Friday, April 12, 2024

The lowest quintile of Americans receives a net of 127 percent of their market income through the tax and transfers while the top quintile gives up 31 percent of their market income due to taxes and transfers

From Erica York. She is senior economist and research director at Tax Foundation.

"Income transfer programs amplify the U.S. federal tax system’s progressivity, move the state and local system from moderate regressivity to moderate progressivity, and result in a highly progressive fiscal system overall.

The lowest quintile of Americans receives a net of 127 percent of their market income through the tax and transfer system, accounting for both the taxes they pay and the transfers they receive, meaning that for each dollar they earned, they received an additional $1.27 from the government, netting transfers (gains) and taxes (losses). At the other end of the spectrum, the top quintile gives up 31 percent of their market income due to taxes and transfers."

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