Mark Perry analyzes the new CBO report on the Distribution of Household Income and Federal Taxes, 2011 showing that only Americans in the top 20% of household income are “net payers” of income taxes, meaning they pay more in taxes than they receive in benefits. The bottom 60% pay less in taxes than they get back in government entitlements and subsidies. The 4th quintile pay only slightly more taxes than they get back. The top 20% in income are funding the entire government.
The CBO report has received a lot of attention and commentary. Perry adds some that hasn’t been discussed yet:
Some additional analysis and commentary will be provided here that reveal a yet-to-be discussed major implication of the CBO report – almost the entire burden: a) of all transfer payments made to American households and b) of all non-financed government spending, falls on just one group of Americans – the top one-fifth of US household by income. That’s correct, the CBO study shows that the bottom three income quintiles representing 60% of US households are “net recipients” (they receive more in transfer payments than they pay in federal taxes), the second-highest income quintile pays just slightly more in federal taxes ($14,800) than it receives in government transfer payments ($14,100), while the top 20% of American “net payer” households finance 100% of the transfer payments to the bottom 60%, as well as almost 100% of the tax revenue collected to run the federal government. Here are the details of that analysis.
Perry includes this stunning chart:
The whiners should stop their bellyaching and start sending thank you cards to anyone they know of who has income over $250,000 a year. These are the people who are pulling the wagon and everyone else is riding in it. OK, that’s they way it is, but those getting a free ride should have the decency to stop fussing about the “Rich.”
Read all of Mark Perry’s analysis.