The Wealthy Pay All of the Taxes? Humbug!

What's Hot


2 Types of Black Marks Might Vanish From Your Credit File SoonBorrow

6 Ways the Obamacare Overhaul Might Impact Your WalletInsurance

7 Dumb and Costly Moves Homebuyers MakeBorrow

This Free Software Brings Old Laptops Back to LifeMore

Obamacare Replacement Plan Gets ‘F’ Rating from Consumer ReportsFamily

Beware These 12 Common Money MistakesCredit & Debt

21 Restaurants Offering Free Food Right NowSaving Money

17 Ways to Have More Fun for Less MoneySave

House Hunters: Beware of These 6 Mortgage MistakesBorrow

30 Household Uses for Baby OilSave

25 Ways to Spend Less on FoodMore

Nearly Half of Heart-Related Deaths Linked to These 10 Foods and IngredientsFamily

5 Surprising Benefits of Exercising Outdoors in WinterFamily

10 Ways to Save When You’re Making Minimum WageSave

Boost Your Credit Score Fast With These 7 MovesCredit & Debt

7 Painless Ways to Pay Off Your Mortgage Years EarlierBorrow

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

The True Cost of Bad CreditCredit & Debt

10 Companies With the Best 401(k) PlansGrow

This Scam Now Tops ID Theft as the No. 2 Consumer ComplaintFamily

6 Stores With Awesome Reward ProgramsFamily

6 Ways to Save More at Lowe’s and The Home DepotSave

6 Healthful Treats for Your DogFamily

New Study Ranks the Best States in the U.S.Family

Thousands of Millionaires Moving to 1 Country — and Leaving AnotherGrow

Strapped for College Costs? How to Get the Most From FAFSABorrow

6 Overlooked Ways to Save at Chick-fil-AFamily

Ask Stacy: What’s the Fastest Way to Pay Off My Mortgage?Borrow

Where to Sell Your Stuff for Top DollarAround The House

8 Ways to Get a Good Price on a Shiny New AutoCars

Ask Stacy: How Do I Start Over?Credit & Debt

Secret Cell Plans: Savings Verizon, AT&T, T-Mobile and Sprint Don’t Want You to Know AboutFamily

30 Awesome Things to Do in RetirementCollege

14 Super Smart Ways to Save on TravelSave

The Rich Prefer Modest Cars — Should You Join Them?Cars

You’ll Soon Pay More to Shop at CostcoSave

10 Ways to Save When Your Teen Starts DrivingFamily

Once again the argument has surfaced that the wealthy are shouldering an unfair tax burden.

As the rich get richer, the poor get poorer. So, who pays all the taxes?

A recent report from CNBC says that “when it comes to individual income taxes, the top 40 percent of wage earners in America pay 106 percent of the taxes. The bottom 40 percent … pay negative 9 percent.” These figures were calculated by the Congressional Budget Office using data from 2010 and released in a report on federal income tax distribution among U.S. households.

CNBC further explains:

How does someone pay negative taxes? The CBO’s formula offsets whatever taxes are paid with “refundable tax credits.” Some of these are due to “government transfers” of money back to the taxpayer in the form of Social Security and food stamps.

From this data, it’s fair to assume that the rich carry the tax burden, while it’s smooth sailing for the lower-wage earners.

But what about all of the other taxes collected by the government?

“Rich people do pay a lot more taxes than poor people, both in absolute terms and as a percentage of income. But the rich are not paying all the taxes. And looking just at the federal personal income tax and trying to draw conclusions about who pays taxes will lead you to wrong answers,” says Josh Barro of Business Insider.

All wage earners must pay a number of other taxes. Barro notes that payroll tax (for Social Security and Medicare), state income tax, sales tax, property tax and excise taxes should not be excluded from the equation. The poorest 20 percent of households, which generate only $11,000 of annual income on average, pay 13 percent of their total incomes in taxes.

Other highlights from Business Insider’s report include:

  • The wealthiest 1 percent pay 43 percent of their total incomes in taxes.
  • The middle quintile of earners pays 25 percent of total income in taxes.

How do you feel about the distribution of taxes? Is the tax code truly progressive? Comment below or on our Facebook page.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: 50 Ways to Make a Fast $50

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 2,004 more deals!