It is sometimes claimed that many low- and middle-income Americans don’t pay taxes while the richest Americans pay a hugely disproportionate share of taxes, especially after enactment of the “fiscal cliff” deal that allowed some taxes to go up.
As the table…illustrates, America’s tax system is just barely progressive even after the fiscal cliff deal’s effects. Claims that the rich pay a disproportionate share of taxes often focus only on the federal personal income tax and ignore the other taxes that people pay, like federal payroll taxes, federal excise taxes, and state and local taxes. Many of these other taxes are regressive, meaning they take a larger share of income from poor and middle-income families than they take from the rich.
The table shows the share of total taxes (all federal, state and local taxes) that will be paid by Americans in different income groups in tax year 2013.
New Tax Laws in Effect in 2013 Have Modest Progressive Impact
Source: Citizens for Tax Justice, April 2, 2013