Death and taxes

[unixronin]

Allegedly, those are the only two certainties.  Few things garner quite as much discussion.  With respect to taxation in particular, almost everybody thinks that they personally are being taxed unfairly, and that someone else should pick up some of the slack.  In particular, far too many people are completely convinced that the wealthy don't pay enough taxes.

Well, let's stir the pot a little.  By way of wcg, here's a graphic from the New York Times explaining the impact on various economic brackets in the US of the coming expiry, or not, of the Bush administration's tax cuts.

Go look at it.  I'll wait.

Doubtless the columns that will attract the most interest from would-be redistributionists are those showing how much greater the percentage income gains from tax cuts are on those at the top of the income range ladder vs. those on the bottom.  We'll talk about that more in a moment.  But first. I want you to go look at the graphic.  Then come back and read below the cut.

Good, you're done.  You probably noticed that the tax cuts mean a 6.9% increase in income to the very top wage-earners, the top 0.1% who average $7.7 million per year, and less than a 1% gain to those who make less than $20,000 a year.  And you may think that's inequitable.

But did you stop to consider that it might be because many of that group already aren't paying any income taxes anyway?

Let's do a little math, shall we?  As this graphic shows, 29% of the population — just under one third — make less than $20,000 a year, 12.5% of them less than $10,000.  They pay 4.6% to 4.7% of their income in Federal taxes, and pay a total of 1% of Federal tax receipts.

On the other hand, 16.2% of the population — a fraction under one sixth — make $100,000 a year or more.  Those 16.2% pay, between them, 68.5% of Federal income tax receipts.

Let's look at that again.  The bottom one third of earners pay one percent of Federal taxes.  The top one sixth pay 68.5 percent.

In other words, each person in that top one sixth pays a one hundred and twenty two TIMES larger share of the Federal budget than each person in the bottom one third.  (122.623 times larger, if you want to be more exact.)

What's more, the 0.3% who make more than $1 million a year pay an additional 14.1 times more of the Federal budget, per capita, than the $100,000-plus group as a whole, picking up fully one quarter of that 68.5% of the tax burden — 1728.66 times the per-capita tax burden of that bottom third of earners.

Now, tell me again about how the tax structure is unfair to the poor, and the wealthy should pay more taxes...?