Fun Facts: Federal Taxes

Doing a little research on income and tax burden distribution in my spare time (I know, get a life, right?), I came across a few interesting nuggets of information to share. The following is the most recent data (2006) provided by the Congressional Budget Office here.

Income tax (after credits): 43.4% of tax receipts in 2006

• The top 10% of income earners pay 72% of the taxes.
  
• The top quintile pays 86%.
  
• The bottom 40% actually earn 3.6% after credits (meaning they pay negative income taxes)
  
• The effective income tax rate spans from 19% (top 1% of earners) to -6.6% (bottom quintile)
  
• Average effective tax rate is 9.1%
  

Payroll tax: 34.8%

• This is the only category in which the top 10% do not pay over half the total taxes collected
  
• The top 10% pay a quarter of these taxes
  
• The top quintile pays 43%, more than the bottom 3 combined
  
• Due to caps on taxable amount, the tax rate spans from 9.6% (second-highest quintile) to 1.6% (top 1%)
  
• Average effective rate is 7.5%
  

Corporate income taxes: 14.7%

• 80% is paid by the top 10% of earners
  
• The top 1% actually pays over 50% of total taxes
  
• Effective tax rate spans from 10.4% (top 1%) to 0.4% (bottom quintile)
  

Overall:

• The top 10% pay over half (55%) of all federal taxes
  
• The top 20% pays 69%
  
• The bottom 40% pays 5%
  
• Effective tax rate spans from 31.2% (top 1%) to 4.3% (bottom quintile)
  

So, next time you're enjoying one of the many services our federal government provides, be sure to thank a rich person…