Which group pays more in individual income taxes? The top 1% of earners of the bottom 95%?
If you guessed the bottom 95%, you would be right.
Follow-up question: What is the spread between the percentage of taxes paid by each group?
What do you think it is? A multiple? Something like double or triple what the 1% pays?
Maybe just a percentage more? 30%, 50%, 60%?
Actually the spread is thin.
Check out the following graph:
Used with permission of Prof. Mark Perry at Carpe Diem.
Here’s a recap of the top 1% and bottom 95% of income earners along with the percentage of total personal income and total individual income tax paid:
- Group – income – taxes
- Top 1% – 19.% – 37.8%
- Bot. 95% – 66% – 41.4%
That means the bottom 95% as a group are paying a larger slice of the total income tax by only 3.6% of the total.
Also notice the gap has been narrowing since 1980 and has been very close since 2005.
If you think “the rich” are not paying their fair share, just how much more would be “fair?” Keep in mind each one person in that “rich” group is paying almost as much in taxes as 95 other people.
What would be “fair” and what emotional basis would you use to determine that to be “fair?”