Thursday, January 9, 2014

Income Distribution and Tax Burden





According to this, 86.4% of all Federal taxes are paid by the top 40% of filers by income. And who are these people? From the table below, the fourth quintile has a market income of $87,700, and the top quintile has a market income of $234,400.



As noted in the footnote of Box 1: "Market income is composed of labor income, business income, capital gains, capital income (excluding capital gains),  income received in retirement for past services, and other sources of income. Government transfers are cash payments and  in-kind benefits from social insurance and other government assistance programs. Federal taxes include individual and  corporate income taxes, social insurance (or payroll) taxes, and excise taxes. After-tax income is the sum of market income  and government transfers, minus federal tax liabilities."