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 â€śBuffett ruleâ€ť to ensure that millionaires pay at least a 30% tax rate, some commentators are decrying the fact that about half of U.S. taxpayers donâ€™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 â€” 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 itâ€™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 wonâ€™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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