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Top 20% of Americans Will Pay 87% of Income Tax
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2018 Apr 6, 10:04am 4,360 views 14 comments
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1
marcus
2018 Apr 6, 12:05pm
marcus
2018 Apr 6, 12:05pm
Sniper says
I wonder what that number would be if payroll taxes were included.
Al Gore lost, so we don't have a "lock box" for payroll tax revenue. It gets spent and counted relative to surplus/deficit the same as income taxes, so it really should be included in that calculation. But upper income people pay into payroll taxes too, so it might not lower the number all that much.
Maybe it's 67% or so of the taxes that the top 20% pay.
The other thing to consider is that if someone's income isn't even enough to cover the most minimal of lifestyles, and all they are paying in fed taxes on that is payroll taxes, it's hard to consider that unfair.
The results show how steeply progressive the U.S. income tax remains. For 2018, households in the top 20% will have income of about $150,000 or more and 52% of total income, about the same as in 2017. But they will pay about 87% of income taxes, up from about 84% last year.
I wonder what that number would be if payroll taxes were included.
Al Gore lost, so we don't have a "lock box" for payroll tax revenue. It gets spent and counted relative to surplus/deficit the same as income taxes, so it really should be included in that calculation. But upper income people pay into payroll taxes too, so it might not lower the number all that much.
Maybe it's 67% or so of the taxes that the top 20% pay.
The other thing to consider is that if someone's income isn't even enough to cover the most minimal of lifestyles, and all they are paying in fed taxes on that is payroll taxes, it's hard to consider that unfair.
2
MrMagic
2018 Apr 6, 12:24pm
MrMagic
2018 Apr 6, 12:24pm
marcus says
Read that again, this time for comprehension.
If you calculate payroll taxes that upper income earners pay in, the percentage and dollars of taxes the "rich" people pay compared to the "poor" people, goes off the chart.
But upper income people pay into payroll taxes too, so it might not lower the number all that much.
Read that again, this time for comprehension.
If you calculate payroll taxes that upper income earners pay in, the percentage and dollars of taxes the "rich" people pay compared to the "poor" people, goes off the chart.
3
GNL
2018 Apr 6, 12:30pm
GNL
2018 Apr 6, 12:30pm
Good or bad, right or wrong, like it or not, wealth/income inequality causes many many problems.
4
Patrick
2018 Apr 6, 12:44pm
Patrick
2018 Apr 6, 12:44pm
The interesting question for me is how much of the wealth that the top 1% get is from their own work, and how much is simply rent seeking.
People should keep 100% of the income they generate through productive work, and 0% of the income they in effect simply stole from others via various kinds of rent-seeking and corruption of regulatory agencies.
In economics and in public-choice theory, rent-seeking involves seeking to increase one's share of existing wealth without creating new wealth. Rent-seeking results in reduced economic efficiency through poor allocation of resources, reduced actual wealth-creation, lost government revenue, increased income inequality,[1] and (potentially) national decline.
Attempts at capture of regulatory agencies to gain a coercive monopoly can result in advantages for the rent seeker in a market while imposing disadvantages on (incorrupt) competitors.
People should keep 100% of the income they generate through productive work, and 0% of the income they in effect simply stole from others via various kinds of rent-seeking and corruption of regulatory agencies.
5
MrMagic
2018 Apr 6, 3:56pm
MrMagic
2018 Apr 6, 3:56pm
Patrick says
What if that rent-seeking came from the production and labor someone put in the past and are reaping the benefits in the future time period. Not every instance has a direct coorelation to activities right now. They could have been very productive in the past and built a system that will pay them in the future, without them doing anything. What's wrong with that?
People should keep 100% of the income they generate through productive work, and 0% of the income they in effect simply stole from others via various kinds of rent-seeking and corruption of regulatory agencies.
What if that rent-seeking came from the production and labor someone put in the past and are reaping the benefits in the future time period. Not every instance has a direct coorelation to activities right now. They could have been very productive in the past and built a system that will pay them in the future, without them doing anything. What's wrong with that?
6
Patrick
2018 Apr 6, 5:02pm
Patrick
2018 Apr 6, 5:02pm
Sniper says
Nothing wrong with that. But then it's not rent-seeking.
I'm talking about non-productive activities like owning land, or radio spectrum, or Congressmen.
Patrick saysPeople should keep 100% of the income they generate through productive work, and 0% of the income they in effect simply stole from others via various kinds of rent-seeking and corruption of regulatory agencies.
What if that rent-seeking came from the production and labor someone put in the past and are reaping the benefits in the future time period. Not every instance has a direct coorelation to activities right now. They could have been very productive in the past and built a system that will pay them in the future, without them doing anything. What's wrong with that?
Nothing wrong with that. But then it's not rent-seeking.
I'm talking about non-productive activities like owning land, or radio spectrum, or Congressmen.
7
EBGuy
2018 Apr 6, 5:06pm
Sniper says
Social security taxes go to zero percent for anyone earning over $128k.
If you calculate payroll taxes that upper income earners pay in, the percentage and dollars of taxes the "rich" people pay compared to the "poor" people, goes off the chart.
Social security taxes go to zero percent for anyone earning over $128k.
8
Patrick
2018 Apr 6, 5:08pm
Patrick
2018 Apr 6, 5:08pm
True, social security taxes are very limited. The rich don't pay anything but a trivial amount there.
9
FortWayne
2018 Apr 6, 5:17pm
FortWayne
2018 Apr 6, 5:17pm
Just want to add that under Ibama I was paying 36% combined with state.
Under Trump it’ll be about 30 combined.
I’m not rich. CA is an expensive place.
Last year my taxes paid Marcus’s entire salary.
Patrick says
Under Trump it’ll be about 30 combined.
I’m not rich. CA is an expensive place.
Last year my taxes paid Marcus’s entire salary.
Patrick says
True, social security taxes are very limited. The rich don't pay anything but a trivial amount there.
10
MrMagic
2018 Apr 6, 6:55pm
MrMagic
2018 Apr 6, 6:55pm
EBGuy says
What did they (and their employers) pay on the first $127K compared to what did a $30K worker pay in?
Here, I'll help with that math:
$127K x 12.4% = $15,748
$30K x 12.4% = $3,720.
Who paid more?
Sniper saysIf you calculate payroll taxes that upper income earners pay in, the percentage and dollars of taxes the "rich" people pay compared to the "poor" people, goes off the chart.
Social security taxes go to zero percent for anyone earning over $128k.
What did they (and their employers) pay on the first $127K compared to what did a $30K worker pay in?
Here, I'll help with that math:
$127K x 12.4% = $15,748
$30K x 12.4% = $3,720.
Who paid more?
11
EBGuy
2018 Apr 6, 7:46pm
So someone making a bit over a quarter of a million dollars per year has a Social Security tax rate of around 3%, while Joe lunch bucket gets taxed at a rate of 6.2% for SS contributions. Very regressive. Sad.
12
MrMagic
2018 Apr 6, 8:02pm
MrMagic
2018 Apr 6, 8:02pm
EBGuy says
Now get your calculator out and tell us how much federal taxes each pays:
Someone at $250K =
Joe lunch bucket at $30K =
We'll be waiting.......
So someone making a bit over a quarter of a million dollars per year has a Social Security tax rate of around 3%, while Joe lunch bucket gets taxed at a rate of 6.2% for SS contributions. Very regressive. Sad.
Now get your calculator out and tell us how much federal taxes each pays:
Someone at $250K =
Joe lunch bucket at $30K =
We'll be waiting.......
13
MrMagic
2018 Apr 8, 4:09pm
MrMagic
2018 Apr 8, 4:09pm
GOP’s tax cut isn’t a gift to the rich, analysis finds. (Crap, another Democrat narrative destroyed!!!)
The top 20 percent of wage earners will pay 87 percent of all federal income taxes in 2018, according to a new analysis by the nonpartisan Tax Policy Center.
That’s up from about 84 percent last year.
The increase comes thanks to the tax-reform bill passed in December, which kept the progressive structure of the US tax code.
The new law reduced taxes for all income levels. Doing so increased the percentage of the total paid by workers earning $150,000 or more.
Overall, about two-thirds of taxpayers are in line for a tax cut. About 6 percent will pay more, while the rest will see no significant change.
Most families earning under $50,000 a year will pay no federal income taxes at all, and many will get money back, due to measures like the increased standard deduction and the child tax credit.
https://nypost.com/2018/04/07/gops-tax-cut-isnt-a-gift-to-the-rich-analysis-finds/
The top 20 percent of wage earners will pay 87 percent of all federal income taxes in 2018, according to a new analysis by the nonpartisan Tax Policy Center.
That’s up from about 84 percent last year.
The increase comes thanks to the tax-reform bill passed in December, which kept the progressive structure of the US tax code.
The new law reduced taxes for all income levels. Doing so increased the percentage of the total paid by workers earning $150,000 or more.
Overall, about two-thirds of taxpayers are in line for a tax cut. About 6 percent will pay more, while the rest will see no significant change.
Most families earning under $50,000 a year will pay no federal income taxes at all, and many will get money back, due to measures like the increased standard deduction and the child tax credit.
https://nypost.com/2018/04/07/gops-tax-cut-isnt-a-gift-to-the-rich-analysis-finds/
14
FortWayne
2018 Apr 8, 4:19pm
FortWayne
2018 Apr 8, 4:19pm
I got a nice tax cut with AMT gone. Going to likely be buying new equipment. Thanks Trump.
Finally a president with a brain who understands business, not some communist jerk squeezing life blood with taxes.
Finally a president with a brain who understands business, not some communist jerk squeezing life blood with taxes.
One of the least discussed parts of America’s income tax is how progressive it is, and the tax overhaul didn’t change that fact. In 2018, top earners will pay a higher share of income taxes.
Top Earners
The top 1% and 0.1% of taxpayers will see their share of income taxes rise in 2018.
The results show how steeply progressive the U.S. income tax remains. For 2018, households in the top 20% will have income of about $150,000 or more and 52% of total income, about the same as in 2017. But they will pay about 87% of income taxes, up from about 84% last year.
By contrast, the lower 60% of households, who have income up to about $86,000, receive about 27% of income. As a group, this tier will pay no net federal income tax in 2018 vs. 2% of it last year.
Roughly one million households in the top 1% will pay for 43% of income tax, up from 38% in 2017. These filers earn above about $730,000.
According to Roberton Williams, an income-tax specialist with the Tax Policy Center, the share of taxes paid by the top 5% will rise.
https://www.wsj.com/articles/top-20-of-americans-will-pay-87-of-income-tax-1523007001