Government costs a lot of money, in its administration and its programs for the common good. As Catholic citizens, we have a moral responsibility to pay taxes — to pay our “fair share.” This ever-popular topic is once again in the spotlight as we hear from presidential hopefuls during this tax season.
One of the most frequent uses of the phrase “pay their fair share” is in reference to the upper few percenters not doing their part. It often seems that these cries are loudest from those who are chronic beneficiaries of politically motivated government largess. Regardless, is it true?
YES! — but in exactly the opposite sense from what they mean… the upper 20% pay 87% of federal individual income taxes — far more than their fair share — while almost half of all Americans pay NOTHING. This is exactly opposite of the general perception. Catey Hill has written about this recently for Market Watch:
An estimated 45.3% of American households – roughly 77.5 million – will pay no federal individual income tax, according to data for the 2015 tax year from the Tax Policy Center, a nonpartisan Washington-based research group. (Note that this does not necessarily mean they won’t owe their states income tax.)
Roughly half pay no federal income tax because they have no taxable income, and the other roughly half get enough tax breaks to erase their tax liability, explains Roberton Williams, a senior fellow at the Tax Policy Center.
Despite the fact that rich people paying little in the way of income taxes makes plenty of headlines, this is the exception to the rule: The top 1% of taxpayers pay a higher effective income-tax rate than any other group (around 23%, according to a report released by the Tax Policy Center in 2014) – nearly seven times higher than those in the bottom 50%.
On average, those in the bottom 40% of the income spectrum end up getting money from the government. Meanwhile, the richest 20% of Americans, by far, pay the most in income taxes, forking over nearly 87% of all the income tax collected by Uncle Sam.
The article has more information along with interesting tables and graphs: 45% of Americans pay no federal income tax.