What percent of taxes (income) do the top 1% pay, top 5%,

[bobbyboucher]

and what are the actual figures of average income of those people. I am in a discussion via email and could use some sources.

Also, what is the average household income?

One more thing, there was a report posted here quite a while back ragarding after-tax income changes from 1979 to 1997. Anyone remember it and can help me find it?

Thanks.

[RobertSeattle]

1. I'd check out the book "Perfectly Legal" By David Cay Johnston

I'm pretty sure there a discussion of the taxes various income groups pay.

If you are in an argument with RW'ers, they'll often focus on Federal Income taxes and exclude the other taxes like SSN and Sales tax with tend to be regressive on poorer people.

[Columbia]

5. Question

Why would upper-income wageearners pay LESS on sales tax? Isn't that a set rate for goods purchased?

[ComerPerro]

9. Its not regressive because they pay less

Its regressive because it AFFECTS them less.

[Columbia]

17. So...

Sorry, I don't really understand. Wouldn't these folks buy more stuff too? How does it affect them less?

[dpibel]

26. Smaller effect

Paycheck-to-paycheck people spend a higher percentage of their income on items subject to sales tax. Hence, the overall effect of the sales tax is greater on them.

This is exacerbated by income tax breaks available to the rich which are not available to the poor. For instance, a rich person can buy a $100K SUV and get a huge income tax break (the SUV, of course, will be for "business use"); the net effect of the sales tax is nil.

Even if you have a situation where the percentage spent on sales-taxable items is the same, it gives you this:

Assuming a 10% sales tax (so I can do this in my head):

Person w/$30K per year pays half that on sales-taxables; the sales tax is $1500.

Person w/$3M per year pays half that on sales-taxables; the sales tax is $150,000.

What's more significant? $1500 for the $30K earner or $150,000 for the $3M person. The $30K person could pay rent for two months. The $3M person could buy another little boat.

[never cry wolf]

28. Actually, sales tax is regressive

If both the $30K earner and the $3M earner buy a loaf of bread, or a toaster or roll of toilet paper, gallon of gas, whatever essentials, they pay the same sales tax but it affects the $30K earner alot more. In your example above the $3M earner is more likely to pay much less a percentage on sales-taxable items so not only can he afford it more, he pays a lower percentage of his income on sales tax.

[dpibel]

29. We don't disagree, do we?

I used the example where both spend the same percentage of their income on sales-taxables to address the previous poster's "don't the rich buy more stuff" query.

In the real world, of course the absolute percentage is higher for the poor and, as my example shows, the effect is greater, too.

[never cry wolf]

30. No, we don't disagree.

If I used an example of shoes, the $30K earner maybe buys a $30 pair of shoes from K-Mart and the $3M earner gets a pair of gucci's for $300. So the rich guy does spend more, and buys that boat you mentioned as well (the poor/middle class guy doesn't get the luxury of discretionary spending, it is all on essentials), but probably would not spend the same percentage of his income. I now understand you were just trying to compare if they DID spend the same percentage.

[jerryfisher]

32. Perfecly Legal is a great source of info

In his just published Perfectly Legal: The Covert Campaign to rig our tax system to benefit the super rich and cheat everyone else Johnston points out how the tilt in the tax system to benefit the super rich has affected the national income and asset ownership distribution. From 1970 to 1999, wages have gone up by an average of a nickel an hour. The top 13,400 families in 1990 received 1% of the nation’s income; they now receive over 5%. The upper 1% of tax payers control 40% of the nation’s assets and pay only 25% of the nations taxes. And the trend is growing in favor of the super rich. The average income of the top 10% of American taxpayers rose 88.6% from 1970-2000 $119,249 to $224,877. There share of nation income went from 33% to 48% and it will rise substantially more under the newest tax cuts. The average income of the bottom 90% have stagnated at $27,060 in 1970 to $27,035 in 2000 and their share of nation income fell from 67% to 52% and it will accelerate it’s fall under the new tax cuts.

Check the book out it is full of so much info.

If you want more info on Johnston's book his web site is http://www.perfectlylegalthebook.com/indexie.htm If you want to hear his Jan 7, 2004 Interview with NPR’s Terry Gross on Fresh Air follow this link http://www.npr.org/features/feature.php?wfId=1587250 and click on Fresh Air Audio.

Regards
Jerry

[jmags]

2. This site should give some help

http://www.itepnet.org/wp2000/text.pdf


Snip:

Our primary finding is that most state and local tax systems take a much greater share of income from middle- and low-income families than from the wealthy. That is, most state tax systems are regressive.

[moof]

3. sorry bobby but it no longer seems to be about taxes

the top percentage pays a huge percent of the tax as they are
quick to tell you but say the top 5 percent paid half the taxes, then why not let them pay all the taxes or only tax people making more than 100,000 dollars, not because it would be a more fair system, but because the OFU's already have too much money & are a danger to the rich and powerful and their ability to hold onto control of everything.

Become enlightened, " They " don't begrudge you the some of the money,
" They " begrudge you ALL the money. So save your typing & read some more books. You might get a twofer by reading " America, what went wrong "

[pacifictiger]

4. I just read somewhere

that the median american income is around $45K +/-
I don't have the link handy, but you can find historical top tax tables going back to WW1 with a google search. Interestingly, the top tax rate was lowered to around 24% right before the great depression. It was highest - up to 91% during the late 40's and 50's for post WW2, when all the highways etc that were being built, the "american dream" boom was underway, and the space program was started.
Seems every time there are top tax cuts, there is a recession. I think we are now at the lowest top tax rate since 1929. I'm no economist, but the figures are pretty striking.
Heard another fact the other day, believe it or not, historically, the stock market has performed better overall under democratic presidents than republican presidents!! Must be another urban myth that republicans are better for the economy.

[ComerPerro]

10. I am sure you are being sarcastic, but "urban myth"?

Its not "urban myth" that Republicans are better for the economy. Its a deliberate, calculated, flat-out lie.

:hi:

[leftyandproud]

6. as far as "income taxes" go..

top 1% I believe is 38.6%

top 5%, around 59%

of course, this excludes the FICA taxes and other local taxes, etc that everyone pays.

[MadHound]

7. I don't know, but I can tell you where to find out

Go check out the book Wealth and Democracy by Kevin Phillips. He has a good run down on who pays what, and who earns it too.

[SheilaT]

8. And the top

income group still winds up with a whole lot more money than everyone else.

Much of the super rich have income from sources that are not taxed as heavily as ordinary income is -- from municipal bonds (some of which are totally tax free) or stock dividends. Or capital gains.

The biggest problem is that the income disparity is increasing.

[7 Lazy P]

25. Muni Bonds

Municipal bonds also are a good investment for those looking to put their money in a vehicle that helps everyone. Typically used to fund things like hospitals,schools, water systems, libraries, etc. They are not only for the rich anymore. The fact that the dividend income is tax free is a pleasant bonus.

[ComerPerro]

11. Do you mean, what is their rate, or what do they actually pay?

I am not sure what the top tax rate is, but I know it has decreased significantly thanks to RayGun, poppy, and Smirk.

But what do the rich actually pay? Who knows, but usually they can weasel out of a good deal of it.

These people say they are patriotic, but when it comes time to chip in and sacrafice something, anything, they are nowhere to be found.

Fuck them.

[snippy]

12. Tax Cut Monkeys typically use "Adjusted Gross Income" for their tax

arguments. Their bible can be found here. http://www.irs.ustreas.gov/pub/irs-soi/01in03ts.xls

This shows that the top 1% have 17.53% of the total AGI and pay 33.89% of the income tax. The top 5% have 31.99% of the total AGI and pay 53.25% of the income tax. What seems to enrage the Tax Cut Monkeys the most is that the bottom 50% of taxpayers pay only 4% of the income tax even though they have about 14% of the total AGI.

However, the income tax is imposed on "taxable income," not AGI so their arguments are based on a faulty premise. Although the data is not sorted by percentiles, taxable income levels can be found here. http://www.irs.ustreas.gov/pub/irs-soi/01in03at.xls

This shows that the top 1% of the taxpayers have 24.5% of the total taxable income. This would be higher but 1.3% of the top 1% have zero taxable income. This also shows that the bottom 50% of the taxpayers have 6.9% of the total taxable income. The average taxable income for these people is around $4,600 per year. One other interesting fact shown here is the percentage of AGI paid in income tax. For the top 1% it ranges from 23.3% to 29.6%.

[leesa]

13. The point is that they don't pay them. You can give whatever number you

want, but corporations can avoid most or all of it and you can bet your ass they do. Was it five years that Enron paid zero taxes while raping the country and its shareholders?

[cryofan]

14. And what percent of all assets do they own? What do they need in return?

I think we need to tax the hell out of the rich? Subtract 70% of 1 million and you still have 300K left over. Sounds like plenty to me!

[dpibel]

27. And then there are the rich people

Don't get me wrong; I agree with you absolutely.

But when you get into the top 1%, you're talking about people who, when they drop a million bucks on the ground, they think for a while about whether it's worth bending over to pick it up.

Think in terms of people making $100M a year. You could tax them to the tune of $90M a year, and they'd have to somehow scrape by on $10M. With the cost of help and whatnot these days, $10M just doesn't spend like it used to. . .

[Kathy in Cambridge]

15. the top 1% of American households controls over 40% of the nation's wealth

in the 1970's the top 1% of American households controlled 20% of the nation's wealth. That points to an inequitable tax system, where the wealthy can hide wealth via loopholes and offshore accounts.

http://www.anotherperspective.org/

There is some good info on this website-a series of articles that explore the tax cuts and other economic issues.

[Beaker]

18. Bingo.

on edit- the top 10% control 71%...here's a pie chart showing income distribution based on 1998 data- I'd be willing to bet that it's gotten even worse(depending on your perspective) since then.

[Bandit]

16. Instead of how much do they pay why not ask how much of our resources

they use? They use a very disproportionate amount from what they pay to what they use.

[rman]

19. Krugman's numbers, 1970~2000

I'm not entirely sure but i think these are after-tax income figures. (since these are presented as 'bottom-line' numbers, and in the end it's after-tax income that matters to any earner).

As presented by Paul Krugman in "What went wrong":
rtsp://real.dialnsa.edu/REAL_BEARD/spring2003_events/schwartz.rm

"Traditionally people look at income distribution by "quintiles", by blocks of 20%. But that is not where the action is. It is not in the top 10%, it is not even in the top 5%.

To really see what is going on you need to look at the top 1%, the top 0.1% and the top 0.01%. Then you discover that there has been an explosion of income on the very top of the scale:

top 1%
1970 9%
2000 22%

top 0.1%
1970 2.8%
2000 11%

top 0.01%
1970 1%
2000 5%

We are by these numbers fully back to and by some measures above the level of concentration of income that we had in the 1920's."


For all i know the lower end of the scale has gone down, i'v seen the numbers but i have no source at hand.
To me this is definate evidence that "trickle-down economics" (and capitalism-as-we-know-it) just does not deliver, in fact it does the opposite of what it supposedly does - which makes perfect sense to me, now that i better understand RW tactics.

[seasat]

20. Here's what you're probably looking for.

The CBO put out a report that was widely ignored by the press. It took into account all sources of income and all Federal taxes. It then calculated tax as a percentage of income. The result is that the rich pay a larger share of income in Federal taxes but when you add it to State and Local tax rates listed in the ITEP report earlier in this thread then you find the tax rates are pretty flat for at least the top three quintiles. The Center on Budget and Policy Priorities has a better analysis of it than I can give. It also has a reference so you can find the original report. A message that I took away from this analysis is that when the rate is higher on the top quintile, the bottom four quintiles gain in real income when the rate is lower, the lower 80% loses or only slightly gains in income. It makes sense since to lower the top rate and balance the budget, you have to cut programs that benefit the lower wage earners. Capitalism works but it needs a safety net. The report also helps to debunk trickle down theory. Also note that this report only goes through the Clinton administration. Don't expect to get a report like this during Shrub's administration. It would probably show that the top 20% now pays a lower percentage of it's income in % taxes.

CBPP report on taxes



This graph tells it all. Trickle down or Trickle on during the 80s?

Also if you need any stats here is another good source. The effective tax rates, however, only use "taxable income", ignore employment taxes (among other taxes), and are not nearly as accurate on income. Also (if I remember correctly) they are using IRS figures and only go up to 75,000 in income.

Statistical Abstract of the United States (Census Bureau)

One more interesting point. Look up the population characteristics of those in the lower 40%. You'll find that most are either elderly, single mothers, or real young couples. Not someone that deserves a big tax burden.

[central scrutinizer]

21. here's another chart on the tax bite

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[Mr.Green93]

22. not enough

[TahitiNut]

23. Here's a graph that offers some perspective ...

[dumpster_baby]

24. fantastic graph! We need to get this one disseminated widely! n/t

[aeon flux]

31. Good source

Citizens For Tax Justice

[Gulf Coast J]

33. Some good links for you...

http://www.taxfoundation.org/prtopincometable.html
The source is biased, but there is no reason to doubt the numbers here. In 2001, the top 1% of income earners earned 17.53% of all income and paid 33.89% of all federal income taxes.

The Brookings/Urban Institutes has a great resource for looking at how the federal income tax has changed since WWII: http://taxpolicycenter.org/TaxFacts/tfdb/TFTemplate.cfm?topic2id=30

The median household income is $43,052. http://www.census.gov/hhes/income/income02/3yr_avg_race.html