New Data: Top 1% Pay Greater Dollar Amount in Income Taxes to Federal Government than Bottom 90%

[hack89]

Source: The Tax Foundation

New data released by the IRS today offers interesting insights into the distributional spread of the federal income tax burden, new analysis by the Tax Foundation shows.

The new data shows that the top-earning 25 percent of taxpayers (AGI over $62,068) earned 67.5 percent of nation's income, but they paid more than four out of every five dollars collected by the federal income tax (86 percent). The top 1 percent of taxpayers (AGI over $364,657) earned approximately 21.2 percent of the nation's income (as defined by AGI), yet paid 39.4 percent of all federal income taxes. That means the top 1 percent of tax returns paid about the same amount of federal individual income taxes as the bottom 95 percent of tax returns.

Read more: http://www.taxfoundation.org/news/show/22652.html

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Any tax experts out there shed any light on this? Is this true or were the numbers manipulated?

[superconnected]

1. The real problem is the wealth gap is so big now

that they have a whole lot more percentage to pay than the people they've left in the dust.

but anyway :nopity:

[PittPoliSci]

2. am i supposed to feel bad for them?

boo fricken hoo.

[hack89]

5. No

it is just that we discuss taxes here at DU with very little hard numbers. Just wondering what it means.

[karynnj]

3. Likely true

What it reflects is the huge gap in income. The top of the top 1% are making an incredible amount of money. The tax is progressive. Also, there is a large % who pay no INCOME taxes - so that would explain why the %of taxes is higher than of income.

[sandnsea]

4. Because they have all the money n/t

[Jackpine Radical]

6. Let's remember that the top 1% use most of the resources paid for by taxes.

Interstate highways exist mostly for the benefit of trucking companies. Courts are mostly occupied with matters of business law. Cops mostly exist to protect the wealthy. It is the rich who benefit from investments in the Defense industry. And on and on.

[mediaman007]

9. One question should always be asked of judicial nominees: Should

corporations have the same rights as individuals?

You are so right that our government's resources are used for the benefit of corporations. The government's support for lower income people is just enough to keep the lower income people from armed insurrection.

[RaRa]

19. Wow, thanks for that - great post n/t

[LiberalFighter]

7. There is a difference between dollar amount and percentage amount

[Viva_La_Revolution]

8. Companies used to pay their share, now it all comes from the people. nt

[Warpy]

10. What that doesn't tell you is a lot

For instance, what was the average tax rate the plutocrats paid?

Was OASDI figured into the dollar amount? Remember, 40% of our OASDI is robbed and put into the general fund just like income taxes.

Not reporting that 40% of OASDI that is taken for taxes skews the bottom 90% downward and the top 1% upward.

Not fessing up about the percentage paid makes those billionaires look horribly put upon compared to the $22K minimum wage workers.

[many a good man]

11. It's a crock of crapola

They pulled their numbers out of their asses, the lying fascist scumbags. Top one percent gets over 40% of the nation's income, not 21%. I don't have the current figures but you can find historical here: Wealth Income and Power


Table 3: Share of wealth held by the Bottom 99% and Top 1% in the United States, 1922-1998.
Bottom 99 percent Top 1 percent
1922 63.3% 36.7%
1929 55.8% 44.2%
1933 66.7% 33.3%
1939 63.6% 36.4%
1945 70.2% 29.8%
1949 72.9% 27.1%
1953 68.8% 31.2%
1962 68.2% 31.8%
1965 65.6% 34.4%
1969 68.9% 31.1%
1972 70.9% 29.1%
1976 80.1% 19.9%
1979 79.5% 20.5%
1981 75.2% 24.8%
1983 69.1% 30.9%
1986 68.1% 31.9%
1989 64.3% 35.7%
1992 62.8% 37.2%
1995 61.5% 38.5%
1998 61.9% 38.1%
Sources: 1922-1989 data from Edward N. Wolff, Top Heavy (New Press: 1996). 1992-1998 data from Edward N. Wolff, "Recent Trends in Wealth Ownership, 1983-98," Jerome Levy Economics Institute, April 2000.

[SDuderstadt]

17. For the record...

I am a flaming liberal and one of my biggest concerns is the incredible gap in both wealth and income in our country...but your claim that the top 1% receives over 40% of the income is not only wrong, it is contradicted by your own source. Wealth and income are two different measures. From your own source:

"The income distribution also can be used as a power indicator. As Table 6 shows, it is not as concentrated as the wealth distribution, but the top 1% of income earners did receive 20% of all income in the year 2000."

Now, having said that, I believe the top 1% receiving 20% of all income is extremely problematic and threatens democracy. But, it is NOT 40% as you claimed.

[davekriss]

20. You're quoting wealth, not income

21% is a slight rise from share of income figures I've seen from past years (see www.inequality.org, for example). This statistic sounds accurate.

[1932]

37. Income vs wealth

The IRS stats are based on your income (earned and unearned).

You can check for yourself, however, I suspect that table you produced measures net worth, which includes the values of assets you own and have not sold during the year, which are not taxed (other than, say, by property tax).

[Xipe Totec]

12. How nice that they give back some of the money stolen from the bottom 90% n/t

[defendandprotect]

13. Many corporations have been paying income tax percentages lower than individuals ---

As Mario Cuomo said even 15 years ago, if we wanted to increase their taxes, we'd have to call out the militia - - !!!


Compared to 1950's tax rates when we had regulated capitalism, they are paying very little --

Sounds like "Bushed" IRS figures ---

[mrfocus]

14. ...and 80% pay more in PAYROLL taxes than INCOME taxes

A favorite red herring argument is to focus tax debates around income and not payroll taxes.

The great "tax cutting saint" Ronald Reagan actually didn't cut tax revenue at all (as percent of GDP) but merely re-distributed it from income and corporate taxes to social security and payroll taxes.

[razors edge]

15. Exactly.

If I invest a million dollars in the stock market and make a hundred thousand in one year, I would pay taxes on the hundred thousand in profit, not the million invested.

If I go to work and invest my labor, I pay taxes on all my payments for the time spent working as though I had no upfront investment of my time and experience at all.

[onehandle]

16. Forgetting this is not breaking, is a press release from a "foundation", and is from last week...

...sounds like bullshit to me.

[davekriss]

18. I think it would be wise to factor FICA into the tax burden...

...before drawing any conclusions about the progressivity in our tax system. Add FICA, sales tax, local taxes, user fees -- and pretty soon I bet you'd see a flat tax burden, if not regressive, across the board.

[spotbird]

21. Damn!! The top 1% earns

21% of income! And that does not touch how wealth is held?

Outrageous, double their taxes. Triple the estate tax.

[truthisfreedom]

22. Okay, fine. Leave the tax breaks in place, offer better tax deals to the middle class, and GET US

THE F*** OUT OF IRAQ and STOP OUR DEPENDENCE ON BIG OIL!

[ScooterFibby]

23. TOTAL DISTORTION - MISSES MOST TAXES

This is another common tactic of the tax-dodging right-wingers - trot out the "top 1% pay x% of federal taxes". Isn't it sooooooo unfair?!?!?!

HELL NO! Most other taxes (sales, gas, cigarette, clothing, and property) taxes are REGRESSIVE. In some cases, like for cigarettes and gas, HIGHLY REGRESSIVE.

Ask a commuter to pay an extra $10 per fill-up. If they make $200,000 / year, its only a matter of principle. If they make $20,000 / year, it may be a matter of whether or not they eat enough.

The true picture of TAX FAIRNESS is the true tax burden - called TAX INCIDENCE. It considers all taxes paid, and when they are shifted by businesses onto individuals.

THE ONLY REASON TAXES OVERALL AREN'T MORE REGRESSIVE IS THAT THE FEDERAL TAX IS PROGRESSIVE.

Fight in your state for a completely progressive state tax burden. THE OVERALL TAX BURDEN IN EVERY STATE SHOULD BE PROGRESSIVE - that is, the more you make, the more you are able, the more you pay.

[Maestro]

27. Exactly!

Hell common stastistics tells you to throw out the extremes! I agree with you. It's tax fairness!

[Lone_Star_Dem]

29. Welcome to DU!

Keep the quality post coming!

:hi:

[TacticalPeek]

24. Poor things.

I'd just die if I had to pay millions in taxes. :sarcasm:

[SDuderstadt]

25. God, I hate trying to explain progressive taxation to my folks

For some reason, after my folks (who had been lifelong dems) became small business owners, they became republicans. To this day, when I ask them why, they cannot tell me, other than to mumble something about the GOP being more "business-friendly".

One day, my dad was railing about how progressive taxation is "punishing me for being successful". Nevermind that I suspect that he does not understand the difference between marginal and effective rates of taxation. I honestly think he believes that 100% of his earnings are taxed at whatever bracket he's in...they're not.

I told him, "if you want a 'fairer' tax system, work for a fairer economy (and, specifically), a fairer income distribuion". He looked stunned, then said, "Why?". I explained, "Dad, our tax system and our eco0nomy are joined at the hip. If you tax the lower quintiles too heavily, they don't have disposable income to buy goods and services, which tanks the economy and, guess what? YOU make less money through your small business!" I'm not sure he fully grasped (nor believed) what I was saying, but it was somewhat fun. You might want to use a similar tack if you encounter a RWer with a similar beef with our tax system.

[originalpckelly]

26. Nice how they forgot to include payroll taxes...

yes they fund social security and etc. but they are still taxes, and since Washington likes to raid the surpluses from the social security trust fund, it's as if the poor are being taxed at higher rates than the poor.

[ThoughtCriminal]

28. Tiresome crap

1. Note that it is the "Top 1%" of taxpayers", not "Wealthiest 1%". Given tax loopholes and non-wage income that is taxed at lower rates there's a lot of income that is not being taxed uon the upper end.

2. It dows not include payroll taxes. Not only do the working poor pay the same rate, since there is a cut-off, the richest wag earners pay a lower percentage of their income than the poorest workers. Oh and the money that is supposed to be saved for our social security, is being borrowed to cover the top-heavy tax cuts.

3. The primary thing that these statistics reflect is the huge wage disparity between the CEO-class and the people who do the productive work.

[Trillo]

30. Looks to me like the "United States" is about the top 400 families....

Source: http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=358&topic_id=4527

[Junkdrawer]

39. That graphic says it all !!!!!

Thanks.

:thumbsup:

[Trillo]

40. It doesn't say how many individuals are in the top 1%!

The top 400 represent only about 0.0003% of the total number of taxpayers.
That's a big difference between the top 1.0000%, which represents about 1,307,284 taxpayers.
Based upon 130,728,360 total individual taxpayers.

One of the greatest dangers in any civilization is a severe imbalance of wealth, according to a number of historians.

The more I think about it, the less I feel that any flat tax, or even progressive tax with stepped-rate levels, is fair. Why should those who make 1 million have the same rate applied to them as those who make 200 million? (those two groups are definitely NOT in the same economic class) Progressive tax rates should probably follow a curve that mirrors the income distribution: roughly, it appears as an exponential curve. Any time a stepped tax rate is applied, there are going to be a whole lot of individuals who get unfairly lumped into that bracket, and this is politically expedient for those at the upper end of any stepped rate, as the 'unfairly' high rate will be objected to by the ~ 1 million lower-level earners.

I'd think 50-70% is about right for folks earning 1 million, but for those earning 200 million, 99% seems about right, that leaves them with about $2 million, more than enough for a nice house with maid and gardening service, dinner out every night, and a yacht or airplane and golf club membership (or whatever cranks their fancy).

What it doesn't leave them is enough disposable dollars to corrupt both our government and business with excessive influence.

[DLnyc]

31. figures don't lie, but liars sure do love to figure.

"1 percent of taxpayers (AGI over $364,657) earned approximately 21.2 percent of the nation's income (as defined by AGI), yet paid 39.4 percent of all federal income taxes"
This means the top federal income tax rate is about double the average rate: If everyone paid exactly the same federal income tax rate, then a group making 21 percent of the nation's income would be expected to pay 21 percent of the nations federal income tax. Since this group is instead paying about double that (39.4 is a little less that double 21.2), we can infer that the average federal income tax rate for rich people is about twice the average rate for everyone. Big deal. Used to be the top rate was 89% (before Reagan). Now, I believe, the top federal income tax rate is down to about 39%, and I would guess the average federal income tax rate paid is around 20%. But, federal income tax is a relatively small part of withholding, for lower income earners. In my experience, at anywhere from poverty wages to middle class wages, social security, medicare, local and federal withholding combined come to from 30% to 33% of income. That's a LOT more than the 14 to 20% federal income tax.

Some key points: a) Article is a little misleading in quoting "federal income tax" rates, which only account for about half of taxes for low income earners.
b) In a progressive tax system, it is to be expected that the group making the top 21% of income will pay something more than 21% of the federal income tax.
c) Due to the non-progressive nature of the social security tax (only collected on the first 85,000 or so of income), even this expected progressive effect is not felt in a practical sense for lowest income earners.

Also, as several posts above pointed out, while the top 1% of taxpayers may have EARNED only 21.2 percent of nation's income, their WEALTH is probably more like 40% and they could have vast amounts of sheltered appreciation of assets that doesn't appear in Adjusted Gross Income.

[Hamlette]

This is Rush propaganda...look at the top and bottom 50%

The top 50% pays almost 97% of the taxes BUT they make over 87% of the money.

That means, the bottom 50% of Americans make 12.83% of the income of the nation.

50% of us get less than 13% of the pie.

Why shouldn't the top 87% pay 97% of the taxes??????

[rug]

32. 20,000 people making $50,000 = 1 person making $1,000,000,000.

[Vinnie From Indy]

33. Bullshit!

This post and OP are full of shit.

[Solar_Power]

34. Does this include estate taxes?

Or just income taxes?

[1932]

35. Just income taxes.

[1932]

36. If the top 1% earn $357K, what does top .5% and .1% earn, and what is their tax burden

relative to % of income.

$357k is a two-doctor or two-lawyer family who gets most of their income from working.

1Mil and up are people who make money off buying and selling assets (and paying 15% taxes on that income).

[Toots]

38. Ad boy did it just destroy their way of living

How could anyone live on just a few measly million dollars? I feel so very sad for them..

[TahitiNut]

41. The "bottom 90%" are sharing 53.56% of the Income Pie.

While the "top 1%" are getting fat on 21.2% of the Income Pie. That means a 1%-er is eating a slice of that pie that's over 35 times larger than the slice a 90%-er is eating.

Since the "bottom 50%" get to share 12.83% of that Income Pie, that means a 1%-er is eating a slice of that pie that's nearly 83 times larger than the slice a 50%-er is eating.

So, when it comes to paying for the 'system' that makes such disproportional slices of the pie available, just WHO the FUCK SHOULD pay for it???