Who Pays Taxes in the USA
My friend Thomas Ryan Stone has a nice blog entry on the topic of who actually pays the vast majority of the taxes in the United States.
He provides a link to a two-page report (PDF) from the congressional Joint Economic Committee.
From Tom’s summary:
- The top 50% of income earners pay a whopping 96.5% of federal income taxes, while the lower 50% pay just 3.5%.
- The top 25% pay 83.88% of federal income taxes
- The top 10% pay 65.8% (these are people with an adjusted cross income of about $95,000 or higher)
- The top 5% pay 54.4%
- The top 1% pay 34.3% (these are people with an adjusted gross income of about $300,000 or higher)
So keep these numbers in mind the next time a politician (or anyone else) bemoans the lack of “progressivity” of the Federal Income Tax. Ask them what percentage of federal income taxes they want the top 1/5/10% of earners to pay, what is their ideal amount? Should the top 1% pay over 50% of the total collected? Should only the top 10% of earners pay any federal income tax at all? Is that what they want to see? Nail them down on their numbers.
While you’re at it, ask them what they think rich people do when they get a tax cut. Do they reinvest that money into their businesses, hire more employees, purchase goods and services that keep poor- and middle-class people employed, or give more money to charity? From the debate on tax cuts for the rich — from those against them — one gets the sense they never do these things... they instead hoard this money in a sack under their bed, or burn it, or put it in an offshore account that in no way helps the US economy. In reality of course, the opposite is true almost 100% of the time.
Well said, Tom.
