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No, the Richest One Percent Don’t Pay 40 Percent of the Taxes



Above: Photo Collage / Lynxotic

NYMag Article details this deceptive talking point endlessly repeated by the Right

It’s hard to trace the origin of the partially accurate, yet highly misleading, stat that has been so often used to refute the idea that the current tax burden in the U.S. is not falling enough on the richest 1% compared to the rest of society.

The stat, which under the very narrow definition of “taxes” as federal income tax, calculated separately from any other form of tax, is, in this narrow sense, basically true. This isolated and totally meaningless fact does not address the overall taxes paid by the “top 1%” (which itself is an arbitrary category).

The reality, when overall taxes paid are taken into account, as the NT Mag article points out, is actually much less dramatic and has completely different implications for any call to “tax the rich” which was made by Alexandria Ocasio-Cortez’s Dress, as an example.

First, the top 1% represent 21% of all income, which means, by the narrow definition of declared income for tax purposes, that they “earn” more than 20% of the total income declared.

Above – :Bob Woodward’s new book: Peril – release date 09/21/2021 available to pre-order now

Further, this does not include the loopholes that allow billionaires to have virtually no declarable income and still avoid capital gains taxes via Roth IRAs and other methods, even as the calculated net worth of theses individuals increases by billions.

Opinion: ultimately, rather than defending the current system as if it is already adequate and somehow fair, the facts show that, on so many levels it’s hard to delineate them all, the system is functioning in a way that is not only unfair, but so corrupt that change would need to be nearly total before it could even be accurate to say that it was functioning fairly for the majority.

According to the article, the actual stat, with the above dodges, that are universally used, still not taken into account, is that: “the richest one percent earn about 21 percent of the income and pay 24 percent of the taxes”.

Which is a far cry from the ubiquitous sound byte that “1% pays 40% of taxes”.

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