Share all sharing choices for: The greatest trick the rich ever before pulled to be making us believe they pay every the taxes

Blue-collar workers pay taxes, too. Shutterstock
generally when politicians fight about taxes, they fight about the income tax. That is come say, they fight around the tax that rich human being hate — no the taxes negative people hate.

You are watching: The greatest trick the rich ever pulled

This leader to a yes, really perverse dynamic, within the count the privileged pay are worthy of attention and the people the negative pay space ignored. The paints a photo where the government is being supported on the backs of the wealthy, and also the poor and also middle class are free-riding. It leads to plan for miscellaneous kinds of taxation cuts and also tax reforms that issue massively for the rich and very little for the poor.

The worry here is the ceaseless emphasis on the federal revenue tax. A report indigenous the joint Committee on Taxation uncovered that most Americans (65.4 percent the filers) pay more in payroll taxes than earnings taxes. It\"s only when you start looking at folks making end $200,000 a year that most world are paying an ext in earnings taxes.

The numbers here are surprising if girlfriend think around tax solution as something people only pay into, fairly than gain anything the end of. But due to the fact that so much of us social policy is structured as taxes credits, a lot of of people get an ext money back from earnings taxes than they placed in. The JCT finds that people making under $40,000 acquire $81.1 billion an ext back native the revenue tax system than they placed in — largely because of refundable credits choose the Earned earnings Tax Credit and also the son Tax Credit.

But the same group pays $121.5 billion in payroll taxes. Lock still, top top net, contribute billions to the federal government every year. Of course, this doesn\"t even count the sizable contribution of the poor and middle course in state and local taxes, i m sorry are actually greater for the poor than they are for the rich.

This isn\"t just true for the negative — it\"s additionally true because that the middle class. Filers making in between $40,000 and also $50,000 pay virtually 12 times as lot in payroll taxes as in earnings taxes; filers making in between $50,000 and $75,000 pay much more than twice as much.

This helps define why some policymakers — like Sens. Mike Lee (R-UT) and also Marco Rubio (R-FL) — are exploring ways to alleviate payroll tax burdens, for example by presenting a brand-new tax credit for parents that can likewise reduce payroll taxes. That\"s a transition from normal, income-tax-focused policy debates — and, for poorer families, a welcome one, too.

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Thanks to Howard Gleckman in ~ the tax Policy center for the pointer to the JCT report.

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