New CBO study shows who pays the most taxes and who gets the most out of it

originally posted by: bigfatfurrytexan
a reply to: jimmyx

The poorest in America don't pay taxes. Instead, they realize income that amounts to a redistribution of wealth (all those EIC's).

When you talk about tax burden you are talking about the middle class vs the wealthy. Taxes hit the middle class first and hardest. The middle class is the lowest class actually paying taxes.

I absolutely agree with you....first time in a long time, furry

originally posted by: bigfatfurrytexan
a reply to: jimmyx

The poorest in America don't pay taxes. Instead, they realize income that amounts to a redistribution of wealth (all those EIC's).

When you talk about tax burden you are talking about the middle class vs the wealthy. Taxes hit the middle class first and hardest. The middle class is the lowest class actually paying taxes.

Actually the poorest pay a truckload of the taxes....just not "Income taxes"
They pay payroll taxes..
Sales taxes on every purchase
Property taxes in rent, utility taxes, gasoline taxes ad infinium...

And while those amounts might seem small in comparison to the "Income Taxes" of the wealthiest 1%...by definition, the rest of the population (99%) pays those many, many fixed taxes 99 times more often each year.

So imagine one man with an annual income of 1 Million dollars fills his tank of gas and pays $10 in taxes on that tank of gas.

At the average income of lets say 80k a year...12 people with a combined annual income of 1 Million also fill their tank, but they pay a combined $120 in taxes for 12 tanks of gas.

2 Million dollars in annual income just drove through that gas station. 1 Millionaire that paid $10 dollars in taxes...and 12 other people that paid $120 dollars in taxes...

Now extrapolate that over every taxable purchase every day from gas to groceries to property tax...

Federal INCOME tax is certainly carried disproportionately (but far from entirely) by those with the greatest income...
But Federal Income Tax revenue only counts for HALF of collected taxes each year..
And 99% of that of that other half of revenues is paid by people other than the 1%..

Lets keep our math honest when shouting about who pays more taxes.

a reply to: Indigo5

Certainly we can split hairs...but we aren't talking about sales and use tax. Payroll tax is paid by the employer, not the employee. The employee pays income tax, but that is given back (and then some) at year end.

The numbers thrown out...known as S.W.A.G. numbers. The "1%" spends a fortune in sales tax and property tax. So far beyond what a regular homeowner pays (at least as far as personal/real property tax is concerned) as to be almost ridiculous. Add to that, the "poor" are not typically property owners. They are renters. So they don't pay personal/real property taxes.

Understand: people who earn less spend less. If you are making a case for a greater tax burden on the poor because they make less money....it just doesn't follow any logic. Especially when you consider the enormous tax burden placed on business owners for their personal/real property taxes.

originally posted by: bigfatfurrytexan
a reply to: Indigo5

Certainly we can split hairs...but we aren't talking about sales and use tax.

Right...we are talking only about Federal Income Tax...which accounts for only half of collected taxes in this country.

Payroll tax is paid by the employer, not the employee.

??? It is called withholding for a reason. It might be "paid" by the employer, but only after being "withheld" from the employee.

the "poor" are not typically property owners. They are renters. So they don't pay personal/real property taxes.

Tenants pay property tax, either directly or through rent. This is a known and established accounting principle and business practice.

Understand: people who earn less spend less.

Yes...but people who earn less and spend less are the VAST MAJORITY of taxpayers when compared to the "1%" or even the top "5%"...By definition, the 99% pay taxes 99 times more often in a given year than the 1% for taxes that aren't Federal Income Tax...and those tax collections are half of all revenues....and they aren't progressive, lest someone asked to see your income statement when you went to get carry-out.

With half of all taxes being non-progressive....each time a multi-millionaire buys groceries to feed his family...99 other people buy groceries to feed thiers. Who pays more in taxes at that grocery store? The 1%er or the other 99 people?

That scenario extends to HALF of all taxes collected.

To claim that the top 5% or 1% pay the majority of taxes in this country is false...by a large amount.

If you want to claim that the top 5% pay an disproportionate amount of specifically "Federal Income Taxes" that is a credible claim.

It should include the caveat that Federal Income Taxes only account for half of all taxes and 95% of the other half is paid by those that aren't in the top 5%.

EDIT to ADD:

This is not some novel view on the math. It is a reality that has been realized repeatedly by policy analysts and economists.
It is usually explained in some dry article once every few years following one of these false Anne Randesque claims of how the top 5% pay all the taxes plastered as a headline across all the usual sites..which also happens once every few years.

People hear what they want to hear...but the math is what it is.

a reply to: Indigo5

"with holding" is FIT, SS, Medicare. That is what the employee pays. FIT, or income tax, is the lions share. The employer pays an amount equal to that, plus FICA and SUI (unemployment taxes, and SUI may vary from state to state) in "payroll taxes". The employee never pays it. The employee never sees any of it. it is 100% billed to, and paid by, the employer. In some states, they tack on a whole lot more of the state level income tax, too. Which wholly depends on the state. But in the realm of Federal taxes withheld....i just summed it up for you. I am actually in the process of doing my biweekly payroll right now.

In the state of Texas the tax burden for property taxes falls solely on the property owner. Yes, monies gained from rentals, obviously, will be used to pay the property tax at years end. But if a property owner chooses not to pay the tax, the renter is screwed. The aren't paying taxes. The owner is. No matter how you try to contort that, it is fact. The bill for property taxes comes in the owners name. Not the tenants name. And the owner carries 100% of the liability for that bill. Do you know what kind of property taxes are paid each year by businesses? A prior business I ran typically paid in around $130k/year in property tax (both personal and real). The one I run now pays substantially more. That isn't getting into all the other stuff like mineral taxes, etc. That is just personal and real property tax.

The thing about tax: you are being charged going in and going out. Earning and spending. Wealthy people earn more and spend more than poor people. Companies earn more and spend more than poor people. And when you talk about wealth, it is rarely liquid. Cash rots in the bank. People with money make their money work for them. Or they lose the value of that money to inflation.

Short of finding statistics to evaluate, all I can say is that I just don't buy it.

www.washingtonpost.com...

This entire conversation is the result of a (largely successful) effort to redefine the debate over taxes from "how much in taxes do you pay" to "how much in federal income taxes do you pay?" This is good framing if you want to cut taxes on the rich. It's bad framing if you want to have even a basic understanding of who pays how much in taxes.

ctj.org...

All Americans pay taxes. Everyone who works pays federal payroll taxes. Everyone who buys gasoline pays federal and state gas taxes. Everyone who owns or rents a home directly or indirectly pays property taxes. Anyone who shops pays sales taxes in most states.

www.businessinsider.com...

But "taxes" are not the same thing as "federal personal income taxes." The federal personal income tax only made up 28% of all U.S. government tax collections in 2012. Federal, state and local governments collected $4 trillion in taxes last year; just $1.1 trillion of that was federal personal income tax.

And people with low incomes who don't pay federal personal income tax do pay lots of those other taxes: payroll tax, state income tax, sales tax, property tax, excise taxes, and more. They pay other taxes indirectly: Workers bear the burden of employer-paid payroll taxes and part of the burden of corporate income taxes.

originally posted by: bigfatfurrytexan
a reply to: Indigo5

"with holding" is FIT, SS, Medicare. That is what the employee pays. FIT, or income tax, is the lions share. The employer pays an amount equal to that, plus FICA and SUI (unemployment taxes, and SUI may vary from state to state) in "payroll taxes". The employee never pays it. The employee never sees any of it. it is 100% billed to, and paid by, the employer. In some states, they tack on a whole lot more of the state level income tax, too. Which wholly depends on the state. But in the realm of Federal taxes withheld....i just summed it up for you. I am actually in the process of doing my biweekly payroll right now.

Not sure why you think that supports your view that the employer pays those taxes? I have employees myself, and yes there is matching on SS and Med. but the employee also pays those taxes (half)...and the Employer does NOT pay an amount equal to Federal withholding or income tax?

Short of finding statistics to evaluate, all I can say is that I just don't buy it.

Your prerogative. I have in fact researched it. Maybe you can do the same before settling on a conclusion that might be convenient to a political ideology?

a reply to: Indigo5

These links:

www.washingtonpost.com...

www.businessinsider.com...

Reports a % of income. Its not total dollars, but rather a percentage, with nice charts. If you want to talk percent of income, I can't participate. If we are talking total dollars spent (which seems to be more topical to the CBO report RE: "bang for the buck"), then we should look at those numbers.

Since bills are paid in dollars, and not percentages, the answer to the question of "who is footing the bill" should be given in dollars, not percentages.

originally posted by: bigfatfurrytexan
a reply to: Indigo5

Reports a % of income. Its not total dollars, but rather a percentage, with nice charts. If you want to talk percent of income, I can't participate. If we are talking total dollars spent (which seems to be more topical to the CBO report RE: "bang for the buck"), then we should look at those numbers.

Since bills are paid in dollars, and not percentages, the answer to the question of "who is footing the bill" should be given in dollars, not percentages.

2013 Tax Revenues
Income Taxes $2.0 trillion
Social Insurance Taxes + $1.3 trillion
Ad valorem Taxes + $1.2 trillion
Fees and Charges + $0.4 trillion
Business and Other Revenue + $0.4 trillion

Total Direct Revenue $5.4 trillion
www.usgovernmentrevenue.com...

OK so lets run some example numbers...The top 5% contributed roughly 58% of INCOME TAX revenues
taxfoundation.org...
www.aei.org...
etc. etc. More links to be had..

So...the top 5% pay 60% of 2 Trillion and 2 Trillion is 37% of all taxes..
.6 x 2 Trillion is 1.2 Trillion..
1.2 Trillion divided by total taxes of 5.4 trillion is 22%

SO...We can say from the math (I provided conservative sources) that the top 5% pay 60% of INCOME taxes or we can say the top 5% pay 22% of all taxes.

Both are accurate...60% and 22%...but one is more convenient when the headline glosses over the fact that Federal Income Tax is only a portion of taxes paid by Americans rich and poor...and the vast majority...95% ..fall into the taxpayers not within the top 5% and they pay taxes on everyday purchases etc. 95 times more often in a year...and they pay more in payroll taxes as the top 5% lean on investments and capital gains.

Just trying to move beyond STARTING with and ideological conclusion and then looking for pseudo-math, less than honest headlines to support it. Math is more honest than politicians.

◾These figures cover only the federal income tax and ignore the substantial amounts of other federal taxes — especially the payroll tax — that many of these households pay. As a result, these figures greatly overstate the share of households that do not pay federal taxes. Tax Policy Center data show that only about 17 percent of households did not pay any federal income tax or payroll tax in 2009, despite the high unemployment and temporary tax cuts that marked that year.[5] In 2007, a more typical year, the figure was 14 percent. This percentage would be even lower if it reflected other federal taxes that households pay, including excise taxes on gasoline and other items.

www.cbpp.org...

Ideology aside...I am not a fan of BS propaganda...clearly this line of "The wealthy pay all the taxes" is faulted...and not ideologically, but mathematically...

a reply to: Indigo5

Beautiful. Itll take me a bit to do some stuff, but I will be back to either continue the debate, or to hand you my towel.

a reply to: ExPostFacto

If you make $50K/ann, show the numbers that demonstrate that 25% Fed Tax rate. Please do not include your FICA
contributions. That's a mandatory insurance which only the rich can escape from.