11/18/09 Stockholm, Sweden – This year, “almost 47% of households in the US currently have zero or negative federal tax liability,” according to Mint. For a nation struggling financially that’s a mighty large group to exempt from pitching in. Still, that leaves another 53 percent of households to pick up the slack… or so one would think.
In actuality, that’s not how the tax cookie crumbles. Mint has put together a graphic showing that 5 percent of taxpayers are paying about 60.6 percent of all taxes. And, as lopsided as that already sounds, the tax situation is likely to get even worse as the nation continues to bury itself in debt.
This coverage of the US tax revenue pie got on our radar via Zero Hedge, and the full graphic is available in a Mint article on who is really paying taxes.
Rocky Vega
Rocky Vega is publisher of Agora Financial International, where he advances the growth of Agora Financial publishing enterprises outside of the US. Previously, he was publisher of The Daily Reckoning, and founding publisher of both UrbanTurf and RFID Update -- which he ran from Brazil, Chile, and Puerto Rico -- as well as associate publisher of FierceFinance. Rocky has an honors MS from the Stockholm School of Economics and an honors BA from Harvard University, where he served on the board of directors for Let’s Go Publications, Harvard Student Agencies, and The Harvard Advocate.
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i normally am disturbed by these lopsided burdens as a miscarriage of justice but the facts are that the 47% tail is so thin in terms of income that it could never contribute a pro rata share of taxes at the level of spending this country wants….when income difusion is higher than in 1929 we can expect numbers like this….
after you scrape away the sensationalism the numbers are not quite what they seem….on the other hand tax policy should be rebalanced in favor of productive pursuits rather than the fire economy which would imply higher taxes on rentier activities and lower on labor….when done, the numbers would not be as skewed as they are….
now if someone wants to return to 5-8% of gdp government spending with a flat tax then we would probably see those numbers shift….yet are taxes so lopsided because of tax policy or because of income distribution….
You forgot payroll taxes which the wealthy do not pay.
Also if the income is calculated after all the deductions, the result is further skewed.
Considering Warren Buffet’s comments on low company taxes relative to personal income taxes, that only leaves one conclusion: the inequality in the US is at an extreme.
In fact, this lopsidedness is exactly what is needed to avoid another depression — it must be exaggerated — maybe by the bankcruptcy of the US government und a whole lot of the economy. Unfortunately, the most miserable ones have been bailed out at large — the banks.
Many idiotic economists discuss the Great Depression on a much too much technical basis. CONSIDER REAL LIFE! Think of Al Capone. Think of the FBI crushing down on corruption entangled into the whole states and cities. Think of the role of eugenics. Think of the missing welfare state. Combine all of that together and you get an environment where the average John Doe is not even worth one bullet. Nearly every famine is due to inequality of wealth and the recklessness of the rhich — they just don’t see any need to feed the rest. Let ‘em die. Everyone for himself. “Socialism” in Europe/Germany before WW2 was confronted by this general sentiment and failed miserably — the result was Hitler who took all of this inhuman attitudes to the extreme. Since then, Germany is probably (due to its own first hand experience) one of the most advanced states on earth.