By EJ Antoni | Heritage Foundation
What is your fair share of what someone else has earned? That’s the fundamental principle being tested when discussing “the wealthy paying their fair share.”
Politicians frequently use this hackneyed phrase with ill-defined terms in their calls to raise taxes. Still, the numbers don’t support the idea that the wealthy are skirting their financial responsibility to the nation.
According to the U.S. Treasury, the bottom 10% of income earners pay no taxes, and the second income decile has an average tax rate of minus-4.8%. Mechanisms like refundable tax credits mean this group receives more from the Treasury than it pays in taxes, creating a negative rate.
Those in the 20% to 30% of income earners pay an average tax rate of just 2.8%. Predictably, as a person earns more, he or she pays a higher percentage of his or her income in taxes. Still, no one in the bottom half of income-earners pays more than a 10.1% average tax rate.