Well. The Beginning of the End?

[ymarkov]

"Bread and Circuses is the cancer of democracy, the fatal disease for which there is no cure. Democracy often works beautifully at first. But once a state extends the franchise to every warm body, be he producer or parasite, that day marks the beginning of the end of the state. For when the plebs discover that they can vote themselves bread and circuses without limit and that the productive members of the body politic cannot stop them, they will do so, until the state bleeds to death, or in its weakened condition the state succumbs to an invader--the barbarians enter Rome." - Lazarus Long in To Sail Beyond the Sunset by R.A. Heinlein

Tax Burden of Top 1% Now Exceeds That of Bottom 95%

by Scott A. Hodge

Newly released data from the IRS clearly debunks the conventional Beltway rhetoric that the "rich" are not paying their fair share of taxes.

Indeed, the IRS data shows that in 2007—the most recent data available—the top 1 percent of taxpayers paid 40.4 percent of the total income taxes collected by the federal government. This is the highest percentage in modern history. By contrast, the top 1 percent paid 24.8 percent of the income tax burden in 1987, the year following the 1986 tax reform act.

Remarkably, the share of the tax burden borne by the top 1 percent now exceeds the share paid by the bottom 95 percent of taxpayers combined. In 2007, the bottom 95 percent paid 39.4 percent of the income tax burden. This is down from the 58 percent of the total income tax burden they paid twenty years ago.

To put this in perspective, the top 1 percent is comprised of just 1.4 million taxpayers and they pay a larger share of the income tax burden now than the bottom 134 million taxpayers combined.

Some in Washington say the tax system is still not progressive enough. However, the recent IRS data bolsters the findings of an OECD study released last year showing that the U.S.—not France or Sweden—has the most progressive income tax system among OECD nations. We rely more heavily on the top 10 percent of taxpayers than does any nation and our poor people have the lowest tax burden of those in any nation.

We are definitely overdue for some honesty in the debate over the progressivity of the nation's tax burden before lawmakers enact any new taxes to pay for expanded health care.

Note the dip in the top 1%'s share of taxes in 2000-2001. I think that this represents the fall-off in capital gain realizations and decreased self-employment income during the recession. This suggests that we will see another dip in the 2008-2009 data... but the trend is there, all right. - YSM

Comments

[dlevey.livejournal.com]

It would be interesting to see the corresponding numbers in the % of wealth in each group's hands, and the % of income. While I understand your concern, it is also possible that the top 1% of taxpayers pay so much because they have vastly more money than that tier ever had before.

[zatakt.livejournal.com]

"We rely more heavily on the top 10 percent of taxpayers than does any nation and our poor people have the lowest tax burden of those in any nation."

But poor people here also have the lowest benefits in any OECD nation , right? (health services, education, unemployment, etc.)