The rich are paying even more in taxes than you think.
According to a Congressional Budget Office report this week, America’s top 40 percent of earners pay 106 percent of the taxes and the bottom 40 percent pay negative 9 percent, reports CNBC.
How can one group pay more than 100 percent and another group pay less than zero?
The formula that the CBO uses offsets taxes that are paid with refundable tax credits. These include money the government transfers back to the taxpayer for food stamps and social programs.
Some low-income Americans received very generous subsidies. The report shows that Americans who earned an average of $8,100 in 2010 received nearly $25,000 in government aid.
And within the lowest income group, approximately one quarter of them pay negative 15 percent in taxes.
The CBO says that the majority of Americans are actually paying relatively low taxes: “For most income groups, average federal tax rates in 2010 were near the lowest rates for the 1979-2010 period.”
But the wealthiest bear most of the tax burden, paying more in 2010 than they did in mid-1980s under President Ronald Reagan.
These percentages were from the 2010 IRS and Census Bureau figures, and since then, new taxes have been placed on most Americans.
President Obama recently said in a speech hosted by the liberal Center for American Progress that economic inequality was the “challenge of our time” and that addressing the issue drives everything he does in the White House.
Raising taxes on the wealthy and providing generous government aid to low income Americans has been a major component of his fight against income inequality; however, since he came to office, over 6.7 million Americans have fallen into poverty.
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