In his recent column about Mitt Romney’s “47%” comment, John Locke Foundation President John Hood details the reality of the annual tax burden. The data doesn’t support the claim that the tax code favors the rich over the poor.
The fact of the matter is that federal taxpayers are also state and local taxpayers. While some households may shield most or all of a given year’s income from federal income tax by the use of deductions and credits, they will still pay lots of other taxes. Here is a rough breakdown of how the annual tax burden is distributed:
• The poorest 20 percent of American households pay an average tax burden of about 16 percent of their incomes. Only 4 percent goes to federal taxes, to be sure, but state and local taxes represent about 12 percent of their annual income.
• Lower-middle-class households pay an average tax burden of about 21 percent – 9 percent federal and 12 percent state/local.
• Middle-class households pay an average tax burden of about 25 percent – 14 percent federal and 11 percent state/local.
• Upper-middle-class households pay an average tax burden of about 28 percent – 17 percent federal and 11 percent state/local.
• The wealthiest 20 percent of American households pay an average tax burden of about 31 percent – 20 percent federal and 11 percent state/local.
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