Those who believe that high-income earners aren’t paying their share for the federal government’s operations ought to consider the following information from Tax Prof blogger Paul Caron.
For 2015, the top 10 percent (in terms of income) of all tax returns receive 45 percent of all income and pay 82 percent of all income taxes. The top five percent of all tax returns receive 34 percent of all income and pay 71 percent of all income taxes. The top one percent of all tax returns receives 19 percent of all income and pay 49 percent of all income taxes. …
… [T]ax returns with $30,000 to $40,000 of income constitute 9.8 percent of all returns, 4.4 percent of all income, 1.8 percent of total taxes, -0.8 percent of individual income taxes, and 4.6 percent of social insurance taxes. Similarly, tax returns with $100,000 to $200,000 of income constitute 15.2 percent of all returns, 26.7 percent of all income, 20.2 percent of total taxes, 23.6 percent of individual income taxes, and 33.7 percent of social insurance taxes. …
… The average tax rate for social insurance taxes is similar across most tax returns, ranging between 7.3 and 10.2 percent for tax returns with income below $500,000, with substantially lower average rates for those with income above $500,000. In contrast, the average tax rate under the income tax varies widely, from a negative 11.0 percent to 27.4 percent, reflecting the existence of refundable tax credits and progressive statutory rates of tax.
Of course, it’s not necessary for a high-income earner to surrender a larger percentage of her income to the tax man in order to end up paying “more taxes,” but Caron’s numbers show that high-income earners are both paying more and paying higher rates, a direct contradiction of claims often emanating from left of the political center.
