The Wealthy Pay All of the Taxes? Humbug!

What's Hot


How a Mexican Tariff Will Boost the Cost of 6 Common PurchasesFamily

Report: Walmart to Begin Selling CarsCars

How to Protect Yourself From the ‘Can You Hear Me?’ Phone ScamFamily

Trump Scraps FHA Rate Cut — What Does It Mean for You?Borrow

This Free Software Brings Old Laptops Back to LifeMore

10 Overlooked Expenses That Ruin Your BudgetFamily

Protecting Trump Will Cost Taxpayers $35 MillionFamily

8 Creative Ways to Clear ClutterAround The House

8 Tuition-Free U.S. CollegesCollege

Study: People Who Curse Are More HonestFamily

Tax Hacks 2017: Don’t Miss These 16 Often-Overlooked Tax BreaksTaxes

The 3 Golden Rules of Lending to Friends and FamilyBorrow

Porta-Potties for Presidential Inauguration Cause a StinkFamily

12 Surprising Ways to Wreck Your Credit ScoreBorrow

These Are the 25 Best Jobs in the U.S.Jobs & Work

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: 6 Presidents Day Sales You Should Know About

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 1,841 more deals!