Taxes: Who pays and who gets? This will piss a lot of people off.
June 07, 2009
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It is commonly repeated that the tax code is slanted toward the rich, at the expense of the middle class and the poor. This is demonstrably erroneous.
To get a true picture, we must expand our common definition of "taxes". The individual Federal income tax totaled $935 billion in 2007 (latest year details are available). Federal, state, county and local taxes of all types totaled $3,425 billion. The large additions are Federal social taxes (FICA) ($841), corporate ($518), sales taxes ($436), property ($397) and state income taxes ($298).
But another balancing component must enter the analysis. Washington, Sacramento, and Boca Raton don't burn the receipts. They are spent for a variety of purposes: Social security, defense, misc/other, Medicare, interest payments, welfare, Medicaid and Federal pensions. There are also state expenditures (accounted for as state benefits).
Who pays these taxes (by income class) and who gets these benefits (by income class)? I have to make a set of gross generalizations for the purposes of this blog. The details of the analysis are available by emailing me at AOL. Much more definitive.
Some simplified examples: we are all served prorata by the military, roads and bridges, police, fire department, the FBI, Homeland Security, Interior, Medicare, Federal pensions...regardless of what we pay in taxes.
We are served progressively (more obtained than taxes paid) by Medicaid, unemployment, food stamps, aid for kids, county emergency rooms, et al.
Attempting to add it all all up on the paying side and the receiving side by income class is a formidable task. I have never seen it done. I have done it. My methodology is set out in my white paper.
The results (in billions): (percentages are of taxes paid)
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Top 1% income: taxes paid $593.1//benefits received $36.2//taxes going to others needs 93.9%
Bottom 99%: taxes paid $2,831.8//benefits received $3,714.9//taxes received from others 131.2%
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Top 10%: taxes paid $1,306.6//benefits received $362.5//taxes going to others needs 72.3%
Bottom 90%: taxes paid $2118.2//benefits received $3,388.7//taxes received from others 160.0%
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Top 25%: taxes paid $1,832.0//benefits received $872.9//taxes going to others needs 52.4%
Bottom 75%: taxes paid $1,592.9//benefits received $2,878.3//taxes received from others 180.7%
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Top 50%: taxes paid $2,386.3//benefits received $1,705.7//taxes going to others needs 28.5%
Bottom 50%: taxes paid $1,038.7//benefits received $2,045.4//taxes received from others 196.9%
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If this analysis is even remotely accurate, the notion that "the rich don't pay their share" is absurd and chaps me off. I do know I paid 41% of my gross income in various taxes in 2008. Did you?
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