Who Pays Taxes
The National Taxpayers Union has updated their “Who Pays Taxes” numbers to include 2002. Nothing really shocking in that the top 50% of income earners pay 96% of the income tax. One thing to keep in mind, when you hear people saying that those in the lower part of the income distribution need a bigger income tax break because they are the ones who will spend it, what they really mean is an income transfer. The bottom half of the in income distribution pays only 3.5% of the income tax. Many people in that part of the distribution have a negative tax rate already. Hence for many of these people a bigger tax cuts means an increase in the income transfer payment they are already recieving.