Who Pays their Fair Share of Income Taxes?
If You Were Told That The Rich Were Not Paying Their fair Share of Taxes, You Were not Told the full Story
Since Occupy Wall Street became a part of the public conciousness, a controversy has been raging about who is and isn’t paying their fair share of the personal income taxes. Some believe that the rich do not pay their fair share and point to the lower marginal tax rates that many millionaires enjoy compared to middle class working people do. It is an interesting point, but as most things worth arguing about are in reality it is not quite that simple. Looking at marginal tax rates does not tell the whole story. In fact, one has to ask why looking at marginal tax rates as become the main focus at all? Why not go direct to the amount of dollars of personal income tax that is paid by the different segments of income earners instead? What look at an indirect measure instead of going directly to the heart of the matter – i.e. who is paying the taxes?The fact is that high income earners pay almost all the personal income taxes collected by the Federal Government and low income earners pay almost none.
No matter what the spin masters and those with agendas will tell you (and they come from both sides of the argument), the facts show the rich are carrying almost the full load when it comes to personal income taxes in the USA – or so reports the Internal Revenue Service (IRS). Interestingly enough, it is not just American high income earners that carry the load for the poor, it is also true in other countries, as well.
The Story the Facts Tell: The Rich Pay Most of the Personal Taxes
From the table below, you can see that the top 1% and top 10% of income earners are paying the bulk of the taxes. Astoundingly enough, the bottom 50% of personal income earners pay so little personal income tax that it is almost an afterthought. For reference and perspective we have shown that same data for Canada.
Income Earner Groups
|Minimum Income Earned to be in the top 1% of earners||$369,691 USD||$201,400 CDN|
|% of All Personal Income Taxes Paid by the top 1% of earners||37.4%||21.2%|
|% of All Personal Income Taxes Paid by the top 10% of earners||70.6%||54.8%|
|% of All Personal Income Taxes Paid by the bottom 50% of earners||2.4%||4.0%|
In relative terms, the USA collects less personal income taxes from the poorest 50% of its citizens and more personal income taxes from its top 10% of income earners than a “so-called” socialist country like Canada.
It leaves one to question all the Occupy Wall Street types as to why they failed to report this fact? Or, for that matter, why a financial wizzard like Warren Buffet failed to mention it. Glaring omissions like these usually point to groups and individuals who are selective in their reporting. Selective reporting is also a sign of persuasion as a top priority instead of understanding the facts. In other words, propaganda and politics first, truth second.
So, to return to the question originally posed,”who pays their fair share of income taxes?”, it is tough to argue the the bottom 50% of income earners pay too much as they pay almost none.
Like it or not, you can not argue with the facts – however, you can ignore them. And for much of this discussion on tax fairness the facts have taken the back seat.
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Picture courtesy of www.morgueFile.com .
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