Courtesy of Mish.
In response to Rich Don’t Pay Most of the Taxes (They Pay All of Them); Reflections on the “Almost Rich” several people complained that I am ignoring payroll taxes such as Social Security and Medicare.
They are wrong.
Here is a repeat of the key facts, followed by an addendum.
Buried inside a Congressional Budget Office report this week was this nugget: when it comes to individual income taxes, the top 40 percent of wage earners in America pay 106 percent of the taxes. The bottom 40 percent…pay negative 9 percent.
The key table is in Box 1 on PDF page 11 (report page 7) of Distribution of Household Income and Taxes. The report was released in December 2013 but data is for 2010.
Highlighting is mine.
Key Facts
- The bottom 20% had average income of $8,100 but received $22,700 in annual assistance, netting $30,800 in after-tax income.
- The second quintile had average income of $30,700 but received $15,200 in annual assistance, netting $43,400 in after-tax income.
- The middle quintile received a bit more than they paid out, with $2,600 in annual assistance to be precise.
That money had to come from somewhere, and it did.
- The highest quintile paid $52,500 more in taxes each year than they got back.
- The second-highest quintile paid $8,800 more in taxes each than they got back.
Wells concludes …
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