Talking Taxes

Bruce Bartlett tackles some tax myths:

– Contrary to popular belief, the vast bulk of federal taxes are paid by the wealthy. According to the JCT, in 2006, 53.7 percent of all federal income taxes were paid by those with incomes over $200,000. Those with incomes between $100,000 and $200,000 paid 28.3 percent of all individual income taxes. Thus those with incomes over $100,000 paid 82 percent of the total. They also paid 44.4 percent of all payroll taxes.

– Those with incomes below $40,000 paid no federal income taxes at all in the aggregate; the positive liability for those who paid anything was more than offset by tax rebates from the Earned Income Tax Credit for many more who paid nothing. In total, the EITC put $41 billion into the pockets of low-income workers in 2005, 91 percent of it being paid to those with no income tax liability. However, according to the Tax Foundation, three-fifths of Americans believe that it is wrong for anyone to pay no taxes at all, that everyone should pay something to finance the government.

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