President Barack Obama wants well-off Americans to pay more taxes, but wealthy Americans already pay a higher proportion of income taxes than top-earners in Sweden, Finland, Holland and other welfare-state nations.
The top 10 percent of income-earners in the U.S. and Sweden earned one quarter of national income, yet rich Americans paid 45 percent of all income taxes, while rich Swedes paid only 26.6 percent of taxes. In Finland and Holland, the wealthy paid 32 percent and 35 percent of taxes, according to a study of tax-data collected by the Organization for Economic Cooperation and Development. a Paris-based organization of 34 governments.
The comparison was prepared by Scott Hodge, president of the D.C. based Tax Foundation.
Liberal groups counter with studies that account for federal income and payroll taxes, as well as state and local property and sales taxes. But even those studies show an enormous skew. In 2009, according to an April study by Citizens for Tax Justice, the top 10 percent of earners paid 40 percent of all taxes after earning 35 percent of all income. The lowest 60 percent of earners paid 17 percent of all taxes, after earning 22 percent of all income.
The effective tax rates on the lowest 60 percent was roughly 20 percent, while the tax-rate on the wealthiest 10 percent was roughly 31 percent, according to charts included in an April statement by the group’. “The U.S. tax system just barely qualifies as progressive,” said the statement.
Historical data from the left-of-center Tax Policy Center shows that the wealthy are providing an increasing share of income taxes. In 1979, the top 10 percent of households paid 40.7 percent of federal income-taxes. By 2007, after President George W. Bush’s tax cuts had taken effect, the top 10 percent paid 55 percent of taxes. The lowest 60 percent saw their share drop from 22.5 percent to 13.4 percent, partly because the Bush tax-cuts eliminated taxes for many low-earners, and boosted the “progressiveness” of the tax code.
One painful side-effect of the federal government’s reliance on income-taxes paid by the wealthy is that the 2008 recession had a disproportionate impact on federal tax-income, which has dropped from roughly 18 percent of the economy to 15 percent since 2008. “Higher-income people tend to have more volatile incomes that middle-income people,” partly because they earn more from from stocks sales and dividends, Mark Robyn, staff economist at the Tax Policy Foundation. When the economy shrinks, so does the stock market, and so does federal income, he said. Tax ”revenues increase faster when the economy is growing quickly, and tend to shrink faster” when the economy turns down, he said.




Pingback: Bajaj Allianz Travel Insurance | Car Insurance Life
Pingback: Pelosi: I have no ‘ownership’ or ‘responsibility’ for spending deal (Daily Caller) | Stock Market News - Business & Tech News