Notes on the Atrocities
Like a 100-watt radio station, broadcasting to the dozens...

Thursday, April 15, 2004  

If tax policy comes up at the water cooler today, you'll do yourself a favor by reading Matthew Miller's analysis of who pays.

The conservative worldview inexplicably ignores the payroll tax (as well as excise taxes on things like liquor) that take their biggest bite, proportionally, from lower-income Americans.

These regressive taxes have quietly (and shockingly) reached near-parity with the income tax as a source of federal revenue. This year the income tax will account for 42 percent of federal revenue; the payroll tax will come to 41 percent (up from 16 percent in 1960).

If you count the portion of the payroll tax paid by employers (which economists agree effectively comes out of workers' wages), four in five workers pay more in payroll taxes than in income taxes....

Consider: The top 1 percent of America's taxpayers earn 17 percent of the income and pay 23 percent of federal taxes; the top 5 percent earn 31 percent of the income and pay 40 percent of the taxes; the bottom 80 percent of the earners make 41 percent of the income and pay 31 percent of the taxes (and those numbers are from 2001, the most recent such data available; President Bush's tax cuts have since made the burden on top earners lower). In other words, in aggregate, we have a modestly progressive federal tax system.

posted by Jeff | 7:09 AM |
Blogroll and Links