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Who Pays America's Tax Burden, and Who Gets the Most Government Spending?
Tax Foundation ^ | March 23, 2007 | Andrew Chamberlain, Gerald Prante and Scott A. Hodge

Posted on 03/25/2007 1:35:33 PM PDT by RKV

While many studies answer the ques­tion of who pays taxes in America, the question of who gets the most government spending is often overlooked. Just as some Americans bear a larger portion of the nation's tax burden than others, some Americans also receive a larger share of the nation's government spending.

This report summarizes the key findings of a comprehensive 2007 Tax Foundation study of federal, state and local taxes and government spending. The results show that when we consider the distribution of government spending as well as taxes, it provides a dramatically altered view of how U.S. fiscal policy affects Americans at different income levels than is apparent from the distribution of tax burdens alone.

Overall, we find that America's lowest-earning one-fifth of households received roughly $8.21 in government spending for each dollar of taxes paid in 2004. Households with middle-incomes received $1.30 per tax dollar, and America's highest-earning households received $0.41. Government spending targeted at the lowest-earning 60 percent of U.S. households is larger than what they paid in federal, state and local taxes. In 2004, between $1.03 trillion and $1.53 trillion was redistributed downward from the two highest income quintiles to the three lowest income quintiles through government taxes and spending policy.


TOPICS: Government
KEYWORDS: communistmanifesto; govwatch; progressivetax; taxes; wealthredistribution
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1 posted on 03/25/2007 1:35:34 PM PDT by RKV
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To: RKV

Put that on the front page:

"Government gets money from people who have money"

Wouldn't it be nice if the Government had to seek money by getting each or our permissions, invidually. Like political parties used to, before they, to went to the Government trough.


2 posted on 03/25/2007 1:44:00 PM PDT by donmeaker (The speed of light is 186,234 miles per second. Not just a good idea, its the LAW!)
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To: RKV

So it could be said with some certainty that the slackers in America make out thanks to Uncle Sugar!


3 posted on 03/25/2007 1:44:13 PM PDT by Ken522
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To: RKV

"Overall, we find that America's lowest-earning one-fifth of households received roughly $8.21 in government spending for each dollar of taxes paid in 2004."

But the lowest-earning one-fifth has no net worth.

Therefore, the logical conclusion is that they don't hang on to the money for long.

In fact, in many cases the money is paid directly to middle or upper class professionals such as doctors and teachers, who provide services to the bottom fifth.


4 posted on 03/25/2007 1:46:26 PM PDT by proxy_user
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To: proxy_user

Where the lowest fifth spend the money is meaningless. What is meaningful is that that parasites are going to kill off the host someday.


5 posted on 03/25/2007 1:55:43 PM PDT by RKV ( He who has the guns, makes the rules.)
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To: RKV

"From each according to their means, to each according to their needs." - Karl Marx


6 posted on 03/25/2007 1:58:58 PM PDT by Mikey_1962 (If you build it, they won't come...)
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To: Ken522

We gave the politicians the power to buy votes with other people's money when we did away with limited government in the 1930s. Up to the 1st World War, the Federal government averaged under 5% of our domestic product, now it regularly runs at 19%.


7 posted on 03/25/2007 1:59:35 PM PDT by RKV ( He who has the guns, makes the rules.)
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To: Mikey_1962

Sounds like public education did what it was designed to do, eh?


8 posted on 03/25/2007 2:00:23 PM PDT by RKV ( He who has the guns, makes the rules.)
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To: RKV

"What is meaningful is that that parasites are going to kill off the host someday."

When, and we are very close now, the lowest 50% of income earners pay zero income taxes, we'll have turned the corner toward economic and political disaster.

That said, the blame really belongs to the politicians. The lower income classes have no more control over this travesty than do any of the rest of us.


9 posted on 03/25/2007 2:01:56 PM PDT by vetsvette (Bring Him Back)
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To: RKV

now the big question .... what is the breakdown of those quintiles as far as individual and family incomes?


10 posted on 03/25/2007 2:07:02 PM PDT by Centurion2000 (If you're not being shot at, it's not a high stress job.)
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To: proxy_user

Income is not a good measure of net worth.

Many seniors own their own home yet have very little income even though they may have a modest amount of savings while receiving substantial benefits, particularly medical.

What's worse is they show up on the poverty statistics because of their low income while being far better off than younger people who still have to pay for their housing and have no other assets or savings.


11 posted on 03/25/2007 2:10:53 PM PDT by DB
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To: RKV
Where the lowest fifth spend the money is meaningless. What is meaningful is that that parasites are going to kill off the host someday.

Right you are. When the takers' take exceeds the givers' gifts, the whole set-up will implode. It will happen first...

...in Kalifornia.

12 posted on 03/25/2007 2:11:04 PM PDT by Migraine (...diversity is great (until it happens to you)...)
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To: vetsvette

No. The blame lies with the voter.


13 posted on 03/25/2007 2:12:14 PM PDT by DB
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To: Migraine

California isn't the highest tax state.

East coast has California beat on that front.


14 posted on 03/25/2007 2:13:19 PM PDT by DB
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To: aflaak

ping


15 posted on 03/25/2007 2:15:57 PM PDT by r-q-tek86 (Snakes can't be taught to walk.)
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To: DB
California isn't the highest tax state.

I say California simply because of the entitlement mentality that has developed there, especially with regard to free benefits for immigrants and for college students. It's merely my prediction, and, as such, is certainly open to gainsaying. Thanks for responding with facts.

16 posted on 03/25/2007 2:17:06 PM PDT by Migraine (...diversity is great (until it happens to you)...)
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To: RKV

Sounds like the thing to do is to find a few tens of million really low earners who are in the country illegally, and make them citizens, so that they can soak up more trillions we got lying around.


17 posted on 03/25/2007 2:22:17 PM PDT by Plutarch
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To: Migraine

Well prop 187 was passed by 59% of California voters to deny illegals all state benefits and it was struck down by the courts as "unconstitutional"... So it wasn't the voters who decided that.


18 posted on 03/25/2007 2:33:23 PM PDT by DB
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To: Plutarch

That appears to be the plan of both political parties.


19 posted on 03/25/2007 2:58:09 PM PDT by RKV ( He who has the guns, makes the rules.)
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To: RKV

How exactly will they kill us? We have all the wealth, all the brains, plus the police and the army.


20 posted on 03/25/2007 3:00:48 PM PDT by proxy_user
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To: Migraine

" There are three kinds of people, makers, fakers and takers. Makers create wealth, fakers pretend to create wealth, here you have all your government workers, and takers who make no pretense of contributing to society. When the fakers and takers outnumber the makers, your society is doomed."

Robert Heinlein


21 posted on 03/25/2007 3:03:08 PM PDT by Kozak (Anti Shahada: " There is no God named Allah, and Muhammed is his False Prophet")
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To: RKV

"Understanding Tax Cuts"
David R. Kamerschen, Ph.D

Professor of Economics
University of Georgia

Sometimes politicians, journalists and the liberal left exclaim;
"It's just a tax cut for the rich!" and it is just
accepted to be fact.

But what does that really mean?

Just in case you are not completely clear on this issue, I hope the
following will help. Please read it carefully.

Let's put tax cuts in terms everyone can understand.

Suppose that every day, ten men go out for dinner and the bill for
all ten comes to $100.

If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.

The fifth would pay $1.

The sixth would pay $3.

The seventh would pay $7.

The eighth would pay $12.

The ninth would pay $18.

The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men ate dinner in the restaurant every day and seemed quite
happy with the arrangement, until one day, the owner threw them a curve.

"Since you are all such good customers," he said, "I'm
going to reduce the cost of your daily meal by $20." Dinner for
the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so
the first four men were unaffected. They would still eat for free.
But what about the other six men - the paying customers? How could
they divide the $20 windfall so that everyone would get his 'fair
share?'

They realized that $20 divided by six is $3.33. But if they
subtracted that from everybody's share, then the fifth man and the
sixth man would each end up being paid to eat their meal.

So, the restaurant owner suggested that it would be fair to reduce
each man's bill by roughly the same amount, and! he proceeded to
work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).

The sixth now paid $2 instead of $3 (33% savings).

The seventh now paid $5 instead of $7 (28% savings).

The eighth now paid $9 instead of $12 (25% savings).

The ninth now paid $14 instead of $18 (22% savings).

The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four
continued to eat for free. But once outside the restaurant, the men
began to compare their savings.

"I only got a dollar out of the $20," declared the sixth man.
He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only
saved a dollar, too. It's unfair that he got ten times more than me!"

"That's true!!" shouted the seventh man. "Why should he
get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison.
"We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for dinner, so the nine
sat down and ate without him. But when it came time to pay the bill,
they discovered something important. They didn't have enough money
between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how
our tax system works. The people who pay the highest taxes get the
most benefit from a tax reduction. Tax them too much, attack them
for being wealthy, and they just may not show up anymore.

In fact, they might start eating overseas where
the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D
Professor of Economics
University of Georgia


22 posted on 03/25/2007 3:04:11 PM PDT by B4Ranch ("Steer clear of entangling alliances with any portion of the foreign world." -George Washington-)
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To: proxy_user
How exactly will they kill us? We have all the wealth, all the brains, plus the police and the army.

Read Atlas Shrugged for a clue.
23 posted on 03/25/2007 3:04:28 PM PDT by Kozak (Anti Shahada: " There is no God named Allah, and Muhammed is his False Prophet")
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To: DB

About 7% of US households have a net worth of greater than $1M (excluding their primary residence). And yes, young people who are working are subsidizing older, retired people. Of course, Social Security is bankrupt (i.e. has more liabilities than assets [the liabilities are kept off the balance sheet]) and the illusion that it still works is going to fail in the near future.


24 posted on 03/25/2007 3:07:04 PM PDT by RKV ( He who has the guns, makes the rules.)
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To: proxy_user

You really don't have the police and the army like you think you do. They obey orders. When the duly elected politicians vote to confiscate your property (think Rhodesia) they'll do what they are told to do, and you'll be out of luck. It will be called "land reform" or "reparations" or some such nonsense. In reality it will be theft.


25 posted on 03/25/2007 3:09:45 PM PDT by RKV ( He who has the guns, makes the rules.)
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To: B4Ranch

Well put - nice example.


26 posted on 03/25/2007 3:11:46 PM PDT by RKV ( He who has the guns, makes the rules.)
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To: RKV

Well, having all the brains and money is much more important. The wealthy and powerful control the political system.

You will notice that even the Democrats never talk about taxing wealth, only income. The socialists have never been more thoroughly marginalized.

Do you really think that fat slobs living in trailer parks, dreaming their lives away watching TV, will ever take over the country? That's what the lower classes consist of. They don't even know when the election is.


27 posted on 03/25/2007 3:27:24 PM PDT by proxy_user
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To: B4Ranch

That's an interesting story. I've seen it before.

But it's a lie.

It wasn't written by Dr. Kamerschen. See here: http://davidk.myweb.uga.edu/

Now - ask yourself. Why would the author of that story want to hide his or her identity and try to pin it on someone else?

Does it have anything to do with its content?

And what it says about the patriotism of the rich?

I don't disagree with the emotion of the story. There is a balance to be struck between taxation and fairness. But the bottom line, in my view, is that it is the wealthy who have benefited the most from this society we call America.

From our laws.

From our constitutional protections.

From our economy.

From our military.

From our transportation, communication, and commercial infrastructure.

It is not wrong to ask them to pay more - the real challenge is finding an appropriate balance.

I'm not a fan of the flat tax for that reason.

But I'm not a fan of the entitlement mentality that plagues so many. It's a difficult, complex question; not well served by simplistic fairy tales such as this anonymous piece whose author apparently was too embarrassed to admit to writing it.


28 posted on 03/25/2007 3:47:20 PM PDT by Air Force Brat
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To: RKV
we find that America's lowest-earning one-fifth of households received roughly $8.21 in government spending for each dollar of taxes paid in 2004

If only my investment portfolio could produce such returns
29 posted on 03/25/2007 5:01:27 PM PDT by TheRedSoxWinThePennant
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To: sauropod

review


30 posted on 03/25/2007 5:04:22 PM PDT by hellinahandcart
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To: Air Force Brat

>But the bottom line, in my view, is that it is the wealthy who have benefited the most from this society we call America.<

My polite reply: BULLSHIT

The opportunity is out there for everyone to make money, make more money than they ever dreamed about having. All it takes is work and more work and more work with the determination to succeed.

It doesn't require a high education. It doesn't require luck or even some high tech skill.

You aren't going to get rich in America buying fancy cars or houses that you can't afford, trying to keep up with the Joneses. You will eventually get rich living below your income level. Notice I said eventually. Earned wealth doesn't fall out of the sky. You earn it by working, saving and investing your savings in sensible investments without overreaching your ability to get out of tight spots.

I am sorry you aren't wealthy but don't expect my sympathy because you didn't "make it". I didn't "make it" either. I earned it.


31 posted on 03/25/2007 5:05:52 PM PDT by B4Ranch ("Steer clear of entangling alliances with any portion of the foreign world." -George Washington-)
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To: Air Force Brat

It's not really a complex issue. You're right that the wealthy have benefitted greatly from our system. But the same opportunity is available to everyone. Some people choose not to take it, and that's fine. But people who choose to live from the earnings of others should want the others to earn more, not less. Otherwise, the charity (be it voluntary or forced) will dry up.


32 posted on 03/25/2007 5:49:11 PM PDT by speekinout
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To: Air Force Brat
But the bottom line, in my view, is that it is the wealthy who have benefited the most from this society we call America.

In my view, the wealthy have created most of the benefits of this society we call America...

33 posted on 03/25/2007 6:36:02 PM PDT by Onelifetogive (Liberals are willing to sacrifice any amount of someone else's money to increase their own power...)
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To: RKV

So 40% of us are carrying the other 60% huh... Funny that. NOT!


34 posted on 03/26/2007 5:59:39 AM PDT by Freeport
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To: Air Force Brat
But the bottom line, in my view, is that it is the wealthy who have benefited the most from this society we call America.

Well I think there is a very good argument to be made that it is the poor that benefit the most from our laws.

After all it wasn't the poor who came up with our laws, wrote our constitution, developed our economy, built our military, transportation, communications and commercial infrastructure.

Yet they are allowed to use it freely with no complaints.

35 posted on 03/26/2007 10:16:19 AM PDT by HawaiianGecko (Victory goes to the player who makes the next-to-last mistake.)
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To: B4Ranch

"The opportunity is out there for everyone to make money, make more money than they ever dreamed about having. All it takes is work and more work and more work with the determination to succeed."

There are lots of very wealthy people where I live that don't work at all because their daddy left them money. We call them "trustifarians". I would still like to see a flat tax.


36 posted on 03/26/2007 10:35:11 AM PDT by dljordan
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To: dljordan

Are you asking that I include your children in my will or are you just whining that your Mommy and Daddy didn't give you more.

Both of my daughters work at least 40 hour weeks and will continue doing so until they have proven to me that they don't need money from me to live comfortably. That's when I may start giving them unhampered cash.


37 posted on 03/26/2007 11:13:21 AM PDT by B4Ranch ("Steer clear of entangling alliances with any portion of the foreign world." -George Washington-)
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To: B4Ranch
Hmmm...

I appreciate your sorrow, but I earn a very, very comfortable living. You've apparently misconstrued my opinion as being rooted in envy. That is an error on your part. It's rooted in logic.

Ask yourself: who has the most to lose in a lawless society? Those who have nothing or those who are wealthy?

Our society benefits the wealthy far more than the poor. Despite my wealth even I can see that.

38 posted on 03/26/2007 7:31:22 PM PDT by Air Force Brat
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To: Air Force Brat

Who has the ability to weather a drastic downturn with the least pain? We do, while the poor will have to stand in line just for their basic supplies.

http://www.freerepublic.com/focus/f-news/1807146/posts?page=29#29

http://www.freerepublic.com/forum/a3a9f53301414.htm


39 posted on 03/26/2007 7:56:50 PM PDT by B4Ranch ("Steer clear of entangling alliances with any portion of the foreign world." -George Washington-)
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To: B4Ranch

Ah.

Again you're clouding the issue.

I didn't ask about an economic downturn in a regulated society with functioning laws, infrastructure, police, and courts.

My question was who benefits the most from our society?

My answer is it is those who rely on steady commerce that is well-regulated and that punishes thieves. It is those who have the water, transportation, and communication infrastructure that allow their business ventures to thrive. It is those who rely on the courts and the police to defend their businesses, their property, their rights.

It is the rich who benefit the most from our society.

And thank God for this society. It has helped so many to achieve.


40 posted on 03/26/2007 8:15:28 PM PDT by Air Force Brat
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To: Air Force Brat
>My answer is it is those who rely on steady commerce that is well-regulated<

I changed careers three times because the economy took various downturns or I saw more opportunity in another path. That's what I mean about keeping your eyes open and staying on top of the news.

Working when most folks were watching TV was my style to success. That opportunity is available to everyone in America.

I have numerous friends who are millionaires and never owned a business. They believed as I do, in hard work and not spending every dime they made. They made careful informed decisions about how and where to invest their savings. I am not positive that they couldn't have operated a business but the route they chose was a successful one none the less.

Another key is staying informed. I always hired the best advisors I could afford, within reason, and listened carefully for other stray bits of advice. I would then present that advice to my advisors for their opinion.
41 posted on 03/26/2007 8:32:33 PM PDT by B4Ranch ("Steer clear of entangling alliances with any portion of the foreign world." -George Washington-)
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To: Air Force Brat

What is your opinion of people, mainly women, on public assistance. They have a great life, never having got out of bed at four in the morning to get a jump on the day. Staying up watching TV until all hours of the night. Using drugs and getting high. Sleeping with most of the men on the block and getting pregnant when they chose to. Killing babies when the pregnancy was an inconvience without fear or financial cost.

You and I support them. That's right we pay every damn bill they run up, on time too and don't require them to pay us back. Nor does the court!

These broads have it made.


42 posted on 03/26/2007 8:41:40 PM PDT by B4Ranch ("Steer clear of entangling alliances with any portion of the foreign world." -George Washington-)
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To: B4Ranch

Absolutely. It's amazing what you can achieve financially by holding down a decent job and spending less than you make.

Our culture has slid into a "I want it now" and "I deserve it" mindset that is very corrosive. The amount of discretionary debt I read about that the average person carries is mind-boggling.

Many people are very stupid with their money.


43 posted on 03/26/2007 8:54:48 PM PDT by Air Force Brat
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To: B4Ranch

I'm not sure women are the worst abusers but I agree with you that there are some very savvy people who are expert at manipulating the system for their gain. It really ticks me off.

Example: I worked until 11:30 last evening on a project, and then set my alarm for 4:30 this morning to go to the airport for an early morning flight. I would have loved to have slept in. But I had a job to do and clients whose interest I protect. Not everybody needs to work as hard as I do, but I wish more people would buck up and grow up. Sometimes I worry we're raising generations of immature children who never learn responsibility. Not all people, of course, but far too many.


44 posted on 03/26/2007 8:58:58 PM PDT by Air Force Brat
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To: proxy_user

You are complaining that the money is not given directly to the people who never earned it ?

That it is somehow unfair that they "only" receive free services like healthcare and education, and free food via foodstamps and school lunches ?


45 posted on 03/27/2007 9:39:32 AM PDT by Kellis91789
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To: vetsvette

Of course they have control. Government programs only exist as long as they have 'clients'. So if the 'clients' decline to use any of those services and reject the benefits they are offered, that government spending would disappear. Conservatives would place measures on local ballots and introduce bills in Congress to de-fund those programs, and they would pass easily without 'clients' creating a need for them.

The control is in the hands of the 'clients' receiving those government benefits.


46 posted on 03/27/2007 9:44:46 AM PDT by Kellis91789
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To: proxy_user
How exactly will they kill us? We have all the wealth, all the brains, plus the police and the army

Wrong. we have the wealth and brains. They have the police and the army. The police aren't there to protect anyone. They're there to carry out the will of the government with armed force. Try seeing what happens if you don't pay your property taxes and defend "your" property with armed force when the police come to seize it so that it can be sold to support the poor.

47 posted on 03/27/2007 9:50:33 AM PDT by from occupied ga (Your most dangerous enemy is your own government)
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To: dljordan

People who've earned money should be allowed to spend it however they choose.

Spending it on their children is suddenly an exception to that ?

That is pure envy.


48 posted on 03/27/2007 9:59:04 AM PDT by Kellis91789
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To: B4Ranch
They believed as I do, in hard work and not spending every dime they made. They made careful informed decisions about how and where to invest their savings

Excellent advice.

49 posted on 03/27/2007 10:18:52 AM PDT by from occupied ga (Your most dangerous enemy is your own government)
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To: Kellis91789

"People who've earned money should be allowed to spend it however they choose.
Spending it on their children is suddenly an exception to that ?
That is pure envy"

The gist of the post was that rich people work hard to get where they are. My post was saying that not all of them do. None of your statements make sense in that light.

As for the envy part, damn right!


50 posted on 03/27/2007 10:21:53 AM PDT by dljordan
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