And Yes, the U. S. Tax System is Progressive, Just Not as Progressive As One Would Think
One of the refrains of Conservatives on tax policy is that under no circumstances should anyone’s taxes be raised, and that tax reform is necessary because about one half of Americans do not pay any taxes and everyone should have to pay something. Ok, no one with a grade school education can reconcile these two positions, that no one’s taxes should be increased and that taxes should be increased on low and middle income taxpayers who don’t pay taxes. But life is a lot easier when consistency and rationality are not required.
It turns out that a large portion of Americans, maybe close to 50% do not pay Federal Income Taxes. But this does not mean they don’t pay taxes, as this study by the Center for Tax Justice shows.
it’s often claimed that the richest Americans pay a disproportionate share of taxes while those in the bottom half pay nothing. These claims ignore the many taxes that most Americans are subject to — federal payroll taxes, federal excise taxes, state and local taxes — and focus instead on just one tax, the federal personal income tax. The other taxes are mostly regressive, meaning they take a larger share of income from a poor or middle-income family than they take from a rich family
Here is the chart showing what each quintile of income pays in total taxes as a percent of cash income.
Yes, the tax system in
America is progressive, but only slightly so. And no, the tax burden on the wealthiest Americans, at under 30% is not the crushing burden that prevents them from investing in the economy. And yes, poor people do pay taxes, kinda a lot when compared to their low income.
And one more statistic is important here. The total taxes paid as a percent of all taxes paid is about equal to the share of income as a percent of all income for all income groups.
So no, the tax burden is not disproportionately borne by the rich. Darn, another Conservative belief shot to hell.