Biden Wants The Wealthy To Pay Their “Fair Share”, What percent Is That?

By Mish Shedlock of MishTalk

What percent of all income taxation collection should the top 1 percent pay? Top 10 percent?

Summary of the Latest national Income taxation Data

Inquiring minds may want to see a Summary of the Latest national Income taxation Data, 2024 Update by the taxation Foundation.

I downloaded their data and created all but 1 of the charts in this post. The Foundation calls it the 2024 update but the latest data is for 2021.

The bottom half of taxpayers, or taxpayers making under $46,637, faced an average income taxation rate of 3.3 percent. As household income increases, average income taxation rates rise. For example, taxpayers with AGI between the 10th and 5th percentiles ($169,800 and $252,840) paid an average income taxation rate of 14.3 percent—four times the rate paid by taxpayers in the bottom half.

The top 1 percent of taxpayers (AGI of $682.577 and above) paid the highest average income taxation rate of 25.93 percent—nearly 8 times the rate faced by the bottom half of taxpayers.

Income taxation after credits (the measurement of “income taxes paid” above) does not account for the refundable condition of taxation credits specified as the EITC. If the refundable condition were included, the taxation share of the top income groups would be higher and the average taxation rate of bottom income groups would be lower. The refundable condition is classified as a spending program by the Office of Management and Budget (OMB) and so is not included by the IRS in these figures.

The only taxation analysed here is the national individual income tax, which is responsive for more than 25 percent of the nation’s taxes paid (at all levels of government). national income taxes are much more progressive than national payroll taxes, which are responsive for about 20 percent of all taxes paid (at all levels of government), and are more progressive than most state and local taxes.

AGI is simply a reasonably narrow income concept and does not include income items like government transfers (except for the condition of Social safety benefits that is taxed), the value of employer-provided wellness insurance, underreported or unreported income (most notably that of sole promoters), income driven from Municipal Bond interest, net imputed pensional income, and others.

Average Income Taxes Paid 2024

The top 1 percent pay an average of $653,730 in national income taxes. The top 10 percent pay an average of $108,251 in national income taxes.

The taxation Foundation reports the bottom 50 percent pay an average of $667 but that is overstated.

Counting kid taxation credits, Earned income, food stamps, and rent support, the bottom 50 percent pay negative taxes. They get much more back than they put in.

Income Taxes Pay Millions 2024

The top 1 percent contribute over $1 trillion annually. That is nearly half of what the top 50 percent contribute.

The bottom 50 percent allegedly contribute $51 billion exception in practice as noted above they actually pay negative income tax.

Average taxation Rate

For all the whining about how small the top pay, on average that just isn’t true.

Warren Buffet is fond of saying his secretary pays a higher taxation rate than he does, but that is the admission (depending on how much he pays her).

Bear in head these are national Income taxes. There are besides state income taxes, payroll taxes, capital gain, etc.

Rising Fair Share

That’s a bonus illustration course of the taxation Foundation. It shows that the share of income taxes paid by the top 1 percent increased from 33.2 percent in 2001 to 44.8 percent in 2021.

2021 was dense influenced by the pandemic which affected lower payment employees more.

Given the bottom half gets money back, and collections and there are besides state income taxes, payroll taxes, capital gain, etc. what percent is fair share?

To we have a collection problem or a spending problem?