Today, President Obama is kicking off a road show campaigning for raising taxes on higher income earners to help reduce the debt. We’ll no doubt hear a lot about how the rich need to pay their “fair share.” Yet an analysis of tax data shows that wealthier taxpayers already pay a disproportionate amount of taxes and that their share under the current Bush rates is actually slightly higher than at the end of the Clinton era.
In 2008, the most recent year for which full data is available, the infamous top 1% – those earning over $380,354 – paid 38.02 percent of federal income taxes, according to an analysis of IRS data by the Tax Foundation. Meanwhile, the bottom 50 percent of income earners – the group that, according to the liberal world view, is subsidizing tax handouts to the wealthy – shouldered just 2.7 percent of the federal income tax burden. And keep in mind, in 2008, the higher income earners share of taxes slipped from the previous year’s 40.4 percent due to the economic downturn.
When you make this argument to liberals, they’ll often respond that the only reason such a distribution exists is that there’s a lot of income inequality in America. But even if you account for that, the wealthy are paying disproportionately. The top 1 percent, for instance, earned 20 percent of the nation’s adjusted gross income in 2008 – yet their share of the tax burden was nearly twice that. Meanwhile, the bottom 50 percent earned 12.75 percent of the nation’s income, while their share of the tax burden was about one-fifth of that. You can see this demonstrated in the chart below.
Another way of looking at this is the average tax rates paid by each income level. As you see below, it’s much higher at the higher income levels.