In the U.S., why do the wealthy pay less in taxes while the middle class pays more?

Answer by Jennifer Dowdy:

In the U.S., why do the wealthy pay more in taxes while the middle class pays less?

There. IFTFY. The answer is obvious: we have a progressive tax system (no scare quotes needed).

From the Tax Policy Center:

Contrary to the multiple ill-conceived attacks on these numbers, this chart actually does show the percentage of income paid in federal taxes (not the percentage of federal taxes paid by each group), does include investment income in these calculations, and does include corporate income and corporate income taxes. It is true that state and local taxes are not included but the effect of these taxes is minimal and, since state and local taxes can be deducted from federal taxes, the regressive nature of these taxes is muted.

The Tax Policy Center's method for calculating income can be found in the middle column of table one here: Page on It does not include "gross income" as most people mean it (income before legitimate business expenses) because calculating business taxes as a percentage of gross income makes no sense.

The numbers are clear and not at all "convenient". The top 0.1% pays more, on average, of their net yearly income than the top 1% who pays more than the top 20% who pays significantly more than the middle 20%. Sure, you can find individual households that pay significantly more or less than their cohorts' average but, as a whole, the wealthy pay much more no matter how you try and twist the data.

At the federal level, only payroll taxes are regressive. I'd love to see progressives and conservatives join forces and fight for SS and Medicare to be paid out of income taxes but I won't hold my breath.

The only way this question makes any sense is if you're asking why the wealthy pay less, as a percentage of their net worth, than the middle class. And the answer to that one is equally obvious: we tax income, not wealth.

In the U.S., why do the wealthy pay less in taxes while the middle class pays more?


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