Top 50% of Wage Earners Pay 96.09% of Income Taxes

http://www.rushlimbaugh.com/ ^ | October 23, 2002 | RUSH

[ATOMIC_PUNK]

Only The Rich Pay Taxes

Top 50% of Wage Earners Pay 96.09% of Income Taxes

October 23, 2002

The IRS has released the FY 2000 data for individual income tax returns. The numbers illustrate a truth that will startle you: that half of Americans with the highest incomes pays 96.09% of all income tax. This nukes the liberal lie that the rich don't pay taxes. The top 1%, who earn 20.81% of all income covered under the income tax, are paying 37.42% of the federal tax bite.

Think of it this way: less than four dollars out of every $100 paid in income taxes in the United States is paid by someone in the bottom 50% of wage earners. Are the top half millionaires? Noooo, more like "thousandaires." The top 50% were those individuals or couples filing jointly who earned $26,000 and up in 1999. (The top 1% earned $293,000-plus.) Americans who want to are continuing to improve their lives - and those who don't want to, aren't. Here are the wage earners in each category and the percentages they pay:

Top 5% - 56.47% of all income taxes; Top 10% - 67.33% of all income taxes; Top 25% - 84.01% of all income taxes. Top 50% - 96.09% of all income taxes. The bottom 50%? They pay a paltry 3.91% of all income taxes. The top 1% is paying more than ten times the federal income taxes than the bottom 1%! And who earns what? The top 1% earns 20.81% of all income. The top 5% earns 35.30% of the pie. The top 10% earns 46.01%; the top 25% earns 67.15%, and the top 50% earns 87.01% of all the income.

The Rich Earned Their Dough, They Didn't Inherit It (Except Ted Kennedy)

The bottom 50% is paying a tiny bit of the taxes, so you can't give them much of a tax cut by definition. Yet these are the people to whom the Democrats claim to want to give tax cuts. Remember this the next time you hear the "tax cuts for the rich" business. Understand that the so-called rich are about the only ones paying taxes anymore.

I had a conversation with a woman who identified herself as Misty on Wednesday. She claimed to be an accountant, yet she seemed unaware of the Alternative Minimum Tax, which now ensures that everyone pays some taxes. AP reports that the AMT, "designed in 1969 to ensure 155 wealthy people paid some tax," will hit "about 2.6 million of us this year and 36 million by 2010." That's because the tax isn't indexed for inflation! If your salary today would've made you mega-rich in '69, that's how you're taxed.

Misty tried the old line that all wealth is inherited. Not true. John Weicher, as a senior fellow at the Hudson Institute and a visiting scholar at the Federal Reserve Bank, wrote in his February 13, 1997 Washington Post Op-Ed, "Most of the rich have earned their wealth... Looking at the Fortune 400, quite a few even of the very richest people came from a standing start, while others inherited a small business and turned it into a giant corporation." What's happening here is not that "the rich are getting richer and the poor are getting poorer." The numbers prove it.

I have made an executive decision as the owner and ultimate editor of this website that this table and these numbers stay on this website forever - or until next year's numbers come out. In order to get these facts, you have to see them each and every day. This story, along with a link to the IRS chart, will stay somewhere on the RushLimbaugh.com homepage so everyone can see and find these numbers at any time. It's crucial that people get this, so please, share it with a friend now!

[SeeRushToldU_So]

We're rich? This will come as a shock to my family...........

Shhhhhhhhhush! My family doesn't know we are "Rich" either. The IRS seems to know though. lol

[leadpenny]

Notice, no comment about the times I was personally homeless and almost starved to death.
Ok leadpenny, how old are you? Have you ever been taught the simple concept of compunded interest?
Did anyone explain to you, that if your current FICA tax was invested, by the age of 65, you would most likely retire with $1 MILLION in the bank?
Nope, you think that the current $280 a month is GOOD MONEY!
Cool, I love it.

I don't know how to respond to any of that. What does my age or anything else in there have to do with 'Who Pays the Taxes?' I truly feel bad about your personal experiences, but they are not relevant.

Go back to what you copied from my reply:

To NOT include the mandatory FICA tax in the equation makes any discussion on Who Pays the Taxes a bogus one.

. . and respond to that.

I'll give you the argument that the wealthy pay more Income Tax but it is like clapping with one had. The other hand is FICA. When you consider the combined effects of the FICA Cap, currently around $85,000, and the 12.4% (combined employer and employee) contribution rate overlaid on the Income Tax Rate, the average middle class wage earner is getting hammered.

I make under the Cap, as do 95% of the working population, and I will compare my total tax rate burden to someone making $1,000,000 any day.

I'll bet you that I pay a higher overall tax rate than Rush Limbaugh. He gets to stop contributing to FICA at $85,000. It's not rich envy - it's just fact. I don't have a choice in the matter. I have contributed to FICA all my life; even reached the CAP back in the 70's because I was an Army Captain on Flight Pay, but there is no guarantee that I will receive any of it.

So, please, stay on topic. Don't go to the benefits side of the ledger. Who pays the highest tax rate to fund the current system? It ain't the rich.

[leadpenny]

clapping with one hand

[Skooz]

Yes, and Medieval serfs paid an effective tax rate of 33.3% and were considered slaves.

[ghostrider]

Thanks! I will check it out later, but reading government economic ststistics may cross my eyeballs for a while - hehe.

[Hunble]

Late at night, and my spelling was horrible.

I don't know how to respond to any of that. What does my age or anything else in there have to do with 'Who Pays the Taxes?' I truly feel bad about your personal experiences, but they are not relevant.

You mentioned FICA and I pointed out to you the aspected of compounded interest upon an investment.

Yes, your age is a factor, since the more time your money is invested, the more you will earn over time.

I was very serious when I asked a rather simple question. If all of your current FICA taxes was invested into a private interest earning account, how much would you have by the time you reached retirement age?

Would this not be much more than Social Security would ever pay you?

On your primary point:

Of course, if you combine a retirement account with your taxes, it will skew the results.

When you complain about someone who is above the current FICA earning limit, did you also realize that they are not allowd to collect any of their FICA contributions upon retirement?

Did you also include their own private retirement investments in your calculations?

Personally, I invest 15% of my wages into my own private retirement account, simply because I realize that FICA will not be around when I retire.

So lets summarize:

27% - Federal and State taxes.
12% - FICA taxes
15% - Private retirement fund

I come up with a sum of 54% of my own personal wages being invested each and every month.

Please remember one other very vital aspect. Since I earn too much money, I do not qualify for any of the government programs. Did you include the money people receive from the government in your equation?

Now, what was that you were saying about the "poor" people?

[Cagey]

Thanks for the ping, Rush. Something most of us have realized for a long time, but having the IRS chart is a good reference.

[leadpenny]

I'm trying to keep it simple while you're throwing in all these distractors.

Let me try one last time. Federal Government - not State. What we pay to the Feds and not what we MAY receive. Because of the CAP on FICA contributions, someone below the CAP is likely to pay a higher Federal (FICA and Income) Tax rate than someone who makes an amount way above the CAP.

[Hunble]

Because of the CAP on FICA contributions, someone below the CAP is likely to pay a higher Federal (FICA and Income) Tax rate than someone who makes an amount way above the CAP.

While I do agree with you, you keep forgetting a very vital portion of this equation.

By law, anyone that hits the CAP, is not allowed to collect any of their FICA investments.

And, as I have pointed out, this is a retirement fund. Even someone as rich as I am ($60,000 per year) is paying 54% of my monthly wages.

Having lived on both sides of this issue in my life, I remember complaining about the $1,000 per year I was paying, while serving on active duty in the Army.

However, after all the tax credits, the goverment ended up sending me a refund larger than the amount I contribited that year in taxes.

Today - I wish!

[VOA]

bump

[leadpenny]

By law, anyone that hits the CAP, is not allowed to collect any of their FICA investments.

Distractor! That not about who pays the highest rate.

You make 60G. Don't know what your AGI is but I'll bet you pay a higher Federal Rate (Income and FICA) than the any Major League Baseball player.

[Teacher317]

To check my math, if 50% pay 96.09% of taxes and 5% pay 56.47% of the taxes, then 45% pay 39.68% of the taxes. This means that 45%/50% or 90% of the top payers pay 40% of the taxes. Looks like most of the top guys aren't carrying their load.

Math skills not your forte? You're comparing the top 5%'s load of 56.47% to the next 45%'s load of 39.68% and saying that the top 5% isn't paying their share???

Or, using your muddled numbers, the 'bottom' 90% (of the top 50%) are paying 39.68% of all taxes, while the top 10% (of the top 50%) are paying 56.47% of all taxes... exactly how are the 'top-10%-of-the-top-50%', who are outnumbered 9-to-1 by the 'bottom-90%-of-the-top-50%' and still paying a larger absolute amount that the 'bottom-90%-of-the-top-50%', not paying their fair share?!?!?

[Hunble]

Distractor! That not about who pays the highest rate.

Actually, around $100,000 per year is about the top limit.

Above that, you own a business and another set of rules sets in. You know, things like capital gains tax, sales tax, business tax, etc...

Major League Baseball player:

While I agree that their yearly pay is obcene, they are also hitting the top tax rate of 80% of their wages. If they are smart, they will divert their money into projects that do not have such a disgusting tax rate.

How do they divert their money? Most likely by investing in new companies that provide jobs to suckers like you and I.

[Straight Vermonter]

You can see by the folowing chart that these programs have completely eliminated poverty, though. < /sarcasm>

LBJ started this all in the mid-1960s and the rate has remained in a constatnt range ever since.

[Hunble]

That is an outstanding chart. Thanks Freeper for providing the information.

Only have one tiny little problem with it. Who defines what the poverty rate is?

Compare American citizens with an African tribe and measure the difference in how much they eat per day. At the last, that would be an honest point of reference.

This is not my recommendation, but can they not use a specific qualifier when measuring something?

[Hunble]

Also, is a chart available going back to 1900?

The starting date of 1959 is most curious!

[leadpenny]

You really are like trying to paint a moving train or nail Jello to the wall. Hold still.

Don't talk macro. Talk micro.

Two people. You: Making $60,000 with taxable income of $48,000.

Someone else: Making $1,000,000 with taxable income of $800,000.

Only talking Federal taxes now (FICA and Income). Do the math and I'm sure you will find that you are paying a higher rate than the millionaire. Don't forget the FICA CAP.

[ancient_geezer]

I'll give you the argument that the wealthy pay more Income Tax but it is like clapping with one had. The other hand is FICA. When you consider the combined effects of the FICA Cap, currently around $85,000, and the 12.4% (combined employer and employee) contribution rate overlaid on the Income Tax Rate, the average middle class wage earner is getting hammered.

All income and payroll[FICA] taxes combined as a percentage of gross family income. Quit guessing.

http://www.cbo.gov/showdoc.cfm?index=1545&from=4&sequence=0:

Table 1. Preliminary Estimates of Effective Tax Rates by Income Category, 1977-1995 and Projected for 1999
Income Category	1977	1979	1981	1983	1985	1987	1989	1991	1993	1995	Projected 1999
Effective Total Federal Tax Rate (In percent)
Lowest Quintile	8.7	8.4	8.0	8.5	10.2	9.0	8.8	7.9	7.8	6.0	4.6
Second Quintile	14.7	14.9	15.0	14.2	15.5	15.2	15.3	15.1	14.3	14.6	13.7
Middle Quintile	18.5	19.2	19.5	18.2	18.8	18.5	18.9	18.9	19.1	19.7	18.9
Fourth Quintile	20.9	22.1	22.9	21.0	21.3	21.2	21.5	21.6	22.0	22.5	22.2
Highest Quintile	28.2	28.5	27.9	24.6	24.5	26.4	25.9	26.2	27.6	29.6	29.1
All Families	22.8	23.4	23.5	21.4	21.8	22.6	22.5	22.6	23.5	24.7	24.2
Top 10 Percent	30.7	30.5	29.0	25.2	25.1	27.6	26.8	27.2	29.0	31.3	30.6
Top 5 Percent	33.4	32.6	30.1	25.7	25.5	28.5	27.4	27.9	30.2	33.0	31.8
Top 1 Percent	39.7	37.3	31.7	26.9	26.2	30.2	28.1	29.1	32.5	36.5	34.4

[jeremiah]

Moving the election to April 16 would do nothing to change attitudes. The ones paying taxes already vote overwhelmingly R, the ones benefiting from this vote D. There are now more net takers than givers........ Too late. We

[Hunble]

Both of my wife's parents lived through the depression. Her father did go into France after D-Day during WWII.

Just curious why this chart started off at 1959. It kinda ignored a very vital aspect of American History.