Tuesday, April 12, 2011

Another Happy Tax Day

As we approach yet another dreadful April 15th, I thought it would be helpful to assemble some national tax statistics.  Interestingly, this subject attracts no shortage of political fodder from both sides, so I’m here to shed some light on an issue many use for political gain.  The following stats are from the Tax Foundation (2008 tax year).  Most of the statistics I’m quoting here cover federal income tax, and not payroll taxes, such as FICA and Medicare.  Almost everyone drawing a regular paycheck shares in the pleasure of payroll taxes.  BTW: your share of FICA payroll taxes was reduced 2% this year as part of the two year tax extension deal signed into law last fall.  I believe this reduction lasts only one year.  

The top one half of all taxpayers paid 97.3% of all federal income tax.  That means about half of all tax filing Americans paid zero federal tax.   With the Earned Income Tax Credit, many individuals with no tax liability actually receive a federal tax refund.  That’s income redistribution.

The top 10% of all taxpayers paid nearly 70% of all federal income tax.  But these rich, thieving bastards earned all the income, you say.  No, this club earned only 46% of all AGI (adjusted gross income) – not quite half.  These folks contributed $721 billion dollars to Uncle Sam’s coffers.

The top 1% of all taxpayers paid just over 38% of all federal income tax.  And the top one percent’s share keeps increasing.  From 2005 through 2007, the tax burden on the top one percenters rose to a record every year.  In 2007, the top 1% paid more federal income tax than the bottom 95%.  This little fact should put to rest the myth that the “rich” don’t pay taxes.  But, this is income, not wealth.

In all, Uncle Sam looted individual taxpayers for a grand total of just over a trillion dollars in 2008, and nearly all of it was contributed by the top half of taxpayers.  Happy Tax Day! 

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