TAXES AND INCOME
December 17, 2007
Based on the latest available tax data, no Administration in modern history has done more to pry tax revenue from the wealthy than the current one, says the Wall Street Journal.
- For 2005, the richest 1 percent paid about 39 percent of all income taxes that year.
- The richest 5 percent paid a little less than 60 percent, and the richest 10 percent paid 70 percent.
- The richest 1.3 million tax-filers -- those Americans with adjusted gross incomes of more than $365,000 in 2005 -- paid more income tax than all of the 66 million American tax filers below the median in income; ten times more.
For the political left and most of the media, this means only that the rich are getting richer. However:
- The rich showed more rapid gains in reported income shares in the 1990s than in the first half of this decade.
- The share of the richest 1 percent jumped to 20.8 percent of total income in 2000, from 14 percent in 1990, but increased only slightly to 21.2 percent in 2005.
- Notably, however, the share of taxes paid by the top 1 percent has kept climbing this decade -- to 39.4 percent in 2005, from 37.4 percent in 2000.
- The share paid by the top 5 percent has increased even more rapidly.
In other words, despite the tax reductions of 2001 and 2003, the rich saw their share of taxes paid rise at a faster rate than their share of income. This makes it hard to pin their claim of "rising inequality" on the Bush tax cuts, though the income redistributionists are trying. By this measure, the Clinton years were far worse for "inequality."
Source: Editorial, "Taxes and Income," Wall Street Journal, December 17, 2007.
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