Wednesday, July 29, 2009
The data from 2007 has just come out, but the story hasn't changed much. Bottom line: the rich pay the vast majority of taxes. The top 1% of income earners in 2007 paid about 40% of all federal income taxes. The top 5% paid about 60% of all federal income taxes, and the top 10% paid 70%.
Note that while the top income tax rate has dropped by half since 1980, the share of taxes paid by the richest 1% of Americans has doubled. This sums up the power of the Laffer Curve very powerfully.
As Mark Perry points out, the top 1% of income earners now pay more tax than the bottom 95%!
As the Tax Foundation points out, "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."
California's fiscal problems stem directly from the fact that its tax structure relies heavily on the rich to foot the bills. That's fine when the economy is strong, but whenever we hit the inevitable recession or slowdown, that causes tremendous fiscal dislocations. The federal government relies very heavily on the financial health of the upper crust of society, something that is not necessarily healthy nor prudent nor fair. Imposing even greater tax burdens on this golden-egg-laying-goose to pay for a fantasy healthcare scheme is not a good idea.
Posted by Scott Grannis at 9:22 PM