The random political thoughts thread (Part Deux)

[Ghoulish Delight]

Originally Posted by Kevy Baby

Just to be a muckraker, I am going to toss this blurb out from an industry newsletter:

And what percentage of all income do that top 1% represent? If they made 38% of the profit in the economy, then they should be paying 38% of the taxes (my guess is that, if you include ALL of their income, that they account for well over 38% of the total US income).

A related question - what percentage of their intake does that 38% represent?

[Alex]

Originally Posted by Ghoulish Delight

And what percentage of all income do that top 1% represent? If they made 38% of the profit in the economy, then they should be paying 38% of the taxes (my guess is that, if you include ALL of their income, that they account for well over 38% of the total US income).

In 2008 the top 1% of income earners reported 20% of income and paid 38% of taxes. Top 5% reported 35% of income and paid 59% of income taxes.

Since much of the bottom 50% of income earners is mostly exempt from income taxes that makes sense it would be skewed that way.

Of course, this is just federal adjusted gross income (which does tend to skew things to the benefit of the wealthier since they have more ways to adjust their income downward).

But federal income tax is progressive, while sales taxes and payroll taxes tend to be regressive and the picture would change (though I don't know how much) if total tax burden were used.

Now the problem really is what constitutes "fair share." Personally, I don't care that I'm taxed at a higher rate than most people I know.

[Ghoulish Delight]

Originally Posted by Alex

Of course, this is just federal adjusted gross income (which does tend to skew things to the benefit of the wealthier since they have more ways to adjust their income downward).

Which is what I was getting at with "ALL of their income." All of these numbers tend to obscure the fact that higher income earners have sources of incoming money that do not fall under "income" and can be sheltered from tax.

But federal income tax is progressive, while sales taxes and payroll taxes tend to be regressive and the picture would change (though I don't know how much) if total tax burden were used.

Yep. Which is why single-line stats are a terrible way to look at things.