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PowerLine Says Wealthy Overtaxed

January 31, 2012

In Toward A Fairer America, John Hinderaker repeats one of his favorite distortions:

Of course, by “fairness” Obama means raising taxes on those who are already paying them, and spending even more money on those who aren’t. The problem with this approach is that the United States already over-taxes its higher income citizens more than any other developed country. The last thing we need to do is make that disproportion even worse.

He claims that the rich are overtaxed because they pay a high percentage of the total tax bill. What he conveniently neglects to mention is that the rate for almost everyone has gone down. And for the very wealthy, it’s gone down the most – they now pay the lowest rate in at least 50 years.

The reason the wealthy now pay such a high share of the income tax isn’t because they’re over-taxed. It’s because they are now taking in a bigger share of the national income than anytime since the 1930’s.

 

 

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3 Comments
  1. knight427 permalink

    In that first graph, are those marginal rates?

    • Michael permalink

      It’s the effective tax rate – total federal taxes paid as a percentage of total income. Even though the top marginal rate is slightly higher now than it was in the late 80’s (35% vs. 28%) the effective tax rate is lower today because of all the other tax cuts enacted recently on capital gains, real estate, dividends, etc.

      • knight427 permalink

        Thanks for the clarification. I have to say that I’m not sure I support the 70-ish% tax rate on the top earners back in the 60s and 70s. But given Republican rhetoric, one wonders why those people didn’t just quit and/or move to another country. I mean, Bill O’Reilly is ready to give up his show over a few percent increase over today’s comparatively low rate. I guess top earners used to love America a lot more.

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