And, yet, the top 10% still pay 70% of the federal income taxes?
Why yes, income inequality
is quite significant.
So if we say 100 million people pay Federal taxes. The top 10% earn on average $300,000 and they pay $120,000 in taxes (simplified 40%). Thats a total of $1,200,000,000,000
The bottom 90% ear $30,000 and pay 15% tax for a tax of $4,500 to a total of 405,000,000,000
Total taxes = $1,605,000,000,000
Top 10% = 75% of taxes
If we continue the simplification and have the top tax be 70% then each tax of those rich would be $210,000 resulting in $2,100,000,000,000 keeping the tax of the rest the same
$2,505,000,000,000 total tax, and the top 10% would be paying 84% of the taxes
If the budget were to remain the same - the bottom 90% would actually not need to pay any tax at all. Again, this assumes a tax structure that is not realistic - since it would be crazy for someone who earned $250,000 to suddenly lose money if they got a $50,000 pay rise...but still.
How could these taxes have been shifted from the rich to the poor/middle if the rich are still paying most of the taxes?
Because that's how numbers work.
I have 71 apples. You have 1 apple.
Someone comes and takes one of my apples and gives it to you.
I have 70 apples. You have 2 apples.
There has been a shift of apples from me to you. I still have the most apples.
If the simplified example above was reversed - a 70% tax to 40% tax for the richest and a 0% tax to 15% tax rise for the rest -- one might say there had been a massive shift of taxes from the rich to the middle class and poor.
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