More on America’s flat tax structure
By Citizens for Tax Justice has a breakdown of the effective tax rate paid by various income groups, taking all federal and state taxes into account. Some highlights:
(1) Outside the poorest 20% (average cash income $12,400) every other subgroup in the survey pays essentially a flat tax. For instance, those averaging 66K a year pay 28.5% of their income in taxes, while those averaging $1.3 million a year pay 30.8%
(2) This means, of course, that the percentage of taxes collected very closely reflects the percentage of income received by each group. For instance the fourth 20% of income earners (60th-79th percentile of income) received 18.9% of the total income of the U.S. population, and paid 18.9% of the total taxes.
(3) The bottom 99% of income earners paid an effective tax rate of 28.2%, in comparison to an overall national tax rate of 28.6%.
(4) If the data had been broken down into smaller increments, we would see that the super-rich actually pay considerably less than the national average effective tax rate. The 400 richest taxpayers in America in 2007 paid 16.7% in federal taxes, as compared to 18.0% for all taxpayers in 2009. In other words at the very top end the system is actually regressive.