Make the rich pay their fair share? For Democrats, liberals and Occupy protesters, it may be surprising to find out that the wealthiest 10 percent of Americans already pay more than 70 percent of federal income taxes in the United States, according to the Tax Foundation. The numbers suggest their tax burden continues to rise.
In 1986, the top 10 percent paid 54.6 percent, while the bottom 90 percent paid 45.3 of all federal income taxes. Twenty-four years later, the gap in taxes paid widened between the rich and everyone else. The bottom 90 percent now pay for 29.4 of all income taxes and 47 percent of Americans hardly pay anything at all.
These findings are similar to what the Heritage Foundation published in 2010. It also found that the top 10 percent of income earners paid 71 percent of all federal income taxes and earned 43 percent of all income. The bottom 50 percent paid only two percent of incomes and garnered 13 percent of total income.
Roberton Williams, a senior economist at the centrist Tax Policy Center, told CNN that the tax code is becoming more and more progressive because there are now seven income tax brackets and more incentives for the bottom 90 percent.
During the 2012 presidential campaign, Republican nominee and former Massachusetts Governor Mitt Romney was harshly criticized for his “47 percent” comment in which he said that 47 percent of Americans are government-dependent.
“There are 47 percent of the people who will vote for the president no matter what,” Romney could be heard saying in a tape released to the media. “All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it.”
Some analysts argue that if people want the rich to pay more tax then they should allow them to earn more money and not cry out the term “income inequality.” The case is that the more they make then the more they will be taxed at the federal, state and local levels.
Late last year, the Tax Policy Center estimated that roughly 4,000 households with incomes more than $1 million did not pay any federal income taxes – 14,000 households earning between $500,000 and $1 million also did not pay any federal income taxes. In total, these households accounted for 0.025 percent of the more than 76 million Americans who did not pay any taxes.
Indeed, if the U.S. government is not careful then it could force wealthy Americans to leave the country in favor of tax nations with lower tax rates. It was reported last year that the nation’s rich are renouncing their citizenship at record levels. According to immigration officials, approximately 8,000 U.S. citizens were projected to renounce their citizenship, compared to 3,805 citizens the year prior.
“High-net-worth individuals are making decisions that having a US passport just isn’t worth the cost anymore,” said Jim Duggan, a lawyer at Duggan Bertsch, which specializes in protecting assets of the wealthy, in an interview with the New York Post. “They’re able to do what they do from any place in the world, and they’re choosing to do it from places with much lower tax rates. Some are philosophically disgusted at the course our country is taking in all kinds of ways. They’re making a strong protest of, ‘Enough is enough.’ But largely it’s an economic decision.”
The state of California is already seeing this. In January, it was discovered that there is a mass exodus of wealthy individuals exiting the Golden State. Economic Collapse News reported on a study that found 225,000 taxpayers leave California each year with their wealth, which equates to more than $14 billion leaving state government coffers.
To illustrate the failure of these economic policies, financial experts say the real data will be revealed in 2014 when California shows a significant decline in tax revenue.
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