Thursday, April 8, 2010

Think you pay too much in taxes?

Maybe we only pay too much in comparison with those who pay too little.

Wealth for the Common Good has released a new report, “Shifting Responsibility: How 50 Years of Tax Cuts Have Benefited America’s Wealthiest Taxpayers.” It details how, over the last half-century, America’s highest earners have seen their tax outlays drop by as much as two-thirds while the tax outlay for middle-class Americans has slightly increased. The report also details an Economic Tax Recovery Plan that would raise $450 billion in revenue by ending unfair tax benefits for the wealthiest Americans. 
The Key Statistics
• Between 1960 to 2004, the top 0.1 percent of U.S. taxpayers — the wealthiest one in one thousand — have seen the share of their income paid in total federal taxes drop from 60 to 33.6 percent.
• America’s highest income-earners — the top 400 — have seen the share of their income they pay in federal income tax alone plummet from 51.2 percent in 1955 to 16.6 percent in 2007, the most recent year with top 400 statistics available.
• If the top 400 of 2007 paid as much of their incomes in personal income tax as the top 400 of 1955, the federal treasury would have collected $47.7 billion more in revenue from just these 400 taxpayers.
• In 2007, if the top 0.1 percent of taxpayers — Americans with incomes that averaged $7,126,395 — had paid total federal taxes at the same rate as the top 0.1 percent paid these taxes in 1960, the federal treasury would have collected an additional $281.2 billion in revenue.
• Tax cuts for the wealthy between 2001-2008 cost the U.S. Treasury $700 billion, with all of these billions added directly to the national debt. Retaining these tax cuts will cost $826 billion over the next decade.1
• In 1960, the middle 20 percent of U.S. taxpayers paid 15.9 percent of their incomes in total federal taxes. That total included not just income taxes, but payroll and other federal taxes as well. These same Americans, according to the most recent figures, are now paying 16.1 percent of their incomes in total federal taxes.
• Federal taxes, even after three decades of tax cuts for America’s most affluent, remain somewhat progressive. The higher the income, the higher the tax rate. But state and local taxes remain decidedly regressive. This offsets, to a significant extent, our residual federal tax progressivity. Taxpayers in America’s middle fifth paid 9.4 percent of their 2007 incomes in total state and local taxes. Top 1 percent taxpayers that year saw only 5.2 percent of their incomes go to state and local taxes.

Photo from alancleaver_2000's photostream at Flickr.

1 comment:

Eci si Cami said...

Interesting topic! Was never in the U.S. but I guess for people of all taxes and fees are quite high. In fact as anywhere in the world. Maybe this is not the biggest problem, perhaps one to make a post about: - How to spend public money?
At least in my home country this is the biggest problem!
We respectfully salute you and your readers!
PS. It would be bad to be a transducer on your blog!