Americans: rich and poor

  • Last week the US census revealed that 46 million Americans – one in six – now live in poverty, the highest number ever.
  • In 2010, the top 20% of Americans earned 49.4% of the nation’s income. The top 1% account for 24% of all income.
  • About 47% of US people pay no federal income taxes, either because their incomes are too low, or because they qualify for enough tax breaks to eliminate their liability.
  • People who make money from investments pay far lower taxes than those who earn it from their wages.
  • Last year Warren Buffett, who has a $50bn personal fortune, paid $6.9m in federal taxes – 17.4% of his taxable income. The other 20 people in his office paid between 33% and 41%.

It is against this background that President Obama struggles to persuade the US Congress to tax the rich a little bit more. Some background here.

One Comment

  • Nick

    According to the Congressional Budget Office:

    The federal tax system is progressive–that is, average tax rates generally rise with income. Households in the bottom fifth of the income distribution (with average income of $18,400, under a broad definition of income) paid 4.0 percent of their income in federal taxes. The middle quintile, with average income of $64,500, paid 14.3 percent of that income in taxes, and the highest quintile, with average income of $264,700, paid 25.1 percent.Higher-income groups earn a disproportionate share of pretax income and pay a disproportionate share of federal taxes. In 2007, the highest quintile earned 55.9 percent of pretax income and paid 68.9 percent of federal taxes. In all other quintiles, the share of federal taxes was less than the income share. The bottom quintile earned 4.0 percent of income and paid 0.8 percent of taxes, and the middle quintile earned 13.1 percent of income and paid 9.2 percent of taxes.

    Odd that the Guardian did not provide this background information.


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