JOURNAL-ISM….I see that the Wall Street Journal is busily cementing its reputation as the most dishonest editorial page in the country. Today they crow yet again about the vast tax burden of the upper classes:
An IRS study by a trio of tax wonks shows that, even after including Social Security taxes, the overall tax burden grew more progressive from 1979 to 1999. And while that burden became a tad less progressive after the Bush tax cuts of 2001 and 2003, the rich and upper middle class continued to pay far and away the bulk of U.S. taxes.
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.
In fact, these numbers might start you wondering. If the income share of the super-rich tripled but their tax share only doubled, doesn’t that mean that their tax rates must have gone down? Indeed it does. Here’s a chart from the tax wonks that the Journal must have inadvertantly overlooked:
(Note: the last line, labeled “1999 JGTRRA,” is basically an estimate of 2003 tax rates after the first round of Bush tax cuts.)
So shed no tears for the super rich in America. Their incomes have tripled in the past couple of decades and at the same time their tax rates have decreased by 9 percentage points. That’s a pretty sweet deal in anybody’s book.