The Awkward Truth: America’s Tax System Isn’t Rigged in Favor of the Rich

Rob Port

The Occupy Wall Street movement and its apologists like to credit the protests with “raising awareness” about income inequality in America, which in turn is used as an argument for raising taxes on the rich. If that’s true (and I’m not sure OWS has done anything more than commit a lot of petty and not-so-petty crimes and vandalism), it’s a false assumption.

The truth, according to a new report, is that America’s tax system is anomalous when compared to other countries not because the wealthiest Americans get off easy but because the rich pay so much more than everyone else.

If anything, rich Americans contribute a greater share of taxes than do their peers in other industrialized nations. The top 1 percent of U.S. taxpayers paid 40 percent of federal income taxes in 2007. The top 1 percent of British taxpayers paid 24 percent of the corresponding total.

A new report by the Organization for Economic Cooperation and Development shows that in the middle of the last decade — i.e., after the Bush tax cuts were introduced — the U.S. income tax was about as strongly redistributive as income taxes in Canada, Denmark, Finland, the Netherlands and Sweden. You might have noticed that the CBO report on top incomes was widely quoted, but one finding got less attention: Between 1979 and 2007, “the federal individual income tax became slightly more progressive.”

The awkward truth is that the U.S. income tax system is anomalous not because it taxes the rich lightly but because it taxes everybody else lightly…

The article continues at SayAnythingBlog.

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