The latest data from the IRS for the 2010 tax year shows that America’s lop-sided tax burden continues. From Professor Mark Perry:
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), see chart above. And it’s that group of top income earners (with income above $221,000 in 2010 to be in the top one percent), that Obama and the Democrats want to tax even more.
According to our friends on the left, “the rich” don’t “pay their fair share” and so should face income tax hikes. But when the top 1% of income earners are paying nearly as much in income taxes as the bottom 95% of income earners, isn’t that more than their fair share?
Not only is that actually very unfair, but it is leading to a government bubble. We’ve seen bubbles in the housing market, and the student loan market, and both were the result of a disconnect between consumer and costs. Because home loans and student loans weren’t, and aren’t, priced appropriately (thanks to government subsidies) too many people bought them which created the bubble.
In the case of taxation, government isn’t being priced appropriately. We are growing government, but hiding the cost either by lumping it on a small portion of the populace (“the rich”) or by not paying for it at all (our $1 trillion annual budget deficit).
If we want end the government bubble, we must start taxing Americans more evenly for the government they’re getting.