Rich Pay All The Taxes (Yes, Including Payroll Taxes, Social Security, Medicare) Take

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Rich Pay All The Taxes (Yes, Including Payroll Taxes, Social Security, Medicare) Take

In response to Rich Don't Pay Most of the Taxes (They Pay All of Them); Reflections on the "Almost Rich" several people complained that I am ig**ring Payroll Taxes such as Social Security and Medicare.

They are wrong.

Here is a repeat of the key facts, followed by an addendum.

Buried inside a Congressional Budget ****** report this week was this nugget: when it comes to individual income Taxes, the top 40 percent of wage earners in America pay 106 percent of the taxes. The bottom 40 percent...pay negative 9 percent.

The key table is in Box 1 on PDF page 11 (report page 7) of Distribution of Household Income and Taxes. The report was released in December 2013 but data is for 2010.

Highlighting is mine.



Key Facts

• The bottom 20% had average income of $8,100 but received $22,700 in annual assistance, netting $30,800 in after-tax income.
• The second quintile had average income of $30,700 but received $15,200 in annual assistance, netting $43,400 in after-tax income.
• The middle quintile received a bit more than they paid out, with $2,600 in annual assistance to be precise.

That money had to come from somewhere, and it did.

• The highest quintile paid $52,500 more in Taxes each year than they got back.
• The second-highest quintile paid $8,800 more in Taxes each than they got back.

Wells concludes ...

Fair or **t, I will let you be the judge. People who make more should pay more, generally speaking. In America, they are. Yes, the Rich (and almost rich) are getting richer. When it comes to individual income Taxes, they're also covering the entire bill. And leaving a tip.

Addendum:

Several people stated the above statistics ig**red Payroll Taxes (Social Security and Medicare).

That claim is easy to prove wrong, from the very page I cited! Here it is, spelled out as **ted above on PDF page 11 (report page 7) of Distribution of Household Income and Taxes.

Source: Congressional Budget ******. **tes: Market income is composed of labor income, business income, capital gains, capital income (excluding capital gains), income received in retirement for past services, and other sources of income. Government transfers are cash payments and in-kind benefits from Social insurance and other government assistance programs. Federal Taxes include individual and corporate income Taxes, Social insurance (or payroll) Taxes, and excise taxes. After-tax income is the sum of market income and government transfers, minus federal tax liabilities

That should **t have been too hard to find, but it was, because the subject keeps coming up.

And while I am at it, I may as well discuss multiple disputes regarding "the top 40 percent of wage earners in America pay 106 percent of the taxes."

Numerous people said that was impossible, even though the very next sentence explained how: The bottom 40 percent...pay negative 9 percent.

It nets out to 100% if you do the actual math.

Mike "Mish" Shedlock
http://globaleco**micanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.


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