Tax Data, who pays and how much

[Brad Johnson]

As we come into the most joyous of seasons for Leftists, Marxist, and Communists of all stripe ... Talking points for tapping your "Rich must pay their fair share!" buddies right in the feelz.

Most recent Tax Foundation breakout of taxes paid (2022 tax year). Keep in mind, 75th percentile and above is considered "rich".

Percentile
Percent of Total Taxes Paid
Income Split Point

Top 1%
45.8%
$682,577

Top 5%
65.6%
$252,840

Top 10%
75.8%
$169,800

Top 25%
89.2%
94,440

Top 50%
97.7%
$46,637

Bottom 50%
2.3%
<$46,637

https://taxfoundation.org/data/all/federal/latest-federal-income-tax-data-2024/

*IMPORTANT NOTE* (lifted directly from the page, right above the tax table)
"Because the Office of Management and Budget (OMB) classifies the refundable part of tax credits as spending, the IRS does not include it in tax share figures. The result overstates the tax burden of the bottom half of taxpayers."
(In other words, 2.3% is actually an overstatement of tax burden. In other, other words, they don't even pay that much. -Brad)

Brad

[zahc]

This is the top X percent for income, I believe, which still excludes the most wealthy people, who often collect low or even no income.

Also property taxes fall disproportionately on the poor. Sales taxes are proportional but the impact is regressive as well.

[Brad Johnson]

Tax Foundation info is based on federal tax returns and calculated on AGI. Regardless of how it's sliced, diced, mangled, mauled, or masticated, it still stands that the top 50% of wage earners pay essentially all taxes on personal income.

Property taxes are a different discussion, but given "the poor" get huge income tax breaks on a significant portion of their income, get the advantage of "free stuff" programs the rest of us can't touch, and have a much higher ratio of housing subsidies regardless of ownership status or property tax assessment, my sympathies are somewhat subdued.

Finally, those "most wealthy who collect low or no income" don't just bury their money in a hole. They invest it, they buy things, they employ people, they take venture capital risks... all of which plows money back into parts of the economy both heavily taxed and solidly beneficial to "the poor" and middle class. Taxation-equivalent expenditure isn't avoided, it's just shifted from straight taxation into other financial instruments.

Brad

[HankB]

. . . Also property taxes fall disproportionately on the poor. Sales taxes are proportional but the impact is regressive as well.

Both property and sales taxes are collected by the STATES, not Uncle Sam. Many states also have their own income taxes.

I don't know if anyone has computed the effect of other Federal taxes (excise taxes, import duties, etc.) and the pass-through of corporate taxes as a function of income.

[zahc]

it still stands that the top 50% of wage earners pay essentially all taxes on personal income.

Of Wage Earners, yes. Which highlights my point that income taxes fall exclusively on the middle class, because the wealthiest do not earn significant wages. The wealthiest are excluded from the distribution.

Finally, those "most wealthy who collect low or no income" don't just bury their money in a hole. They invest it, they buy things, they employ people, they take venture capital risks...

The middle classes would pour their money back into the economy too, if they had it. But they don't have that chance to the extent the money is taken in taxes. If you are saying that taxing the few rich, however that might be done, harms the economy, per income collected, more than taxing the wages of a much larger number of middle class, citation needed. It's probable that the opposite is true; depending how they are taxed, taxing the rich could plausibly benefit the economy, but taxing wages never does. Taxing wages always causes deadweight economic loss, but depending on how the rich are taxed it could either cause equal or less deadweight loss, zero deadweight loss, or even benefit the economy at large by extracting Ricardian rent. At worst, it would be as bad as taxing wages....

all of which plows money back into parts of the economy both heavily taxed and solidly beneficial to "the poor" and middle class

Sometimes. Sometimes it's primarily beneficial to themselves alone, or the rich in general. Outside charity, economic activity doesn't magically always benefit the poor.

Taxation-equivalent expenditure isn't avoided, it's just shifted from straight taxation into other financial instruments.

I'm having a hard time understanding this argument. Are you saying "if we didn't take the money in taxes, they would just spend it anyway"?

[Boomhauer]

You have no right to my money regardless of how much I have.

Rich or poor, taxation in all its forms is still legalized theft and I’m tired of the class war bullshit about it that distracts from the fact of wasteful government spending at all levels.

[zahc]

You have no right to my money regardless of how much I have

Does it make any difference how you got your money; how that money became yours? I think it does. Money gained by honest work and productive deployment of capital should be taxed the last and the least. Money extracted by monopoly or government favor should be taxed first and the most. Unsurprisingly our tax policy is nearly the opposite of the above.

Rich or poor, taxation in all its forms is still
legalized theft

It's different from theft because of the social contract. By definition.

All taxes are bad but since it's clearly possible to make tax policy worse, therefore it's possible to make tax policy better. It distracts from the conversation about making tax policy to just "pretend taxes are bad so we shouldn't try to make them better ".

[MechAg94]

Does it make any difference how you got your money; how that money became yours? I think it does. Money gained by honest work and productive deployment of capital should be taxed the last and the least. Money extracted by monopoly or government favor should be taxed first and the most. Unsurprisingly our tax policy is nearly the opposite of the above.

It's different from theft because of the social contract. By definition.

All taxes are bad but since it's clearly possible to make tax policy worse, therefore it's possible to make tax policy better. It distracts from the conversation about making tax policy to just "pretend taxes are bad so we shouldn't try to make them better ".

1.  Monopolies and cronyism should be addressed in other ways.  It shouldn't be used an excuse for arguably bad tax policy (which will normally benefits those who can lobby politicians best). 
2.  If voters treated it like it was theft and voted accordingly, we might have better govt.  Instead, we get a lot of people that celebrate how much tax money their politicians direct to their state/city (after the enormous bureaucratic cut).   

No one ever talks about how much money govt agencies get budgeted versus how much is actually spent or issued to people that are supposed to get it.  Seems like back in the 1980's, we heard that number a lot.