According to 2007 IRS data and some highlights from The Tax Foundation, here are some facts about who pays what when it comes to income taxes:
The top 1% earn 22.8% of all the adjusted gross income. These people pay 40.4% of all the federal income taxes. To make the top 1%, you must have earned $410,100.
You: Gee, Michael, I just missed the cut-off.
Really?
You: What do you think?
I know people, personally, who are in the top 1% and who live paycheck to paycheck.
You: Get out of here.
Seriously.
You: Seriously?
No doubt. Remember, income does not equal wealth. Furthermore, it why, despite all these statistics seeming to tell you otherwise, the rich don’t necessarily pay more in tax than you do.
Moving on,
The top 5% made 37.4% of all AGI. They paid 60.6% of all the income tax. To reach the top 5%, you needed to have earned $160,000 or more.
The top 10% made 48% of all the income and paid 71.2% of all the tax. To make the top 10%, your earnings needed to have reached more than $113,000.
The bottom 50% paid less than 3% of the income taxes. However, they paid a ton of Social Security and Medicare tax (payroll taxes) which are not, technically, income taxes.
You: They sure feel like income taxes to me.
I agree. Such are the joys of statistics. So, your thoughts on these figures? What feels good? What bothers you?
Tags: income tax, taxes
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How much of that bottom 50% received more than they paid in because of various credits that aren’t available to all Americans?
How much of those payroll taxes did the bottom 50% pay compared to the top 50%?
@Ron: Didn’t do the study myself, so i can’t answer those specific questions, but if you check out the link above, you may be able to answer those you posed (and certainly thousands you did not!) Thanks for stopping by!
Will do. I’m reminded of a guy I formerly worked with who said one January as I was preparing his W-2, “Can you hurry up with that? I want my tax refund!” I asked him how much he paid in. “Nothing, but I want my tax refund.” He wasn’t amused when I explained that he wasn’t getting a “refund,” he was getting a handout.
@Ron: Good story. Along the same lines of common confusion for those who do pay taxes “A refund is the government giving me money – finally.” No, it’s them giving your money back to you!
Well I’m sure everyone should be asking their refunds since it’s their money they are getting back.