Yes, the wealthy pay their fair share
To the editor:
James L. Allen recently wrote a letter to the editor suggesting that the real redistribution of wealth in America comes from working people such as welders and goes to the billionaires. This simply is not true. He also states that ďPresently the U.S. tax code provides huge tax deductions for business and business investments.Ē In reality, the U.S. corporate tax rate of almost 39 percent is the third highest in the world. While tax deductions on health insurance, pensions, investment returns, etc. do ultimately reduce the effective tax rate to 27.9 percent, that still leaves American businesses paying the 15th-highest corporate tax rate among the 189 countries measured.
Moreover, 45 percent of Americans (more than 77 million households) didnít pay a single penny of federal individual income taxes in 2016.
In fact, on average, those in the bottom 40 percent of the income spectrum end up getting money from the government. Meanwhile, the richest 20 percent of Americans pay the most in income taxes, forking over nearly 87 percent of all the income tax collected. Indeed, the top 1 percent, who have an average income of more than $2.1 million, pay 43.6 percent of all the federal individual income tax in the United States.
The U.S. income tax system remains very progressive, with high-income taxpayers paying a disproportionate share of the tax burden relative to their share of the nationís income, while the majority of taxpayers pay a considerably smaller share relative to their share of total income. Although many people continue to believe that the wealthy donít pay their fair share of income taxes, the data simply does not support that opinion.
Sources: Tax Foundation, Tax Policy Center, Market Watch