Soak the Rich?

The “fiscal cliff” drama is playing out in Washington, with Barack Obama fixated, apparently, on raising taxes on “the rich”–i.e., hard-working families, most of them with multiple income-earners. So the IRS’s recent release of tax data for 2010 is timely. The American Enterprise Institute has the numbers:

According to new IRS data, the 1.35 million taxpayers that represent the highest-earning one percent of the Americans who filed federal income tax returns in 2010 earned 18.9% of the total gross income and paid 37.4% of all federal income taxes paid in that year. In contrast, the 128.3 million taxpayers in the bottom 95% of all U.S. taxpayers in 2010 earned 66.2% of gross income and that group paid 40.9% of all taxes paid. In other words, the top 1 percent (1.35 million) of American taxpayers paid almost as much federal income tax in 2010 ($354.8 billion) as the entire bottom 95% of American tax filers ($388.4 billion).

So the top 1% pay twice their fair share of federal income taxes. This chart shows the data graphically:

When 1% of the population pays as much in income taxes as 95%, something is seriously wrong. More than any other developed country, the U.S. already depends on its high earners to subsidize everyone else when it comes to taxes. Enough is enough: at some point, it isn’t taxation, it’s theft. If people think they have the right to vote, they should be willing to step up to the plate and pay some income taxes, even if the amount is modest.

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