Skip to comments.CBO: The wealthly pay 70 percent of taxes
Posted on 07/11/2012 3:33:01 AM PDT by markomalley
Wealthy Americans earn about 50 percent of all income but pay nearly 70 percent of the federal tax burden, according to the latest analysis Tuesday by the Congressional Budget Office though the agency said the very richest have seen their share of taxes fall the last few years.
CBO looked at 2007 through 2009 and found the bottom 20 percent of American earners paid just three-tenths of a percent of the total tax burden, while the richest 20 percent paid 67.9 percent of taxes.
The top 1 percent, who President Obama has made a target during the presidential campaign, earns 13.4 percent of all pre-tax income, but paid 22.3 percent of taxes in 2009, CBO said. But that share was down 4.4 percentage points from 2007, CBO said in a finding likely to bolster Mr. Obamas calls for them to pay more by letting the Bush-era tax cuts expire.
The big losers over the last few years were the rest of the well-off, especially those in the top fifth, who saw their tax burdens go up.
(Excerpt) Read more at washingtontimes.com ...
The numbers reported in the Times are for total tax liabilities. Income tax is a whole lot more dramatic:
In regards to income tax, the bottom 20% of income earners earn 5.1% of the money earned in the country. The bottom 60% (the lower three quintiles) earn 29.6% of the money earned in the country. The top 20% earn 50.8% of the income earned in the country and the top 1% earn 13.4% of the income in the country. On the other hand, the lowest quintile (bottom 20%), cumulatively, contributed -6.6% (a NEGATIVE 6.6%) of all the revenue collected by individual income tax. The lowest 60% (the lowest three quintiles), cumulatively, contributed -7.4% (a NEGATIVE 7.4%) of all the revenue collected by individual income tax. The top quintile (the top 20%), cumulatively, contributed 94.1% of all the revenue collected by individual income tax. The top 1%, cumulatively, contributed 38.7%.
What could be unfair about that? Sounds like it's time to soak the rich more. (/sarc)
Thanks markomalley. Have a great day, all.
............................................................................................. we will have more people riding in the cart than pulling the cart. “
Governor Bobby Jindal
homosexuals, abortionists, militant atheists, earth worshipers, black racists, illegals, the dead, multiple voters, cheaters, welfare free loaders, social security disability scammers, and feminists.
Obama received a significant majority of these groups in the 2008 election: single mothers, divorced women, the elderly, Catholics, College and University students.
Oh.....forgot union thugs...and perhaps a few others.
More money can be raised from those who pay nothing than from those already over taxed.
Fair is incredibly miss valued when some get refunds for unpaid taxes and their net tax paid is actually negative
Remember the old article about the ten guys who always go for drinks on Friday afternoons? 5 guys pay nothing, 3 pay for 1, 1 pays for 2, and one pays for 7. What happens when the guy who pays for 7 doesn’t show?
So basically, Obama is Hedley Lamarr.
I really wish that analysts would look at the Total tax burden, and include SS taxes, taxes on tires, phone bills, etc and not just income taxes. As a self-employed individual, I have to pay a higher percentage in total taxes than the 1 per centers. I am not saying that they need higher taxes, but it is time to look at the entire burden, not a part of it.
The 7 expecting a handout start a riot.
“College and University students. “
I would propose that if you are paying for your children to go to a university, you should be able to use their vote, by proxy.
While true, I don’t think most of the middle class is too concerned about how overtaxed the rich are. A good many want them to pay even more.
I think there would be a much better response if we were to talk more about the taxes imposed on production and how it affects job creation and consumer costs. Its America’s hidden VAT tax and most people only understand that things simply cost too much and they blame the manufacturer for it.
I used to work for a company that made interior door skins for Cadillac. The raw materials to make the doors cost less than a dollar but by the time they made it to the Cadillac plant in Livonia the finished product was valued at some $600. Yet even at $600+ the factory still only made a couple of bucks per door after costs.
People need to be made to understand that the individual pieces of the products we buy are taxed and even the machines that make those parts are taxed. The screws are taxed, the glue is taxed, the paint is taxed, the plastic is taxed, the property the factory sits on is taxed, the building is taxed and the energy used is taxed. And then there are labor and transportation costs.
Its not a complicated issue. Years ago My niece asked my why penny candy cost 10 cents. I was able to reasonably explain why candy that cost a fraction of a cent to make cost a dime to buy. She did a few liberal years in college but has since returned to conservatism and I recently found her explaining to he niece more or less what I said more than a decade ago.
If it were up to me, I would dump all the taxes on the consumer at the point of sale and clearly label all things with their actual cost vs taxes.
See post #14
I just paid 18.43% tax on a six pack of beer. I’m sure if my total tax burden i.e. gas taxes, property taxes, sin taxes, vehicle taxes, utility taxes, sales taxes, service taxes, income taxes, school taxes, etc were calculated, it would be around 50% of my total income going to one government or another. Spending needs to be cut and the parasites need to become useful members of society. If they can’t manage it, they need to go to prison where they can’t reproduce and their parasitic activity can be minimized. Parasitic infestations, if not eliminated, ultimately kill the host organism and that is what is happening here.
“Liberalism”, being the political expression of Humanism, caters to the basest of human nature, covetousness and envy.
If they were honest, those that want the rich to be taxed more don’t really want the wealth that “the rich” have,
THEY JUST DON’T WANT “THE RICH” TO HAVE IT,
and want someone to take it away from them.
People with assets are taxed every which way possible. The more you have, the more tollbooths they put in your path. It’s sickening. The rich must be shaken down to finance entitlements. Barak Obama is leading a bolshevik revolution in slow motion.
About those parasites. You can’t send them to prison. You can’t even outvote them. You probably don’t want to refuse to pay your taxes or quit making income, which would really cut your taxes down.
So just have another beer!
Unfortunately Rush is correct that class warfare is not the fight we can win. We already know that the top is overtaxed along with every other producer in this country.
We’ve simply got to find a new way to teach the taxation and spending issue that doesn’t sound like we’re trying to make the wealthiest among us look like victims.
I don’t think that even pointing out the disastrous consequences of leftist policies will work.
That’s not what a sheeperal is most interested in.
This explains the response I got from my lib-in-law. I pointed out the inevitability of an economic crash - “then we’ll all be in the same boat”. Like that was a consolation, indeed, even a “good” thing. I think the root of that was “then the rich will not have anything either”.
Work hard, do your best, protect your assets as well as you can...and fight the liberal bastards until your dieing breath (whenb you leave whatever remains of your assets to the most conservative cause that you find interesting.
Work hard, do your best, protect your assets as well as you can...and fight the liberal bastards until your dieing breath (when you leave whatever remains of your assets to the most conservative cause that you find interesting.
That’s why I wish we could eliminate all the taxes down the line and dump them on the consumer as a clearly marked sales tax. Even people on welfare could understand why other people’s money doesn’t buy as much as it used to.
I doubt that we’ll ever get a NRST because politicians live on hidden detriments and visible benefits. They would be powerless if the situation was to change to visible detriments along with visible benefits.
My daughter (28) was complaining yesterday about having to pay her car tax every year in NC. We started talking about how there are so many more taxes than income tax and how that is never brought up when discussing taxes. I would love to know the total taxes on everything we pay per year. I’m sure it would be depressing.
If we remove the taxes and regulations from corporations, they won’t have any incentive to buy politicians and then we’d have a bunch of politicians living on the 6 figure pittance we pay them. LOL
When ‘Progressives’ screamed about the lowering of rates, they NEVER do the math with all the other taxes that State and local officials dream up.
Here in Ohio, we have a CAT (Commercial Activity Tax) for businesses. We are currently preparing our 2290 (FHUT- Federal Highway Use Tax) @ $550 per truck. And we used to manufacture specialty agricultural trailers and pay a 12% Federal Excise Tax on the TOTAL purchase price(even on the initial profit which is also subject to income taxes).
The total Revenue of ALL (Federal, State, and Local) governments was 38% of GDP in 2007. I guarantee that it will NEVER get that high again. People are consciously altering their behavior to avoid (not evade)all tax burdens.
The simple solution is to get rid of withholding and force people to write a check every April 15th, instead of making them feel like they cheated the government when they get a tax refund. Of course they’re too stupid to realize that a tax refund is nothing more than an interest-free loan they gave to the government.
Being self-employed, you probably feel like you are paying double the social insurance taxes, but the CBO considers all social insurance taxes to be paid by the employee -- in other words, the "employer's share" is really just another payroll cost.
No, it doesn't include state and local taxes. But, the CBO compiles this information to document the effects of federal tax policy. If you want to know about state taxes, you should be looking to the state(s) to compile that information.
However, if you look at the actual numbers, I think you would be hard pressed to claim that you actually pay a higher average federal tax rate than the top 1%'s. There's a pretty sharp contrast between the overall average and the top 1% (and the top 5%, too).
As a whole, the group still gets a significant portion of their income from ordinary sources that are taxed at the highest marginal rate. Yes, there are undoubtedly some high income tax payers that pay only the minimum dividend and capital gains taxes, but that income has already been taxed as corporate profits (and their share of corporate income taxes reflects that).
Here are lots of graphs from the last set of data, ending in 2007:
Until now, that was the last data that the CBO has published. The IRS has published data up to 2009, but for federal individual income tax only:
I've written an extensive posting about this data here:
It will take a while before I can build similar graphs from this new data.
A quick look at the tax rates turned up something really interesting.
The burden of taxes have been shifting more and more onto the "rich" over the past 30 years. In the past 2 years, the average tax rates for the bottom 80% of taxpayers has dropped significantly. Despite that, their SHARE of federal taxes has gone up.
In contrast, the tax rates for the top 20% have (proportionally) dropped much less, or even held steady. But, since their income has been significantly reduced, the tax revenue from that segment has been reduced as well -- and their share of federal taxes has shrunk.
This is yet another folly of depending on significant tax revenue from the "rich": their income rises and falls with the economy, much more so than everyone else. So, when times are bad, the impact on tax revenue is magnified by the dependency on the "rich".
It will look almost exactly the same as the previous set. I'm planning to replicate these graphs:
There is some additional data in this set from which I want to make some graphs, but I haven't figured out exactly how to portray them. It shows how the different types of income are distributed: wages/salaries, capital gains, etc. In a quick glance, I found some surprises (at least to me).
It might be interesting to compare the old data with the new as well.
There's no need to compare the two sets -- both stretch back to 1979. You can see exactly how things have changed in the past three decades. I think that's the most important part of the data -- our tax burden is actually being shifted onto the "rich".
Aside from the fairness issue, it's turned out to be a bad policy: the "rich" have a variable income that is much more sensitive to the economic cycle. In this most recent downturn, it significantly increased the deficit. If the income tax was more broadly based, the revenue downturn wouldn't have been as bad.
However, even the earlier years aren't going to be exactly the same, as the CBO adjusts everything into constant dollars, as of the last year. So, the previous set of data will be in 2007 dollars, while the new set of data will be in 2009 dollars.
I didn't notice this before, and I think it's worth a separate response. I've explained it in other postings, but I want to make it clear:
The reason that the top 1%'s share of federal taxes have gone down since 2007 is because their share of income has gone down. Here are the numbers:
Share of federal taxes: 2007-26.7%, 2009-22.3%. That's an absolute reduction of 4.4%. But the relative change is actually (26.7-22.3)/26.7, or 16.5%.
Share of before-tax income: 2007-18.7%, 2009-13.4%. That's an absolute reduction of 5.3%. But, the relative change is (18.6-13.4)/13.4, or 28.3%.
Do you see what happened? The top 1%'s share of federal taxes went down because their share of before-tax income went down even more. So, if you hear anyone claim that the rich paid less taxes in 2009 than 2007, you must push back right away with the factual counterpoint that it was because their income went down even more.
As I've noted in my previous posting, this is one of the bad aspects of relying on the "rich" to foot most of our income tax bill. Their income is much more sensitive to the economic cycle. As a result, recessions now have a disproportionate impact on federal tax revenues.
Maybe someday someone will figure out the total of all taxes and not just Federal Income.
I wouldn't bet on that.
Unless you’re a prosecutor or a judge and I’m pretty sure you’re not a judge.
They’ll send themselves to prison once they’re deprived of the tax payer dollars. Given the number of concealed carry permits being issued and the dramatic increase in firearm sales in the various states, they’ll be lucky if they make it to prison.
I'm hardly rich, and I paid a combined $57,962 in Federal and State taxes last year. I don't want the rich to pay more, I want us ALL to pay less! Starve the beast folks, all they do is eat more and more of our hard-earned money, and the rotten bastards think WE work for THEM.
This government of ours is so corrupt it's time to clean house of each and every one of 'em and start over. The founding fathers revolted over far less than each one of us puts up with on a daily basis.
As for me, I'm sick of supporting the MOOCHERS. If the Republican Party doesn't win the White House, Senate and overturn Obama-Care and get fundamental tax reform in place, I'm quitting my job Dec 31st, 2013 (the day before Obamacare kicks in) and I plan on being a burden to the bastards. I've had enough.
Thanks, you two saved me hours of research, I was just about to start hunting for this very data :-)
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