Be sure to read the whole piece, if for no other reason than to access the tables. The money quotes come in the last paragraph, which I’ve not quoted here.
“During my recent testimony before the Senate Budget Committee (found here), I cited an OECD statistic that the U.S. has the most progressive income tax system among industrialized nations.[1] This prompted one Senator to point out that if the richest 10% of taxpayers earn the most of any OECD country, shouldn’t it make sense that they bear the largest tax burden of any country?
The answer can be found in the OECD table below. This table shows the share of taxes paid by the richest 10 percent of households, the share of all market income earned by that group, and the ratio of what that 10 percent of households pays in taxes versus what they earn as a share of the nation’s income.
The first column shows that the top 10 percent of households in the U.S. pays 45.1 percent of all income taxes (both personal income and payroll taxes combined) in the country. Italy is the only other country in which the top 10 percent of households pays more than 40 percent of the income tax burden (42.2%). Meanwhile, the average tax burden for the top decile of households in OECD countries is 31.6 percent.
By contrast, column #2 shows that the richest decile in America earned 33.5 percent of the market income in the country in 2005 – the year in which this snapshot was taken, but little has changed since then. But, a few other countries do have a greater or similar concentration of income as does the U.S. For example, the OECD table shows that the wealthiest decile of households in Italy and Poland earn a greater share of their country’s market income than do our “rich” – 35.8 percent and 33.9 percent respectively – while the share of income earned by the top decile of households in the U.K. is about on par with those in the U.S. at 32.3 percent.”
Read the rest here.
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Perhaps proper taxation of corporations and less corporate welfare would lessen the burden in households of the highest order.
Well corps are taxed at the 2nd highest rate of any developed country. The problem is that the tax breaks, which favor special interests, ensure that corps never pay such a high rate. Reforming the entire tax code for corps and individuals is the solution. I’m thinking that is what you meant.
big biz, like big oil, can lobby for significant tax breaks. small businesses cannot. a guy could write a fairly justifiable rant here about how the system in the US is stacked against the most economically important part of the country – small biz…
But the truth is, small business owners hide alot of income, in various ways, even without breaking the law. I would know, I’ve never had a real job, just been an entrepreneur. You can write off vehicles and rents and computers and a great deal of other things. In the end, over all, I don’t think that the tax rate paid by many small business owners is actually that high, and probalby the highest tax rate winds up being paid by people whose income is high, but not in debate at all.
This is a fantastic post and I’m very glad I stumbled across it.
corporations pay nothing:
http://www.forbes.com/2010/04/01/ge-exxon-walmart-business-washington-corporate-taxes_print.html
http://dealbook.nytimes.com/2008/08/13/study-tallies-corporations-not-paying-income-tax/
this is why both federal and states run serious deficits besides spending of course
http://www.sunherald.com/2011/03/23/2967641/coalition-corporations-pay-too.html
reform is necessary for sure…..
Exactly. They are taxed at very high rates in an effort to collect revs but then the same stupid bureaucrats grant them special interest breaks, ensuring they pay little. For example, GE purchasing the Volt, by the thousands, and collecting a huge tax break.
yep if we really collect from corporations then we could lay off the households….
taxation on corporations, however, is a 2 way street, as they do at least somewhat possess the ability to simply leave if we burden them too greatly. low corporate tax rates was part of the Irish economic miracle and all of that.
This is good stuff, I am very glad to have found it.
Our top 10% does indeed do very well, but they are taxed at the highest rate of anybody, paying the highest share, with the highest ratio of taxes to income percentage. Spits, a bit, on the liberal/populist contempt of high income persons in this country.
I will offer a joke, here, but while its extremely funny it is also extremely relevant to businesses and the taxes they pay.
Jimmies Widget Company had enjoyed the services of Robert Smith, a loyal and talented accountant for 30 years. But one day, ole Robert walked in and announced his imminent retirement.
The CEO, Ian Curtis, was distraught to say the least. He had trusted and relied on Mr. Smith heavily. Realizing that he needed to find someone young, so as to have him or her around for a long time, and extrmeely talented, he told his staff to find the 3 best and brightest candidates available anywhere and fly them in for interviews immediately.
When the 3 best candidates were located, and flown in, Mr. Smith sat them down and gave them the last years records, and instructed them to come to his office in one week with a detailed breakdown of the financial performance of Jimmies Widget.
One week later the first candidate, one Martin Gore, walked into Smiths office extremely confident, and presented his take on the numbers. He showed that Jimmies had not made a great profit, and he was extrmeely proud of this as it would lower the income tax burden on the firm.
The second candidate, Johnette Napolitano, was also extremely confident as she waited for her turn to present. She had shown that Jimmies made a substantial profit, which she was sure would please the CEO, as it would please the shareholders and perhaps help the stock price.
The third candidate, one Jim Reid, on the other hand, showed up disheveled and obviously still drunk from the night before. He reeked of seedy bar, and was completely out of it. When he walked in to give his presentation, the CEO was put off to say the least. “What the hell”, Smith demanded, “are you thinking showing up like this when looking at a job that pays this much”
“What are you talking about? How the hell could I come up with how much profit Jimmies Widget made last year when you didn’t tell me what you wanted the number to be??!! JEsus, man!”
Mr. Reid was hired on the spot.
failed, got some names mixed up. still a good joke
I see right through this tired argument-the middle class gets screwed every time. Just look at the percent of income each income bracket gets to keep and leave out those who pay nothing, changes the picture. The rich are richer and pay less taxes than ever before. Thus we have a deficit. End of story.
dd, I don’t think you read the article.
“Interestingly, countries with top personal income tax rates that are higher than in the U.S., such as Germany, France, or Sweden, have ratios that are closer to 1 to 1. Meaning, the share of the tax burden paid by the richest decile in those countries is roughly equal to their share of the nation’s income. By contrast, we prefer to have the wealthiest households in this country pay a share of the tax burden that is one-third greater than their share of the nation’s income.”
Give it up Wood. There’s a reason people like “Dd” vote Dem. They are looking for someone else to blame, and the demagogues offer them a convenient excuse.
Ironically, they are not unlike the conspiracy theorists on our side of the aisle.
“Don’t nettle me with the facts!”
The Tax Foundation is always very clever, but, with a little digging, you can usually find the breadcrumb showing where they have made a deliberate decision to mislead people.
For example, they put out a July 2010 report with the following statement:
“Indeed, since 1981, when the failed windfall profits tax was first enacted, federal, state, and local governments in the U.S. have collected more in taxes from the oil industry than the industry has earned in actual profits for its shareholders.”
It was backed up with facts and everything.
The problem is, one of the facts showed that a majority of the supposed “taxes from the oil industry” were actually taxes on you and me – the sales and excise taxes collected at the gas pump. The taxes used largely to pay part of the cost of the roadways that make so much of that oil consumption possible.
So, the Tax Foundation thought we should be sorry for the oil companies, because the government was making drivers pay for the roads that encourage purchase of the oil industry’s products.
In the next comment, I’ll show you the one-word breadcrumb in the Tax Foundation material Wood posted.