Rich Don't Pay Most of the Taxes (They Pay All of Them); Reflections on the 'Almost Rich'

By: Mike Shedlock | Wed, Dec 11, 2013
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Counting transfer payments such as foods stamps, Medicaid, Medicare, and other government welfare, Congressional Budget Office (CBO) analysis shows the top 40% pay 106% of all taxes (more than all of them). In turn the bottom 60% get money back.

Please consider The rich do not pay the most taxes, they pay ALL the taxes by CNBC reporter Jane Wells.

Buried inside a Congressional Budget Office report this week was this nugget: 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.

The key table is in Box 1 on PDF page 11 (report page 7) of Distribution of Household Income and Taxes. The report was released in December 2013 but data is for 2010.

Highlighting is mine.

Distribution of Market Income, Transferes and Federal Taxes by Market Income Group, 2010


Key Facts

That money had to come from somewhere, and it did.

Wells concludes ...

Fair or not, I will let you be the judge. People who make more should pay more, generally speaking. In America, they are. Yes, the rich (and almost rich) are getting richer. When it comes to individual income taxes, they're also covering the entire bill. And leaving a tip.


Reflections on the "Almost Rich"

I would be hard-pressed to call the fourth quintile "almost rich". And I rather doubt they are getting much, if any richer, inflation-adjusted.

The benefits to this recovery are concentrated in the top 10%, with most of that in the top 1%. Thank the Fed for that outcome.

For further discussion, please see ...

Regardless of who you think is to blame for rising income inequality, the report sheds a great deal of light on where tax dollars are coming from, and where they go.

Fair is in the eyes of the beholder.

 


 

Mike Shedlock

Author: Mike Shedlock

Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/

Mike Shedlock

Michael "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Visit http://www.sitkapacific.com/ to learn more about wealth management for investors seeking strong performance with low volatility.

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