Interestingly, as in previous years, the latest IRS data shatters the popular myth that there are so many loopholes in the tax code that the rich don't pay tax. In fact, as past years' data has shown, the latest IRS Collections data, broken down by income category or "percentile", conclusively dispels that myth. In fact, this data leaves no doubt that the rich pay far more than their share.
Here is just a sample of what's in this year's tax collections data.
• The top-earning 1% of taxpayers earned 21% of the income.
• The top-earning 1% of taxpayers paid 40% of taxes collected.
• That's roughly double their share, based upon income.
Once again, this report shows that the Bush tax cuts didn't benefit the rich, as liberals would have us believe. In fact, the most relevant benchmark of tax load - the ratio of percent of total income earned, to the percent of total tax paid, by each income group - has been higher for the top-earning 1% of income earners, in each of the years 2001 through 2004, than in any of the prior four years, when that ratio was trending down. Only in 2005 has that ratio dropped to close to the level that it was when Bush took office. Interestingly, the years 2002 and 2003 were the first years since 1996 that the top-earning 1% paid more than double their share of taxes, based upon income. Try to spin that as the media may, such data demonstrates, beyond any shadow of a doubt, that if anything, the Bush tax cuts actually hurt, rather than helped the richest taxpayers.
But there is a lot more to it than just that. Check out the article for more analysis and a link to the actual data, in spreadsheet format, on the IRS web site. Afterwards, come back here and discuss it. [more...]
Note: Every year, between September and February, the IRS releases their most recent collections data, sorted by income category or "percentile". Because of the time it takes to complete collections and to compile the data, the released data is always about two years old.