Jane Wells, a business news reporter for CNBC, after reviewing the latest report from the Congressional Budget Office (CBO) on who pays income taxes in America, claimed that the rich pay them all. The CBO, wrote Wells, showed that the top 20 percent pay nearly 93 percent of all income taxes, while the top 40 percent pay 106 percent of them.
How is that possible? The bottom fifth of wage earners get more from the government than they pay in taxes. Hence, the anomaly of the so-called rich paying more than 100 percent of all income taxes received by the government.
The CBO’s math is straightforward: For the year 2010, the bottom fifth earned “market income” — wages, business income, capital gains, retirement income, and so on — of $8,100 per person. But they also received “government transfers” — cash payments and in-kind benefits such as SNAP — of $22,700, leaving them with a per-person after-tax income of $30,800. Each person’s income tax liability in that group? Exactly zero.
For the second lowest quintile, the numbers for 2010 were similar: income of $30,700 per person, government transfers of $15,200 with income taxes paid of $2,500 per person, leaving them with an after-tax income of $43,400.
This government largess must be paid for in some way, and it’s the remaining three-fifths of Americans who do the paying, especially the top fifth. Says the CBO, the average wage earner in the top 20 percent of all wage earners had an income in 2010 of $234,000, received government benefits of $6,500 and paid taxes of $58,900, leaving each with an after-tax income of $181,900.
People who make more should pay more, generally speaking. In America, they are.…
When it comes to individual income taxes, they’re also covering the entire bill. And leaving a tip....
Fair or not, I will let you be the judge.
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