Facts of Life: Tax Burden in the USA

Continuing our detour from current events, let's take a quick look at the Federal tax burden. If there are any latter-day Republicans in your neck of the woods, you've no doubt heard many, many times how the rich in this country are shouldering too much of the cost of Government. It has become a reflex action with many of them: ring the bell, and they salivate and repeat some pre-packaged factoid such as, "the top 1% pay half of all taxes". The figures cited vary in proportion to their emotional distress, of course. Sometimes the numbers they give are even correct, as far as they go. What these behavior-modification subjects have not been trained to reveal is context. For instance, in 2000 the top 1% paid 20% of all Federal taxes, but at the same time, they held roughly 36% of wealth in the U.S. Toward the other end of the spectrum, the bottom 80% paid "only" 35% of those taxes, while accounting for a whopping 4% of wealth. And that was before the Bush tax cuts.

I recently presented an overview of wealth in the U.S. featuring a nifty illustration of "who owns what". The first person I showed it to, certainly no hardcore Republican, immediately asked, "OK, but what share of taxes did they pay?" The graph above shows the answer, combined with the wealth data for comparison. 'Nuff said? If this picture doesn't drive the point home, I doubt another thousand words would help.

Incidentally, the raw data on wealth is here, and a nice summary of the tax breakdown is here.

facts_of_life_taxes.html ... released 12 February 2006 ... expires 6 November 2012