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The Official Blog of National Taxpayers Union

Progressive Taxation

Posted by Andrew Moylan - December 01, 2008

A very interesting table, over at Real Clear Markets, shows just how progressive our income tax rates are.

When you look at the top 10% of households in each country, we have the highest tax-to-income ratio of any OECD country, meaning the percentage of their income those folks pay in taxes versus the total share of the nation's income tax revenue they shoulder. In the U.S., our top 10% pays 33% of their income in taxes while supplying 45% of the total income tax collections. Of the group listed, only Italy is close with 36% and 42%, respectively.

You hear a lot about how "unfair" our tax code is from people who think the rich don't pay enough, but the data is becoming harder and harder to ignore. Check out our "Who Pays?" and "Who Doesn't Pay?" features for more data.

Hat tip: Andy Roth at the Club for Growth.

Thoughts?   Add Comment -

Nathan Benefield said on Dec 01 2008 at 10:20am
I believe that the 33% figure in that table shows the percentage of total household income the top 10% earns, rather than the percent of their income spent on taxes.

Thus, the disparity between the share of income and the share of taxes of "the rich" demonstrates the progressivity of our tax code.

Joe said on Dec 02 2008 at 9:00am
I think the Feds should try this to stimulate things -- a TAX FREE YEAR for individual filers. It would certainly get things moving for the better. And find a way to control spending.

Chernevog said on Dec 20 2008 at 12:07pm
The price of a democratic society is progressive taxation.

The founding fathers who were pretty well read fellows, examined every empire, republic, city state, and form of government known to history at their time. Going back to Aristotle, they came to the conclusion that there were two conditions that occured in states that either started as some for of tyrannical government, or became tyrannical.

The first was the existance of extremes of both poverty and wealth. The second was the existance of entrenched wealth.

Jefferson, Madison, Adams, Franklin , Paine,and the rest all agreed that the main difference between the colonies and the mother country was that for some reason, extreme poverty and extreme wealth did not exist in the colonies to the same`degree that it existed in Europe of their time. Jefferson and Franklin were appalled at the even greater degree of extremes of poverty and wealth that existed in the France of their day compared to their own Great Britain.

Each one of these founding fathers came up with the same solution and each one at one time or another suggested some form of progressive taxation be applied to "excess wealth" which was something they also felt needed clear definition.

Madison and Jefferson discussed this at length with each other in many letters, and they both discussed it with Tom Paine when writing to him about his written works, The Rights of Man, Common Sense, and his later work, Agrarian Justice, where he calls for some standard base income for this who were not propertied, to be paid for by a tax on those who were, as a basic human right.

Paines basic positions were opposition to slavery, free universal public education, and a guaranteed minimum income.

Jefferson and Madison both supported these positions and offered their ideas about how they would be funded. Their final conclusion was some form of progressive taxation. Jefferson and Madison did not equate the right to own property with the right to wealth.

Progressive income taxes have been common throughout our history. Largely they were adopted at a time when the government needed to raise revenues, usually during war, and then ended when the war ended. But then again, up until World War II, the military was dissolved at the end of each war.

Given the need or at least the desire, for a permanent large standing military force, the need for the taxation to pay for it also stands.

Out military largely protects American business interests and our police largely exist to protect American property rights.

It is not unreasonable for those who have more to be protected to pay more towards its protection.

I often find that the argument against income taxes is made by those who have benefited most from our form of government, our social and political systems.

I also find that they are the least willing to pay for this.