Now do it by net worth. It’s easy to not have reportable net income that correlates with your net wealth when you can do things like take out loans against unrealized capital gains and delay selling assets until they step up at death for inheritance.
HaikuHaiku on
For anyone saying that people should be taxed on the value of their assets, like a wealth tax, just consider what happened to SpaceX in the last month or two. It made Elon a trillionaire, and then declined by almost 40% in the last 30 days. The $700 billion that Elon lost in net worth, that was supposedly stolen from workers (socialist economic reasoning), where did that go? Did it go back to the workers? Did Elon steal a trillion from workers and then give 700 billion back? where is that money in your moral equation?
EverybodyHits on
I’m in about the 5%, and while I don’t mind paying significant taxes at all, it does annoy me when people walk around not understanding this graph. Europeans spread the tax take far more broadly, the US take is very progressive already
Crypticarts on
This needs to go squarely in data is abysmally ugly regardless of your view on the topic.
F0tNMC on
Now show the distribution of income and wealth.
Eleventhousand on
My main issue with this type of information is that people tend to use it to try to prove a point to counter complaints on wealth inequality (I’m not saying that this is what OP is doing). The bottom 50% do pay a lot of tax, but this graph shows only the type that they happen to not pay much into (federal income tax). Additionally, the bottom 50% earn much less than 50% of aggregate income (obviously),
OutInLeftfield on
The top 1% now has more wealth than the bottom 90% combined.
What I think they owe is at minimum what the top 10% pays right now, rather than the 38% they do pay.
SaturdaysAFTBs on
I always find it funny when people say the rich need to pay their “fair share” of taxes. I’d imagine if you asked them what % of the taxes should be paid by various income brackets to be fair, a lot of them would come up with something close to this. I think it’s fine to have the position that the rich should pay more in taxes but I don’t think you can really say they aren’t paying a fair share when the bottom 50% of taxpayers pay literally zero tax and are probably the biggest recipients of social welfare spending.
jtp_311 on
This makes some sense when you look at the wealth distribution.
I’d prefer to see a graphic that included Medicaid, Medicare, Sales Tax, Real Estate Tax, State Income Tax, etc… Of course we know that the poor in the USA pay very little to no federal income tax.
2L84T on
This is in line with most developed economies who have progressive tax regimes, generally 80% of the total income tax take comes from the top 20% of earners.
Gigawrench on
Whenever this % share of total tax receipts breakdown gets brought up I like to remind people that this is just more evidence of the wealth inequality in our society. Here’s a quick hypothetical:
Society generates $100 of income.
Group A gets 90% of the income ($90) and gets taxed at a rate of 10%. They pay $9 of taxes.
Group B gets 10% of the income ($10) and gets taxed at a rate of 20%. They pay $2 of taxes.
Of the total $11 of tax receipts:
Group A is paying 81.8% while Group B is paying just 18.2%.
Even in this clearly regressive tax regime we end up with Group A, which is paying a lower effective tax rate, dominating the % share of total receipts due to inequality.
So when people say they want rich people to „pay their fair share“ they generally mean that they want the effective tax rate to rise as ones income / wealth increases.
Ok_Mention_9865 on
You cant tax people on money they do not have.
Cursewtfownd on
Who would have thought that disposable income past the average household expenditures would be taxed at an exponential rate. Why tax anything at all at the bottom 50%, just let states take it.
What would fix things, is to have the top .5% make up another 38.4%. Then lower effective taxes on the 50th-90th by half.
The money at that level is absurd.
You could not spend that amount of money without buying literal estates and yachts yearly – and that’s just what has been reported as income.
RichOrlando on
The bottom 75% shouldn’t pay any taxes, that would be very helpful for the economy
Won-Ton-Wonton on
Now do it as a percentage of discretionary income.
This will look very, very different.
The bottom 50% have no discretionary income based on the government definition used for student loan repayment, so it’s literally 100% or more.
Hence why the bottom 50% don’t AND SHOULD NOT pay more.
aburrido on
The bottom 50% don’t have any money to pay a significant amount in taxes. I’d like to see a graph of how much money each group earns.
PriceNation on
You need to look at the percentage of net worth that is paid by each bracket. That tells a different story.
didsomebodysaymyname on
Makes sense. Are homeless people’s lives going to change wildly if China invaded or global trade is interrupted? Who benefits more from a trillion dollar military budget? Rich people are the ones with more to lose.
And who’s more dependent on interstate highways and an educated workforce? Me or Jeff Bezos? I don’t employ anyone and I take surface streets to work.
Ozempic drew from government funded research, do I get a cut? What percentage does the government get?
Countries with high wealth and income inequality are often some of the worst to live in. Would you rather be a doctor or engineer in the western world or Zimbabwe?
Note that this doesn’t include payroll taxes for social security and Medicare which make up the largest portion of the federal budget and are capped at 185k income.
Deto on
Does the „bottom 50%“ include people making zero dollars?
beramaan on
The 75 th to 90th is getting screwed cost to every other group.
heelspencil on
This chart ranges from useless to misleading.
Federal income tax represents 50% of all federal tax revenue and about 40% of all tax revenue in the US. It is also the most progressive tax we have in the US. If you didn’t know that then this chart is misleading about who pays how much tax.
If you knew all that already, then this chart is useless.
bduxbellorum on
This is one of the worst charts I have ever seen. Annulus chart with terrible labels, that bar chart is a cumsum of the annulus chart but the colors tell you nothing.
scyber on
Now compare that to the 1950s or 1960s tax brackets. Lets make america great again based on those tax brackets.
Carochio on
This is just income taxes, what about all the other taxes like FICA
Analrapist03 on
Honestly, I wish there was a remember copy-and-paste text for this crap. Its like every few years this comes up again, and we already know why this cherry-picked drivel is stated this way and who keeps pushing it.
What is next? Trickle-down (Voodoo) economics being presented as a viable macroeconomic mechanism after it has been explicitly, both practically and theoretically refuted?
Maybe „double taxation“ will emerge again from the cesspool of conservative sophistry and illusion?
TralfamadorianZoo on
It’s almost like the rich people have all the money.
Magalahe on
And by the way, in a fractional reserve banking system, purchasing power is stolen by those with access to bank loans (mortgages, student loans, credit cards, etc) from those with less access to bank loans (lower classes).
Thats the real evil 99% of society is ignorant of.
thedukejck on
Sure, but what percent of their income are they being taxed. I’m sure it’s a lower percentage. Also keep in mind this is income earners. The truly rich pay virtually nothing because they use their wealth as leverage and corporations are paying at historically low percentages. Bottom line: the burden is on the workers.
Successful_Worth_501 on
I think charts like this are genuinely dishonest in what they leave out. It becomes an exercise for the reader that I have tried to address below
This chart is accurate about what it measures. The issue is that what it measures isn’t quite „the tax base and burden.“
It covers about half the federal system: Individual income tax is roughly 50% of federal receipts. Payroll taxes are another 35%, and they work almost the opposite way: flat rate, capped at the top, applied to the first dollar earned. Most households pay more in FICA than in income tax. Add payroll and state/local (sales, excise, property) and the distribution flattens noticeably.
Share-of-taxes conflates progressivity with income concentration: Under a perfectly flat tax, the top 1% would pay 20.6% of revenue, exactly their AGI share. They pay 38.4%, so the system *is* progressive. But their share of income taxes has climbed for decades partly because their share of income climbed. Effective rates separate those two effects; share-of-total doesn’t.
AGI understates top-end income: It’s a tax-code construct, not an economic one. It excludes unrealized capital gains, borrowing against appreciated assets, step-up in basis at death, and municipal interest. Those exclusions are concentrated at the top, so the 20.6% denominator is the most contestable number on the page.
Effective rates still show real progressivity: Bottom 50% pays around 3 to 4% average federal income tax; top 1% pays around 25 to 26%. CBO’s all-federal-taxes measure runs from near zero at the bottom to about 30% at the top. The exception is the very top tail, where income arrives as unrealized appreciation rather than wages, and estimated rates range anywhere from 8% to 25% depending on whether unrealized gains count as income. That’s a definitional fight, not an empirical one.
The chart also ignores transfers: Refundable credits, Medicaid, SNAP, and ACA subsidies leave many bottom-half households with a negative net fiscal position. On a taxes-minus-transfers basis the system is *more* redistributive than shown. So the chart isn’t one-sidedly misleading; it’s a partial slice, and the omitted pieces pull in opposite directions.
Once the numbers are right, the disagreement is about ability to pay. Whether a 26% rate on $2M versus 4% on $38K is too wide a gap or too narrow is a values question. Both camps cite this same IRS data.
The honest version would pair share of income against share of taxes for *all* federal taxes, plus a second panel of effective rates by percentile. CBO’s Distribution of Household Income does the full version with transfers broken out separately.
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32 Kommentare
I thought top 1% paid much less taxes,
interesting, !remindme 6 hours
the comment section will be fun to read
Now do it by net worth. It’s easy to not have reportable net income that correlates with your net wealth when you can do things like take out loans against unrealized capital gains and delay selling assets until they step up at death for inheritance.
For anyone saying that people should be taxed on the value of their assets, like a wealth tax, just consider what happened to SpaceX in the last month or two. It made Elon a trillionaire, and then declined by almost 40% in the last 30 days. The $700 billion that Elon lost in net worth, that was supposedly stolen from workers (socialist economic reasoning), where did that go? Did it go back to the workers? Did Elon steal a trillion from workers and then give 700 billion back? where is that money in your moral equation?
I’m in about the 5%, and while I don’t mind paying significant taxes at all, it does annoy me when people walk around not understanding this graph. Europeans spread the tax take far more broadly, the US take is very progressive already
This needs to go squarely in data is abysmally ugly regardless of your view on the topic.
Now show the distribution of income and wealth.
My main issue with this type of information is that people tend to use it to try to prove a point to counter complaints on wealth inequality (I’m not saying that this is what OP is doing). The bottom 50% do pay a lot of tax, but this graph shows only the type that they happen to not pay much into (federal income tax). Additionally, the bottom 50% earn much less than 50% of aggregate income (obviously),
The top 1% now has more wealth than the bottom 90% combined.
What I think they owe is at minimum what the top 10% pays right now, rather than the 38% they do pay.
I always find it funny when people say the rich need to pay their “fair share” of taxes. I’d imagine if you asked them what % of the taxes should be paid by various income brackets to be fair, a lot of them would come up with something close to this. I think it’s fine to have the position that the rich should pay more in taxes but I don’t think you can really say they aren’t paying a fair share when the bottom 50% of taxpayers pay literally zero tax and are probably the biggest recipients of social welfare spending.
This makes some sense when you look at the wealth distribution.
https://preview.redd.it/p4hnm6idfafh1.jpeg?width=1125&format=pjpg&auto=webp&s=a679f6dd39fa2cc6dbccf4e99f05b02305166ad7
I’d prefer to see a graphic that included Medicaid, Medicare, Sales Tax, Real Estate Tax, State Income Tax, etc… Of course we know that the poor in the USA pay very little to no federal income tax.
This is in line with most developed economies who have progressive tax regimes, generally 80% of the total income tax take comes from the top 20% of earners.
Whenever this % share of total tax receipts breakdown gets brought up I like to remind people that this is just more evidence of the wealth inequality in our society. Here’s a quick hypothetical:
Society generates $100 of income.
Group A gets 90% of the income ($90) and gets taxed at a rate of 10%. They pay $9 of taxes.
Group B gets 10% of the income ($10) and gets taxed at a rate of 20%. They pay $2 of taxes.
Of the total $11 of tax receipts:
Group A is paying 81.8% while Group B is paying just 18.2%.
Even in this clearly regressive tax regime we end up with Group A, which is paying a lower effective tax rate, dominating the % share of total receipts due to inequality.
So when people say they want rich people to „pay their fair share“ they generally mean that they want the effective tax rate to rise as ones income / wealth increases.
You cant tax people on money they do not have.
Who would have thought that disposable income past the average household expenditures would be taxed at an exponential rate. Why tax anything at all at the bottom 50%, just let states take it.
What would fix things, is to have the top .5% make up another 38.4%. Then lower effective taxes on the 50th-90th by half.
The money at that level is absurd.
You could not spend that amount of money without buying literal estates and yachts yearly – and that’s just what has been reported as income.
The bottom 75% shouldn’t pay any taxes, that would be very helpful for the economy
Now do it as a percentage of discretionary income.
This will look very, very different.
The bottom 50% have no discretionary income based on the government definition used for student loan repayment, so it’s literally 100% or more.
Hence why the bottom 50% don’t AND SHOULD NOT pay more.
The bottom 50% don’t have any money to pay a significant amount in taxes. I’d like to see a graph of how much money each group earns.
You need to look at the percentage of net worth that is paid by each bracket. That tells a different story.
Makes sense. Are homeless people’s lives going to change wildly if China invaded or global trade is interrupted? Who benefits more from a trillion dollar military budget? Rich people are the ones with more to lose.
And who’s more dependent on interstate highways and an educated workforce? Me or Jeff Bezos? I don’t employ anyone and I take surface streets to work.
Ozempic drew from government funded research, do I get a cut? What percentage does the government get?
Countries with high wealth and income inequality are often some of the worst to live in. Would you rather be a doctor or engineer in the western world or Zimbabwe?
Note that this doesn’t include payroll taxes for social security and Medicare which make up the largest portion of the federal budget and are capped at 185k income.
Does the „bottom 50%“ include people making zero dollars?
The 75 th to 90th is getting screwed cost to every other group.
This chart ranges from useless to misleading.
Federal income tax represents 50% of all federal tax revenue and about 40% of all tax revenue in the US. It is also the most progressive tax we have in the US. If you didn’t know that then this chart is misleading about who pays how much tax.
If you knew all that already, then this chart is useless.
This is one of the worst charts I have ever seen. Annulus chart with terrible labels, that bar chart is a cumsum of the annulus chart but the colors tell you nothing.
Now compare that to the 1950s or 1960s tax brackets. Lets make america great again based on those tax brackets.
This is just income taxes, what about all the other taxes like FICA
Honestly, I wish there was a remember copy-and-paste text for this crap. Its like every few years this comes up again, and we already know why this cherry-picked drivel is stated this way and who keeps pushing it.
What is next? Trickle-down (Voodoo) economics being presented as a viable macroeconomic mechanism after it has been explicitly, both practically and theoretically refuted?
Maybe „double taxation“ will emerge again from the cesspool of conservative sophistry and illusion?
It’s almost like the rich people have all the money.
And by the way, in a fractional reserve banking system, purchasing power is stolen by those with access to bank loans (mortgages, student loans, credit cards, etc) from those with less access to bank loans (lower classes).
Thats the real evil 99% of society is ignorant of.
Sure, but what percent of their income are they being taxed. I’m sure it’s a lower percentage. Also keep in mind this is income earners. The truly rich pay virtually nothing because they use their wealth as leverage and corporations are paying at historically low percentages. Bottom line: the burden is on the workers.
I think charts like this are genuinely dishonest in what they leave out. It becomes an exercise for the reader that I have tried to address below
This chart is accurate about what it measures. The issue is that what it measures isn’t quite „the tax base and burden.“
It covers about half the federal system: Individual income tax is roughly 50% of federal receipts. Payroll taxes are another 35%, and they work almost the opposite way: flat rate, capped at the top, applied to the first dollar earned. Most households pay more in FICA than in income tax. Add payroll and state/local (sales, excise, property) and the distribution flattens noticeably.
Share-of-taxes conflates progressivity with income concentration: Under a perfectly flat tax, the top 1% would pay 20.6% of revenue, exactly their AGI share. They pay 38.4%, so the system *is* progressive. But their share of income taxes has climbed for decades partly because their share of income climbed. Effective rates separate those two effects; share-of-total doesn’t.
AGI understates top-end income: It’s a tax-code construct, not an economic one. It excludes unrealized capital gains, borrowing against appreciated assets, step-up in basis at death, and municipal interest. Those exclusions are concentrated at the top, so the 20.6% denominator is the most contestable number on the page.
Effective rates still show real progressivity: Bottom 50% pays around 3 to 4% average federal income tax; top 1% pays around 25 to 26%. CBO’s all-federal-taxes measure runs from near zero at the bottom to about 30% at the top. The exception is the very top tail, where income arrives as unrealized appreciation rather than wages, and estimated rates range anywhere from 8% to 25% depending on whether unrealized gains count as income. That’s a definitional fight, not an empirical one.
The chart also ignores transfers: Refundable credits, Medicaid, SNAP, and ACA subsidies leave many bottom-half households with a negative net fiscal position. On a taxes-minus-transfers basis the system is *more* redistributive than shown. So the chart isn’t one-sidedly misleading; it’s a partial slice, and the omitted pieces pull in opposite directions.
Once the numbers are right, the disagreement is about ability to pay. Whether a 26% rate on $2M versus 4% on $38K is too wide a gap or too narrow is a values question. Both camps cite this same IRS data.
The honest version would pair share of income against share of taxes for *all* federal taxes, plus a second panel of effective rates by percentile. CBO’s Distribution of Household Income does the full version with transfers broken out separately.