A Tax Foundation (TF) paper on the distribution of government tax and spending policies in the United States has noted that they combine to redistribute more than USD2 trillion from the top 40 percent of families to the bottom 60 percent by income.
The TF paper points out that the question of who benefits from government spending is just as important as the question of who pays taxes, and that lawmakers can remove equity as an issue in tax reform by matching any loss in progressivity on the tax side with an equal increase in progressivity on the spending side.
Overall, it finds that the lowest-income families in the US receive USD5.28 worth of government spending (federal, state, and local) for every dollar they pay in total taxes. Middle-income families receive USD1.48 in total spending per tax dollar, while America’s highest-income families receive USD0.25 cents in spending for every dollar of taxes paid.
