Here’s the data that shows just how “fair” our current federal tax system is, and the trends that will choke capitalism, production, and prosperity in this nation. At this rate, we are literally taxing ourselves out of the prosperous America we know.
This table illustrates which Americans provide income tax revenue for our nation. It’s from the AICPA, the American Institute of Certified Professional Accountants, and it sources the Congressional Budget Office, Historical Effective Tax Rates: 1979 – 2005, December 2007.
Each column shows the percentage share of US income tax for the years 1980 to 2005, separated into quintiles (5 equal segments of 20%) based on taxable income.
Share of Federal Income Tax Liabilities (Quintiles)
| Year | Lowest | Second | Middle | Fourth | Highest |
| 1980 | 0.1 | 4.2 | 10.8 | 20.2 | 64.8 |
| 1985 | 0.2 | 4.0 | 9.9 | 16.0 | 66.9 |
| 1990 | -0.4 | 3.3 | 8.9 | 17.8 | 70.4 |
| 1995 | -2.0 | 1.9 | 7.7 | 16.2 | 76.1 |
| 2000 | -1.6 | 1.1 | 5.7 | 13.5 | 81.2 |
| 2005 | -2.9 | -0.9 | 4.4 | 13.1 | 86.3 |
Some Interpretation
In 1980, taxpayers whose taxable income was in the lowest 20% group provided .1% of the nation’s income tax. For this same year, taxpayers whose taxable income was in the highest 20% provided 64.8% of the nation’s income tax.
Contrast this to 2005, when taxpayers whose taxable income was in the lowest 20% group had a negative 2.9% income tax due to various tax programs that provide payments to low income individuals; taxpayers whose taxable income was in the highest 20% group provided 86.3% of the nation’s income tax.
The impact of this chart becomes even more dramatic when the groups are combined…..
In 1980, combining Lowest, Second, and Middle columns shows that 60% of taxpayers provided only 15.1% of our nation’s tax revenue. Combining the Fourth and Highest columns shows that 40% of taxpayers provided 85% of our nation’s tax revenue.
The tax burden shifts even more to high income taxpayers in 2005 – the lowest 3 groups provide only 0.6% of the nation’s tax revenue while the 2 highest groups provide over 99% of the nation’s tax revenue.
To summarize 2005:
- 40% of taxpayers provide over 99% of our total tax revenue
- 60% of taxpayers provide less than 1% of our total tax revenue
What Do You Think?
This data is only as recent as 2005. Does anyone think this trend is sustainable?
If you have further insights or comments into how these taxing trends affect us, please leave comments.
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“The war against illegal plunder has been fought since the beginning of the world. But how is… legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. Then abolish this law without delay … If such a law is not abolished immediately it will spread, multiply and develop into a system.” ~ Frederic Bastiat
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