which is also 0.5% of his income.

We both get a 0.5% benefit in relation to our income. But I get $500 and my neighbour gets $250, so it's unfair. Well, duh - high income people earn more money than low income people. So what.

Now, whatever one's position might be on this particular issue, the subject of this thread is "lying with statistics" - so let's try and stick to that.

In my opinion, while the article quoted in the OP is definitely misusing statistics, for reasons others have pointed out, in fact the full table as posted by LeftCoast does support the argument that this is not just a "tax break for the wealthy". The author of the article got it right, but used the wrong statistical support.