Reply to post: Re: Seems legit @DougS

Re: Seems legit @DougS

While I'm typically one who is called a leftist radical because I believe in a progressive tax system, the reality is that even when one takes into account things like carried interest for hedge fund managers or long-term capital gains, those top 1% do pay a much larger percentage of their income to taxes.

Though the Tax Foundation is often seen as a right-leaning think-tank, it is frequently used by both sides to bolster their arguments. Using the link provided by Justin S., one can easily see that for Adjusted Gross Income, the 1% have 21.9% of the reported income and pay 38.1% of individual income taxes collected. In other words, they are covering a lot of the income taxes not paid by the rest of the households. If you want to get even sillier, the top 5% have 36.8% of the AGI and pay 58.9% of all individual income taxes collected. That means that the households in the highest 5% of income in 2012 paid almost 60% of all the income taxes collected. That's 6.8 million returns out of 136 million filed. The next 5% (5% to 10%) pay "only" 11.2% of all of the income tax collected, while covering 11% of the AGI reported to the IRS.

You can start including payroll taxes and other things and present a tax incidence study of some variety... which the Tax Policy Center has done (my preferred source for tax-related info) and it too shows that as one walks up the income ladder, a larger share of income is sent to Uncle Sam. In 2013, the bottom 20% earned 4.2% of all cash income in the US, and paid 0.3% of all taxes collected, while the top 1% pulled in 17.4% of cash income and paid 29.3% of all federal taxes. Link: http://taxpolicycenter.org/numbers/displayatab.cfm?DocID=3806

Methodologies differ and some things are excluded, but the general message is that for all the whining, the super rich (or at least those with the most annual income) also pay a larger percentage in taxes, both as a function of income as well as a percentage of the total taxes due to the US Treasury. Could they pay more without too much of a haircut? Quite likely, at least the top 1 to 5% households. Does that further what we want to do as a country? That's a deeper question that can't be answered here... if such a thing exists.