Who Really Carries The Income Tax Burden
You might say the due date for federal income taxes is the starting gun for silly season.
With tax day over, office-seekers of the demagogic sort can tiptoe out of the tall grass and peck around nervously before they finally start calling attention to themselves. And as they do, we’ll begin hearing the first refrains again about the need to “shift more of the tax burden onto the rich” and to “give a break to the working man.” Predictably, this chirping to redistribute the nation’s wealth will yield full-throated halleluiahs from network parrots, most of whom literally seem unable to do anything more than repeat.
Well, it so happens that one regular source of redistributionist stories — the Associated Press — last Tuesday hit dead on target about who’s truly carrying the tax load. Perhaps the article was accurate because a tax specialist wrote it, rather than a general assignment reporter. But regardless of the author, AP made it clear that the nation’s wealthiest taxpayers already are shouldering more than Atlas’s share of the federal income tax burden.
WASHINGTON (AP) — As a group, Americans whose incomes are in the top 5 percent are footing an increasing share of the national income tax burden. People in the bottom half, on the other hand, are paying only a fraction of the total take.
CBS should engrave these words on Peter Jennings’ teleprompter, plus the eyelids of every local anchor person, but don’t hold your breath. In January, Teddy Kennedy proposed a tax increase on “the rich” and Rather, Jennings, Brokaw Inc. acted as if Moses had just brought a new set of commandments down from the mount.
The timing was great because Teddy’s tax-the-rich pitch came just as the IRS released its annual figures about who pays how much income tax. Fortunately for him, all media except for the Wall Street Journal ignored the information.
But with April 15 looming, AP’s Curt Anderson sat down and got the same data from Scott Hodge, executive director of the Tax Foundation, a nonpartisan tax education and research group. What Hodge learned from the IRS was that the 6.3 million Americans whose incomes were in the top 5 percent — that is, $120,846 a year and up — paid more than 55 percent of all income tax revenues. And, note this, though they paid more than half the tax, they collectively earned 34 percent of the income.
Of that group, the top one percent — the really filthy rich, earning $293,000 and up — paid more than a third of all federal income taxes based on slightly less than 20 percent of the earnings.
Meanwhile, the IRS revealed that the taxpayers in the bottom half of the income range — those 63 million (not 6.3 million people) people earning less than $26,415 a year — paid about 4 percent of the federal income tax burden. Their earnings amounted to 13.3 percent of the total, more than thrice their contribution to the treasury
What do we have when 6.3 million pay 55 percent of the taxes and 63 million pay four percent of the taxes?
We have what the tax specialists call a really, really progressive tax system; a system very heavily weighted in favor of the poor. (Beg pardon for not writing, “working man,” but it’s our observation that most salaried people of this community routinely put in 55 and 60-hour weeks.)
One other point: the percentage paid by the wealthy to the treasury is rising. A decade ago, the top 5 percent of filers paid 43.4 percent of all taxes in contrast to 55.5 percent last year.
“This trend is not going to reverse,” Hodge told Associated Press. “This will be the demographic for the 21st-century taxpayer.”
We hope both candidates and talking heads at least around this community take note.