Taxes are a universal complaint regardless of where you live. It is the stuff of bar conversations, news reports and Presidential debates. It is mentioned in the bible and let’s not forget that one of the twelve disciples was a tax collector (Matthew). Okay, Mitt Romney, here we go. . .
Is it true 47% of Americans don’t pay income taxes? After the Mitt Romney comment that almost half of Americans do not pay income tax, the Economist published this helpful table to give some context. Of the 47% of Americans who do not pay income tax. . .
- 28% of them do pay payroll taxes (even if they don’t pay income taxes)
- 10% are elderly
- 7% have income of less than $20K
- The % of Americans not paying income taxes has increased from 15% in 1985 to almost 50% currently during by Democratic and Republic administrations
Are US taxes high compared to other countries? As an American who recently filed his taxes (yes, I got the extension to August), I don’t like paying taxes; Don’t feel like I am getting my money’s worth – but that is a different discussion.
Looking at this Economist comparison of the effective tax rates paid by people earning the equivalent of $100K annually in different countries, the US has one of the lowest rates. . .
- Belgium, Greece, Germany, and France have the highest effective tax rates
- India and Brazil (both developing countries) also have high rates
- Of the 16 countries shown, only Russia and the UAE had lower rates
Are the wealthy in the US paying their fair share? In his Wall Street Journal article, David Wessels provided a lot of the data for readers to make up their own mind. In an interview, he noted that “fair share” is a completely subjective assessment. After looking at these four charts, what do you think? .
- #1: The top 5% have increased their share of wealth, but also increased the amount of taxes they pay. They earn 25% of the wealth, and pay 40% of the federal taxes
- #2: The bottom 40% earn a smaller portion of the pie, but also pay dramatically less (%) in federal taxes. Almost nothing
- #3: Most Americans pay less in fed taxes than they did in the early 80s (Regan era)
- #4: Inequality (rich getting richer, poor getting poorer) is rising, but government benefits and taxes are dampening those effects. Somewhat progressive.
Does everyone hate the rich? As a bit of a libertarian at heart, I believe that those who add value in the market place deserve their success and wealth. All Americans deserve equality in opportunity (education, legal protection, access to capital), but what you do with those blessings is completely up to you. People should be given the same inputs, not guaranteed the same outputs.
- From this survey, the Australians, Canadians, US and the Chinese seem to agree with me. The rich deserve their wealth
- Greeks, Russians, and Turks are most skeptical of the rich
With so many governments in debt and the increase in the numbers of pensioners, the notion of raising taxes is just as unpopular in the the UK, France, Greece or Germany. More than half of the readers of this blog are not from the US. Please leave your comments. Do these opinion poll results about the “rich” match your feelings?