One phrase that I hear out of the mouths of politicians, mainly liberals is that the "rich" don't pay their "fair" share of income taxes.  Here is an article that describes how taxes are paid and by whom.

 

Here is a chart that breaks it down.

 

In a nutshell, the top 3/5 of income earners are the ones that actually pay taxes.  The bottom 2/5 actually get paid when it comes to the tax system.  In my mind, I would probably consider the middle class to have an annual household income of around $50,000 to around $120,000.  The top 1/5 of income earners (those earning above $134,300) shoulder most of the burden at 83.9% of income taxes paid.  The rest of taxes actually paid falls on what I consider the middle class that I just described.

 

After writing my check to send to the IRS tomorrow, I as usual started to get a bit ticked off that people seem to think that this system, or one like it is actually "fair".  My income group ($79,500 - $134,300) shoulders the next highest portion of taxes paid at 13.4%.  I am by no means a rich guy, but I live comfortably.

 

One proposal that has come up is the Fair Tax Act.  This proposal is continuously shot down by liberals because it would "burden" lower income people.  This is a consumption tax that would tax based on what you spend vs. what you earn.  I happen to like this proposal because it would encourage saving and yet still bring in the same amount of revenue that we currently put on the upper and middle classes.

 

Keep in mind, we are only talking income tax here.  The Fair Tax would eliminate the income tax, and those that earn no income (ie. those that are wealthy that don't work, but survive off of dividends) would actually be contributing.  Also, those that "earn" their money illegally (ie., illegal immigrants, prostitutes, drug dealers, etc.) would also be forced to contribute to the system.  Finally, because it is a consumption tax, foreign visitors would also be putting some into the system.

 

 

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