Wednesday, April 14, 2010

Who pays taxes?

The blogosphere is buzzing about the current conservative talking point that 47% of Americans pay no income tax. As many have pointed out, this is a very selective reading of the numbers. Anyone in the middle class who's looked at their pay stub notices that they pay more to that goddamn FICA than they do in actual income tax. FICA is one of a couple payroll taxes that people pay that are not being counted in the number being bandied about on Fox News.

There's also state income taxes, which tend to be more regressive, with fewer and closer spaced brackets. (Illinois, for example, has a flat 3% income tax, which falls more heavily on the poor than the rich, who make more of their income through capital gains.) States, counties and cities also levy sales taxes, which are highly regressive. Someone living paycheck to paycheck spends far more of their income than someone who makes enough to invest in stocks and whatnot. Overall, our taxes mirror the percentage of income that we make quite well:

(Of course, the end point of the debate is the conservative view that taxes should be made more regressive. I already posted a couple charts that should make anyone rethink that idea.)

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