Tuesday, April 26, 2005

Kevin Drum takes an editorial in the Wall Street Journal whining about how the upper middle class and rich have such a heavy tax burden, and he totally tears it apart.

Now, it's true that the rich and the upper middle class pay the bulk of U.S. taxes. But you know why? It's because the rich and the upper class also have the bulk of the money: the top 20% of taxpayers pay 67% of federal taxes, but they also earn 60% of all income.

And how about the super rich? Here's the Journal's half of the story: according to their tax wonks, the share of federal taxes paid by the top .1% of the country — those making roughly a million bucks a year — doubled between 1979 and 1999, rising from about 5% to about 11%.

But here's the second half of the story that the Journal mysteriously left out: during that same period, the share of income received by the top .1% tripled, from about 3% to about 10%.

So in 1979 the super-rich earned 3% of the money and paid 5% of the taxes. In 1999 the super-rich earned 10% of the money and paid 11% of the taxes. The Journal clearly has a different definition of "grew more progressive" than the rest of us.

So in truth, the tax share of the super-rich went down, not up. And Kevin provides a cool chart, complete with 3-d red arrows and notes, demonstrating that while middle class tax rates went up one percentage point, the super-rich's tax rates went down by nine percentage points.

This is the kind of analytical, let's-crunch-the-numbers piece that Kevin is really, really good at. Nobody I know of does graphs and charts as well as Kevin does. Superb.

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