We continually hear that "The Rich" got richer thanks to the tax cuts enacted in 2001 George W. Bush's first term. If that’s the case, why is it that in the wake of these lower tax rates (set to expire at the end of this year) the top 1% of income earners now pay roughly 40% of the income taxes collected. As you can see by the chart below from the non-partisan Tax Foundation, that’s double the share they paid back in the early 1980s. (2)
Still convinced the “wealthy” (whatever that means) don’t pay their fair share? It turns out that the U.S. has the most progressive personal income tax rates of any country in the Organization for Economic Cooperation and Development (OECD). According to the Tax Foundation, “the top 10% of U.S. taxpayers pay a larger share of the income tax burden than do their counterparts in any other industrialized country, including traditionally ‘high-tax’ countries such as France, Italy, and Sweden.” (1) Moreover, the Tax Foundation calculates that even if you took as much as half the annual income “from every person making between one and ten million dollars,” you’d only reduce the federal deficit by 1%.
I Double-Dare You to Defend Yourself!
Here's the question: Why- especially in an election year- is raising taxes on top earners so popular? “It’s clearly class envy,” says Tom Giovanetti, president of the Institute for Policy Innovation (IPI), an economic think tank headquartered in Dallas. (It’s no coincidence that Texas is a state with no income tax and far from our nation’s capital.) “There’s a group of voters who are very susceptible to arguments that the rich or corporations should pay more. They’re not interested in thinking it through.”
It may also have to do with the fact that the wealthy aren’t organized. There’s no union for taxpayers who fall in the top two brackets.
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