by Mitch Kokai
Senior Political Analyst, John Locke Foundation
“We are going to tax the rich and make them pay their fair share!” Senator Manchin thunders the sentiment from his yacht, Senator Sanders from his lakeside dacha, Senator Warren from her gilded Cambridge retreat. Tesla-driving Met-gala debutante Alexandria Ocasio-Cortez insists that Democrats are going after the top 1 percent, not doctors, blissfully ignorant that doctors are more common among the top 1 percent than are members of any other occupation. Jonathan Chait, the dim and dishonest New York magazine typist, denounces the inconvenient facts about federal tax policy as — and I am not making this up — “deeply misleading” even though the figures in question are “literally true,” italics in original.
Here is some more literal truth about taxes you may find useful.
Fair share? The high-income already pay the majority of federal income tax, and the share of tax they pay is larger than their share of income. Their share of all taxes (income tax and other kinds of taxes) is also in excess of their share of income, though not as dramatically as is their share of federal income tax.
According to IRS data, the top 1 percent of taxpayers (which includes households making $540,000 a year or more) take home about 21 percent of all income and pay about 40 percent of federal income taxes — which is to say, their share of the income-tax burden is about twice their share of the income.
The top 10 percent earns about 48 percent of all income and pays about 71 percent of federal income taxes.
The top half of earners make about 88 percent of the income and pay virtually all of the income taxes — more than 97 percent.
The Tax Policy Center, a left-leaning advocacy group, calculates that 1 percenters pay an effective federal tax rate — on all taxes, not just income tax — of 29.4 percent, while the top 0.1 percent pays 30.1 percent — an effective rate higher than that of any other income group. Their federal tax rate is more than twice that of middle-income (third quintile) households.