Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: Notesfiles $Revision: 1.6.2.11 $; site uiucdcs.UUCP Path: utzoo!watmath!clyde!floyd!harpo!ihnp4!inuxc!pur-ee!uiucdcs!renner From: renner@uiucdcs.UUCP Newsgroups: net.politics Subject: Do the rich pay their fair share? - (nf) Message-ID: <29200122@uiucdcs.UUCP> Date: Mon, 23-Apr-84 00:15:00 EST Article-I.D.: uiucdcs.29200122 Posted: Mon Apr 23 00:15:00 1984 Date-Received: Wed, 11-Apr-84 07:35:37 EST Lines: 75 Nf-ID: #N:uiucdcs:29200122:000:4299 Nf-From: uiucdcs!renner Apr 9 23:15:00 1984 #N:uiucdcs:29200122:000:4299 uiucdcs!renner Apr 9 23:15:00 1984 tim sevener (iuvax!scsg) writes: > ...the middle-income taxpayer is forced to pay the taxes the wealthy > should have paid but didn't... Perhaps a few facts will help in understanding this issue. My source is the U.S Statistical Abstract (1982-3), table number 435: "Individual Income Tax Returns, by Adjusted Gross Income Classes: 1965 to 1980." All figures are in billions (1.0e09) of dollars. The question here is: do the wealthy avoid their "fair share" of the tax burden? The following table gives the total AGI, taxable income, and tax paid for 11 AGI classes in 1980, as well as the % of AGI deducted to form taxable income, and the % of taxable income paid as taxes. % of Adjusted total taxable % de- tax taxable Gross income class AGI income ducted paid income Under $5000 18.1 14.5 19.8 0.6 4.1 $5000-$9999 109.9 86.0 21.7 7.8 9.0 $10,000-$14,999 172.5 136.7 20.7 17.0 12.4 $15,000-$19,999 191.1 154.3 19.2 22.8 12.4 $20,000-$24,999 204.0 164.5 19.3 26.8 16.2 $25,000-$29,999 185.1 149.9 19.0 26.6 17.7 $30,000-$49,999 406.2 329.4 18.9 69.9 21.2 $50,000-$99,999 165.0 133.2 19.2 39.5 29.6 $100,000-$499,999 86.7 70.0 19.2 30.2 43.1 $500,000-$999,999 8.3 6.5 21.6 3.6 55.3 $1,000,000 and over 9.2 7.0 23.9 4.3 61.4 But how about those millionaires that pay no income tax at all? Table number 436, "Nontaxable Individual Income Tax Returns", says that there were 15,000 nontaxable returns with an AGI >$50,000 filed in 1980. The total income of all of these returns amounted to 1,109 billion dollars. The percent of AGI taken in deductions seems fairly constant at all income levels. The % of taxable income paid in taxes increases greatly with income. One might still wonder if the rich are paying their "share." The next table uses data from Table 433: "Federal Individual Income Tax Returns with Adjusted Gross Incomes," to present a breakdown of % of returns filed and % of total tax collected by AGI classes. number of returns filed % of total tax paid % of total Gross Income class (thousands) returns ($billions) tax paid Under $5000 19,492 20.7 0.6 0.2 $5000-$9999 18,371 19.5 7.8 3.1 $10,000-$14,999 14,303 15.2 17.0 6.8 $15,000-$19,999 11,098 11.8 22.8 9.2 $20,000-$24,999 9,159 9.7 26.8 10.8 $25,000-$29,999 6,784 7.2 26.6 10.7 $30,000-$49,999 11,004 11.7 69.9 28.1 $50,000-$99,999 2,568 2.7 39.5 15.9 $100,000-$499,999 444 0.4 30.2 12.1 $500,000-$999,999 12 0.013 3.6 1.4 $1,000,000 and over 4 0.004 4.3 1.7 If one defines "rich" as AGI>$500,000, then in 1980 the rich made up 0.02% of the US population and paid 3.1% of the total income taxes. CONCLUSION: Based on the above data, it does not appear that the rich are evading their reasonable share of the tax burden. Caveat: the definition of AGI (see below) does not exclude all abusive income shelters. I would have prefered to work with unadjusted gross incomes, but couldn't find that data. Obviously, I don't think the distinction destroys the validity of this article, or I wouldn't have bothered to prepare it. You may reasonably draw a different conclusion--but if you flame, please include *your* data and sources. [AGI is Adjusted Gross Income: gross income from all sources subject to tax reduced by legally permitted subtractions such as: expense of operating a business or trade, losses from sales of capital assets, etc. I am not able to compensate for capital loss exemptions, which include some (but not all) of the abusive tax shelter schemes.]