We Know Who Pays The Most Taxes…Who Benefits Most?

Quite a few studies show us who pays taxes in the U.S.. How about we have a look at who gets the most government spending. A report put out by the Tax Foundation, whose mission is to educate taxpayers about sound tax policy, reveals some interesting if unsurprising answers.

The study takes into account federal, state and local taxes, as well as government spending. When we look at the distribution of government spending as well as taxes collected, it provides us with a dramatically altered view of how U.S. fiscal policy affects citizens at different income levels than is clear from the apportioning of government spending.

To quote the report,”Overall, we find that America’s lowest-earning one-fifth of households received roughly $8.21 in government spending for each dollar of taxes paid in 2004. Households with middle-incomes received $1.30 per tax dollar, and America’s highest-earning households received $0.41. Government spending targeted at the lowest-earning 60 percent of U.S. households is larger than what they paid in federal, state and local taxes. In 2004, between $1.03 trillion and $1.53 trillion was redistributed downward from the two highest income quintiles to the three lowest income quintiles through government taxes and spending policy.”

So there you have it. Under-achievers are paid more by the government, so why achieve? The more you achieve, the more money the government rips out of your pocket to pay-off the under-achievers. Looks alot like farm subsidies. The government will pay you this much money if you limit the growth of “this” produce.

Yet another reason to support tax replacement, not tax reform!!