According to a recent Congressional Budget Office report on taxes, the top 40% of income earners are paying 106.2% of the nation’s net income taxes. How is paying more than 100% possible? The answer is that low income earners get refundable tax credits often in excess of what they pay into the system.

A prime example of such refundable tax credit is the Earned Income Credit. This gives money to people who have earned income, but are still below the poverty line based on the size of their households. One of the largest redistributions using this that I have seen was when I was preparing taxes voluntarily while in law school. An individual came to me and she had about $6,500 in income. She also had three kids. Her EIC ended up being about $8,000.
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A lot is still said about the rich not paying “their fair share”. I think that is a lot of bunk and these recent numbers (and my past experiences) seem to back that up.