The right wing has a tendency to portray the present tax situation in the US as if it's a tremendous burden for the rich. I was recently told by a friend that the top 10% of income earners pay 90% of all the taxes. That sounds pretty surprising and rather bogus. When I challenged my friend he withdrew the claim and revised it. Then the claim was the top 1% pay more than the bottom 90%. Well, that's also bogus. Where do they get this stuff?
My friend got the revised claim from the Koch brothers owned Tax Foundation and you can get it here. They aren't lying. What they are doing is omitting important information that caused my friend to misrepresent the claim.
I knew that Warren Buffet was paying less than his secretary, so I knew that the right wasn't showing the full picture. So I took some time to understand things. Here's what I came up with.
The Congressional Budget Office has great data here. It's only up to 2006, but still good. The Koch brothers want to talk about income taxes. Those are progressive, so focusing on them highlights the suffering of the rich. What they don't want to talk about is the payroll tax because that's regressive and highlights the contributions of the poor. And the payroll tax is now an enormous portion of the total federal revenue. They don't really want to look at capital gains either. That's a major source of wealth for the uber rich and is taxed at a lower rate. CBO looks at it all, include corporate taxes, which it divies up mostly to the rich because of course the rich own most of everything. So they are getting their credit for corporate taxes as well.
What's the end result? The top 1% pay 28.3% of all federal taxes. In 2007 they accounted for 23% of all the income. And they likewise have about 50% of the stocks, bonds, and mutual funds. Seen in that light it doesn't seem like 28.3% is all that outrageous. And if we were able to find data regarding the top 0.1% I suspect we'd find, as their income becomes more and more heavily skewed towards capital gains, that Warren Buffet's claim makes sense. They aren't even paying a share proportionate to their income, let alone their wealth. That's what's really outrageous.