03 Aug 2009 Soaking the Rich

Who is soaking the rich? In 2007, the top one percent of all taxpayers paid 40.4 percent of all federal income taxes. This came when a Republican had been in the White House for six years and the GOP had controlled the House for 12 and the Senate for four.

So much for stereotypes.

As to the statistics themselves, Scott Hodge of the Tax Foundation, which provided the tax analysis above, notes:

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.

These facts bring to mind something former Congressional Budget Office Director Douglas Holtz-Eakin said months ago:

Insulating 95 percent of voters from the consequences of their electoral decisions is dangerous and misleading. Does anyone really believe that we can expand nondefense spending to a record share of gross domestic product, reform the health-care system that amounts to one-sixth of the economy, reinvent the energy portfolio that powers our lives, and drive next-generation broadband to every home while cutting taxes for 95 percent of Americans?

I don’t believe it. I believe we need to cut spending, and I also believe the top one percent — which does not, alas, include me in their number — are paying more than their fair share.

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Labels: Economics, Government Spending, Taxes