Tax Code Is Already Steeply Progressive


Posted by Ryan Ellis on Tuesday, April 10th, 2012, 10:55 AM PERMALINK


What percent of all tax revenues do high-income households pay?

 

Income Tax

All Federal Taxes

Top 1% ($344,000 +)

39.5%

28.1%

Top 5% ($155,000 +)

61%

44.3%

Top 10% ($112,000 +)

72.7%

55%

Lower Half ($32,000 -)

2.4%

2.6%

Middle Quintile ($65,000)

4.6%

9.2%

All Households

100%

100%

  
What is the average tax rate paid by high-income households?

 

Income Tax

All Federal Taxes

Top 1% ($344,000 +)

19%

29.5%

Top 5% ($155,000 +)

17.6%

27.9%

Top 10% ($112,000 +)

16.2%

26.7%

Lower Half ($32,000 -)

1.9%

9.6%

Middle Quintile ($65,000)

3.3%

14.3%

All Households

9.3%

20.4%

IRS Statistics of Income
CBO "Average Federal Taxes by Income Group"

 


A “Buffett Rule” Raises Almost No New Revenue Because the System Is Already Steeply Progressive

According to the Joint Tax Committee, a version of the “Buffett Rule” proposed by President Obama (30% tax rate on any income earned over $1 million) would raise just $31 billion in tax revenue over the next decade
To put that in context, that is less than one-tenth of one percent of all tax revenues that CBO expects the federal government to collect over that time period, and this assumes (wrongly) that no one would change their behavior as a result of the tax.


There's nothing stopping Warren Buffett from paying extra taxes today.

Wealthy individuals can make a voluntary payment to the Treasury today by sending in a check.  In addition, Congressman Steve Scalise (R-La.) and Senator John Thune (R-S.D.) have introduced legislation to let taxpayers do it right on their own tax form.  The bill is known as the “Buffett Rule Act” (H.R. 3099/S. 1676)

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