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Top 20% of Americans Will Pay 87% of Income Tax


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2018 Apr 6, 10:04am   4,307 views  14 comments

by MrMagic   ➕follow (2)   💰tip   ignore  

Well, that certainly kills the Liberal narrative that the "rich" got all the tax breaks in the new legislation Trump signed.

One of the least discussed parts of America’s income tax is how progressive it is, and the tax overhaul didn’t change that fact. In 2018, top earners will pay a higher share of income taxes.

Top Earners
The top 1% and 0.1% of taxpayers will see their share of income taxes rise in 2018.

The results show how steeply progressive the U.S. income tax remains. For 2018, households in the top 20% will have income of about $150,000 or more and 52% of total income, about the same as in 2017. But they will pay about 87% of income taxes, up from about 84% last year.

By contrast, the lower 60% of households, who have income up to about $86,000, receive about 27% of income. As a group, this tier will pay no net federal income tax in 2018 vs. 2% of it last year.

Roughly one million households in the top 1% will pay for 43% of income tax, up from 38% in 2017. These filers earn above about $730,000.

According to Roberton Williams, an income-tax specialist with the Tax Policy Center, the share of taxes paid by the top 5% will rise.


https://www.wsj.com/articles/top-20-of-americans-will-pay-87-of-income-tax-1523007001

Comments 1 - 14 of 14        Search these comments

1   marcus   2018 Apr 6, 12:05pm  

Sniper says

The results show how steeply progressive the U.S. income tax remains. For 2018, households in the top 20% will have income of about $150,000 or more and 52% of total income, about the same as in 2017. But they will pay about 87% of income taxes, up from about 84% last year.


I wonder what that number would be if payroll taxes were included.

Al Gore lost, so we don't have a "lock box" for payroll tax revenue. It gets spent and counted relative to surplus/deficit the same as income taxes, so it really should be included in that calculation. But upper income people pay into payroll taxes too, so it might not lower the number all that much.

Maybe it's 67% or so of the taxes that the top 20% pay.

The other thing to consider is that if someone's income isn't even enough to cover the most minimal of lifestyles, and all they are paying in fed taxes on that is payroll taxes, it's hard to consider that unfair.
2   MrMagic   2018 Apr 6, 12:24pm  

marcus says
But upper income people pay into payroll taxes too, so it might not lower the number all that much.


Read that again, this time for comprehension.

If you calculate payroll taxes that upper income earners pay in, the percentage and dollars of taxes the "rich" people pay compared to the "poor" people, goes off the chart.
3   GNL   2018 Apr 6, 12:30pm  

Good or bad, right or wrong, like it or not, wealth/income inequality causes many many problems.
4   Patrick   2018 Apr 6, 12:44pm  

The interesting question for me is how much of the wealth that the top 1% get is from their own work, and how much is simply rent seeking.

In economics and in public-choice theory, rent-seeking involves seeking to increase one's share of existing wealth without creating new wealth. Rent-seeking results in reduced economic efficiency through poor allocation of resources, reduced actual wealth-creation, lost government revenue, increased income inequality,[1] and (potentially) national decline.

Attempts at capture of regulatory agencies to gain a coercive monopoly can result in advantages for the rent seeker in a market while imposing disadvantages on (incorrupt) competitors.


People should keep 100% of the income they generate through productive work, and 0% of the income they in effect simply stole from others via various kinds of rent-seeking and corruption of regulatory agencies.
5   MrMagic   2018 Apr 6, 3:56pm  

Patrick says
People should keep 100% of the income they generate through productive work, and 0% of the income they in effect simply stole from others via various kinds of rent-seeking and corruption of regulatory agencies.


What if that rent-seeking came from the production and labor someone put in the past and are reaping the benefits in the future time period. Not every instance has a direct coorelation to activities right now. They could have been very productive in the past and built a system that will pay them in the future, without them doing anything. What's wrong with that?
6   Patrick   2018 Apr 6, 5:02pm  

Sniper says
Patrick says
People should keep 100% of the income they generate through productive work, and 0% of the income they in effect simply stole from others via various kinds of rent-seeking and corruption of regulatory agencies.


What if that rent-seeking came from the production and labor someone put in the past and are reaping the benefits in the future time period. Not every instance has a direct coorelation to activities right now. They could have been very productive in the past and built a system that will pay them in the future, without them doing anything. What's wrong with that?


Nothing wrong with that. But then it's not rent-seeking.

I'm talking about non-productive activities like owning land, or radio spectrum, or Congressmen.
7   EBGuy   2018 Apr 6, 5:06pm  

Sniper says
If you calculate payroll taxes that upper income earners pay in, the percentage and dollars of taxes the "rich" people pay compared to the "poor" people, goes off the chart.

Social security taxes go to zero percent for anyone earning over $128k.
8   Patrick   2018 Apr 6, 5:08pm  

True, social security taxes are very limited. The rich don't pay anything but a trivial amount there.
9   FortWayne   2018 Apr 6, 5:17pm  

Just want to add that under Ibama I was paying 36% combined with state.
Under Trump it’ll be about 30 combined.

I’m not rich. CA is an expensive place.

Last year my taxes paid Marcus’s entire salary.

Patrick says
True, social security taxes are very limited. The rich don't pay anything but a trivial amount there.
10   MrMagic   2018 Apr 6, 6:55pm  

EBGuy says
Sniper says
If you calculate payroll taxes that upper income earners pay in, the percentage and dollars of taxes the "rich" people pay compared to the "poor" people, goes off the chart.

Social security taxes go to zero percent for anyone earning over $128k.


What did they (and their employers) pay on the first $127K compared to what did a $30K worker pay in?

Here, I'll help with that math:

$127K x 12.4% = $15,748
$30K x 12.4% = $3,720.

Who paid more?
11   EBGuy   2018 Apr 6, 7:46pm  

So someone making a bit over a quarter of a million dollars per year has a Social Security tax rate of around 3%, while Joe lunch bucket gets taxed at a rate of 6.2% for SS contributions. Very regressive. Sad.
12   MrMagic   2018 Apr 6, 8:02pm  

EBGuy says
So someone making a bit over a quarter of a million dollars per year has a Social Security tax rate of around 3%, while Joe lunch bucket gets taxed at a rate of 6.2% for SS contributions. Very regressive. Sad.


Now get your calculator out and tell us how much federal taxes each pays:

Someone at $250K =

Joe lunch bucket at $30K =

We'll be waiting.......

13   MrMagic   2018 Apr 8, 4:09pm  

GOP’s tax cut isn’t a gift to the rich, analysis finds. (Crap, another Democrat narrative destroyed!!!)

The top 20 percent of wage earners will pay 87 percent of all federal income taxes in 2018, according to a new analysis by the nonpartisan Tax Policy Center.

That’s up from about 84 percent last year.

The increase comes thanks to the tax-reform bill passed in December, which kept the progressive structure of the US tax code.

The new law reduced taxes for all income levels. Doing so increased the percentage of the total paid by workers earning $150,000 or more.

Overall, about two-thirds of taxpayers are in line for a tax cut. About 6 percent will pay more, while the rest will see no significant change.

Most families earning under $50,000 a year will pay no federal income taxes at all, and many will get money back, due to measures like the increased standard deduction and the child tax credit.

https://nypost.com/2018/04/07/gops-tax-cut-isnt-a-gift-to-the-rich-analysis-finds/
14   FortWayne   2018 Apr 8, 4:19pm  

I got a nice tax cut with AMT gone. Going to likely be buying new equipment. Thanks Trump.

Finally a president with a brain who understands business, not some communist jerk squeezing life blood with taxes.

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