NC State Ag Economist Mike Walden – “Taxes and Transfers”

Mary:  I’m Mary Walden, with economist MW, welcoming you to the economic perspective.   Today’s program looks at taxes and transfers.  Mike, on one hand government taxes money away from households.  But on the other hand, government can send money to households through various programs.  Do we know how these taxes and transfers balance for households of different income levels?

Mike:  Summary Answer

  1. As might expect, the ratio of transfers to taxes is highest for low income households and declines as household income rises
  2. Using the latest data for 2011, the 20% of households with the lowest income, transfers are 18x taxes paid
  3. For 20% of households with middle income, transfers are twice taxes paid
  4. But for 20% of households with the highest income, taxes are 5x more transfers received
  5. So very “progressive”
  6. I’m MW

Mary:  And I’m Mary Walden for the North Carolina Cooperative Extension Service