Bloomberg uncovered a shocking truth in 2018 about the top half US taxpayers. The top half of US taxpayers pay ninety seven (97.0) percent (%) of all federal income taxes. The top 1% pays 37.3% of all federal income taxes.
I thought the top 1% didn’t pay any taxes.
According to household income distribution data obtained from Statistica this revelation means 6.03mm households in the United States pay nearly forty (40) percent (%) of all taxes. The total United States Population is 327.2mm people as of 12/31/2018 (US States Census Bureau).
I’m a very common sense person. I also identify patterns well. I discern despite politicians insistence rich pay more…they actually pay enough. I’ll make my case with facts not opinions.
The total federal income taxes collected in 2018 was reported as $1.7 trillion dollars. That means the top 1% paid $634.1 billion dollars in tax revenue.
Let’s analyze some numbers further. That is roughly $105,157.54 per household. That doesn’t seem like too much per person right? Remember we tax income not assets. Millionaires are usually rich by assets not income. See the asset distribution for the rich as cited from Wall Street Journal. You will notice millionaires often have less than 10% of their wealth in cash.
Most people in the top 1% don’t make 1mm, 10mm, or 100mm per year. To be in the top 5% you need to clip $209,400 in earnings for the year and $421,926 per year for top 1%.
This income fact means the 1% income marker currently pays an effective tax of 24.9% a year (if uniformly averaged out over all households). Last time I checked that is almost at par with every other citizen. Comparing the top 1% with the rest of the population is only fair if we analyze the middle wage earners. 37% of households made less than $40,000. 25% of our household population made less than $25,000 per year. These people don’t pay any taxes. (Source: Statistica)
Roughly 62% of all households make less than $40,000 per year and didn’t pay any taxes.
If we charge even a 1% tax on these households a big gap in our deficits would reduce. The issue is government doesn’t charge them because of politics. There is thing called “Paid Tax Credits”. So these people often receive a refund back at the end of the year.
So who does the tax burden really get dumped on? If 62% of the working population skips a bill and 1% pay 37% of all tax revenue…who picks up the burden?
You guessed it. The working middle class foots the bill for nearly two thirds of the population who pay nothing. Here are the income brackets for 2018 for everything below the top 5% (Source: Statistica):
According to this chart 128,860,000 households fall in a taxable bracket. We call this middle class. The middle class is burdened by $1.0659 trillion of tax revenue. This amounts to $8,271.76 per household.
This means the top 1% pay approximately on average 12.71x the middle class tax burden.
38% of all households made more than $75,000 per year but were under the $166,200 for entry into the top 10%. The difference between 5% earners and 10% earners is only $43,200 per year.
People I think it’s time for us to stop being played by politicians, who manipulate words, misdirect issues and create agendas to deceive. The truth is the top 1% pays a huge portion of tax burden. The truth is 62% of our population pays nothing. The truth is the middle class picks up slack for those making under $40,000 a year. Even with the slack, the middle class burdens less than $10,000 a year.
The issue at hand is corruption, lack of transparency, and misdirection to hide issues that are apparent. Many US government officials have gross incompetence, lack of experience in solving real issues and worry only about re-election. Re-election is designed for a pay check and a lifelong pension.
If you want honest politics tell politicians the job doesn’t pay anything to support their households. I know what my opposition says. “Full time jobs require pay”.
Let’s analyze the history to see if we can support a full time job statement.
The House of Representatives averaged 138 “legislative days” a year since 2001, according to records kept by the Library of Congress. That’s about one day of work every three days. These people work fewer than three days a week. Why are we paying full time salaries for about 2 days of work a week? The average salary for a US Senator is $149,000. Don’t forget healthcare, benefits and other perks.
The American Congress started by George Washington and our fore fathers paid $6.00 per day (when you were actually at the house voting on bills not a salary). Congress and Senators need stipends like we get for jury duty. They don’t need us paying them full time. As far as inflation data goes back is 1860. $1 in 1860 is equivalent in purchasing power to about $30.79 in 2019. Let’s give them the $6 a day of 1860 which is $184.74 per day stipends. If our representatives keep up the work load they would earn $25,494.12 per year on the stipend program.
That’s what their time is worth. Anyone who doesn’t have a passion for making this country great, doing their civil service and striving to keep Americans safe doesn’t deserve a seat. These activities shouldn’t be considered a job. These activities should be considered a responsibility. Remove all the slander, negative comments, and corrupt over payments and you would see me be the first to volunteer.
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About Christopher: Christopher Knight Lopez is a Professional Entrepreneur. Christopher has opened over 7 businesses in his 14-year career. Christopher’s purpose is to take advantage of various market-driven opportunities. Christopher is a certified Master Project Manager (MPM) and Accredited Financial Analyst (AFA). Christopher previously held his Series 65 securities license. Christopher also has his General Lines — Life, Accident, Health & HMO. Christopher has managed a combined 286mm USD in reported Assets Under Management & Assets Under Advisement. Christopher has work experience in 29 countries, raised over 50mm USD for various businesses, and grossed over 7.5mm in his personal career. Christopher worked in the highly technical industries of: biotechnology, finance, securities, manufacturing, real estate, and residential mortgages. Christopher is a United States Air Force Veteran. Christopher has a passion for family, competitive sports, fishing, martial arts and advocacy for entrepreneurs. Christopher provides self-help classes for up-and-coming entrepreneurs. Christopher’s passion to mentor comes from belief that entrepreneurs need guidance. The world is full of conflicting information about entrepreneur identity. See more at www.christopherklopez.com.