A Factual Compendium of Taxation Unfairness, Wealth and Income Concentration

I. Taxation of the Wealthy
1) IRS data shows that the 400 wealthiest households in the United State paid 18.1 percent of their total income in federal income tax in 2008; in contrast, they paid 51.2 percent of their total income in 1995.

2) The Center on Budget and Policy Priorities found that the effective income tax rate for the top 400 taxpayers declined by nearly half in just over a decade, even as their pre-tax income had grown over five times larger.

3) The wealthiest 400 households paid 16.6 percent of their incomes in federal income tax in 2007, down from 30 percent in 1995.

4) MIT economist Peter Diamond found that in 2007 the top one percent of taxpayers paid an average 22.4 percent of their incomes in federal income tax.

5) The Congressional Budget Office has reported that the gap in after-tax income between the richest one percent and the middle and poorest fifth of the nation more than tripled between 1979 and 2007.

6) The Institute of Policy Studies calculates that if those earning $1 million or more paid taxes today at the same rate as they did in 1961, there would be an additional $716 billion annual revenue for the national government.

7) There is general consensus among economists that those in the 35 percent tax bracket pay an average of 18 percent of their earnings in federal income tax. In 1961, those in the 91 percent bracket paid an average of 42 percent.

II. U.S. Wealth Concentration
1) The wealthiest 400 households own more wealth than do the bottom 40 percent.

2) The bottom 60 percent of the U.S. population own less than two percent of the wealth and the bottom 40 percent own 3/10s of one percent.

3) The Walton family owns more wealth — $89 billion — than does the bottom 40 percent.

4) The economist Leon Friedman has calculated that the top one percent owns 35 percent of the nation’s wealth and the top five percent owns 62 percent.

5) The economist Joseph Stiglitz says the top one percent owns 40 percent of the nation’s wealth.

6) The Ecomic Policy Institute calculates that the richest five percent owns 63.5 percent of U.S. wealth and the richest 20 percent owns 84 percent.

III. U.S. Income Concentration
1) After adjusting for inflation, the IRS has concluded that the top 400 households reported incomes in 2008 that were 20 times the comparative incomes a half-century before.

2) Joseph Stiglitz says the top one percent takes in a quarter of the annual income. He further says that the incomes of the top one percent have risen 18 percent since the year 2000.

3) According to U.S. Senator Bernie Sanders’ newsletter, between 1980 and 2005, 80 percent of all new income created in the nation went to the top one percent.

4) The economists Emmanuel Saez and Thomas Riketty have found that 93 percent of the earnings gains during the 2009-10 recovery went to the top one percent of earners. The top 0.01 percent captured 37 percent of the total recovery pie, with a rebound in their incomes of more than 20 percent, which was an additional $4.2 milllion each. IRS data shows that the top 0.01 percent earned 7.9 percent of the national income in 2009.

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