Many of you know how riled I get about the fact that so many Americans pay no income tax. How many (or what percentage), you may ask? Feast your eyes on the graph above to the left. Or are you one of those people who think the rich don't pay their "fair share" of income taxes? Well, take a look at the graph on the right.
Graphs from AEI's blog, HT Jonah Goldberg at NRO
Add in the Earn Income Tax Credit and it really gets ugly. But you've hit the nail on the head. When people have no tax liability, they could give a damn about tax policy.
ReplyDeleteDon't people realize that the more money you make the more you pay in taxes. It has always irked me when people get on the "rich" paying taxes thing. Obviously they don't realize how much the "rich" do for America. It's a "they have it better than me and I have a chip on my shoulder" mentality. This is America shouldn't it be a great thing that there is unlimited potential and you can become rich. Why do people want to bring that down.
ReplyDeleteJust wanted to make a side note....I AM NOT RICH AT ALL! I am just on the side of capitalism.
ReplyDeleteI always enjoy reviewing data like you presented in this blog - fascinating. Next time consider adding the total revenues earned by that top 1% who pay 40% of the total US tax revenues. You will find that their revenues have grown disproportionately to the remaining 95%.... in fact they earn more on the order of 80% of the monies earned by the rest of Americans (I believe 80% is a conservative %, it is actually much higher). With that said, I believe all Americans should pay something in taxes.... JPH
ReplyDeleteThe highest % of household income earned by the top 1% statistic I have been able to find cites 16% (in 2006). That is, of the total revenues taken in by the country's tax system, 16% comes from the highest 1%. That said, virtually every statistic I've read says that this group's share has risen higher, faster than any other.
ReplyDeleteI believe what you might be thinking about are statistics that compare net worth of the top 1%--in those studies, figures of between 80 and 90% (that is, the net worth of the top 1% is equal to that of the other 80-90%. This is indeed astounding--a credit to the time value of money and the power of compounded interest. But we are only indirectly taxed on net worth in this county (through taxes on interest earnings), so we deal with the system we have--income taxes.
So yes--the top1% earns an outsized portion of total income in the US. And they pay outsized income taxes on it. The percentage of total revenues collected by the US through its income tax system paid by these people has risen while the percentage paid by nearly everyone else--the bottom 95% has fallen. If anything--our system has become MORE FAIR (if your definition of fairness is one of rich people paying a progressively higher share of federal income taxes) rather than less fair over time--undercutting the cry of those who continue to have us believe the rich don't pay their fair share. They do. And they pay my fair share, and yours and mostly everyone else's too.
Interesting also for the curious is where in the curves the most recent uptick in total percentage paid by the top 1 % and the most recent downtick in the total percentage paid by the bottom 95% occurred. Yep--it was that mean old George Bush and his tax cuts!! The guy who loves rich people and hates poor people.
Finally--I don't think I've ever (publicly) stated that the tax system is UNFAIR to rich people. I posted those graphs to undercut the perception--and it is a widely held one--that the system is unfair to POOR people by somehow giving the rich a good deal.
I'm sorry--the article I cite my 16% income figure for the top1% is here:
ReplyDeletehttp://www.cato.org/pub_display.php?pub_id=6863
CW, thanks for taking the time to respond. Great clarrification -- much appreciated. JPH
ReplyDelete