BUT THEY’RE STILL GETTING HOSED …
More than four out of ten Americans paid no income tax in 2016, according to data from the left-leaning Tax Policy Center. All told, 44.3 percent of Americans – or 76 million people – did not pay a dime of income tax to the government last year.
That percentage is expected to hold in 2017 at roughly 43.9 percent.
Obviously this doesn’t mean these citizens are getting a free ride – as “Republican” politicians like Mitt Romney have previously suggested. Almost all of them pay state and local sales taxes, property taxes and other assorted governmental fees.
Moreover, at the federal level the vast majority of them are getting pummeled by the payroll tax – which was raised from 4.2 percent to 6.2 percent beginning in 2013. In fact as we noted last year, roughly eighty percent of families filing returns pay more in payroll taxes than they do in income tax.
So who’s paying the income tax?
Here’s an excerpt from a recent report by Catey Hill of Money-ish …
More than 31% of all federal individual income tax is paid by those who bring in more than $1 million a year, who have a net effective tax rate of 25.3%, the highest of any group. Another 14% of income tax is paid by those who make between $500,000 and $1 million, who have a 20% tax rate, the second highest.
U.S. president Donald Trump campaigned last fall on broad-based middle class (and upper class) tax relief – but so far he’s been unable to get his plans through an increasingly dysfunctional legislature.
Accordingly, Trump has gone back to the drawing board.
The federal government collected $3.276 trillion during its most recent fiscal year – which ran from October 1, 2015 to September 30, 2016. Of that total, 47 percent came from income taxes, 34 percent came from payroll taxes and nine percent came from corporate taxes. The remaining ten percent came from estate taxes (i.e. the “Death Tax”), excise taxes and interest on federal deposits.
Unfortunately, politicians in Washington, D.C. spent $3.876 trillion over the same time period – and are on track for an even larger budget deficit in the current fiscal year.
As we’ve pointed out on multiple occasions, tax reform is long-overdue because the American middle class cannot continue to empower the nation’s consumer economy if it is responsible for subsidizing welfare statism, crony capitalism, global interventionism and the “manifest destiny” of an unchecked federal bureaucracy.
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