Who Pays America's Tax Burden, and Who Gets the Most Government Spending?

[Calabrio]

Who Pays America's Tax Burden, and Who Gets the Most Government Spending?
http://www.taxfoundation.org/news/show/2286.html
by Andrew Chamberlain, Gerald Prante and Scott A. Hodge

Special Report No. 151

Executive Summary
While many studies answer the question of who pays taxes in America, the question of who gets the most government spending is often overlooked. Just as some Americans bear a larger portion of the nation's tax burden than others, some Americans also receive a larger share of the nation's government spending.

This report summarizes the key findings of a comprehensive 2007 Tax Foundation study of federal, state and local taxes and government spending. The results show that when we consider the distribution of government spending as well as taxes, it provides a dramatically altered view of how U.S. fiscal policy affects Americans at different income levels than is apparent from the distribution of tax burdens alone.

Overall, we find that America's lowest-earning one-fifth of households received roughly $8.21 in government spending for each dollar of taxes paid in 2004. Households with middle-incomes received $1.30 per tax dollar, and America's highest-earning households received $0.41. Government spending targeted at the lowest-earning 60 percent of U.S. households is larger than what they paid in federal, state and local taxes. In 2004, between $1.03 trillion and $1.53 trillion was redistributed downward from the two highest income quintiles to the three lowest income quintiles through government taxes and spending policy.

These findings suggest tax distributions alone do not tell Americans how much the nation's fiscal system is helping or hurting low-income households. To answer that, we must look beyond tax burdens to government spending as well. Lawmakers who ignore the distribution of government spending risk making policy judgments based on an incorrect set of facts about the United States fiscal system.

 

[fossten]

With that perspective, it should be with a jaundiced eye that we view any words by the Democrats such as, "...tax cuts for the richest of Americans." If they are the only ones paying taxes, they would obviously be the only ones to receive a tax cut.

 

[Joeychgo]

Something rarely mentioned... Income tax is by far not the only tax. Real Estate, fuel, utility tax, sales tax, liquer, cigarettes, etc. These are all taxes that get paid as well, and get paid on a usage basis. I only point this out because it often sounds like the lower incomes pay next to nothing and suck all the money out of the system.

Im not trying to start a debate, just make the figures more accurate and encompassing.

Personally, I would rather see a national sales tax instead of an income tax anyway.

 

[Calabrio]

Something rarely mentioned... Income tax is by far not the only tax. Real Estate, fuel, utility tax, sales tax, liquer, cigarettes, etc. These are all taxes that get paid as well, and get paid on a usage basis. I only point this out because it often sounds like the lower incomes pay next to nothing and suck all the money out of the system.

Im not trying to start a debate, just make the figures more accurate and encompassing.

Personally, I would rather see a national sales tax instead of an income tax anyway.

With the exception, possibly, or cigarette taxes, which of those taxes are you trying to imply are paid in a greater percentage by the poor?

Real estate? No. Irrelevant though, since this is a study of federal tax. But wealthy people typically own more expensive property, in areas with high tax rates.

Fuel? Unlikely though possible. But this would be a very small federal figure.

Sales Tax? Rich people buy less stuff than poor people? Nope. Also not a federal taxes.

So, what's your point Joey? You just made a very case providing even more sources where the wealthy are paying a higher amount of tax dollars for fewer services.