Recently, concerns about economic inequality have risen to the
forefront, as minimum-wage protests against
, and other employers have highlighted the tension between the
rich and the poor. But when it comes to income taxes, one report
suggests that the highest-income Americans bear more than the
entire income tax burden for the nation.
In the following video, Dan Caplinger, The Motley Fool's
director of investment planning, looks at the Congressional
Budget Office report, which says that the the 40% of Americans
with the highest income paid 106% of the total income tax burden
in the most recent year for which data were available. Dan
explains how that's even mathematically possible, as the lowest
40% of income-earners actually get net money back on their income
taxes because of the earned income tax credit. When you look at
other taxes like payroll withholding from paychecks, even the
poor end up paying something. But Dan notes that the top 40%
still pay 86% of the tax, further observing that those
disparities make sense given similar disparities in the total
amount of income each group earns.
Be smart about your taxes
Income tax inequality is a contentious issue, but one thing
everyone agrees on is that it doesn't make sense to pay more tax
than you have to. In our brand-new special report "
How You Can Fight Back Against Higher Taxes
How You Can Fight Back Against Higher Taxes," The Motley Fool's
tax experts run through what to watch out for in doing your tax
planning this year. With its concrete advice on how to cut taxes
for decades to come, you won't want to miss out.
Click here to get your copy today -- it's absolutely free.
has no position in any stocks mentioned. The Motley Fool
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