Revisited: Federal Income Taxes

Episode Transcript

Speaker 1 (00:00):
Who pays federal income taxes. This is brought to you
by Melissa Ashes check Mark Collections. As tax season is
heading down the home strates for the twenty one tax year,
who paid what in taxes has come into focus, And
of course you do have President Biden's proposal out there,
his new one. So let's get into this a bit.

(00:20):
The biggest takeaway of all from the twenty twenty one
tax year the country hit a post World War iiO
low for participation in federal income tax contributions. A study
of the twenty twenty one tax year by the Tax
Policy Center found a stunning fifty seven percent of households
paid no net federal income tax. In fact, almost all

(00:44):
of those households profited off of the federal tax programs
put in place, largely due to the pandemic. In other words,
the United States broadly participated in socialism last year, where
forty three percent of taxpayers not only accounted for the
entire federal income tax bill, but also for the direct
redistribution to the majority of households. Many analysts and experts

(01:07):
note that coming out of the pandemic, it's likely light
levels will recede to pre pandemic levels, but even then,
forty four percent of households were profiting off of the
federal income tax system. Here's an update to look at
who pays what in federal income taxes. Based on the
most recent information available from the IRS. The breakout based
upon income bracket. The top one percent pay thirty six

(01:31):
percent of the entire federal income tax burden, top one
percent thirty six percent, The top five percent accounted for
sixty percent of all federal income tax and then of
course your top forty three, So really those who are
six percent to forty three accounted for forty percent of

(01:55):
the federal taxes, but all of it. While focus has
once again shifted towards increasing still further the income tax
rates on higher income earners based on President Biden's newly
proposed tax plan, it's evident higher income earners are already
shouldering almost the entire federal income burden as it is,
and while there's potentially merit in Biden's proposal to mandate

(02:16):
a minimum income tax on high income earners to ensure
the select few who find ways to shelter against tax
income tax aren't able to do so. It's notable that
the ten year estimate. An additional revenue raised in that
plan is only three hundred and sixty billion dollars or
thirty six billion dollars per year. Last year's deficit was

(02:38):
over three trillion, just last year's. Remember this is ten years. Hey,
if this happened in theory, you could get to thirty
six billion a year. Last year three trillion dollar deficit.
This year's is protected to be well above one trillion.
It's evident that a there aren't that many high income
earners who you've been able to shelter under the current

(03:02):
tax code, and be many more Americans need to pay
into the system, or federal spending needs to come way down.
Most people don't equate it inflation to the federal deficit. However,
there is a direct relationship between the two, as the
US takes on more debt and creates more money out
of thin air to fund the ever growing appetite for
spending and negatively impacts the value of the dollar in

(03:23):
your pocket, requiring more of them to buy stuff and sinflation.
So it's food for thought and back of what proved
to be the first year in which the United States
was effectively a quasi socialist country.