The Rich Pay Their Fair Share in Taxes — And Then Some
By Jeff Jacoby
TownHall.com
ARE AMERICANS EAGER for higher taxes on the affluent?
Barack Obama and his allies clearly think so. The president who came to office vowing to "spread the wealth around" by raising taxes on individuals with incomes above $200,000 is doubling down, making a tax hike on the rich the centerpiece of his campaign for reelection.
"We should ask the wealthiest Americans to pay a
little more,"
he urged a White House audience last week.
"We're talking about folks like me going back to the
tax rates that existed under Bill Clinton.… And
here's the thing -- there are a lot of well-to-do
Americans, patriotic Americans, who understand this
and are willing to do the right thing, willing to do
their part to make this country strong."
An
Obama campaign ad summarizing "President Obama's
plan" drives the point home succinctly. "Wealthy Pay
More," the on-screen title says; "Middle Class Pays
Less."
Meanwhile, the union-funded activist group
Americans United for Change is out with a
quarter-million-dollar
preposterous accusation that Mitt Romney "has
not paid taxes for ten years," thanks to the "many
tricks" for avoiding taxes that "people who make as
much money as Mitt Romney have … at their disposal."
Few things get liberal Democrats salivating like
populist red meat. But if voters generally shared
the left's weakness for soak-the-rich nostrums,
Nancy Pelosi would be speaker of the House, the
Occupy movement would be riding high -- and
Republicans would still wince at the memory of
Ronald Reagan losing the White House to Walter
Mondale in a 49-state landslide.
But voters, by and large, don't yearn to see
the wealthy stripped bare by the tax collector. In a
new nationwide poll, Gallup asked Americans to
rank a list of policy proposals for the next
president to address. Respondents gave highest
priority to "creating good jobs," "reducing
corruption in federal government," "reducing the
federal budget deficit," "dealing with terrorism and
other international threats," and "ensuring the
long-term stability of Social Security and
Medicaid." Raising taxes on the wealthy placed last.
Even among Obama supporters, no issue on Gallup's
list was deemed less important.
Blasting the wealthy for not paying their "fair
share" in taxes may rev up what Howard Dean called
"the Democratic wing of the Democratic Party."
But measured by any reasonable yardstick, rich
Americans pay their fair share. And then some.
One reasonable yardstick might be the average rate
paid when all federal taxes -- including not just
income taxes but also payroll taxes -- are
considered. The
Congressional Budget Office reported last month
that in 2009, the top 20 percent of taxpayers paid
an average of 23.2 percent of their income in
federal taxes -- more than double the 11.1 percent
paid by the middle quintile, and 23 times the 1
percent paid by the lowest quintile. Even within the
top 20 percent, average tax rates rose with income:
The richest 1 percent paid 28.9 percent of their
earnings in federal taxes.
Or perhaps a more reasonable yardstick would compare
the share of federal taxes paid with the share of
national income earned. The CBO ran those numbers
too. In 2009, the bottom 20 percent of taxpayers
earned approximately 5 percent of the nation's
income but paid just 0.3 percent of all federal
taxes. Households in the middle quintile, which
earned almost 14.7 percent of national income, paid
only 9.4 percent of federal taxes. Yet Americans in
the top quintile, who earned 51 percent of the
nation's income, paid a whopping 67.9 percent of all
federal taxes.
And the much-demonized 1 percent? They took in 13.4
percent of all income in 2009 -- and shelled out
28.9 percent of all federal taxes.
Reasonable minds can debate whether income
inequality is good, bad, or neutral; whether "fair"
tax rates should be flat or graduated; whether
income-redistribution is a legitimate function of
government. But what's clear is that wealthy
Americans pay plenty -- far more than plenty -- in
taxes. Maybe that's why voters aren't clamoring to
make them pay even more.