Tuesday, November 18, 2014

Our income tax system is unfair!

Our income tax system is unfair!  The graph at right is taken from this American Enterprise Institute article.  Each column shows the net taxes paid by each quintile (fifth) of income earners.  By net taxes, they mean income taxes less transfers (such as earned income credits, welfare, etc.) from the federal government.

The bottom line is very simple: virtually all net income taxes are paid by Americans in the upper income quintile.

On what planet is that fair?

It's even worse for residents of states with high income taxes (such as California, Massachusetts, New York, etc.) ... in some of those states, virtually all net taxes are paid by the upper decile (tenth)!

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