Nobody likes to pay taxes and it gets even tougher when you hear things like the people wo make all the money pay less taxes than you do. But things may not always be as they seem. Top earners don’t always get away with paying less taxes then those who don’t make as much. So, who really pays more taxes?
In 2018, top earners will pay a higher share of income taxes. The individual income tax is where the country gets most of its revenue and so it is an important thing. For 2018, the individual income tax could raise 50% of total federal revenue, according to estimates from Congress’s Joint Committee on Taxation, up from about 48% last year.
So where is most of that money coming from? The Tax Policy Center, a nonpartisan research group provides estimates of who pays what as far as taxes are concerned. For their calculation they divide about 175 million American households into five income tiers of roughly 65 million people each. The income includes earnings from wages and investments plus untaxed amounts, such as from health coverage.
The results for the 2018 tax year may be quite surprising to some. For 2018, those households with an income of about $150,000 or more which is the top 20 percent of earners will pay about 87% of income taxes, up from about 84% last year. At the same time, the lower 60% of households, who have income up to about $86,000 will pay no net federal income tax in 2018 vs. 2% of it last year.
Although this seems fair for the average tax payer, there are those who still believe that people who earn far more than even the top 20 percent are enjoying the best tax benefits. With so many loopholes in the U.S. tax code it is difficult to really see how fairly Americans at all levels are taxed.