Q&A of the Day – Can you really tax the “rich” for more free things?
Each day I’ll feature a listener question that’s been submitted by one of these methods.
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@brianmuddradioA while back you did an excellent piece on who is considered rich by IRS standards. If I recall the number was just south of $70K/year. My adjacent theory is if you taxed top 1% at 90% rate, it would still not cover annual government spend. Any numbers to share?
Bottom Line: If memory serves this was a story, I created last September based on data from the Pew Research Center along with IRS data demonstrating the percentage of people who live in upper, middle- and lower-class households along with who pays what in taxes. With the 2020 Democrats talking about raising taxes, taxing the rich, for puppies and lollipops for everyone every day, etc. It’s a good time to reset. Here’s a quick recap to set the stage for your question.
Based on the most recent available information from the IRS:
- Top 1%:37% of all federal income taxes paid
- Top 5%: 60% of all federal income taxes paid
- Top 17% (all who earned $100k or more): 80% of all income taxes paid
Those earning under $50k
- 43% don't pay any net federal income tax
- The percentage of taxes paid...5%
Now, to your question about the taxing the top 1%at 90% still not being enough to cover the total tax burden. You’re right and then some. The total earnings of the top 1% equaled $2 trillion last year. The total federal government spend was $4.1 trillion. Forget 90%, if you confiscated all of the top 1%’s earnings you still can’t even account for half of the government spend prior to offering free puppies and lollipops to you and all of the illegal immigrants of the world who will also get free college education. It’s all a bunch of campaign BS and no, it’s not evenly remotely plausible to tax the rich into the ability to provide for all the “free” promises.