Tuesday, August 07, 2007

Progressive Tax Debate. Fun! (I'm Serious)

Andrew Sullivan's on vacation, but his guest bloggers are having some interesting conversations. Bruce Bartlett posted the following:
Rasmussen has a new poll out on the way Republicans and Democrats perceive the tax system. Republicans believe that tax fairness is best achieved when everyone pays the same percentage of their income in taxes; Democrats believe that fairness demands that the wealthy pay a substantially higher percentage of their income in taxes. This is not earth shattering news. ... Perhaps the most interesting data in the poll, however, is that Democrats overwhelmingly believe that we do not at present have a progressive tax system. By a 53 percent to 28 percent margin, Democrats believe that those earning $50,000 per year now pay a higher percentage of their income in taxes than those making $200,000. By about the same percentages, Republicans have the opposite view.

Since this is a factual question, it is a simple matter to check and see which side is right. The best data we have comes from the Congressional Budget Office. Looking at the total federal tax burden, which includes income, payroll, corporate and excise taxes, we see that those in the middle quintile, with an average income in 2004 of $56,200, paid 13.9 percent of their income in taxes. Those in the top quintile, who had an income of $207,200, paid 25.1 percent.

Thus we see that the Democrats are simply wrong in their perception.
Eric Kleefeld, another of Andrew's fill-ins -- and much to the left of Bartlett -- responded here and here. I don't really have a dog in this fight. I think each system offers reasons to argue for its relative fairness. I just like the back and forth, because I'm a geek that way.

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