{"id":55715,"date":"2013-06-11T12:00:22","date_gmt":"2013-06-11T17:00:22","guid":{"rendered":"http:\/\/thesocietypages.org\/socimages\/?p=55715"},"modified":"2013-06-04T14:08:47","modified_gmt":"2013-06-04T19:08:47","slug":"the-top-1-of-u-s-income-earners-receive-15-of-tax-breaks-and-credits","status":"publish","type":"post","link":"https:\/\/thesocietypages.org\/socimages\/2013\/06\/11\/the-top-1-of-u-s-income-earners-receive-15-of-tax-breaks-and-credits\/","title":{"rendered":"The Top 1% of U.S. Income Earners Receive 15% of Tax Breaks and Credits"},"content":{"rendered":"

Cross-posted at\u00a0Montclair Socioblog<\/a>.<\/em><\/p>\n

We got another reminder last week that despite complaints about federal government programs that give money to the poor, when it comes to taxes, the government\u00a0is much more generous to the wealthy. \u00a0The news came from\u00a0a\u00a0report<\/a>\u00a0from the Congressional Budget Office on\u00a0tax expenditures.<\/p>\n

These are the ways that the government uses the tax system to give money to people. Some expenditures are tax credits, which can take the form of cash payments.\u00a0 Others are tax breaks — taxing people less than the going rate. For example, if I am in the 35% tax bracket, but the government charges me only 15% on the $100,000 I made playing the stock market, the government is giving me $20,000 it could otherwise have had me pay in taxes. That\u2019s an expense. The preferential rate for my luck in the market costs the government $20,000.<\/p>\n

The justification for these expenditures is that they are a way the government can encourage people to do something that it wants them to do.\u00a0 With tax breaks, the government is basically paying people by not charging them full tax fare — encouraging them to buy a house or give to charity or get health insurance at their work.\u00a0 Similarly with the tax credits that go mostly to the poor. We want people to hold a job and to care for their kids.\u00a0 The child tax credit gives people more money to care for their children.\u00a0 The Earned Income Tax Credit pays them for working, even at jobs that pay very little.\u00a0 By the same logic, the government is paying me to invest my money in companies — or put another way, to play the stock market.<\/p>\n

This government largesse, however, benefits some people more than others:<\/p>\n

\"1\"<\/a><\/p>\n

About half of all tax expenditures go to the top quintile (top 20% of income earners).\u00a0 The bottom 80% of earners divide the other half.\u00a0 And within that richest quintile, the top 1% receive 15% of all tax expenditures (this distribution of tax breaks roughly parallels the distribution of income). Were you really expecting Sherwood Forest?<\/p>\n

Here is a breakdown of the costs of these different tax expenditures:<\/p>\n

\"2\"<\/a><\/p>\n

The Earned Income Tax Credit, which benefits mostly the poor, costs less than $40B.\u00a0 The tab for the low tax on investment income (capital gains and dividends) is more than twice that, and nearly all of that goes to the top quintile.\u00a0 More than two-thirds goes to the richest 1%.<\/p>\n

Dylan Matthews at the\u00a0Washington Post<\/em>\u00a0WonkBlog<\/a>\u00a0regraphed the numbers to show the total amounts overall plus the amounts in each category for each income group:<\/p>\n

\"3\"<\/a><\/p>\n

The point? People complain about government payments to the poor, but tax breaks are also payments, though less obviously so, to the rich.\u00a0 And those tax breaks cost the government a lot more money.<\/p>\n Jay Livingston is the chair of the Sociology Department at Montclair State University<\/a>. You can follow him at Montclair SocioBlog<\/a> or on Twitter<\/a>.<\/span>","protected":false},"excerpt":{"rendered":"

Cross-posted at\u00a0Montclair Socioblog. We got another reminder last week that despite complaints about federal government programs that give money to the poor, when it comes to taxes, the government\u00a0is much more generous to the wealthy. \u00a0The news came from\u00a0a\u00a0report\u00a0from the Congressional Budget Office on\u00a0tax expenditures. These are the ways that the government uses the tax […]<\/p>\n","protected":false},"author":258,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[349,29,36,252,8080,272,3920],"class_list":["post-55715","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-ageaging","tag-class","tag-economics","tag-healthmedicine","tag-housingresidential-segregation","tag-marriagefamily","tag-nation-united-states"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/55715","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/users\/258"}],"replies":[{"embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/comments?post=55715"}],"version-history":[{"count":7,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/55715\/revisions"}],"predecessor-version":[{"id":55726,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/55715\/revisions\/55726"}],"wp:attachment":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/media?parent=55715"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/categories?post=55715"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/tags?post=55715"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}