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Some of you may have come to work bleary-eyed Tuesday and angry at Uncle Sam.
You procrastinators waited untl the last minute to file your income taxes, which were due by midnight Monday.
In honor of the tax deadline, Tom Graves, a congressman from northwest Georgia, began sending out messages last week about the current tax system. One message, posted on his Twitter page, caught our attention.
"America's wealthiest 25 percent pay 86 percent of total income taxes. Wealthiest 5 percent pay 60 percent of total income taxes," the message said.
If you’re part of either of those income classes, you may be really upset now. That’s the point most fiscal conservatives are making as President Barack Obama proposes ending tax cuts for the wealthiest Americans as part of his debt reduction plan.
"This is not because we begrudge those who’ve done well -– we rightly celebrate their success," Obama explained in a recent speech. "Instead, it’s a basic reflection of our belief that those who’ve benefited most from our way of life can afford to give back a little bit more."
The top 5 percent have an annual adjusted income before taxes of about $160,000 or more. The top 25 percent have an annual adjusted income before taxes of about $67,000 or more.
Instead of trying to figure who’s right about whether the rich pay their fair share in taxes, we wanted to know whether Graves’ facts were correct.
Our friends at the PolitiFact national site found that U.S. Rep. Michele Bachmann, R-Minn., slipped up while talking about the subject in a recent television interview on "Today."
Bachmann, who is considering a run for president, said, "The top 1 percent of income earners pay about 40 percent of all taxes into the federal government." The top 1 percent of income earners (people making more than $380,000 a year before taxes) did in fact pay 39.5 percent of individual income taxes in 2007, but they paid 28 percent of all federal taxes in 2007.
That’s a meaningful distinction because, as a general rule, the burden of the income tax is tilted heavily toward the upper end of the income spectrum, while the payroll tax burden -- another major federal tax -- is paid somewhat more evenly by poor and rich alike. PolitiFact rated Bachmann’s claim False.
Graves, by contrast, avoided Bachmann’s linguistic error. His spokesman, John Donnelly, directed us to a report by the Internal Revenue Service that was completed this past winter, based on 2008 data. The report shows that the top 5 percent of taxpayers paid 58.7 percent of federal income taxes. The top 25 percent of taxpayers paid 86.34 percent of total income taxes.
The National Taxpayers Union keeps a chart of such data on its website, and its spokesman said Graves’ math is accurate. The group supports the Republican proposals to cut the federal debt, which includes spending cuts to entitlement programs such as Medicare and no tax increases.
"The [tax] burden is inordinately high on the top 50 percent of income earners," spokesman Doug Kellogg said.
Eric Toder, a veteran tax expert at the centrist to liberal Urban Institute, said his organization analyzed income tax rates for 2010 and also found similar numbers to what Graves put on Twitter. Toder noted that the current annual income cap on Social Security is $106,800, which is less than what the top 5 percent of earners pay. Obama said Tuesday that he wants to raise the income cap on Social Security.
Graves was off by a percentage point in relaying the figure for the top 5 percent, but both of his numbers are very close to the IRS data. And while using only the federal income tax as a stand-in for the total federal tax burden paints a somewhat skewed picture, Graves was careful to make his words in the tweet accurate. So we rate his claim as True.
Internal Revenue Service, "Individual Income Tax Rates and Shares, 2008"
E-mail from John Donnelly, communications director for U.S. Rep. Tom Graves, April 18, 2011
PolitiFact, "Michele Bachmann says top 1 percent pay 40 percent of all federal taxes," April 18, 2011
President Barack Obama speech on fiscal policy, April 13, 2011
Reuters, "Obama backs lifting income cap on Social Security," April 19, 2011
Telephone interview with National Taxpayers Union spokesman Doug Kellogg, April 19, 2011
Telephone interview with Eric Toder, Urban Institute, April 19, 2011
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