Who Pays Their Fair Share Of Taxes?
Who Pays Their Fair Share Of Taxes?, Do you pay your fair share in taxes?
Even as President Barack Obama pitches the “Buffett rule” to ensure that millionaires pay at least a 30% tax rate, some commentators are decrying the fact that about half of U.S. taxpayers don’t pay any federal income tax.
But our tax system is more complex than any sound bite or simplistic headline can illustrate.
Some multimillionaires do pay a lower effective income-tax rate than some middle-income taxpayers — receiving a chunk of your income via long-term capital gains rather than a paycheck is just one reason that happens. In fact, 1,470 millionaires were among those who paid no federal income tax in 2009, according to IRS data.
But it’s also true that the top 20% of income earners paid 70% of federal taxes in 2007, according to the most recent data available from the Congressional Budget Office. That group also pulled in 60% of total pretax income, according to the CBO.
Meanwhile, 46% of taxpayers won’t owe any federal income tax for 2011, according to the Tax Policy Center, a joint venture of the Urban Institute and Brookings Institution.
But those taxpayers will pay a hefty portion of their income to levies at the federal, state and local level. Those include payroll taxes for Social Security and Medicare; state and local sales taxes on groceries, clothing and other purchases; and federal and state excise taxes on things such as gas, cigarettes, alcohol and airline tickets.
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