President Barack Obama says “the rich” should pay their “fair share” of taxes. While it is true that the ridiculously complex federal tax code has allowed some major corporations to whittle down their taxes to a very low level, high-income Americans already pay, on average, a disproportionately large share of federal taxes.
Here are the numbers cited by the Congressional Budget Office:
n “In 2007, households in the bottom fifth, or quintile, of the income distribution paid about 4 percent of their income in federal taxes, while the middle quintile paid 14 percent, and the highest quintile paid 25 percent.”
n “In 2007, households in the highest quintile earned 55 percent of before-tax income and paid almost 70 percent of federal taxes; for all other quintiles, the share of federal taxes was less than the share of income.”
It is easy to point out a few big corporations that avoid paying much in taxes, and that is a good reason to simplify the tax code. But most of the so-called “rich” – often just job-producing small-business owners – pay more than their “fair share.”