This is proof that most people don’t want to learn who pays the most in taxes. Later, when the reporter published his article, the headline read, “Rich Man Makes $1 Million and Admits to Paying Nothing in Taxes.” While he had the facts right-I did pay nothing in taxes-he got the spirit all wrong. The money was never technically income but instead reinvested into new, larger properties. I then went on to explain that I had sold three pieces of property and was able to defer my income by placing the proceeds into a 1031 exchange. To his surprise, I said that I paid nothing. The reporter’s follow-up question was, “How much did you pay in taxes?” I told him that I made about a million dollars that year (considered 0.01% at the time). Many years ago, I was asked by a newspaper reporter how much money I’d made in the last year. When you take into account that the average earner in the 0.01% makes $26.1 million, you can start to see that those who many would consider “rich”-the top 1% of earners-are actually paying a lot more in income tax than those who are ultra-rich, the top 0.01%. Based on 2018 estimates, while the top 1% of earners (those above $730,000) pay 43% of all income tax, the 0.01% (those above $3.2 million) only pay 22%. What’s interesting, however, is when you break down the share of income tax paid by the rich vs. But they will pay about 87% of income taxes, up from about 84% last year.”Ĭonversely, when you look at the lower tier of income earners, people making up to $48,000 a year actually pay net negative income tax. A 2018 analysis from the Tax Policy Center, a non-partisan think tank in Washington D.C., was visualized in this chart in “ The Wall Street Journal” to help break down the numbers.Īs the Journal reported: “For 2018, households in the top 20% will have income of about $150,000 or more and 52% of total income, about the same as in 2017. This chart by The Balance shows that the top 10% of earners in the US pay almost 60% of the federal income tax.īut if you slice the numbers even further in that 10%, things get interesting. Most people like to complain about the “rich” not paying their fair share in taxes.īut if you look closely at the numbers, those whom most people would consider “rich” pay almost all of the income taxes collected by the US government.
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