RW friend says "Top 10% pay 70% of all taxes, taking care of that 47%." True?

[Travelman]

31. Study the link that econoclast gave in #17

That's a good one. It looks a little confusing at first, but the second table is the one you want to look at, the one one that is "Share of Individual Income Tax Liabilities." In that one, your friend is correct: the top 10% pay 72.7% of all federal individual income tax. But is that the only tax that the federal government collects? No, and these tables show that. For all federal taxes (your friend said "all taxes," which would include stuff like local sales taxes and such), the top 10% pay 55% of all federal taxes, and for federal excise taxes, it's about 25%. Actually, I'm not really sure how they can measure federal excise taxes because if you go into the 7-11 and buy a pack of cigarettes, how do they (the federal government) know whether you're Joe Schmoe who works at the factory or you're Bill Gates? You pay the same amount of money and there's no paper trail on that transaction. Same goes with, say, liquor sales, another federal excise tax. There are others, but you get the idea. Poor folks pay these taxes all the time. They're not "skating" on this stuff.

And then there's things like tariffs (I'm assuming that these aren't counted in excise taxes for the purposes of these charts). Who pays a tariff on some import? Ultimately, I suppose, the final consumer, but once again, how does the federal government know whether the person buying Indonesian widgets with tariffs is dirt poor or filthy rich? Obviously if Indonesian widgets cost a million dollars a piece, they know, but what if they're $5 a piece?



Anyway, the short answer is that your friend has become another tragic case of a small amount of knowledge being a dangerous thing. She has AN idea, but doesn't grasp the larger surrounding picture. Surprise! If you make a lot of income, you pay a lot of income tax! If you don't make much income, you don't pay much income tax. Staggering, I know. But you (the Royal You) get taxed a whole lot of other ways besides income.