Earlier this week, Grant Bosse wrote how unfair the American tax system is to wealthy taxpayers. As proof, he provides this fact:
Our progressive income tax system, made steeper over the years, now yields revenues from which more are derived from the richest 1% of Americans than from the bottom 95% combined.
OK, an impressive sounding statistic. Also misleading and largely irrelevant. Since the income tax generates less than half of all federal tax revenue, a serious discussion of tax fairness must include all taxes — including payroll taxes, corporate income taxes, excise taxes, etc.
The Tax Policy Center of the Urban Institute and the Brookings Institution found that in 2009, the top 1 percent shouldered the burden for roughly 23 percent of all federal taxes.
So the top 1 percent receive 16 percent of the nation’s income and are responsible for 23 percent of the total federal tax burden. That’s the nature of a progressive — and fair — tax system.
As further proof of how unfair the U.S. tax system is to the wealthy, Bosse cites corporate taxes:
We also learn today that Japan’s pending corporate tax rate cut will leave the U.S. with the highest corporate taxes in the world.
Also largely irrelevant. A complete measure of the corporate tax burden must include other aspects of the tax system, including exemptions, deferrals, tax credits, and other incentives. Take those into account and the U.S. effective corporate tax rate is the 4th lowest among the 11 G8 and BRIC [Brazil, Russia, India, China] countries.
As Scottish philosopher Thomas Carlyle noted, “Statistics are the greatest liars of them all.”