A few weeks ago, the Internal Revenue Service released data on tax year 2003. They show that the top 1 percent of taxpayers, ranked by adjusted gross income, paid 34.3 percent of all federal income taxes that year. The top 5 percent paid 54.4 percent, the top 10 percent paid 65.8 percent, and the top quarter of taxpayers paid 83.9 percent.
Not only are these data interesting on their own, but looking at them over time shows that the share of total income taxes paid by the wealthy has risen even as statutory tax rates have fallen sharply. A growing body of international data shows the same trend.
At some point, those on the left must decide what really matters to them -- the appearance of soaking the rich by imposing high statutory tax rates that may cause actual tax payments by the wealthy to fall, or lower rates that may bring in more revenue that can pay for government programs to aid the poor? Sadly, the left nearly always votes for appearances over reality, favoring high rates that bring in little revenue even when lower rates would bring in more.
Okay, number one--this data is absolutely meaningless without some indication of what percentage of the total income the wealthiest 1%, 5%, 10% et al bring in each year. Even in a flat tax society, the wealthiest 1% would still pay a fair percentage of the total income tax because they make a fair percentage of the total income. If they make 10% of the income, they'd pay approximately 10% of the total taxes. Since we have a progressive tax system, they pay somewhat higher than that--but the disparity isn't as crazy as Bartlett plays it up to be. The only way for the wealthiest 1% of Americans to pay exactly 1% of the income taxes would be either a) for us to live in a communist society where everybody made the same amount of money or b) for us to have some extraordinarily low flat non-percentage tax which would crush the poor. Conservative economists always use these numbers and they always use them wrong.
This observation also leads us to problem number two: if the wealthy's share of tax dollars is rising, isn't that equally explainable by a rising income gap between the rich and the poor? Indeed, wasn't that the major critique of Reaganomics--they put more wealth in the hands of the rich while the poor stagnated? That seems to be the most plausible interpretation of Bartlett's data--the rich paid a greater portion of the tax load because the rich were getting, well, dirty rich(er). This is especially true because it isn't like the wealthy got a tax cut while the middle and lower class tax rates stayed constant or rose. Everybody's taxes fell, which will counter-act the proportionality argument Bartlett tries to make.
Third, economies move for complex reasons--it's foolish to associate them particularly with one policy or another (especially, and I know Bartlett knows this, fiscal as opposed to monetary policy). For Bartlett to say that the information he provides indicates that lower tax rates for the rich will give the government more money to spend on the poor is a gross oversimplification. And his statistics don't even prove that--they say nothing about whether governmental revenues rose or fell in this time period (in real dollars), just that the rich's share rose.
Fourth, the folks who want to lower taxes don't want to do it to see increased revenues--and they definitely wouldn't want to increase said revenues. They want to shrink government further and they want to cut programs--especially those for such no-good worthless constituencies like poor people. So to characterize the "choice" by the left as between keeping up appearances and joining the noble conservative crusade for greater financing on the safety net is just absurd.
So if Justin Jones really "couldn't say it better" himself, well, then I think liberal economic theory is in pretty good shape.