In honor of tax day, we have quite the study on taxes. 45% of Americans pay zero tax. Then the top 400 income Americans pay just 17%, not 35%, in taxes. Why? In part, capital gains, which is taxed at a 15% rate. That's Wall Street profits folks.
The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.
Over the same period, the average federal income tax rate for all taxpayers declined to 9.3 percent from 9.9 percent.
That said, watch out, Republicans are out to give more tax breaks to the wealthy. Bear in mind most of America is poor, with the median income being a little over $26,000 dollars.
So, statistics like the below disguise the fact the super-rich pretty much already have most of the money in the United States.
More than half of the nation's tax revenue came from the top 10 percent of earners in 2007. More than 44 percent came from the top 5 percent. Still, the wealthy have access to much more lucrative tax breaks than people with lower incomes.
If you want to tax the rich, hit Wall Street profits on the markets and consider some form of a Tobin tax. Don't remove tax credits for those earning $200,000 dollars or less, unless you want to hurt the economy further. Just as an example, the housing market is already at record lows. Removing the mortgage tax credit will assuredly depress the residential real estate market further.
The article is somewhat misleading in that the quoted 45% of all households do not pay taxes includes retirees, the poor, the disabled. Considering over 50% of America is dirt poor, take that number in stride. It's not the number of people paying or not paying taxes, it's how much money they make that is the critical number. When just a few have all of the money and one has income inequality worst than third world nations, you will see a reduction in the number of people paying income taxes. You cannot squeeze blood from a stone, unless of course you are the Heritage foundation.
Don't forget Wall Street in this either, for hedge funds, multinational corporations, executive pay, that's where Uncle Sam is being robbed blind.
The 45% of all households don't pay taxes quote also ignores other taxes people pay when receiving their paycheck. Remember that little FICA box on your W-2? Those are taxes folks, you are paying them, even when you pay no income tax. That's social security, Medicare and that's your money, being withheld, what you are paying in taxes for those government programs.