Do wealthy taxpayers pay their fair share of taxes? Polls consistently show Americans believe they don't. But are they right?
The U.S. Treasury Department recently released a memo (PDF) that sheds some light on the issue:
...[A] small group of higher-income taxpayers pay most of the individual income taxes each year. In 2002, the latest year of available data, the top 5 percent of taxpayers paid more than one-half (53.8 percent) of all individual income taxes, but reported roughly one-third (30.6 percent) of income.
From the memo, here's the projected breakdown of income tax payments by income group for 2005:
Projected Share of Individual Income Taxes and Income in 2005 (U.S. Treasury Estimate)
| |
Top1%
|
Top5%
|
Top10%
|
Top25%
|
Top50%
|
Bottom50%
|
| Percent of Income Taxes |
33.7 |
54.1 |
65.8 |
83.6 |
96.4 |
3.6 |
| Percent of Income |
16.5 |
31.0 |
42.1 |
64.7 |
86.1 |
13.9 |
With the wealthiest 1 percent of taxpayers paying roughly 33.7 percent of income taxes and earn just 16.5 percent of income, it's hard to argue they're not paying a fair share by any reasonable definition of "fair."
Be sure to check out the Tax Foundation's summary of the most recent income tax data for more.
