The I.R.S. data are for shares of federal income taxes and income by percentiles and include new figures for 2011. The wealthy pay the vast bulk of federal income taxes. But as one can see, there has been a sharp reduction in the share paid by those in the top 1 percent of taxpayers ranked by adjusted gross income, since 2007.
Internal Revenue Service Indeed, there was a significant reduction just between 2010 and 2011. If those in the top 1 percent had borne the same share of federal income taxes in 2011 as they did in 2010, they would have paid $24 billion more.
Conservatives always point out, correctly, that the share of taxes paid by the wealthy greatly exceeds their share of aggregate income. In 2011, the top 1 percent earned 18.7 of all adjusted gross income and the top 5 percent earned 34 percent.
That is because we have graduated tax rates that rise with income and a tax system that largely exempts the poor from paying income taxes. The top 1 percent paid an average federal income tax rate of 25.5 percent in 2011 and the top 5 percent paid a rate of 20.9 percent. Both percentages are up very slightly from 2010.
But keep in mind a couple of points. Adjusted gross income excludes a number of important sources of income for the wealthy, including unrealized capital gains and interest on state and local government bonds. There are also a number of deductions from gross income to derive adjusted gross income, including contributions to retirement plans, alimony paid and others. Thus, adjusted gross income is considerably lower than what economists would call economic income — the total increase in someone's ability to command resources during a year.
And of course the data are only for the federal income tax and exclude other taxes that those with low incomes pay, such as the payroll tax, federal excise taxes like the gasoline tax, and state and local government taxes.
The C.B.O. data include all federal taxes paid through 2010. They tell the same story: Effective tax rates on the rich have fallen despite inclusion of the corporate income tax, which the agency estimates is largely paid by those with high incomes – 80 percent is paid by those in the top 20 percent of households.
The C.B.O. report also has data on the receipt of government transfers. They show that the tax and transfer system has a powerful redistributive effect, raising the share of post-tax and transfer income for those at the bottom and reducing it for those at the top.
Those in the bottom 20 percent of households had 2.3 percent of all market income, such as wages and private pensions, but received more than a third of all Social Security and Medicare benefits and almost half of other transfers like Medicaid and unemployment compensation. The effect of these programs is to quadruple the share of post-tax and transfer income going to those in the lowest quintile.
Congressional Budget Office New data from the Census Bureau show that a rising share of Americans benefit from government transfer programs. Between the fourth quarter of 2008 and the fourth quarter of 2011, the percentage of Americans participating in transfer programs rose to 49.2 percent from 45.3 percent. Key drivers were a 40 percent increase in the number of people receiving food stamps in what is now called the Supplemental Nutritional Assistance Program, or SNAP, and a 14 percent increase in those receiving Medicaid, a health program for the poor.
Census Bureau. Totals do not add up to 100 percent because of participation in multiple programs.According to the Pew Research Center for the People and the Press, there has been a decline over the last 25 years in support for programs that aid those who cannot care for themselves. In 1987, 71 percent of people supported such programs; in 2012, that percentage fell to just 59 percent. Most of the decline is accounted for by Republicans, whose support has fallen to 40 percent from 62 percent. But Democrats and independents are also slightly less willing to support government programs that aid the poor than they used to be.
Still, I don't think very many Americans would want to live in a survival-of-the-fittest economy in which those who can't work are left to starve. In fact, even some conservatives now believe that the shredding of the social safety net in the name of deficit reduction has gone too far.
Arthur Brooks, president of the conservative American Enterprise Institute, recently said, "The social safety net is one of the greatest achievements in our society, and we have to fight for it."
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