Are Taxes For the Top 1% of Taxpayers Too Low? Too high?

Posted on:  December 4th, 2014
By:  Diane Morrison

If you were to stop ten people on the street and ask them if they pay enough in taxes, you would probably get ten yesses.  But when the question changes to taxes paid by other people, perception can be somewhat skewed.  Ask anyone if the top 1% of earners pay enough taxes and most people will say no.

Earlier this year, CNN conducted a survey called CNNMoney’s American Dream poll.  The main takeaway of the survey was that Americans are feeling pretty pessimistic about todays economy in general.  Six out of ten respondents felt that “The American Dream” – in whatever way they define it, is now an impossible goal for young adults.

One of the other insights gained from the poll is that 55% of respondents feel that the top 1% do not pay their fair share of taxes.  Women (61%) outnumbered men (49%) slightly in this sentiment.  Another 25% of the people surveyed felt that the amount of taxes paid by the top 1% is “about the right amount”.  Oddly enough, 19% actually felt that they pay too much!  That’s quite a broad range of opinions which, for the most part, are based purely on perceptions.

Here are the facts based on 2011 numbers.  In order to qualify for that top 1% tier, your adjusted gross income (AGI) must be above $389,000.  The top 1%, taken as a group, earned close to 19% of all AGI for that year.  This same group paid 35% of all federal income taxes.  Fair?  Unfair?

2011 is long gone.  Looking at today’s numbers, have things gotten any better?  Well, it depends on who you are.  Beginning in 2013, taxes have increased for that top 1% because of measures that were a part of the fiscal cliff deal, including higher tax rates, restricted deductions, and higher Medicare taxes.  The truth of the matter is, of course, that it all depends on your perspective.

 

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