Friday, August 5, 2011

Does Half the Population Pay Nothing in Taxes?

I often see in op-eds, and from politicians, the sincere belief that half of the population pay nothing in taxes. Perhaps, if you're talking about income tax and federal tax. However, even if this were true (which it isn't), those people still pay many other kinds of taxes. Everybody pays into FICA (social security, medicaid, etc). AL and MS residents pay full taxes on food, and all other products are subject to sales tax everywhere. If you own property, there are property taxes, and even if you rent, those taxes are passed along to the renter. The primary argument is that people under the poverty line pay relatively little in federal income tax, which is largely true, but the other taxes have a large impact on the money you have available. If you earn less than $15K, sales and other taxes represent a large percentage of your disposable income, whereas if you make $250k, sales tax does not impact your ability to buy food and pay your home electric bill. Regardless, if you look at the actual data available from the IRS, the picture looks far more fair than talking points make it sound. These are the facts: the top 50% of workers pay 92.5% of U.S. income, however, those same workers monopolize 88.2% of all U.S. income.

No comments:

Post a Comment