Tax Cuts for Millionaires and Billionaires

I blame Mark Levin for this post. It is all Mark Levin's fault. I was reading his wonderful book, "Liberty and Tyranny". On page 64, in the chapter "On the Free Market," he clearly wrote out who paid what in taxes. But it didn't really click. So I followed the footnote to the reference in the back of the book, which conveniently listed the web page where the data was obtained. Great stuff, but I am not a numbers guy. So I wondered if it was possible to graph it out and get a better understanding.

When politicians talk about how they won't approve tax breaks for millionaires and billionaires, it is doubtful they have a clear picture of the tax code.

In the graph on the right, there are 4 shades of green. All of the green together represents the top 20% of earners. Notice that all of the green in the right hand column shows that the top 20% of earners pay 86% of the taxes. Hmmm . . .

The top 1% of earners earn 18% of the money and pay 39% of income taxes.

A point of interest is that the Tax column adds up to 104%. It is the way the data is presented in the Tax table. It is because the red part of the graph, the bottom 40% of earners earn 13% of the income and pay no taxes, but instead get money out. Interestingly, what they get out is about the same as what the middle 20% of earners put in.

Another interesting fact is that the middle 20% of earners earn 13% of the income. The 20% above them earn 20% of the income. Looking at that, it would seem that "The System" is pretty fair and equitable.