Vince Farrell on taxes:
If you are lucky or hard-working enough to have earned $364,657 in 2006, the last year for which data is fully available, you are in the top 1% of earners. That group earned 22% of all income and paid 40.4% of all taxes levied on individuals. The top 1% paid almost as much as the lower 95%! The percent of taxes paid by the top 1% has increased from 19% of all tax to the current 40% over the last 25 years.
$145,283 in earnings landed you in the top 5% of earners, and the top 5% paid 60% of all taxes. $103,912 was needed to qualify for the top 10%, and that group paid 70% of all taxes. The top 25% of incomes (over $62,066) paid 86% of taxes. It’s estimated that, in 2009, well over 40% of American earners will pay no Federal tax.
The campaign promise was that 95% of Americans would get a tax break of some kind. The 5% that won’t get a tax reduction now pay 60% of all tax. The campaign slogan was it’s “all about fairness.” I don’t quibble with that concept nor do I think we should have anything but a graduated tax system. I need to be told the definition of “fair.” Is it fair for the top 1% to earn 22% of income and pay more than 40% of taxes? Is it fair for the top 5% to pay 60% of taxes but not share in a tax reduction program? Maybe it is fair, but what I believe is needed is not what was a very effective campaign argument but a thoughtful discussion and explanation of what our tax program should be.
HT: Barry Ritholtz