Latest IRS Data Shows that Wealthier Americans’ Portion of Taxes Actually Exceeds Their Portion of Income
In their never-ending campaign to increase taxes, those on the left endlessly allege that wealthier Americans don’t pay their “fair share” in taxes.
There’s only one problem: the exact opposite is true.
When one compares the portion of taxes paid by Americans of various income brackets to their corresponding portion of the nation’s income earned, wealthier Americans actually pay more than their fair share.
And once again, the latest Internal Revenue Service’s (IRS) numbers prove that. This month, the IRS’s income statistics division released its latest data comparing the amount of income earned by various segments of the income ladder against the amount of taxes paid by those same segments.
And what do they reveal?
According to the statistics, the richest 1% of American taxpayers (those earning above $389,000) earned 22% of the nation’s reported income. But their share of the nation’s income taxes was 40%. In other words, the wealthiest 1% of Americans’ income tax payments are almost twice as much as their “fair share.”
The same is true for other income levels as well. According to the IRS data, the wealthiest 5% of Americans earned 37% of the nation’s income, but paid some 60% of the nation’s income taxes. The top 25% of Americans earned 68% of the nation’s income, but paid 86% of the nation’s taxes.
And astonishingly, the top 50% of American earners brought in 88% of income dollars, but paid 97% of all income taxes in this country. Thus, half of the American population is paying almost the entirety of income taxes.
So what was that about paying their “fair share?”
And precisely how does Senator Barack Obama plan to cut taxes for lower-income Americans, when the lower half of income earners already pay only 3% of the nation’s income taxes? But we digress.
Americans can agree or disagree about whether we should dismantle our graduated income tax system, which imposes higher tax rates as income levels rise, in favor of a flat tax. But to paraphrase the late Senator Daniel Patrick Moynihan, “everyone is entitled to his own opinion, but not his own facts.” And in this case, the fact is that regardless of whether one prefers a graduated income tax or flat tax, one cannot allege that wealthier Americans’ income share exceeds their share of taxes paid.
It is also untrue that wealthy Americans have disproportionately benefited from the 2001 and 2003 Bush tax cuts. As noted by The Wall Street Journal, the wealthiest Americans today pay twice as much of the nation’s income taxes as they did during the Carter administration. Back then, they paid 19% of income taxes, compared with 40% today.
So much for another myth advanced by the left.
Not that anyone would hear about this from the mainstream media, of course. Across the country, newspapers, radio and television reports focused only upon the fact that the wealthiest 1% group’s share of the nation’s income rose to 22% from 21.2% in the previous IRS report. Most mainstream media reports either ignored the disproportionate share of income taxes paid by that same segment, or buried that data deep below the headline.
All of this is important beyond the fact that it once again obliterates the notion that wealthier American’s don’t pay their “fair share” in taxes, however.
Namely, liberals are using this canard as a ploy to justify tax increases. To hear Senator Obama and other liberal leaders tell it, we must allow the Bush tax cuts to expire because they disproportionately favor the rich. If they are able to dupe enough Americans into believing that, they can impose what will constitute the greatest tax increase in the nation’s history.
The simple reality is that the 2001 and 2003 tax cuts brought dramatic economic growth following the 9/11 attacks and the recession that began just as the Clinton Administration ended, and they prompted enormous increases in incoming federal revenues.
So the next time you hear a liberal candidate, political leader or supporter allege that the rich aren’t paying their fair share, direct them to the actual IRS data.
And tell them that numbers don’t lie – politicians do.July 24, 2008