Who Pays the Most Income Tax?
Higher income earners pay the most, Treasury says
By Robert Longley,
Feeling overtaxed? Under the U.S. income tax system, most of the taxes collected are supposed to be paid by the people who make the most money. Thanks to President Bush's tax cuts, that is exactly the way the system works, says the U.S. Treasury Department.
According to the Office of Tax Analysis, the U.S. individual income tax is "highly progressive," with a small group of higher-income taxpayers paying most of the individual income taxes each year.
In 2002 the latest year of available data, the top 5 percent of taxpayers paid more than one-half (53.8 percent) of all individual income taxes, but reported roughly one-third (30.6 percent) of income.
The top 1 percent of taxpayers paid 33.7 percent of all individual income taxes in 2002. This group of taxpayers has paid more than 30 percent of individual income taxes since 1995. Moreover, since 1990 this group’s tax share has grown faster than their income share.
Taxpayers who rank in the top 50 percent of taxpayers by income pay virtually all individual income taxes.
In all years since 1990, taxpayers in this group have paid over 94 percent of all individual income taxes. In 2000, 2001, and 2002, this group paid over 96 percent of the total.
Treasury Department analysts credit President Bush's tax cuts with shifting a larger share of the individual income taxes paid to higher income taxpayers. In 2005, says the Treasury, when most of the tax cut provisions are fully in effect (e.g., lower tax rates, the $1,000 child credit, marriage penalty relief), the projected tax share for lower-income taxpayers will fall, while the tax share for higher-income taxpayers will rise.
The share of taxes paid by the bottom 50 percent of taxpayers will fall from 4.1 percent to 3.6 percent.
The share of taxes paid by the top 1 percent of taxpayers will rise from 32.3 percent to 33.7 percent.
The average tax rate for the bottom 50 percent of taxpayers falls by 27 percent as compared to a 13 percent decline for taxpayers in the top 1 percent.
The White House has announced it will lobby Congress to pass legislation making most of President Bush's tax cutting measures permanent.
Source: U.S. Treasury, Office of Tax Analysis
22 comments:
As important to point out is that almost half the country rides the bus for free.
Or as Weird Al would say...
There's a smelly bum standing next to me
Hasn't showered in a year
Think I'm missing a contact lens
I think my wallets gone
And I think this bus is stopping again
To let a couple more freaks get on
LOOK OUT
Another one rides the bus
Another one rides the bus
just a couple of random points, not a treatise on taxation:
1. the 1% pays taxes on that percentage of money that they chose to report, not that very large percentage of money that they have the means and ability to shelter.
2. and hows about corporation taxes? hows about corporations that move their headquarters to so-called "tax havens"? and hows about corporations that outsource their jobs thereby avoiding paying local, state and federal payroll taxes (not to mention employee benefits?)?
and, by the way, i work for myself. my company is an S-Corporation in the State of New York. As it turns out, as a small company I can't afford to hire employees simply because I can't afford to pay the payroll taxes on anyone but my own salary, despite the fact that i get pretty good fees for what i do.
so I understand the severe burden of taxation on a personal and a business level. for example, I pay both the employer's and the employee's portion of social security and FICA.
i just cannot feel sympathy for these 1-percenters whose wealth you are so dead set on defending and protecting.
They don't need your sympathy just as they don't deserve your scorn. To say the top brackets don't pay their fair share is mathematically incorrect and morally reprehensible.
I'd rather the "95%ers" just said thank you and went on their way. Otherwise, I suggest you pick up a W-2 and stand a post. Either way, I don't give a damn what they think they're entitled to.
I'm not sure what you mean by "I suggest you pick up a W-2 and stand a post." I file a W-2 every single year. And my point was that I PERSONALLY pay literally double the amount of social security tax and FICA than the average person with a W2. I.e., the world is stacked against the small business and stacked FOR big business. Another topic for another day but a topic nonetheless.
And yes, mathematically speaking you are correct. But just hypothetically speaking 33.7% taxes in $10M of income is far and away less burdensome than 13% on a family making $50K who is also being severely burdened by rising state and local taxes, cuts to their public school systems, rising costs of food and transportation, etc., etc., etc.
If you want to do math, you have to do a FAR more complex and true-to-life equation to get to the REAL answer.
Nothing personal but a man would understand my last sentence. It'll all be clear when rhino and getlive pipe in since between the both of em combined could be considered one.
I'll leave the details to Anita, but I think we've established that the rich make most the money and pay most of the income tax. Seems fair. Maybe the rich and their defenders should stop whining.
Why do you even comment Gary?
You make zero sense half the time and the other half regurtitate gibberish and think you're being profound.
Noone is arguing the rich make the most money or pay the most taxes. Well until you showed up acting the fool and stating the obvious.
Problem is you, Anita, Obama et don't think they're doing enough and want to punish their success out of some twisted sense of resentment masked as fairness. If it was about fairness you wouldn't speak with such contempt. Fair people aren't usually so angry.
...And fyi Anita I was paraphrasing a movie quote wasn't about you personally. However I will suggest without knowing your company structure that you might be better served naming yourself a partner filing K-1 and go 1099. Not sure thatd work, just an idea.
correction: o.donkey and rhinoculous make one thing (what that "thing" is is yet to be determined -- i think "IT" may actually be a rock formation, but that's just my female brain speaking, which we all know is inferior).
anyway(s), maybe science, in the future, will provide us with that answer. maybe, even, if we are lucky, obama will tell us. after he finds a cure for The Swine Flu.
It's not that I don't make sense, it's just that you cannot follow my profound wisdom. Or something.
The both of us combined would be considered ONE bad ass mutha fuka!
I heard you guys won the co-ed chickenfight championship at the public pool growing up.
You guys together were like Voltron, only balder, gayer, and more mexican. Wonder twin powers jackasstivate!
Hell yea we did! Those girls were no match for us.
gary....well you know.
anita the flaw in your argument is that you're going in the wrong direction.
Are the "rich" paying their fair share? Clearly the FACT that they pay such a huge percentage of the total income taxes in this country means that the answer is yes and in fact they pay MORE THAN THEIR FAIR SHARE.
Do YOU pay your fair share? well I don't know what your exact income level is, but i'm going to say YES you do and in fact, like myself you probably pay MORE THAN YOUR FAIR SHARE!
The Aurora argument is and has always been TAXES ARE TOO HIGH! for the "rich" too high. for the middle class too high. for everyone in between TOO HIGH!!!
You don't seem to realize this because you've been programmed like most of society to just follow the herd and pay your taxes to be "patriotic" or actually IDIOTIC!
Our government spends OUR money like drunken sailors!
Who do guys like in the Derby? I like Zito's longshot horse, Nowhere to Run.
Well said Rhino. To damn high. The liberals manipulate the herds emotional integrity by making them believe that the rich don't pay enough taxes. They say "it's not fair". I'm far from rich and I still think the rich pay more than their fair share. C'mon people, THINK.
So do you support Obama's tax cut for the middle class?
Not that I expect an answer. Generally you guys ignore my best points. For example, in the ongoing GW debate, you cite a 3-year old non-peer reviewed study in a LaRouche publication. I cite a recent study in "Nature." You are unable to explain why your study is more credible. Actually, your usual response is to ignore my best points and close the thread. Oh, and call me stupid. But it's your blog.
gary is stupid.
However, i support any and all tax cuts for any and all reasons.
What i DON'T support is cutting taxes on the "middle class" (which is bullshit because i didn't get one) and raising taxes on the "rich" to pay for it.
Bush did it right. He cut taxes for EVERYONE who pays them.
Now you're speaking ENGLISH, Rhino.
I think you have to consider Atomic Rain Jockey is Joe Bravo, winningest jock at Monmouth and can handle the slop. Longshot but could be big payoff in exotics.
I like it! The horse I like as a fav is Dunkirk. Prado is the jock and it's a Pletcher horse. He's never won the derby. This could be his year.
"winningest jock at Monmouth"
hey, i grew up in the shadows of Monmouth Park. oceanport nj. could smell the dung every single day throughout the summer.
don't be jealous.
and no, i have to be a corporation and i have to show that all my "employees" (who are, for the most part, just "me") are on payroll because a large percentage of my work is for government agencies (and therefore subject to audit) and my fees are based on an hourly base wage plus a multiplier for office overhead, non-technical staff and etc. people who are on 1099's are considered "passthrough's" and i can't make any money off of them.
but thanks for the advice. it's better than my accountant has ever done in the past 11 years for me.
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