Are The Rich Being Taxed Unfairly ?

The Republicans have been whining for years about how unfair our tax system is to the richest Americans. They are quick to point out that the richest Americans (the top 20%) actually pay about 64.3% of all taxes, leaving only 35.7% of taxes being paid by the bottom 80% of people in America.

That might sound unfair if that was the only statistic you are given. But as the top chart above shows the richest 20% pay 64.3% of taxes because they take home 59.1% of the nation's income (leaving only 40.9% of the nation's income for the bottom 80% of Americans to share).

Frankly, that doesn't sound to me like they are paying an inordinately large percentage of the taxes in this country. If this group is making approximately 60% of all income, I think they should be paying more than 64% of the taxes. After all, aren't we supposed to have a progressive tax system, where the rich pay a larger share of their income in taxes than the people who don't make nearly as much? And shouldn't the people who have benefitted the most from the American system pay the most to support that system?

The bottom chart shows that our system is not nearly as progressive as most Americans think (or as unfair as they Republicans would have us believe). It shows that the percentage of their income that the rich pay is really not that much more than the percentage paid by all other Americans (except for the bottom 20%, which includes the unemployed, the poor, and the minimum wage workers -- and still this group pays 16% of their income in taxes).

In fact, the top 1% of income earners actually pays less in percentage than the 9% of income earners right below them, and virtually the same percentage as the 10% right below that 9%. This is because much of their income is taxed as "capital gains" and not earned income, and the capital gains tax is only 15% (far below the 35% the Republicans want us to think the richest 1% are paying).

The truth is that the richest Americans are not being taxed unfairly at all. They should be paying more than they are paying -- and that would not stifle business investment and job creation as the right-wing says. Much higher taxes have been paid by the rich in the past and it did not stifle investment or job creation. That's just a false argument used by the greedy rich to keep from paying their fair share of taxes.

Now some of you may be thinking right now that I've culled these charts from some left-wing source. Not true at all. They actually come from a very good article in the business-oriented magazine Business Insider. In fact, this magazine goes even further and says the Occupy Wall Street protesters have a legitimate point. Here is a quote from the article:


So, what are the protesters so upset about, really?

Do they have legitimate gripes?

To answer the latter question first, yes, they have very legitimate gripes.

And if America cannot figure out a way to address these gripes, the country will likely become increasingly "de-stabilized," as sociologists might say. And in that scenario, the current protests will likely be only the beginning.

The problem in a nutshell is this: Inequality in this country has hit a level that has been seen only once in the nation's history, and unemployment has reached a level that has been seen only once since the Great Depression. And, at the same time, corporate profits are at a record high.

In other words, in the never-ending tug-of-war between "labor" and "capital," there has rarely—if ever—been a time when "capital" was so clearly winning.