Taking a deeper look at tax numbers
The Oct. 18 column by Walter E. Williams asserts that a mere 1.7 million Americans, less than 1 percent of our population, are paying 70.6 percent of our federal income taxes. That sounded outrageous to me, and it also turned out to be wrong.
Mr. Williams was right about the top 10 percent of taxpayers paying 70.6 percent of taxes, but way off base about this group being only 1.7 million Americans. We have 171 million households in the U.S. that file federal tax returns. If we are taking 10 percent of this number, that would be 17 million, not 1.7.
We also must remember that these are households, not individuals. The higher the income level, the more likely it is that the household consists of a married couple. I could not find anything for the top 10 percent, but I did find a report stating that 85 percent of the top 20 percent of income-reporting households were married couples. So we are actually talking about at least 32 million Americans that fall into this group.
This equates to 10 percent of our population of 323 million, a number that includes children and the elderly. I personally would exclude those two groups from the calculation, but obviously Mr. Williams was determined to make his point. Why shouldn't toddlers pay taxes? The freeloaders.
Still, is this level of taxation fair? The top 10 percent of taxpaying households happen to earn 47 percent of all the income. If we are going to have a graduated federal income tax, then by definition, this group has to pay more than 47 percent of the taxes. And let's not forget the growing income disparity in this country. Since the 2008 financial crisis, the vast majority of the growth of income in the U.S. has gone to the top 10 percent. One report stated that this group captured all of the income growth between 2011 and 2014.
We should also consider the many taxes that are not graduated - payroll taxes, sales taxes, state income taxes and excise taxes - which proportionately take a larger bite out of the income and buying power of less affluent taxpayers.
So yes, I think the current federal tax rates are very fair. I also think the economy is better served by putting more money into the hands of the poor and middle class. They would use it to buy goods and services. What are the Koch brothers going to do with another giant bucket of money? Influence more legislation?
William Myers
Buffalo Grove