IRS Numbers Shred Biden’s “Fair Share” Platitudes

[Vambram]

IRS Numbers Shred Biden’s “Fair Share” Platitudes

As for Biden’s “fair share” rhetoric, the IRS data eviscerates his claims.

cfif.org

Do wealthy Americans pay their “fair share” of income taxes?

If “fair” is defined as a reasonable equilibrium between someone’s share of income earned and their share of income taxes paid, then wealthier Americans actually pay more than their fair share.

That might surprise many people, but it’s the inescapable takeaway from the latest Internal Revenue Service (IRS) numbers.

It would certainly surprise Joe Biden, to the extent that he ever engages in thoughtful self-reflection. Oblivious to the facts, however, Biden instead continues to rationalize his relentless effort to raise taxes by insisting that he simply seeks to make the wealthy pay their “fair share.”

With this week’s grim news that the federal budget deficit has already reached a whopping $1.1 trillion just halfway through the 2024 fiscal year, Biden’s motive for raising taxes is obvious, even if his fidelity to facts leaves much to be desired. The problem isn’t that Americans are undertaxed, it’s that Biden and the federal government are overspending.

As for Biden’s “fair share” rhetoric, the IRS data eviscerates his claims.

For the 2021 tax year, the latest fully available to the public, the top 1% of income earners (Americans with incomes above $682,577) earned 26.3% of the nation’s income. But then take a look at the portion of the nation’s total income taxes that they paid: 45.8%. Accordingly, the portion of total income taxes paid is nearly twice as high as their portion of total income earned.

Under what form of logic can that gross disparity be characterized as “not paying their fair share?” Even the most stubborn leftists must experience an episode of cognitive dissonance upon the realization.

When it comes to the top 5% of income earners (those with incomes above $252,840), a similar imbalance exists. They earned 42.0% of the nation’s total income, but paid a lopsided 65.6% of the nation’s total income taxes. In other words, the top 5% is paying almost two-thirds of all income taxes, while their ratio of income on which they’re paying those taxes is well under half.

Moving down to the top 10% of Americans (those earning above $169,800), they earned 52.6% of the nation’s total income, but accounted for 75.8% of all income taxes paid – over three-fourths.

Even Biden himself would begin to detect a logical trend here.

Continuing to expand the income bracket survey, the top 25% of income earners (incomes above $94,440) accounted for 72.1% of the nation’s total income, but paid 89.2% of the federal government’s income tax share.

 

[KCfromNC]

Are the income numbers reported just W-2 income or do they include investment dividends and gains?

 

[o_mlly]

Are the income numbers reported just W-2 income or do they include investment dividends and gains?

Click on the "numbers" link in the article to access the IRS report. The basis for the report is AGI which includes all sources of income.

 

[BCP1928]

What individual tax rate were the people in those groups paying?.

 

[Yeshua HaDerekh]

IRS Numbers Shred Biden’s “Fair Share” Platitudes

As for Biden’s “fair share” rhetoric, the IRS data eviscerates his claims.

cfif.org

Do wealthy Americans pay their “fair share” of income taxes?

If “fair” is defined as a reasonable equilibrium between someone’s share of income earned and their share of income taxes paid, then wealthier Americans actually pay more than their fair share.

That might surprise many people, but it’s the inescapable takeaway from the latest Internal Revenue Service (IRS) numbers.

It would certainly surprise Joe Biden, to the extent that he ever engages in thoughtful self-reflection. Oblivious to the facts, however, Biden instead continues to rationalize his relentless effort to raise taxes by insisting that he simply seeks to make the wealthy pay their “fair share.”

With this week’s grim news that the federal budget deficit has already reached a whopping $1.1 trillion just halfway through the 2024 fiscal year, Biden’s motive for raising taxes is obvious, even if his fidelity to facts leaves much to be desired. The problem isn’t that Americans are undertaxed, it’s that Biden and the federal government are overspending.

As for Biden’s “fair share” rhetoric, the IRS data eviscerates his claims.

For the 2021 tax year, the latest fully available to the public, the top 1% of income earners (Americans with incomes above $682,577) earned 26.3% of the nation’s income. But then take a look at the portion of the nation’s total income taxes that they paid: 45.8%. Accordingly, the portion of total income taxes paid is nearly twice as high as their portion of total income earned.

Under what form of logic can that gross disparity be characterized as “not paying their fair share?” Even the most stubborn leftists must experience an episode of cognitive dissonance upon the realization.

When it comes to the top 5% of income earners (those with incomes above $252,840), a similar imbalance exists. They earned 42.0% of the nation’s total income, but paid a lopsided 65.6% of the nation’s total income taxes. In other words, the top 5% is paying almost two-thirds of all income taxes, while their ratio of income on which they’re paying those taxes is well under half.

Moving down to the top 10% of Americans (those earning above $169,800), they earned 52.6% of the nation’s total income, but accounted for 75.8% of all income taxes paid – over three-fourths.

Even Biden himself would begin to detect a logical trend here.

Continuing to expand the income bracket survey, the top 25% of income earners (incomes above $94,440) accounted for 72.1% of the nation’s total income, but paid 89.2% of the federal government’s income tax share.

and so much for Biden's claim of not taxing anyone making under 400K lol...but those are who the IRS is targetting for audits Middle-class earners are the most targeted group for IRS audits — how to prepare if an auditor comes knocking

 

[iluvatar5150]

What individual tax rate were the people in those groups paying?.

SOI tax stats - individual statistical tables by tax rate and income percentile | Internal Revenue Service

This table, specifically:
https://www.irs.gov/pub/irs-soi/21in41ts.xls

IRS Numbers Shred Biden’s “Fair Share” Platitudes

As for Biden’s “fair share” rhetoric, the IRS data eviscerates his claims.

cfif.org

Do wealthy Americans pay their “fair share” of income taxes?

Your author's information is mostly correct - that is, until he gets to the bottom, at which point, he goes off the rails:

Again according to the official IRS data, as opposed to Biden’s mental meanderings, the top 1% of American income earners paid an average rate of 25.9%.

Everything up through the end of that sentence is fine. I'd argue that he's leaving out some of the rest of the context regarding how much value these high-income individuals derive from various government services, but the numbers themselves look okay. Everything he's been citing is available in Table 4.1:

SOI tax stats - individual statistical tables by tax rate and income percentile | Internal Revenue Service

Statistical tables classified by tax rate and income percentile.

www.irs.gov

But then he goes to this:

The top 5% to 1% bracket paid an average rate of 18.9%, with the top 10% to 5% of income earners paying a 14.3% average rate. Moving downward, the top 25% to 10% bracket paid an average rate of 10.3%, while the top 50% to 25% bracket of earners paid an average rate of 7.2%. Meanwhile, the bottom half of American income earners paid an average of just 3.3%.

I have no idea where those numbers come from.

The average tax rate for the Top 1% is listed in cell F138, and the value is 25.93%, which is what he cited.
But the averages for the Top 2-5 percentiles are listed in cells G138-J138, with the lowest being 23.29%, but he said averaged to 18.9%.
Top 10 - 25 have avg tax rates between 18.44% - 21.47%, which he averages to 10.3%.
Top 25 - 50 have avg tax rates between 16.24% - 18.44%, which he averages to 7.2%.
The bottom 50% isn't even listed on this chart, but he averages it to 3.3%.

His numbers are nonsense. You can't have a bunch of numbers between 18 and 21 and have them average out to 10.

What I suspect happen was that he tried to calculate these averages himself because those specific brackets (e.g. Percentiles 2 through 5, or IOW the Top 5 minus the Top 1) aren't part of the IRS' official data and, in doing so, he messed up the math.

It’s also important to note that the U.S. income tax system has become more progressive since the 2017 tax cuts under former President Donald Trump, not less. Since that date, the share of income taxes paid by the top 1% has increased from approximately 39% to today’s 45.8%.

To be more precise, it jumped from 38.47% to 45.78%, which is an increase of 19%.

However, their share of income over that same span went from 21.04% (in 2017) to 26.3% (in 2021), which is an increase of 25%.

So, yes, the income tax rates became a little more progressive (but only the income tax rates, not payroll or capital gains rates), but at the same time, even more money flowed to the top.

Accordingly, whether one prefers a flat tax or a progressive income tax under which wealthier Americans pay a higher rate, it’s impossible to intelligently argue that the U.S. tax system itself isn’t steeply progressive.

And because tax policy maintains such outsized impact on our economy and wellbeing, it’s important to be guided by facts, not baseless rhetoric of the sort peddled by Biden and those who relentlessly demand ever-higher taxes and more government spending.

It's progressive. It's not "steeply" progressive. Contrary to what the author claims, the average rate for the Top 50% (which has an income floor of $46,637) is 16.24%. The Top 5% (with an income floor of $252,840) has an average rate of 23.29%. It then goes up to 25.93% for the Top 1% (income floor of $682,577), where it peaks, and then back down to 23.1% (income floor of $118 million) for the Top 0.001%.

ETA: I'd also point out that this is only federal taxes. State taxes and fees tend to be much flatter or even regressive, so they'll flatten out some of this progressivity.

 

[Fantine]

FACT: You can't get blood from stones.

So the only alternative, according to you, is to drastically cut the budget (or, as Republicans prefer, throw caution to the winds and skyrocket the deficit.).

Let's see how the rich like Banana Republic social services.

Let's see how they can find qualified employees when the elementary, secondary and university school budgets are demolished.

Let's see how they like supervising a sick, uninsured employee base.

Let's see how they like a senior citizen populace that can't afford to shop, travel, etc. because of social security cuts. If you don't have consumers to use your goods and services, your companies fail.

Many call the Eisenhower years the best years. Tax rates for the rich were much higher, but the economy was great.

Likewise the Clinton years in the go-go 1990's.

 

[dogs4thewin]

FACT: You can't get blood from stones.

So the only alternative, according to you, is to drastically cut the budget (or, as Republicans prefer, throw caution to the winds and skyrocket the deficit.).

Let's see how the rich like Banana Republic social services.

Let's see how they can find qualified employees when the elementary, secondary and university school budgets are demolished.

Let's see how they like supervising a sick, uninsured employee base.

Let's see how they like a senior citizen populace that can't afford to shop, travel, etc. because of social security cuts. If you don't have consumers to use your goods and services, your companies fail.

Many call the Eisenhower years the best years. Tax rates for the rich were much higher, but the economy was great.

Likewise the Clinton years in the go-go 1990's.

Well, the wealthy tend to have less need for social serrvices as they usually do not need help and in as far as other things heck they could hire people to do it.

 

[Fantine]

I was on a mission trip in a country you apparently aspire to be--Guatemala.

We took a trip to the tablon (the squatters' village) in a pickup with some local activists. We passed by an enormous coffee plantation with a mansion across the streets with swimming pool, tennis courts, etc. And then everything ended.

No electricity.
No water.
No gas.
No roads.

I guess the coffee plantation owner liked a society where these things went to his house--and no further.

In the tablon people had homes made of sheet metal and cardboard They had a cpvered patio where a "volunteer" teacher would visit once a week and educate? the children there. Children in oversized crocs could be seen carrying piles of twigs for fires or jugs of water. It was kind of how I picture tribal Africa.

So this is the kind of society you propose for America? The rich don't need social services so no one else should, either? SMH.

 

[RocksInMyHead]

Well, the wealthy tend to have less need for social serrvices as they usually do not need help and in as far as other things heck they could hire people to do it.

While they do not directly benefit from a lot of social services (in that they do not draw from them themselves), they do benefit indirectly in many ways. Robust social services keep society functioning as a whole - they reduce crime, keep people off the streets, and help maintain a healthy, educated workforce. Sure, if you're wealthy, you can deal with a society that lacks those things - you can build a wall around your mansion, hire guards to defend it, and treat your workforce as a disposable commodity, but is that really a society that you want to live in?

 

[dogs4thewin]

While they do not directly benefit from a lot of social services (in that they do not draw from them themselves), they do benefit indirectly in many ways. Robust social services keep society functioning as a whole - they reduce crime, keep people off the streets, and help maintain a healthy, educated workforce. Sure, if you're wealthy, you can deal with a society that lacks those things - you can build a wall around your mansion, hire guards to defend it, and treat your workforce as a disposable commodity, but is that really a society that you want to live in?

does not sound particularly fun.

 

[RocksInMyHead]

does not sound particularly fun.

Right - you see the point then?

 

[dogs4thewin]

Right - you see the point then?

a little bit

 

[Vambram]

I was on a mission trip in a country you apparently aspire to be--Guatemala.

We took a trip to the tablon (the squatters' village) in a pickup with some local activists. We passed by an enormous coffee plantation with a mansion across the streets with swimming pool, tennis courts, etc. And then everything ended.

No electricity.
No water.
No gas.
No roads.

I guess the coffee plantation owner liked a society where these things went to his house--and no further.

In the tablon people had homes made of sheet metal and cardboard They had a cpvered patio where a "volunteer" teacher would visit once a week and educate? the children there. Children in oversized crocs could be seen carrying piles of twigs for fires or jugs of water. It was kind of how I picture tribal Africa.

So this is the kind of society you propose for America? The rich don't need social services so no one else should, either? SMH.

I apologize up front. But the questions in this post are some of the most ridiculous questions I have read on the American politics forums here in a long time.

 

[rambot]

Without social supports for the very poor, I am unsure what Americans think other Americans would do. I've heard PLENTY of people say they'd kill someone to protect their family or help them survive. Well, why do you think that extreme poverty would be an area where that WOULDN'T happen.

 

[Vambram]

The entire point of the article in the OP was to show that the vast majority of the federal income tax burden is continuing to be paid by those whom can afford to do so. Any attempts by the progressive left politicians to suggest that the rich and wealthy are not paying their fair share is more attempts by the progressive left to hide the truth.

 

[rambot]

I apologize up front. But the questions in this post are some of the most ridiculous questions I have read on the American politics forums here in a long time.

Exactly what level of support, if ANY should government provide to it's poorest citizens?

Does anyone BESIDES the government have any other obligation to provide for these people in your ideal world?

If these people are unable to get the necessary income to survive, what do you predict would be the next steps they would take?

 

[Vambram]

Exactly what level of support, if ANY should government provide to it's poorest citizens?

Does anyone BESIDES the government have any other obligation to provide for these people in your ideal world?

If these people are unable to get the necessary income to survive, what do you predict would be the next steps they would take?

My OP is not suggesting that we do not support and take care of those whom need help.

 

[rambot]

The entire point of the article in the OP was to show that the vast majority of the federal income tax burden is continuing to be paid by those whom can afford to do so. Any attempts by the progressive left politicians to suggest that the rich and wealthy are not paying their fair share is more attempts by the progressive left to hide the truth.

The truth is that there is a class warfare in the United states and the money is flowing from the poor to the rich.

You can argue they are paying their fair share in tax but that's because they got ALL THAT MONEY from the poor.

It seems hard to believe that someone who could afford innumerous houses and yachts with chopper pads and baby boats inside them, is EVER REALLY paying their "fair share" in taxes, when taxes contribute to some people's inability to treat themselves to their first vacation in 5 years and go on a staycation to a local hotel with a swimming pool.

It's a bit like the widow who only gave a couple copper pennies. Jesus recognized that gave WAY more than the rich men who PILED on their tithes to the church. Why don't other christians see the same when it comes to the "value" of people's contributions?

View taxes as a "Sacrifice" and then you see that taxes and fines are no sacrifice for the rich but are a practical burden on people like you and me. So yeah, for SURE they are paying MORE money in taxes than me and most people I know. But their lifestyle and it's spoilings are not affected by it.

 

[RocksInMyHead]

The entire point of the article in the OP was to show that the vast majority of the federal income tax burden is continuing to be paid by those whom can afford to do so. Any attempts by the progressive left politicians to suggest that the rich and wealthy are not paying their fair share is more attempts by the progressive left to hide the truth.

That depends on how you define "fair share". No one disputes that the wealthy pay the largest portion of federal income taxes, or even that they pay a greater percentage of their income than other income brackets (though this can vary on an individual basis thanks to creative accounting).

The arguments are that:

1. The government is short on money, and that money has to come from somewhere. Tax cuts have not caused it to materialize as promised, and the government has shown itself incapable of cutting expenses in any meaningful way.
2. Those people in higher income backets are more easily able to bear a tax increase as they have significantly more disposable income.