Refer back to this stunning chart the next time President Obama or someone else from the "penalizing wealth" crowd goes on about the rich not paying their "fair share" of taxes:
Some additional analysis and commentary will be provided here that reveal a yet-to-be discussed major implication of the CBO report – almost the entire burden: a) of all transfer payments made to American households and b) of all non-financed government spending, falls on just one group of Americans – the top one-fifth of US households by income. That’s correct, the CBO study shows that the bottom three income quintiles representing 60% of US households are “net recipients” (they receive more in transfer payments than they pay in federal taxes), the second-highest income quintile pays just slightly more in federal taxes ($14,800) than it receives in government transfer payments ($14,100), while the top 20% of American “net payer” households finance 100% of the transfer payments to the bottom 60%, as well as almost 100% of the tax revenue collected to run the federal government. Here are the details of that analysis.
[. . .]
The CBO study released this week provides ample evidence that the richest Americans are paying their “fair share” of federal taxes. In fact, the richest 20% of Americans by income aren’t just paying a share of federal taxes that would be considered “fair” — it goes way beyond “fair” — they’re shouldering almost 100% of the entire federal tax burden of transfer payments and all other non-financed government spending. What’s probably not so fair is that the bottom 60% isn’t just getting off with a small tax burden or no tax burden – the bottom 60% are net recipients of transfer payments from the top 20% to the tune of about $10,000 per household in 2011. So maybe what the CBO report shows is that we should be asking whether or not the bottom 60% are paying their fair share when they’re not paying anything – they’re net recipients of transfer payments that come from “the richest” 20% of American households.
Households in the top quintile, by the way, earn more than $90,000, so that ain't me. I'm in that second quintile that contribues a teeny bit to all the money needed for government spending. I recommend neither hating nor envying those whose economic situation is better than yours. Taint healthy.
Comments
Leo just highlights the taxes paid by the wealthy but won't mention the growth in income they have enjoyed for decades. I can find fancy charts too. Look at it then explain why they should not be paying what they do and in fact should be paying more.
Joe, you may want to consider Pethokoukis' argument that before 1998the incomes of the bottom 99 percent increased at a greater rate than the top 1 percent. What changed in 1998? The increase in divorce rates and single parent families.
His contention is that middle class incomes have frozen for social reasons and not because of any action of "the rich", who overwhelmingly maintain two parent families.
People who practice certain behaviors -completion of education, marriage, delay of children, and saving- become those awful "rich people." Those who don't practice these behaviors are creating their own roadblocks to success.
But, it's always easier to blame someone else and punish them for being successful.