There are a couple of particularly interesting stats in the Spending and Taxes commentaries I posted last week.
The first relates to the percentage of income individuals in different income brackets pay in state and local taxes. The bottom quintile of income earners pay 12% of their income in state and local taxes. Each higher quintile pays successively less of their income in state and local taxes, all the way up to the top 1% of income earners, who pay 8%.
The second is the percentage of taxes which come from different sources, compared to the items on which we spend them. Income and Social Security taxes each contribute about 40% of the total taxes collected. But just 20% of the spending goes to Social Security, so it is paying taxes at double the rate. Of course, since our taxes only pay 60% of our spending, that 40% of taxes only covers 24% of spending, but it still greater than what we spend on Social Security. Since we tend to have this sense that Social Security is separate, let’s take it out of both the tax and spending equation. Since our taxes only pay for 60% of what we spend, the remaining 60% of taxes covers 36%, but since we taken out Social Security, needs to cover only 80% of spending. In other words, the rest of our taxes only pay for 45% of what we spend.