Where does the tax burden lie?

Author: Tom Ackerman / 11 News

Published: April 15, 2004

With just a few hours left before this year's Income Tax deadline, here's a question: Are you paying too little, too much or your fair share? Who does carry our country's tax burden, now and in the future?

Back when John Kennedy was president the government collected up to 91 cents of income tax on the last dollar you earned. Today that top rate is down to 35 cents per dollar.

Even for a big earner like Vice President Dick Cheney the tax bite is much less. Cheney reported more than $1.25 million in adjusted gross income last year, investment profits included. But he only paid 12.7 percent of that total in all federal taxes.

At the same time an average household earning the national median, about $42,000, paid 15.2 percent in federal taxes. Unlike the vice president that family was less likely to collect big investment gains. They're now taxed at just 20 percent. And unlike Cheney it had to pay social security tax on every dollar of their paychecks.

Still the top 10 percent of earners make 40 percent of all the income. And they pay just over half of all the federal taxes.

So the biggest benefits of the Bush tax cuts have gone to the highest earners. But tax cut advocates argue they've also paid more than their due. "Many of those who received the tax cuts actually paid more taxes," said Brian Riedl with Heritage Foundation. "Because they worked more, they saved more, they invested more, they created more wealth which gave them income to tax."

But others point out that the government is financing the tax cuts with borrowed money. "Eventually it will have to be paid back," said Leonard Burman with the Urban Institute. "So basically we're setting the stage for tax increases in the future and maybe benefit cuts as well, but we haven't said who's gonna pay them."

And just who will pay more, the middle class or the high earners? That is shaping up as a key issue in the presidential race.

One other fact, four in five workers pay more in payroll taxes, social security and Medicare, than in income taxes.