Who pays the lowest portion of the tax burden in the United States?

Question

This morning I visited the IRS and ran some numbers concerning the TAX burden in the United States.

The numbers were pretty revealing. They were not as easy to get as I first thought they probably were. I took them from an IRS web site, which does not agree with other websites I visited. Congress really needs to work on data accessibility and consistency.

What I found was kind of startling.

Returns filed making between 200,000 and 500,000 pay the lowest portion of taxes. In fact they pay about 1/8 of the ratio that most other groups including people making between 5 and 10 million.

After running some statistical analysis there is no way to account for this.

Most corporations pay a higher ratio of taxes to net compared to individuals.

I ran the numbers pre-tax credit, just as an FYI.

Corporations paid about 200 billion in taxes (2004) and individual tax returns accounted for almost a trillion.

So did anyone else expect these kinds of numbers?

I should have mentioned "Income" tax as opposed to tax.

Statistically there are 11,670,44 returns making less than 5K, paying a total of $1,907,604,000.00 with an average of $163.46 per return. 1/30

There are 9,735,569 returns making between 100K and 200K paying $194,152,622,000.00 in taxes for an average of $19,942.61 per return. 1/12

There are 2,348,163 returns between 200K and 500K making a total of $13,625,272,000.00 for an average of $5,802.52 per return. 1/87

Corporations pay a higher percentage of net (before credits) than individual returns do.

There is no doubt in my mind that individual returns account for a small portion of the national GDP and about half of the US tax receipts.

I did not expect the dramatic drop in the 200K to 500K range and then more normal taxation at higher income.

This 200K to 500K issue seems to go on for many years and I wonder why this group is not audited more often. There is obviously an issue in this group.

No real answers huh? bummer

Oh, one more thing, there are 15,835 returns between 5m and 10m making a total of $25,604,609,000.00 and paying an average of $1,616,962.99 for a ratio of 1/6.

Get it?

I expected the ratio to go down from either the mean or median as it went up and the ratio did not go down, people who make more money pay a higher percentage of taxes EXCEPT for the 200K to 500K.

That surprised me.

That and the fact corporations paid about 1/5 of what taxpayers paid in total although they paid a higher ratio, 1/2 (about).

BekindtoAnimals22:
people making from 1 to 50K pay a total of $165,891,200,000.00 in taxes, 89,447,510.00 total returns with an average per return of $1,854.62 and a ratio of about 1/13

I need to study this further. I was hoping for some good input. I am going to run some analysis comparing income, taxation and GDP to see where I get with that.

My bottom line is that 200K to 500K should be paying around an average of 41K, not an average around 5K.

Anyhow, more work to do reviewing taxes and GDP. I will pick a best answer later today.

Grandad, you have a good point although my research leads me to believe the majority of politicians make less than 200K.

Interestingly it appears that the demographics indicate that most people in the 200K to 500K range identify as "liberals". Interesting.

Answer 1

Our tax system is entirely too complicated and I gather from your comment about finding the actual figures shows that it is used as a political ploy. The fact that people argue constantly about who pays the most taxes proves that. I would be interested in how much is collected from people making $50,000 and under.

Answer 2

Politicians fall into that 200-500K catagory,didn't you know that?
We need a national sales tax to replace the mess we have now.
You get taxed only when you buy.
Criminals,drug dealers and hookers don't pay any taxes,but they buy things.
All the IRS agents can be reassigned as Border Patrol Agents and sent south where they can do some good.

Answer 3

Huh....say when you were running those numbers, did you not see that there is a large portion that pay ABSOLUTELY NO taxes? Would that not be the group that pays the lowest portion? Then if you match that with what subgroup gets the largest portion of domestic spending....why you got a group that pays nothing and gets most of the money. Sound fair?

Numbers are fun

Answer 4

Obviously, the sheer numbers of people that are in the mainstream would make this true.


Unless your calculator is missing some buttons, you will know that a corporation paying x amount of dollars will be overtaken by 100,000 of the mainstream median income. That is just common sense.

Answer 5

Your questions should reflect INCOME TAXES, when you say taxes, that includes all taxes. Look at you phone bill and see the taxes listed and fees. The lower a person income the higher their average, on a percent, they are paying. Tithing is a ten percent across the board. This is a good example of a fair system. What we have is criminal!

Answer 6

In real numbers of course corporations will pay more. Corporations pay a larger figure of tax monies because they are vastly richer.

What matters is who pays PROPORTIONALLY more - a corporation with 1 billion dollars can afford to pay 1 million in tax, someone with 100 can not so readily afford to pay 10.

Answer 7

Your findings were not surprising,however you should also realize that the corporations also suck out billions of free money from the U.S. Treasury, i.e. Bail outs and fraudulent billing in the defense industry,not to mention white collar crime in the banking industry.
Can we have a flat TAX Please! Now!

Answer 8

Why would you find that startling? I had someone on here tell me that 84K a year was just getting by, so I can assume that the group you mentioned is now the middle class.

Answer 9

Welfare queens take from the system and never put anything into it, so I'd say they "pay" the lowest portion of taxes in the US.

That's why I'm a conservative, because we can't all be on welfare.