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The Rich Are Already Paying Their Fair Share
Daily Policy Digest

Tax Issues / Tax Burden and Fairness

Monday, July 14, 2003
There is substantial mobility in and out of the ranks of the very wealthy, a fact documented by Forbes in its annual survey, notes Bruce Bartlett.

* According to a recent study by the Federal Reserve Bank of Boston, between 1988 and 1998, 47 percent of those in the lowest income quintile rose to a higher quintile, and 47 percent of those in the top quintile fell to a lower one.

* Furthermore, although the average tax rate on the top 400 fell, one has to go to the original IRS report to discover that their share of total income taxes paid rose by 50 percent, from 1.04 percent in 1992 to 1.58 percent in 2000.

In other words, the richest of the rich paid more and everyone else paid less, explains Bartlett.

This information is not surprising to those who know that the top 1 percent of taxpayers have increased their tax share almost annually, from 19 percent in 1980 to 27 percent in 1988, despite the Reagan tax cuts, and to 37 percent in 2000. Interestingly, the same pattern holds in other countries. ...