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.
