… you can show them this chart, courtesy of the Congressional Budget Office, via Greg Mankiw:
Lowest quintile: 4.3 percent
Second quintile: 9.9 percent
Middle quintile: 14.2 percent
Fourth quintile: 17.4 percent
Percentiles 81-90: 20.3 percent
Percentiles 91-95: 22.4 percent
Percentiles 96-99: 25.7 percent
Percentiles 99.0-99.5: 29.7 percent
Percentiles 99.5-99.9: 31.2 percent
Percentiles 99.9-99.99: 32.1 percent
Top 0.01 Percentile: 31.5 percent
Here is Mankiw’s accompanying note:
The C.B.O. has released a new report on effective tax rates (total taxes divided by total income). Compared with previous reports, it includes more information about thin slices at the top of the income distribution. [These] are the total effective federal tax rates for 2005, the most recent year available … N.B.: These figures include all federal taxes, not just income taxes.
Remember that these are percentages and not amounts, which makes it pretty hard to keep making the argument that the rich are dumping their tax burden on the middle class and the poor. Yes, it is true that the top .01 percentile pays slightly less than the fraction of taxpayers just poorer than them, but if that is the extent of the rich-don’t-pay-enough-taxes argument, then … oy vey.
Also this morning comes word of an Obama plan for a $300 billion tax cut, fully half of which will “provide credits up to $500 for most workers.” One can assume that “most workers” includes people far below the 99th percentile.
If this still leaves you needing to scratch that hate-the-rich itch, consider one of the largest effects of the Great 2008 Financial Meltdown: income inequality — which many Americans fear more than fear itself — has been substantially leavened since the biggest losers of the meltdown have been high-income and high-net-worth individuals.
and 
. You can also watch it on 
Adjusted to subtract the poverty line from average income ( presuming a low 2 person household size )
Lowest quintile: 23 percent + almost 20%
Second quintile: 15 percent + 5%
Middle quintile: 18 percent
Fourth quintile: 20 percent
That is before state, local, and indirect taxation especially for working individuals where half of the taxation is indirect.
Plot the effective tax rate of percentile 91 thru the top 0.1; then plot the annual income for each. The former looks linear, the latter more like geometric. We’re pretty high up in the percentiles ourselves, as *I’m* miffed about about the slope differential; anybody in the middle quintile oughta be outraged….22 / 25 / 29 / +35 / +39 / +44 would be a nice start that could lower the rates for others or be invested into education and infrastructure would be a good start.
Let’s see…
Regressive: Sin taxes, gas taxes, sales taxes…
Regressive: fines, fees, permits…
Regressive: loopholes, off-shoring, tax shelters, muni bonds…
Progressive: income tax..
I have at least one way to make the tax code more progressive: index fines to income. This is done in some European countries. If the idea of a fine is to invoke pain on the violator, then why is my pain so much greater than a millionaire’s?
The person who pays the tax is not necessarily the one that bears the burden. The classic example is the employers portion of the payroll tax. I would speculate that large aggregations of capital (rich people and the businesses they predominantly own) are much more likely to have the market power necessary to pass through some of their tax burden to others.
I would also speculate that the wealthy bear less of the burden of externalities. They tend not to live in neighborhoods that are close to freeways, industrial pollution, poor schools, and crime.
As it is, the table is nothing more than a statement of receipts, not a valid piece of economic analysis suitable for making policy.
“…income inequality … has been substantially leavened since the biggest losers of the meltdown have been high-income and high-net-worth individuals.”
Hmmm. Be nice to see that backed up by some data. Which would be hard to produce, given that these folks have not yet filed any tax report for 2008.
The sudden drift from vague, global facts (the rate table) to a more specific but entirely unsubstantiated claim about who is feeling pain, does not do this blog justice
Paraphrasing Hem & Fitz–
The rich pay very differently from you and me.
Yes. They pay more money.
That is because they make more money.
But do they pay anything close to the actual percentages as set out in the tax codes? I believe, for example, that Mssrs. Cheney and Bush paid something like 21% of actual gross income. They would both be found somewhere in the higher echelons of the highest bracket.
So if you make a million and you keep $800,000 and much of the $200,000 is spent on personal deductible items…is the tax code too demanding?
@ #8, right on.
@#6:
Government transfers represent a very smal percentage of government spending, as do public libraries.
Education of poor people actually benefits rich people at least as much as it beneifts the poor.
If you are a rich person, you probably own or manage a business. You require the labor of others in order to make the money you do. The state’s education of your workers makes them much more productive than they otherwise would be, increasing your profits and income.
The benefits of police protection accrue substantially more to weathy people than poor people. If you are wealthy, you have substantially more incentive to protect your property, and subsequently derive greater benefit from that service than a poor person with little to protect. Not to mention, as #8 did, the lack of effective (even antipathetic) police protection in poor neighborhoods.
And I forgot to mention earlier the vast transfer of wealth that results from the payment of interest on national debt. While people of modest means are more invested in bond markets today than in the past, the vast majority of government interest payments go to wealthy people.
The question we should be debating is not whether we have a flat, regressive, or progressive tax burden but why many people prefer to punish success with progressive taxes? Does anyone really believe the government is better at spending their money than they are?
Plus it does not show the cost that those in the upper ranges face to keep their taxes down. Do you think it happens naturally or they pay professionals and experts to help them lower their tax obligations though legal channels? Does that cost show up in their part?
Do the benefits that those in the lower portions show up? EITC, public assistance, etc? Do they show up as negative taxes or transfers of wealth?
Our government has grown too large and will never be an engine of long term economic growth. Taxes will always be a negative drag on the economy as you lose efficiency the more times the money changes hands before finally being spent.