Monday, September 26, 2011

The top 400 Americans make more than half of all Americans combined

First Posted: 9/25/11 10:46 AM ET Updated: 9/25/11 01:15 PM ET


On Fox News Sunday, Plouffe and host Chris Wallace argued over whether the wealthiest Americans already pay too much in taxes. Wallace put up a graphic on the screen with data from the Tax Policy Center showing that the top 1 percent of Americans pay 38 percent of federal income taxes, and the top 10 percent pay 70 percent. Meanwhile, 46 percent of households pay no federal income taxes.


Those numbers have become favorites among conservatives, used by New York Times columnist David Brooks.

However, they don't tell the whole story.

First of all, the top 400 Americans make more than half of all Americans combined.

Income taxes aren't the only types of taxes people pay. There are also sales, payroll and property taxes, among others.

As David Leonhardt of The New York Times wrote, the "vast majority" of American households do end up paying federal taxes, even if they don't all pay income taxes.

"Congressional Budget Office data suggests that, at most, about 10 percent of all households pay no net federal taxes. ... The reason is that poor families generally pay more in payroll taxes than they receive through benefits like the Earned Income Tax Credit. It’s not just poor families for whom the payroll tax is a big deal, either. About three-quarters of all American households pay more in payroll taxes, which go toward Medicare and Social Security, than in income taxes."

The White House, in its talking points on Obama's jobs plan, also tried to debunk the notion that the wealthiest pay an unjust share of federal taxes, noting, "And the top 400 richest Americans, all making over $110 million per year and making an average of $271 million per year, paid only 18 percent of their income in income taxes in 2008. In fact, since the mid-1990s, the share of income paid by the wealthiest 400 Americans has fallen by nearly 40 percent, from 29.9 percent in 1995, even as their average incomes roughly quadrupled."


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