"Looking at all the taxes" the Economist

[applegrove]

Looking at all the taxes

the Economist

http://www.economist.com/blogs/democracyinamerica/2012/07/taxes-and-rich-0

"SNIP........................................

MY COLLEAGUE suggests that America’s wealthy already pay at least their fair share of the cost for the public goods they depend on to prosper. He notes that in recent years, the top 5% of earners have received 32% of the country’s adjusted gross income, but paid 59% of federal individual income taxes. “If that’s not giving something back, what is?”, he asks.

This is a case of cherry-picking the data. Yes, the federal income-tax system is progressive through most of the income distribution—although it becomes extremely regressive at the high end, because of the low rates applied to qualified dividends and long-term capital gains (as Mitt Romney can attest).

However, federal income taxes account for just 27% of total government revenue collected in America. And the remaining three-quarters of the tax pie is quite regressive. The middle class may not pay much federal income tax. But they sure pay the payroll tax for Social Security and Medicare, which the rich can mostly skip out on since it only applies to the first $110,000 of wage income. (The Medicare levy, unlike its bigger Social Security counterpart, is not capped). The masses also pay a much greater share of their income in sales and excise taxes than the rich do, because they cannot afford to save.

The fact of the matter is that the American tax code as a whole is almost perfectly flat. The bottom 20% of earners make 3% of the income and pay 2% of the taxes; the middle 20% make 11% and pay 10%; and the top 1% make 21% and pay 22%. Steve Forbes couldn’t have drawn it up any better.
.........................................SNIP"

[geckosfeet]

1. One needs to examine the percentage of income paid in taxes. That is the only equitable measurment.

I will wager that that 59% represent about 10-15% - possibly 20%, of the 5%'s gross income.

[catnhatnh]

2. Morning K&R