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Who is Paying Taxes?

Infographic by Ross Crooks

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MINT-TAXES-R4

Recent news articles have brought to light the fact that almost 47% of households in the US currently have zero or negative federal tax liability. We take a closer look at this lack of liability across each income level, highlighting the percentage in each range that will not pay any taxes. Also shown is a full breakdown of who is paying the bulk of all taxes collected by the Federal Government each year.

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103 Comments so far

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  1. How would that pie chart look if it were instead taxes paid as a percentage of total wealth? How about you use yearly wages as the wealth measure.

    Then get really smart and plot it as a time series and adjust it for inflation. That will tell you the real story of how the wealthy are screwing America.

    • Robert

      The article is trying to measure nominal burden not inflation-adjusted intrinsic value. As such, I don’t think adjusting for inflation would be meaningful because purchasing-power isn’t the issue here. It WOULD be f issue if the article was trying to show HOW said tax dollars could be used.

    • Norman St. Philips

      As a statistician, I must say your suggestions are silly. Income taxes are not levied based on a linear percentage of income, meaning the pie chart you are requesting would be misinformative. Plotting it in a time series (presumably over years) will only serve to magnify this and many other auto-correlated errors. Adjustments for inflation afflict all wage earners at the same rate.

    • Dustin

      You mean, doing this might show that smart people get richer quicker than dumb people? All of American has gotten wealthier in the past 50 years. The disparity between “classes’ might have increased, but this isn’t the rich peoples fault. Go out, work hard, take risks, and with some luck you too can be a “rich” person paying way more than your share.

      “Let not him who is houseless pull down the house of another, but let him work diligently and build one for himself, thus by example assuring that his own shall be safe from violence when built.” ~Abraham Lincoln

    • As a percentage of total wealth? OK. I see now. So the people who save money for things like a home, college for children and retirement should be punished! Yes take that money from them immediately! Give it to all of those poor downtrodden who spend their money on alcohol, drugs, designer label cloths and every stupid consumer product that they can run up on their credit card. YES! YES! YES! THIS IS AMERICA! Also make sure you give that money you collect to people who are not citizens. People who routinely lie, cheat and steal from our system through social security fraud, welfare fraud and tax fraud. People who come here with a load of kids (every relative’s that they have) call them their own kids, don’t pay any school taxes and use all of the resources (including free lunches) of our best elementary and secondary school systems. Make sure you give these same kids grants for free college educations and then swing the door of America wide open to let them go back to their original country to sell those same goods to those same people who continue to spend the money that they don’t have to buy those goods so that those people we gave a free ride to can eventually own America.

      Beautiful plan Chris. Guess what Bro? As one of those guys at the $500K+ who paid over $250K in taxes last year, WE’RE LEAVING. If that is the way it is going to work in the future, we will take our companies and move to a place that doesn’t penalize the people who worked their way up from nothing. The people who always paid their own way and their kids way. The people that funded Medicare, Social Security, Bosnia, Iraq (both times) Afghanistan, Somalia and every other hair brained government screw-up.

      Happy Thanksgiving Chris. It’s up to YOU now. Be thankful that you had us for this long. With great ideas like you have I’m sure it will all work out for you.

    • Facebook User

      The top 10% pay 75% of all Federal Income Taxes but that isn’t good enough for Chris. He thinks the rich are still somehow screwing him over and that we should extract more from them.

      I got an idea Chris, drop dead.

  2. Whenever you show a chart of which income brackets are paying what percentage of taxes, you ought also show what percentage of the total income each income bracket earns, so that the percentage of taxes number can be meaningfully interpreted.

  3. Do you mean zero federal income tax liability? Sure some 40 percent of Americans pay no income tax, but they pay 11-12 percent of their income in payroll taxes. Simply counting income taxes is a conservative tactic to make it seem like the rich are overburdened.

  4. this chart ignores sales tax, which hits the lower classes harder … it ignores Social Security taxes … it ignores state, local and other taxes … the Federal Income Tax is not in any way an accurate measure of the total tax burden each American faces

    • Facebook User

      “this chart ignores sales tax, which hits the lower classes harder”

      It has nothing to do with sales tax for good reason: sales tax is levied equally to anyone who purchases taxed items in the state. Your comment that sales taxes hit the poor harder is simply wrong, it may have more impact on their quality of life and purchasing habits, but the rich pay much more in sales taxes due to purchasing much more expensive goods… and therefore just as with income taxes the rich subsidize the poor extensively with sales taxes.

    • Radii is right. Commonly, sales tax is considered a regressive tax : http://en.wikipedia.org/wiki/Regressive_tax

      The reason is simple. Even though the poor earn less and therefore spend less, and pay less in sales tax in absolute terms, the poor have significantly less discretionary income in absolute and in % terms.

      The % of total income that goes to food and other necessities that have sales tax applied to them is much higher than the rich.

    • What we should do is have rich people use a special card when they purchase items. This card actually doubles the cost of everything they buy. That way when the poor ( I am poor) shop with their card that cuts the cost in half if all evens out. When have the rich payed their fair share? How much do you take?

  5. can you please clarify what the percentages represent? ie for the first income bracket, 1.8% and 1%??

  6. I have seen these stats too many times, and it’s always comes with this mind-numbingly stupid view-point that “the rich unfairly pay most of the taxes”. As if the rich are being treat unfairly. They over look the simple fact that they are RICH. It’s idiotic. How can you be surprised that people with no money don’t pay any taxes? And as the wealth gap widens, a chart such as this will only look worse, until finally a few thousand men at the top pay all the taxes, b/c they own nearly everything.

    • John M

      I guess the chart is showing that >$75,000 a year makes you rich because they are a big part of the income taxes paid.

      The people who get hurt the most by high taxes are the ones who make $100,000-$1 million a year. Most of them don’t have a lot of wealth generally speaking and have to work 9-5 like the rest of us, but have to pay a much bigger share and the taxes they pay make a big dent in their wealth. They can’t retire for quite some time either just like you an me.

      It sounds silly to say that but it is true. This group is often small business owners who have worked hard to be successful and get slammed for their success. Not only that, often their income can vary greatly. They aren’t sure if their business will be profitable or even operational in a few years.

      In any case, grouping a guy who makes $350K a year with a guy who makes $10 million into the same tax bracket is absurd… Those two guys live completely different lifestyle, with the former probably living like the rest of us…

      Those who make tens of millions a year or more aren’t affected nearly as much.

      Yeah we can say oh poor guy he only makes $350K but in many parts of the country that isn’t a lot and that kind of money is in no way rich…

    • You should never group a doctor who makes $100,000 with Bill Gates. Gates can afford more taxes, but the doctor may not be able too. High taxes penalize hard work and saving on the well to doo, but not super rich.

  7. Very revealing, but also, like most statistics dealing with this ridiculous government we have, it also hides much. This only deal with income taxes. But what about other taxes? Ultimately, what do I care about the difference between income taxes versus sales taxes versus payroll tax (unless in this last case you believe the fiction that it’s really a retirement plan!). We have lots of different taxes that we as individuals pay (including corporate income taxes which, of course, we individually pay) so that that much can be hidden and diffuse. Wealthy people pay so much? Perhaps. But you can’t really tell from this. Do they actually pay a higher percentage of their income in all taxes? Who knows when you factor in all taxes.

    • John M

      I am sure most of the “rich” would gladly trade a 33% reduction in income tax for a 100% increase in all other combined taxes paid…

    • John M

      I’m sure most of the “rich” would gladly trade a 33% reduction in income tax paid for a 100% increase in all other combined taxes paid.

  8. Hard to believe there are so few out there that make THAT much money whilst the lower class can’t even put their kids through a decent education.

    • Justin

      Our socialist approach to education has bureaucrats making pathetic “standards” of required knowledge. Because these standards are enforced upon all students, private schools are forced to alter their subject matter to compete. Thus, freedom of speech in education is destroyed along with free competition among schools. No, nobody can put their kids through a decent education.

    • We have a great education system if you choose to make it one yourself. The single most important aspect of a students education and what they will get out of it is not money, it is family. How the kids are raised. Education spending while on the rise has brought no increase in average IQ or test scores. The political correct movement while rampant in the education administrations has only made is so people who would not normally be competition in the job market are now competitors.

  9. Captain Obvious

    You conveniently left out all the regressive forms of taxation (like payroll taxes), and leaving out what percentage of the total income these brackets earned is extremely misleading and irresponsible.

  10. Ah the excuses of the Left, trying to convince people that the so-called progressive tax system is fair or equitable. Never mind that the money that pours into the Federal system is wasted on corruption and pet projects.

  11. Most worthless infographic I’ve seen.

  12. Jimmy Johnson

    From each according to his ability, to each according to his need …

  13. In addition to the sales and payroll tax issues already raised by commenters, it’s ignorant or deceitful to ignore that the usefulness of wealth is logarithmic.. In other words, it hurts a lot more for a person in poverty to give up $5 than it does for a millionaire to give up $5000. Progressive taxes aim to shoulder the burden and pain equally, not the numerical value.

    • If the usefulness of wealth is logarithmic, then doesn’t that make any claims of “income disparity” complete b.s.? We keep seeing hysterical claims that there is a “widening wealth gap”, but that is always measured in *linear* dollars, not logarithmic dollars. In fact, though, the lifestyle of someone making, say, 1M a year really isn’t much different than that of someone making 100K a year: sure, they can buy bigger TVs, but the guy making 100K has TV technology that even the richest person didn’t have, oh, 10 years ago; sure, the 1M guy can stay in 5-star resorts that cost 10X as much as a more modest place, but the 100K guy is taking vacations that couldn’t have been dreamed about 50 years ago, etc.

      If you’re going to play these games, you have to play them both ways.

  14. Interesting how many state that it shows that the rich are overburden by taxes. When I look at this chart, I see something totally different. Yes, the chart shows that those making over half a million dollars in income pay over 40% of the taxes collected, but I think it clearly shows why the rich need to be taxed and those with lower incomes need to have less of a tax burden.

    If taxes were to be lowered for the rich, there would be no way to make up for the loss of taxes collected – even if you started to tax the poor more. The money just isn’t there.

    What I really find interesting from the chart is that those making 75K-100K pay more than those who make 100K-200K. Not only do they pay more, they’re paying nearly 50% more. I suppose this can be more of a reflection of where the mass population’s income resides, but I still find it quite interesting especially in this day and age of combined incomes.

    • Well, what do you mean? If you didn’t tax the rich more, you could either A) just steal it from the rich, since 99% of the people can surely overpower 1%, or more constructively B) reduce government spending.

      The point of the graphic is that A is exactly what *is* happening: 99% of the people are stealing from the other 1%. There’s no other justification or explanation, and it’s a natural outcome of “majority rules” system if the income distribution is such that the distribution of incomes is higher at the lower ends: the majority at the lower end are going to vote to steal money from the minority at the upper end.

      But the whole problem goes away if we take a little personal responsibility for our lives and stop asking others – via the government – to make our lives better for us.

  15. The only solution is to restrain government spending across the board.

    Democracy can only survive as long as the people restrain themselves from voting themselves other peoples money. Taxing the rich and spending it on government services is the majority voting themselves other peopele’s money.

    Wikipedia publishes the net worth of the richest people in the USA. If you sum the entire net worth of these individuals, it doesn’t even dent the current spending levels.

    There are lots of hidden taxes as well. Social Security is a 14% tax. Of course 1/2 is paid by employer. This helps hide the true cost to each of us for SS. This makes it more expensive for companies to hire people to work in the USA. So, they hire them in China instead.

    And don’t forget state and local taxes and fees! We are *ALL* taxed as a rate much higher than specified here. Rich and poor alike.

    And always remember, the bigger government gets, the less freedom we have as individuals. In effect, we are selling our freedom.

  16. Wow, a bunch of socialists here. Are you really antagonizing the rich because they have more money? Are you really wanting to take more money from them because they have more of it and give it to people who are poor?

    If I was walking down the street with a sandwich and passed a hungry person with no food, I would be kind to give it to him and he would be grateful. However if someone came up to me, put a gun to my head and made me give him my sandwich you would all call that person a criminal. Yet you want the government to do the same thing to the rich.

    I can’t believe how pervasive the mindset is that poor people are entitled to assistance and rich people should be required to give it to them. If it weren’t for the rich America wouldn’t be the country it is.

    People commenting on this blog should probably go give their computer to someone who doesn’t have one. Better yet someone should storm your house and take it from you.

    By the way I’m no rich man.

    • And that’s the problem. YOU guys ignore the realities of class, and willingly do the dirty work of the rich by using their talking points. The rich has bankrupted and looted this country.

  17. Robert

    It is SO sad to read these comments. What happened to people’s American ingenuity, work ethic and integrity? What happened to the idea that what you earn you deserve to keep! These comments are rife with self-pity and class-envy. It disgusting!

    • What happened to affordable health care? What happened to unionized jobs that paid a living wage? What happened to the cost of higher education? You’re being robbed and you’re still listening to Rush Limbaugh.

  18. yarite

    Way to manipulate data Mint.com

  19. yarite

    According to your article “Death and Taxes” the amount of taxas per billion payed in by a person making $1,000,000 is about .00023% per doller earned. A person making $30,000 is about .0001% per doller earned. So Millionaires allegedly pay about 2X per dollar earned but, they make over 33X as much.

    So ya, they pay more but, clearly have more to pay.

  20. Who’s paying?

    Based on this image one might conclude that a small percentage of the population is under attack with burdensome taxes and the rest of us are living off their wealth.

    The fact is that the tax burden is well balanced based on income and the reason that small population of high income earners pay as much as they do in taxes is because the average workers creating that wealth for them made it possible.

    To put it into the proper perspective here is a similar image that expands the tax unit to show how much of the total income they acquire before taxes…

    http://picasaweb.google.com/lh/photo/qSs0Z3nAFrM863cIW-pJlA?feat=directlink

    • Facebook User

      “because the average workers creating that wealth for them made it possible”

      Not a very well disguised point of view here.

  21. A few simple points. First, a number of commentators say “this ignores State income taxes.” So what? State income taxes are even more progressive. It would only make the chart more extreme.

    Some commentators say “it ignores regressive taxes like sales taxes and payroll taxes.” Okay, fair. But sales taxes are an entirely different creature and I’m not sure how you could possibly incorporate them into this chart. And payroll “taxes” at least theoretically pay for specific, guaranteed benefits that accrue to the individual who pays them, so they are also a bit different.

    A number of commentators imply it would be interesting to see the numbers “in perspective” e.g. as a function of how much wealth the groups have. Well, that might be interesting, but it misses the point. The purpose of taxes is to fund government operations, not to punish rich people. The point of this graph is that a very small number of people are funding our government’s operations.

    A lot of commentators seem to think this data is somehow “conservative” (as if raw data has a political leaning) and see an opportunity to make left-wing points about the rich and powerful etc. etc. But if there is any political point to be made here, I think it is this: remember all the screaming we heard about the “Bush tax cuts benefit the wealthy?” Well, Obama hasn’t made any major tax changes yet, so this chart reflects the Bush tax cuts. The wealthy are paying more than their fair share.

  22. Sea Salt 88

    No wonder we have such high idleness in this country! A few years back I made the mistake of going right back to work when laid off. When the tax bill hit, I calculated that had I sat around for an extra few weeks and earned $0 instead of my income (under $1000/wk) I would have save over $10,000 in taxes. I have to work 1.6 times as many hours for each dollar I earn than someone with an easy minimum wage job because the more you work a larger portion of what you get is taken away. how can anybody with any morailty think that’s right unless they are the lazy A$$3$ benefiting from those of us willing to work an 80-hour work week!

    • I finally got a high paying job a while back and quit, because I was working much harder and risking bodily harm to come out barley ahead of when I slacked off. It’s stupid. Lets penalize someone who works hard.

  23. Facebook User

    Don’t forget the tax of inflation we’ll all likely pay as this economic scenario unfolds. Given the huge indebtedness of our country, we will do anything to avoid deflation (that’s bad for debtors). If we error (as we most certainly will), it will be on the side of inflation. The Fed has unashamedly indicated a willingness to keep rates insanely low for the indefinite future. Inflation will eventually result. Until/if incomes adjust, we’re all taxed.

    As for class warfare, two things. First, our government makes it very attractive for the lazy to stay poor. It’s called the poverty trap, and you can learn more about it here: http://gregmankiw.blogspot.com/2009/11/poverty-trap.html. While it may be hard to break out of poverty, you cannot overlook the fact that millions are comfortable subsisting without expending too much effort. You also cannot overlook the fact that, at least for now, we do have an economic system that will handsomely reward the creation of value. That is harder for some than others, but it is still possible for many.

    Second, deriving a moral stance on capitalism, which is itself amoral, from the crony bastardization of capitalism that our government currently practices is not rational. Capitalism has proven itself over and over as the best, most sustainable way to raise living standards in modern societies. (If you disagree, please provide another system that is superior.) Jumping on the Michael Moore bandwagon and decrying capitalism might provide an easy outlet for your frustration towards social injustice, but it quickly breaks down when you dig past the surface. The wealth gap can be largely attributable to the US government and its progressive appetite for bailouts, starting with the Lockheed Bailout in 1971. Since then, Washington has continued to make decisions that allow corporations to privatize profits and socialize losses. The element of risk/reward is one of the most critical elements of capitalism. When you remove risk but not the reward, reckless behavior is encouraged. That simply is not capitalism in any way, shape, or form. The answer is not the end of capitalism but rather the return to it.

  24. kankan

    This could be much more informative if it explain demographics of these categories.

    Like it occur to me that perentage of people making 100k to 200k seems real low but then I think, that is probably some professionals that make that money for maybe 15-20 years of their 75-85 year life….so really even a surgeon may only be in that category just a minority percentage of their life.

    Is 300 mill the number of adults? How many of this 47 percentage is teenagers, or if its all adults, waht percentage 18,-24 yr old min wage workers or college students still a part of a household headed by older workers, maybe even still dependents on the tax forms, what percentage are retired people over 55, 60 65 years old? What percentage of 47 completely disabled people, to sick to work (work injury, cancer, seriously mentally ill etc), too disabled to work (big physical disabilities, mental retardation etc..). What percentage of this 47 percent are stay at home moms, typically with younger than school age children, earning nothing and are wholly dependent on another wage earner in the house, or child support of AFDC, as some raising several younger than school age children for a few years and not earning much and not paying much taxes hardly seems a leech to me. What part of the 47 percent are “kept” spouses. Also, what percentage of these people are supporting themselves but likely sort of hiding their a good portion of their income (like a day laborer working for cash, people in completely illegal, cash only trades, well-paid hourly freelancers/contractors/sole proprietars that show almost all their income as dividends, not wages and who write off most of their revenue/income with expenses that are really paying their basic domestic costs…I know lots of contractors, graphic designers, IT guys in this category and this category is growing, they are living an okay life but really show very little taxable wages).

    I’d really like to know what portion of this 47 percent is working age, able bodied people who are just plain low wage workers so they pay no income tax that I think most of us reflexively think of when we see this stat.

    As comment notes above, looking at fed income tax but not FICA is so selective. Its congress’ joke to note that FICA isn’t a tax, but come on, they take it from the first freaking dollar of wages of the poorest worker while those over 100k get to stop paying after earning that amount. That is why Buffet says his sec pays a greater percentage of income in taxes than him, its because FICA is massively regressive.
    And then there is sales taxes, prop taxes (which renters pay for too), and state taxes.

    If you take into account all taxes people pay includin FICA, Fed, State, Prop, sales, and all the categories of legit leeches (moms of young kids, kids, kept spouses, young adult dependents, disabled/sick, retired old people) how many poor or low wage or un-legit under the table “leeches” do we have left, and even those are still paying sales and prop taxes unless they are completely wards of state or homless people that steal all their food…knowing the percentage of those types, the abled bodied poor and working class paying much less taxes than everyone else, now that would be an interesting figure.

    • Ross Crooks

      Kankan-

      Thanks for taking the time to ask some interesting questions about the graphic. Although there is not data readily available to answer many of them, I do have a bit more information that may address some of your initial concerns.

      The population number in the introduction is an estimate from the US Census Bureau, and includes men, women and children of any age. The graphic includes data from both filing and non-filing tax units, but omits those that are dependents of other tax units. There are 151,485,000 of these tax units. The number of tax units that have no federal income tax liability varies greatly by filing status. The breakdown is as follows:

      Single: 46.7%
      Married filing jointly: 38.1%
      Head of Household: 71.9%
      Married Filing Separately: 25.8%
      Elderly: 55.3%
      Tax Units with Children: 54.1%

      …with the average coming out to 46.9%

      Hopefully this helps out a bit.

      -Ross Crooks.

  25. I do find it a little disturbing how alot of people second guess the wealthy on this blog as they pitter patter away on their blackberry or iphone while eating their fast food in their 35,000 SUV. You call me a liar but I see this happening all the time all the while they have very liberal stickers on their SUV promoting how we should ‘help our common man’. That is what we call a ‘double standard’. If you were driving an old car so you could afford to help the poor then I would be first to protest next to you about how the rich ride our backs.

    And since we’re on the topic of taxes I asked my uncle who is nearing retirement as an attorney what he made last year and his taxes. He made over 300k and his taxes were well over 120k. i make about 35k a year. So in comparison he paid almost 3.5x what I make in a year. But here is the thing everyone forgets. He racked up 40k in debt for his 12years in college and it took him into his 30s to finish paying that debt off. So while it sucks that I make 35k and he makes 300k I have to stop and remember I have an associates degree and no debt while he started his adult life with huge amounts of debt and couldn’t even begin working until his mid to late twenties.

    If we continue to tax and tax the wealthy then no one will be motivated to BE wealthy. I mean why should I goto college and get a good job when the government will give me all that i need and I get to sit around and play xbox all day long?

    • Facebook User

      “The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.” – Thomas Jefferson

      Nothing new in economics really… this wisdom comes to us from 200 years ago.

    • Actually that “Jefferson quote” about democracy ceasing is fake. He did write a comment once that was in some ways similar.

      http://wiki.monticello.org/mediawiki/index.php/The_democracy_will_cease_to_exist

      But Jefferson wrote many more comments specifically about taxation in the United States under the freshly inked Constitution…

      “Many of the opposition [to the new Federal Constitution] wish to
      take from Congress the power of internal taxation. Calculation
      has convinced me that this would be very mischievous.” –Thomas
      Jefferson to William Carmichael, 1788.

      “Taxes should be proportioned to what may be annually spared by
      the individual.” –Thomas Jefferson to James Madison, 1784.

      “Another means of silently lessening the inequality of property is
      to exempt all from taxation below a certain point, and to tax the
      higher portions of property in geometrical progression as they
      rise.” –Thomas Jefferson to James Madison, 1785.

      “The rich alone use imported articles, and on these alone the
      whole taxes of the General Government are levied… Our revenues
      liberated by the discharge of the public debt, and its surplus
      applied to canals, roads, schools, etc., the farmer will see
      his government supported, his children educated, and the face of
      his country made a paradise by the contributions of the rich
      alone, without his being called on to spend a cent from his
      earnings.” –Thomas Jefferson to Thaddeus Kosciusko, 1811.

      “Excessive taxation… will carry reason and reflection to every
      man’s door, and particularly in the hour of election.” –Thomas
      Jefferson to John Taylor, 1798.

  26. TEXAS PATRIOT

    Kankan poses some terrific questions.

  27. I wonder whether this takes into account short term incentives such as the First Time Homebuyer’s Credit. I know that I have had a positive federal tax liability for as long as I have worked but this year I won’t due to the $8k coming back to me. So even though historically I haven’t been in the 46.9% and am unlikely to be in the future, this year will be the exception where they will be paying me back more than I owe.

    If it does account for the FTHB credit or the Clunkers deal, I’d be more interested in the data from 2008 and the projected data from 2010. Or even what 2009 would have been without those temporary programs.

  28. SMB Owner

    I have to agree with Robert, I too am sick of these lazy people bitching and whining about the rich. Here is a concept for you, get off your ass and do something. I barely made it through high school, dropped out of college and now I own two companies with dozens of employees that all have Masters or PHDs. What’s the difference? I put my ass on the line and started these companies. Should I be penalized for my hard work and my tolerance for risk by paying higher taxes and supporting the lazy who feel they are entitled? Absolutely not! If more people in this country would put down the remote control and master a trade, then parlay that experience into their own company this board and country would have an entirely different tone.

    • ThatPirateGuy

      So educated people are worthless because they don’t have as much money as you. Those employees wouldn’t have the educations you use to make your money without your taxes.

      If you are making all of the money you are going to have to pay most of the taxes. Stop being such a prima-donna victim and pay your dues you ungrateful tool.

  29. You don’t see a disconnect between 1.8% of the population controlling 95% of the resources of the country and paying the tax they do?

    By the way, how odd is it that this manipulated chart (see comments below) appears on a website that markets financial services designed to lower your tax burden?

  30. This infographic looks like it took a page out of Darrell Huff’s playbook.

  31. Vermont Conservative

    The only fair tax across the board in this country would be a flat tax. Very easy to implement. The tax rate would be 10%. The first $40,000 you make, is tax free, no matter how much or little you make.

    No other deductions apply

    Your tax form would be a slip of paper.

    How much did you make this year? – $40,000 X 10% = Your Tax

    So a person making $200,000 would pay $16,000 in taxes. Someone making $50,000 would pay $1000

    • Amen Vermont! Why does someone get to pay less taxes because they live in a big house and can deduct a higher mortgage interest? This makes no sense. Level the playing field with the flat tax, not the fair tax. Those are two totally different concepts.

    • A flat tax, geared solely to enrich the haves even more. The government needs those war dollars! Let the rich pay more — they’re the one profiting.

  32. I notice that when trying to extort higher taxes from the successful, the left always gives you the line about “taxes aren’t theft – they’re the price you pay so you can live in a civil society. ” Except as the graph shows half the people are essentially paying nothing towards that civil society. Apparently making bad life choices and being a failure does give you the right to be a freeloader on society.

  33. Something else that I am sure most of you will discount. We live in a truly global economy. Myself and several others are leaving the US to do our next startup in a country that offers reasonable tax rates and has courted us to come there by giving us corporate tax breaks for our startup. The US does not do this and cannot due to spending.

    The cost to the US of people doing this (there are a few other people I have talked to doing this and I expect that there will be more in the next 5 years) is massive. We are top earners. We go our and tip waitresses and bartenders. I see that most of you don’t want my tax dollars and I will gladly pay them to someone else who charges a reasonable tax rate.

    Enjoy your carry trade currency.

  34. The period of American history most conservatives want to return to, the Golden Age of American Prosperity, occurred because of high taxes and Government spending, or is a 91% margin tax rate just invisible to you fools?

  35. everyone is paying taxes, where do people come up with these crazy ideas

    • Facebook User

      Clearly not everyone is paying taxes as the data shows, where did you come up with the idea everyone was?

  36. I could analyze what everyone is debating , if I knew the answer to two questions.
    1- How many of the poor are lazy and therefore good for nothing.
    2- How did the richman become rich? Was it passed down since the railroads were built, or did they earn what they have.

  37. A lot of this inequality would go away if there was a flat tax. Say 10% of whatever a person makes is paid in taxes – no matter what their income level, handicap, social-economic status, race, religion, etc. EVERYONE pays 10% of their earnings. No loopholes, no “if you make this much you are in this bracket” crap – this would enormously simplify and streamline the tax system and in doing so would cut some government jobs but that would in turn reduce government spending and those savings along with the tax money would go towards paying off the deficit.

    • Even the flat tax is theft. When you go the store to buy milk, they don’t charge you based on your income; a gallon of milk is a gallon of milk. When you have a restaurant cook food for you, they don’t ask for your income level, everyone pays the same for the same service. Our government provides services to people (”it is a government… *for* the people”); pricing should be based on a per-service basis. Take away the subsidies that try to keep the post office competitive with private industry, and the post office is actually a government entity that gets it right: you pay for a *stamp*, you don’t have to show your income level first and pay a percentage of your income for the stamp.

      Run the government like any other service provider: you want something for the government, you pay for it. For some services, that’s going to be the same fee for everyone. For some services – let’s say the government mowed lawns, say – the “rich” would pay more, presuming they have larger lawns. More realistically, for the somewhat legitimate functions of government – national defense and police, that is, protection of property – there’s certainly an argument to be made that that service should be paid for based on how much, exactly, the government is protection, just as private security firms charge more to wire up a mansion than my two-room shack. But that certainly isn’t *income*; some people with big houses have no income (they don’t work, say), and others with lots of income do not have big houses (they save their money, say). *Income* is a private transaction between an employer and an employee and even forcing people to disclose their income is an undemocratic violation of privacy.

      The last step is to open up all of the areas that government currently provides to competition. The government can run schools, sure, but they have to run them *from money they earn from the people who pay fees to go to them*, not by stealing money. They might do very well, but if they do so, it will be because they have innovated and learned to provide a better product for the money than their private competitors.

  38. Great graphic. I can’t believe that statistic of 46% with zero liability. That has to make all of us that are paying WAY too much, very disgusted. Hope this makes it to Obama.

  39. Gregory Kirk

    What percentage of the total income tax each income band pays is meaningless without knowing what percentage of the total income that band also receives.

    For comparison purososes, using the figures for tax year 2007 at:
    http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96981,00.html

    Households with incomes over $500,000 represented received 27.4% of the total income, and paid 37% of the total income taxes.

    As another poster pointed out payroll taxes such as FICA and Social security taxes add to the total taxes paid, and these taxes represent 7.65% of gross salary for individuals (not households) earning up to $97,500 in salary in 2007. Individual earnings above $97,500 are not subject to this tax, favouring higher income earners.

    it is also worthwhile to note that many of the higher incomes receive beneficial tax treatments, for example capital gains and dividend income are taxed at a maximum rate of 15%, substantially below the marginal tax rates on ordinary income. Higher earners typically receive a greater share of from these sources or income, and therefore receive preferential tax treatment.

    • Facebook User

      Preferential tax treatment because capital gains are taxed at a lower rate? Hilariously uninformed. Few, and that is VERY FEW, people make all of their income through capital gains, and those people generally are making so much money that paying at 15% is still subsidizing the poor at an extreme rate in comparison to the services that individual receives.

      Speaking only of taxes in percentages is where this idiocy stems from… because looking only at percentages leads one to conclude that an individual earning $500,000 and paying a tax burden of $75,000 (15%) has not done their fair share while an individual earning $45,000 and paying $9,000 (20%) has paid far more than their share. The truth is that the disparity between the government funded services available to these individuals is much smaller than the disparity between their tax burdens… indicating an unequal and unfairly levied system.

      It is disingenuous, misleading, and extremely biased to claim ‘preferential tax treatment’ exists in that example as it is quite likely those two individuals could live in the same neighborhood, send their children to the same school, and have the same fire and police services protecting their homes.

  40. Here is another link addressing taxes,
    http://truecostblog.com/2009/10/06/who-pays-taxes-in-the-us/

    The exact numbers are somewhat irrelevant, the illustration simply points out that the majority of people pay very little taxes and the majority of taxes are paid by very few people.

  41. The graphic is a bit misleading and definitely could be much more clear. What would Tufte say?

  42. The graph is unnecessarily complicated…and is sneaky…

  43. Stop using class warfare as an excuse for not “having as much as someone else”. There are two things to keep in mind 1) In a capitalist economy people achieve to their own level based on how much sacrifice, skill, effort and risk tolerance a person is willing to invest. In other words, people set their own priorities and live with the results. In a socialist economy there are two classes of people a) The rich ruling class and ) the poor working class.

    2) Because everyone in a capitalist economy sets their own level, there is always someone richer than you and someone poorer. So crying that someone else makes more than you is childish.

    • ThatPirateGuy

      And how lucky they got. Success requires hard work and LUCK. Hard work and sacrifice don’t guarantee success. They are merely required.

      Crying how people who make substantially less than you pay substantially less than you is the definition of childish.

  44. May I suggest for you to read the book “Cracking the Code, the truth about taxation in America” by Pete Hendrickson. http://www.losthorizons.com This book will shed light on so much and go into depth about the fiat Income Taxes.

  45. DEREK… regarding your comment…
    “What I really find interesting from the chart is that those making 75K-100K pay more than those who make 100K-200K.”

    You’ve embarrassed yourself by demonstrating for everyone that fact that you cannot read a simple bar chart. Note: there are no % burden numbers covering only the $75K-100K income range. The $75K-100K people are lumped in with the $100K-150K people. They did this grouping to highlight the fact that the 1.75% of the people making $150K-$200K bare 10.6% of the burden; their intent was to make a point in exact opposition to your interpretation.

    ps
    My 13 year-old daughter was able to read this chart correctly… if you’re in the group that’s not making the big money… now you know why.

  46. Wow, 47% of America doesn’t pay any taxes + all the 20 million illegals who aren’t counted on this figure. And the “man” and his commies still want to “share the wealth” + free health care to non taxpayers + cap-and-trade to support Goldman Sachs and the European elite. Tell me again why should we, productive taxpayers, get a degree and go to work every day? We know who will be paying for the continuing war in Afghanistan. How’s that “change” working for ‘ya?

  47. I’m looking at this… and I’m beginning to wonder if I should just turn down my next raise. It’s sad that a $65K a year salary is ‘barely enough’ when one factors in all the bills, and I’m not talking a Saks Fifth Avenue card here either, I mean just keeping the car running, the rent paid, the lights on, and the tax bill covered. Forget about saving for retirement.

    Yet the higher you go, the worse it gets. At what point should I just sign my paycheck over to the IRS and be done with it?

    The OTHER elephant in the room is, what am I getting for this ‘investment’ in my country? Am I to expect that this will go for better schools, or better roads, or safer neighborhoods? Or will it go to finance something utterly frivolous, like a multimillion-dollar bridge no one will use, or perhaps an airport that only sees one or two flights a week? Oh right, let’s not forget the billions, even trillions of dollars going to other countries, even as we’re economically under siege, our workforce invaded by non-citizens, and our former GNP parceled out to the lowest bidder.

    That’s right, people. Taxes paid do not just vanish into a vault someplace. They BUY things. I’d like to know what we’re paying for, and perhaps figure out some things we as a nation could either get a better deal on, or learn to do without, just as we do personally when we tighten our budgets at home.

  48. Facebook User

    The number of envy-driven Marxists on this comment board is discouraging . not to mention the total lack of understanding of data.

    Poor people don’t hire anyone.

    Poor people don’t buy the big homes and numerous other goodies that other people make a good living manufacturing, selling, servicing and supporting.

    What are you thinking? Government creates wealth? Seriously!

    To all those who want to look at the entire gamut of taxes – you’re chasing peanuts compared to the federal elephant. Get real – or are you student punks without any income? Additionally, since 7 states don’t have ANY individual income tax, you can see how useless that analysis would get.

    Well over 50% of all taxes levied in the US are collected by the Feds – of course this needs to be the focus of the debate – out of that, around 46% is from income taxes, about 36% is from payroll taxes, and 12% is a tax on entrepreneurs (aka corporate taxation). If someone can create graphs of all the federal tax rates, all the better – but I think what MINT has done already is a good start.

    Check your federal income taxation level here:
    http://www.moneychimp.com/features/tax_brackets.htm

    • If it wasn’t the working class in this country, the Walton family and others wouldn’t have their fortunes. Capital without labor power is dead. Oh, and it’s a myth that the rich got where they are by hard work. That’s a load of crap, because there are many more people moving horizontally through their life.

  49. Is this just based on income tax or include SS and Medicare – taxes just the same.

  50. No! I do not want the government knowing how many condoms or bullets I bought last year. Flat tax please.

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