Saxton: Top 1% Pay Too Much in Taxes

Joint Economic Committee ranking member Rep. Jim Saxton (R-NJ) wants us to know what a soul-crushing burden of taxes the richest one percent of income earners shoulder. The share of federal income taxes paid by the top 1 percent of households ranked by income increased from 36.5 percent in 2000 to 38.8 percent in 2005, recent Congressional Budget Office (CBO) data show. ... "Despite the contention that the tax cuts would unfairly reduce the tax burden of the rich, their share of taxes has in fact gone up," Saxton concluded. But that very same data set contains this interesting inconvenient factoid that Jim "Defender of the Richest Among Us" Saxton omits: From 2000 to 2005, the effective income tax rate for the top 1 percent of income earners fell 4.8 percentage points (pp) from 24.2 percent to 19.4 percent. In fact, this drop is larger than the average for all income groups (2.8 pp) and more than double the drop for middle income groups (second through fourth quintiles, which saw an average 2.2 pp drop.) Changes in Effective Income Tax Rates, 2000 to 2005 Income Group Effective Income Tax Rate Percentage Point Change in Effective Income Tax Rates Change in Income Tax Liability (dollars) 2000 2005 Lowest Quintile -4.6 -6.5 -1.9 -270 Second Quintile 1.5 -1.0 -2.5 -940 Middle Quintile 5.0 3.0 -2.0 1,095 Fourth Quintile 8.1 6.0 -2.1 -1,733 Highest Quintile 17.5 14.1 -3.4 -6,342 Top 10% 19.7 16.0 -3.7 -9,631 Top 5% 21.6 17.6 -4.0 -14,674 Top 1% 24.2 19.4 -4.8 -51,116 Source: CBO, Historical Effective Federal Tax Rates: 1979 to 2005
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