When people claim that the rich don’t pay their fair share of taxes, do they believe that top earners should pay 90% or more of taxes?
The bottom 40% of earners pay no taxes, and actually pay negative income taxes through government transfer payments.
Why is the share of income taxes negative for 40% of Americans? In recent decades Congress has chosen to funnel important benefits for lower-income earners through the income tax rather than other channels. Some of these benefits, such as the Earned Income Tax Credit and the American Opportunity Credit for education, make cash payments to people who don’t owe income tax.
The top 1% of earners pay “nearly half the income tax”.
Professor Mark Perry says we should “thank top 20% for shouldering 84% of the income tax burden”. So are the top earners villains or heroes?
Laura Saunders, “Top 20% of Earners Pay 84% of Income Tax”, Wall Street Journal, April 10, 2015.