CBO Shows Top 40% Pay More than 100% of Taxes
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The Congressional Budget Office has published a study, The Distribution of Household Income and Federal Taxes, 2010, which shows that the top 40 percent of income earners paid 106.2 percent of total federal income taxes, while the bottom 40 percent paid -9.1 percent. This isn’t the study’s headline, so you have to dig a bit to get that information, but look at Table 3 on page 13 of the study to find that information.
The Table shows that the top 20 percent of income earners paid 92.9 percent of total income taxes in 2010 (the latest year available), and the next-highest 20 percent paid 13.3 percent of total income taxes, so the top 40 percent paid 106.2 percent.
Refundable Credits = Negative Tax Liability
Because of refundable tax credits like the earned income tax credit and the child tax credit, the bottom 20 percent got more money refunded to them than they paid in taxes, so they paid -6.2 percent of total taxes. The next-lowest 20 percent paid -2.9 percent, so the bottom 40 percent paid -9.1 percent of total income taxes. More than 9 percent of total income tax payments go toward paying out money directly to people who get more back than they paid in.
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