Your Taxes At Work: All You Need To Know About Who Pays What Taxes In The US

Tyler Durden's picture

Presented with little comment - since the charts speak for themselves. From Buffett to a Burger-flipper, everyone has a view - driven in large part by their anchoring bias of who they choose to listen to. The graphics below will help, we hope, to clarify that thinking - whether you are the 1%, 47%, or 99%...

 

 

 

 

 

The Share Of Adjusted Gross Income Earned through time (by income bracket)

 

The Share Of Federal Income Taxes Paid through time (by income bracket)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Glasgow Gary's picture

Now, if I wanted to read partisan skew on tax data I could simply go to the Heritage Foundation myself.

donsluck's picture

Why the Heritage Foundation left out investment income is, shall we say, misleading? The top 1% has 43.6% of their income in investment (not "earned income"). If you add that, it looks like they pay their "fair share".

BKbroiler's picture

Another gem:

Tax cuts can create incentives for individuals to work, save, and invest, which can generate more revenue

so, cutting taxes creates more revenue for the government, not less. that's genius.

TWSceptic's picture

Yes at a certain point tax increases reduce revenue and at a certain point tax cuts add to the deficit, the trick is to find the right balance. But before that, abolish the income tax and replace with spending tax.

LetThemEatRand's picture

So the trillions belonging to the .01% sitting in trusts and off-shore investments should be left alone even though that money will never be spent in the U.S.?  Poor people spend 100% of their income, wealth, investments, etc.  Your proposal would tax every penny they earn or otherwise take in, while even further increasing the wealth of the very top who literally have more money than they can spend.   You are either very wealthy or very brainwashed by the very wealthy to propose such a thing.

TWSceptic's picture

When the rich spend they will pay the tax and when they do not spend they will invest it, growing the economy. Both from a moral and economic standpoint it is superior to the coercion based system you seem to prefer. I'm neither.

LetThemEatRand's picture

You are brainwashed.  The wealthy have trillions sitting in non-productive assets and there is nothing moral about taxing 100% of the income of the poorest who spend every penny they bring in.    And explain how it is non-coercive to require a poor person to pay tax on food, gas, rent, and other necessities that he literally cannot do without?   It is no less coercive to them.  You are simply seeking to shift the burden more to the poor.  That's fine if you want to defend that, but don't hide behind some supposed moral superiority.  P.S.  what stops the wealthy in your "tax it when they spend it" model from simply spending it in some other country?  Again, the poor have no such option.  

TWSceptic's picture

The current system is set up to tax productivity and labor, and promote spending and borrowing. A structural shift will actually be more benefitial for the poor and middle class than for the rich. More freedom and less coercion is always the answer, in the end, everyone wins. In the current system, everyone loses. Your hate towards the rich is blinding you. Try to look beyond your emotions.

LetThemEatRand's picture

I don't hate the rich.  I hate lies  spread by some rich designed to fool the poor and middle class into considering ridiculous proposals like taxing 100% of their income with spending taxes so the rich can get richer.  You don't even understand the first thing about the tax you propose.  Aside from the coercive aspect explained above, if you don't like taxing productivity then why tax things that people buy?  Someone was productive and made that thing, so you are still taxing productivity and in fact discouraging buying of things, meaning you are discouraging productivity.  I say tax the wealth that is sitting around in vaults doing nothing, that was put there by an ancestor of the person who currently owns it.

urrterrible's picture

When are you all going to understand that inflation at even 3% is a FREAKING tax.  Rich poor doesn't matter...Look where we are for Chr... sake....printing money at record levels b/c we spend more than we have.  Population is probably getting too large, but eventually something will weed out the unemployment, entitlements and spending...either we do or time will take care of it.

A Dollar Short's picture

Inflation at any percent is redistribution of wealth, just what the annointed one has stated he wants.  

urrterrible's picture

Inflation hurts the poor most....forget the redistribution part, yes it is passed to the rich but also the poor....you HAVE to educate the poor that it is hurting them, forget that it passes at all to the rich

Sofa King Confused's picture

50% wealth tax on anybody worth more than 10 million should make one hell of a dent in the US debt.  Also corporate taxes should be at least the same as individual taxes if not more.

 

kralizec's picture

Don't be such a pussy, take it all.  And yes, there will still be trillions in national debt left to deal with.  Then you can go after the $5-10m crowd, then the $1-5m crowd...then anyone still left...and still have debt.  Awesome!

A Nanny Moose's picture

All that matters is that I am first in line for fresh fiat.

jeff montanye's picture

i'm not saying the heritage foundation is a tool for the rich but i didn't see any graphs by income group of how much payroll tax or excise tax (or at the state level sales tax) is paid.  just sayin'.

TWSceptic's picture

Please don't twist my words. Their income is taxed 0% and the tax rate should stay the same if they're working. The difference is that they now have an incentive to climb the economic ladder while being more productive and helping to grow the economy. Taxing spending is not taxing productivity. It's a keynesian falacy to think that buying things is equal to creating productivity. Spending is the reward of productivity, so it's the reward that is taxed. Where you got the idea that the rich put all their wealth in vaults I don't know. Ask Buffett what he thinks of that idea. Most rich people invest most of their wealth in businesses. Yes, some choose to keep their wealth in hard assets if they expect bad things to happen to the economy.

LetThemEatRand's picture

I'm not twisting your words.  The poor spend 100% of their income on necessities.  If you tax the purchase of said necessities, you necessarily tax 100% of their income.  Explain why you think this is wrong, other than that you don't like the observation that it is an indirect way to tax literally 100% of what they earn, are given, etc.  As for the incentive to climb the ladder, what part of being poor is not incentive enough?  If living hand to mouth doesn't cut it, what makes you think that paying more in taxes will?    And it is just simple fact that if you discourage purchase of goods by taxing the purchase of goods including those who have discretion over which goods they buy (e.g., the rich), that you are affecting productivity associated with creating those goods.  Simple math.   I'm not saying it's always bad, but you did and I'm merely pointing out that your proposal taxes productivity in a different way than the current system that you hate because it taxes productivity.   As for where the very wealthy keep their money, ask the Queen of England.  Ask the Waltons.   Ask the Rockefellers.  Even in Buffet's case, most of his wealth is invested in hard assets and equities for companies whose shares already existed (the companies did not use his money to build a factory etc).  Every now and then he takes his company's assets and invests in companies that need the money so they can grow and prosper, which is indeed productive and what capitalists should be all about.   

A Nanny Moose's picture

"The poor spend 100% of their income on necessities."

Oh...since when are iGadgets, gambling, a bottle of Boones, air conditioning, and new Ford Extinctions with 26 inch rims, necessities? Proof please? At lease PoS tax is more voluntary. There are always ways to cut back on expenditures. They have the choice to not buy a damned thing from a store.

Broader capital formation is the rising tide that tends to raise all boats, as long as government stays out of the way. You cannot call it capitalism, when capital formation is discouraged as a matter of policy.

Perhaps, rather than whining, hand waving, and being generally argumentative, you might offer an alternative solution, or modify version from the OP?

Anusocracy's picture

The poor are also likely to be spending someone else's income.

Thanks to government redistribution.

blindfaith's picture

 

This kind of practiced ignorance even God, Jesus, and the Holly Ghost will have a hard time forgiving.   Good Christians all here today of that there is no doubt.  Even the most ancient and primative societies took care of their poor.

No doubt also that you would be happy to rent busses to ship the poor to someplace out of your sense of smell so the rotting courpses of women, childern, veterans, and the like don't soil your gated community.

By the way, how is that defered income stream to avoid income tax working out fot you?

LarryDavis's picture

Fuck you religious idiot. Go back to Palestine and look for manna.

Kobe Beef's picture

"Even the most ancient and primative societies took care of their poor."

Because they were all related to each other.

oh and since you decided to try to guilt Christians into "social justice":

2 Thessalonians 3:10

Proverbs 6:6

Proverbs 13:4

Proverbs 20:4

Proverbs 21:25

Ying-Yang's picture

When you and your family are trying to sleep and it is 98 degrees inside and out A/C is healthy. Wash cloths on fans and swamp coolers don't help much when humidity is so high. Most people take for granted what a lot of underpaid people have to suffer. Don't use bad examples of humanity to illustrate your point.

Try working for Walmart for period of time and see how that impacts your lifestyle. You may have earned assets that are only one medical emergency away from vanishing. You may make a high salary until they lay you off. Most people are not scumbags but you are a disgrace to humanity.

stuckpixel's picture

"Oh...since when are iGadgets, gambling, a bottle of Boones, air conditioning, and new Ford Extinctions with 26 inch rims, necessities?"

generalize much? I'm going to go out on a limb and assume you don't know any actual poor people.

LarryDavis's picture

They have the choice to not buy a damned thing from a store.

 

That is a really fucking stupid remark. Capital formation? Is that something you learned in an econ class at Right Wing U. Heard the girls are slutty but if you nut inside them you might be paying an 18 tax. So you are a proponent of freedom but don't like poor people buying new phones? Should they be sharecropping until corporations repatriate those profits and hire? Here is my take on the whole thing economy and all: republicans are generally religious and anyone believing that Christ rose from the dead is a mongoloid. Maybe you can have a prayer rally to fix the the tax mess you piece of shit. Do you think its a fair generalization when you characterize poor people as having 26 inch rims? Go back to KANSAS AND DIE THERE.

urrterrible's picture

You are such and idiot....why do you think they are spending 100% on necessities.....b/c of inflation.  Look at what our dollar has done in the last 40 years you fool.  Unless you SUPPORT a president that HATES seeing the dollar diminish things won't change.  How's this for a change.......someone makes 40K a year and CAN still SAVE money.  Keep drinking kool aid

Acet's picture

The current problem is not one of lack of Production, it's one of lack of Consumption.

Your proposal to eliminate tax on income and tax sales only would place a huge tax-load on consumption and would make things worse.

In fact, the case can be made that, because of the excessive concentration of wealth, an ever increasing proportion of money has moved from consumption into investment (the poor & middle class spend their entire incomes, the rich spend a tiny part of their income and save/invest the rest) which has created an excess of production (almost all of it abroad) and multiple asset bubbles - to the point that whole new asset classes were created to funnel this excess of investment money - which is why the economy is completelly out of balance (something which was disguised for a while with a huge growth in debt).

Another little point is that Production increases happen almost exclusivelly abroad while Comsumption increase always have a local impact - even on imported goods, some money stays local - so the state giving priviledged terms to "investors" while putting the tax burden on consumers will eventually strangle the local economy.

That said, I'm all for a flat tax rate on income, as long as the exact same tax rate is applied to all kinds of income (I noticed that investment income was noticeably absent from this article's numbers - one might even think the article is propaganda) and there are no deductions whatsoever and benefits in kind are taxed too (for example: no company jet travelling for free).

jekyll island's picture

LTER, 

 

Your argument is quite silly.  You are blinded by your emotions and you cannot see it.  Why in hell would you want the US Gubmit to get their hands on more private sector money?  Because they have been good stewards with what they have already been given?  You are brainwashed by class envy bias.  The answer, Sherlock, is make the government spend LESS.  Way less.  Why not eliminate about 100 congressional seats?  We don't really need the Depts of Energy, Education and Agriculture, do we?  The Bureau of Indian Affairs?  Give me a fucking break.  Do you really want to stick it to the wealthy elite?  Get your congressman to pull the federal reserve's charter.  

Ace Ventura's picture

TOUCHDOWN!  Thanks for injecting some real truth into the whole 'who should we tax more/less' Circus-of-Not-The-Real-Issue. As long as the truly elite can keep us squabbling over the rate at which each segment of society is coercively and unconstitutionally ROBBED, while not mentioning the metastasizing growth, spending, and influence of leviathan gubment (aka the enforcement tool of said elite)....then we've already lost the fight.

END THE FUCKING FED.

 

Urban Redneck's picture

Even John Corzine could do better job of managing the wealth of Native Americans "entrusted" to the BIA and BLM, but then agan Obama's redistribution is all about redistributing wealth from the many, to the few, which makes one question the wisdom of his many supporters.

LarryDavis's picture

TWSceptic.......not sure why you got even a single +1 because this sales tax bullshit is INSANE and something fit for a Creationist or perhaps Rick Perry. you dont answer homeboy's questions either......why shouldn't trusts and offshore accounts be taxed? Why orient taxation towards consumerism? Has aligning with consumption helped society in recent times? Moreover, if there is a sales tax why not just buy shit elsehwere? Effective tax rates are much lower here than Western Europe and they have a decent standard of living? Have you been to Denmark? More freedom..........are you a fucking moron? How about exponentially more opportunity to defraud the system by rich and poor alike. Let's get rid of the loopholes which allow Buffet to pay less than his secretary or Romney to not pay taxes at all (most likely) or cut down the fucking military budget. A better article would have shown where the tax dollars go but this article is written by monkeys with a penchant for graphs containing primary colors (so other Republicans albeit without much success can try to parse something numerical)

More freedom and less coercion is always the answer, in the end, everyone wins. 

Did you get that at an NRA rally? Eat a dick.

Paul Bogdanich's picture

Notice how when the escribed the laxes by class they put "Individual taxes" wich is an artificial category under which they aggredated income taxes FUTA and FICA.  had FUTA and FICA been put on the Social Security column where they belonged it would have been clear that Working people pay about 70% of the taxes.  Further all their other analysis was on the marginal tax rate which only the unwashed masses pay as opposed to the effective rate after deductions and avoidnce.  Just a bullshit propaganda piece in support of ruinous policy alternatived being championed by idiots who don'e even know how to keep their stupid traps suht as the secretvideos of Romney clearly show.  For all planning purposes odds are now >80% tha Obama wins re-election because Romney doesn't even know how to be a good politician and say the same thing in non-offensive ways.     

RockyRacoon's picture

The Heritage Foundation.  What else do you need to know?

Also, I get pretty sick of the "U. S. has the highest corporate tax rates" bullshit.  It would be if any of them actually paid it.

the optimist's picture

You are watching the show but do not understand the plot. The same politicians decrying unpaid taxes are pleased to hand tax credits to their favorite causes. For example, the renewable energy wind industry would not exist without Democrats' massive subsidies of the sector to companies (most predominantly GE) who "do not pay their taxes." Good luck finding any accounting for this intimate hug.

Harbanger's picture

I'll never understand why leftys bother reading a financial blog like this.  I hope you learn something.

LarryDavis's picture

I learn everyday how scary and out of touch Republicans are when they can't fucking add or arbitrate even basic matters using common sense (much less peform any sort of statistical analysis required to render the conclusions they wave around as fact). I hope Jesus isn't pissed that Romney worships a con man who was murdered in prison. Why would Jesus let a black man be President? Can Jesus help me pay less taxes? ALL OF US ARE GETTING FLEECED BY THESE FUCKING CORPORATIONS, RELIGIONS, AND POLITICIANS. GROW YOUR OWN VEGETABLES AND DO NOT SUPPORT CORPORATIONS.

Harbanger's picture

Wow. Those are some interesting connections and solutions.

RockyRacoon's picture

You haven't read enough of my comments to refer to me as a "lefty", unless you've gone back well over 3 years to try.  Picking a political or ideological "side" is not what it's about.  The truth is.  If my view doesn't coincide with yours, that doesn't mean I'm wrong.  Attributing some arbitrary title to another does.   I don't do that.   Address the topic at hand and try to avoid the argumentum ad hominem.   You'll look smarter.

Umh's picture

It's the politically unconnected smaller businesses that end up paying the most taxes. They don't have enough resources to dedicate staff to bribing politicians.

nmewn's picture

LTER,

Brainwashed you say?...lol.

Since when, has allowing the government to tax more of anyones earnings been deemed morally superior? When did this concept creep into public discourse? Are you saying government is the sole arbiter of morality and one of its vehicles is, in fact, the tax code?

LetThemEatRand's picture

If you bothered to read the thread rather than take parts out of context to suit your agenda, you would see that it was the person I was talking to who claimed that taxing 100% of the earnings of the poor via a tax on spending (the poor spend 100% of their income on non-discretionary purchases, thus they would be taxed on 100% of their income under his sytem) is "morally superior" to the current system.  I pointed out that such a claim is absurd.  

A Nanny Moose's picture

Sorry, your thinking here is entirely too linear.

Umh's picture

Linear like a fence post; so discussing things with it is a waste of time unless you just like to waste time.

A Nanny Moose's picture

The wealthy have trillions sitting in non-productive assets and there is nothing moral about taxing 100% of the income of the poorest who spend every penny they bring in. 

Perhaps the poor are spending every penny they have because the taxes and fees were setup that way. Perhaps they are the ones who who pay their entire OASDI contribution. Perhaps they are are paying the $181 Billion in Corporate taxes (since corporations do not pay taxes) through purchases, lost jobs, and suppressed wages. Perhaps they paid too much for a substandard government indoctrination through government run schools.

Urban Redneck's picture

I wouldn't toss around accusations of brainwashing backed by your arguments.  It's not measured in "trillions" unless you include a decimal point.  There is also a significant issue of "ownership" of the assets, you have to tax the "owner" of the income or assets.  For example, should Warren Buttfuck pay taxes on the shares of Berkshire he "gave" to the Bill and Melinda Gates Foundation, or should the foundation?  And since we talking about corporate and trust tax vehicles crossing tax jurisdictions, how would feel about the Chinese, Indians, or EU taxing the worldwide income of US companies that seek access to their markets?      

northerngirl's picture

Do you realize the poor are already being taxed on the things they cannot do without?  Buy gas, guess what Federal and State taxes, there is no exemption for a poor person.  Pay rent or make a house payment, yes poor people own homes, guess what they pay State, County and local taxes.  Purchase food in the State I live in State Sales tax on products that are processed, no exemption for the poor.  Use electricity, phone service, city water and sewer, or waste removal, all taxed and no exemption for the poor.  What most Americans rich or poor do not realize is we are already paying a consumption tax already it is just worded differently.  Instead of pointing fingers at each other why not look at our elected leaders and question them on where all this tax revenue is going each year?