Depending on your news source of choice, you’ll hear a lot about the tax bill that just passed through Congress being the best tax overhaul in a generation or the worst catastrophe to ever befall the republic. The line I heard today that most sticks with me, though, is that “the tax bill does the most for the people at the top of the income ladder.”
Um, well, yeah. I guess it does. Those are the people who are paying most of the income taxes collected by the federal government. It seems that any changes at all to the tax code would likely impact them more than it does the 43% of the population who currently pay no income tax.
In a quick review of the discussion, I found that “A Pew Research Center analysis of IRS data from 2015, the most recent available, shows that taxpayers with incomes of $200,000 or more paid well over half (58.8%) of federal income taxes, though they accounted for only 4.5% of all returns filed.” Drop that income level down to $100,000 and it accounts for 80.6% if all federal income tax receipts but only 16.8% of tax returns filed with the IRS.
Let that sink in for a moment. About 17% of those filing their taxes carry more than 80% of the burden of paying income taxes. This doesn’t even account for people who for whatever reason aren’t required to or don’t file with the IRS. I’m not now nor have I ever been a math major, but the numbers do seem to indicate pretty strongly that a small percentage of the population is doing a very large percentage of the heavy lifting when it comes to the overall income tax burden.
Knowing all this, when the discussion comes around to who needs to pay their “fair share” or how wrong it is that the people who actually pay the vast majority of income taxes should benefit from a reduced tax burden, I honestly have no bleeding idea what you’re talking about.