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SO WHAT WOULD A 'PROGRESSIVE' TAX SYSTEM LOOK LIKE?

October 08, 2007

The Tax Foundation has taken a look at the recently-released income tax payment statistics for 2005. If you believe in a steeply progressive income tax, it looks like your work is done:

The report highlights the fact that both the tax share and AGI share of the top 1 percent reached all-time highs in 2005. In 2005, the top 1 percent of tax returns earned 21.2 percent of adjusted gross income and paid 39.4 percent of the nation's federal individual income taxes. This indicates that the federal individual income tax is highly progressive as under a purely proportional system, the two shares would be identical.

Furthermore, in 2005, the top 1 percent of tax returns paid nearly the same amount in federal individual income taxes as the bottom 95 percent of tax returns, a group which was responsible for 40.4 percent of the federal individual income taxes paid.

The top 1% pays as much as the bottom 95%? Well, surely there must be something missing from these statistics that shows that the plutocrats are sticking it to the masses. Oh, yeah, this:

(Note: This data does not include the refundable portions of the child tax credit or the Earned Income Tax Credit, which if included, would make the share of taxes paid by the top 1 percent even greater as those items would significantly lower the tax bill of the bottom income groups.)

Even so, as long as there are politicians, some will keep saying that the rich should pay more, no matter how much they pay already.

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