We are often reminded these days that the top 1% of earners in America pay about 40% of the nations federal income taxes–nearly double the share they paid in 1980...
Republicans say the high share is due to our overly progressive tax structure and growing programs for the rest of the non-taxpaying Americans. Democrats, to the extent that they even concede the number, argue that it’s because the rich now make all the money.
Who’s right? An article in the Economist states the answer quite simply: “In America the income share of the rich has grown faster than the share of taxes paid.” Data from the Tax Foundation bears this out. Between 1987 and 2008, the share of income controlled by the top 1% grew to 20% from 12%. That signals a total share growth of 67%. During the same period, their share of taxes went to 28% from 24%, suggesting share growth of 17%. In other words, the top 1% share of income grew nearly five times faster than their share of taxes.
As The Economist points out, this same dynamic is true in much of the developed world, as globalization showers larger rewards on winners...
The reason behind the 40% number doesn’t answer the larger question of whether it’s “fair” to tax the rich more.
27 September 2011
"Rich people pay most of the taxes in this country"
From the Wall Street Journal: