A Closer Look at Federal Income Taxes by Fernando Martin
The Federal Reserve has done a nice job of illustrating how the varying household income levels and corporations pay taxes and which groups are most able to increase tax revenue. This is particularly important with President-elect Trump and a Republication Congress preparing their budget for the coming year. Current proposals would lower incomes taxes on high income earners and corporations which will greatly increase the federal budget deficit. The hope is that lower taxes will spur economic growth so employees and employers earn more and eventually pay more in taxes.
Most of this short, but dense, article nicely explains how much of the tax revenues are paid by the top 1% income earners. This article also includes payroll taxes which are often neglected in political discussions. These taxes are paid by the company or business on behalf of the employee. The employee doesn't see this directly, but they are extremely important since this tax is paid into medicare, social security and social insurance (entitlements). So these taxes are a significant portion of the money that will eventually provide income and healthcare in retirement.
As an aside, I find the term "entitlements" often misused in policy debates. Entitlements have been earned by payments to the government from individual tax payers and employers. So, it's understandable when either political party intends to reduce these benefits and senior citizens or people with disabilities strongly object.
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