Click on link and scroll down to see the essential CHARTS.
WED NOV 23, 2011 AT 05:15 PM PST
Income inequality and tax fairness in three charts
Occupy Wall Street has made a difference in the public narrative to the extent that the traditional media is at least now aware of the idea of income inequality. You don't need more proof of that than this "Reality Check" from the Washington Post.
It’s true that the share of the tax burden paid by the rich has grown. The first chart shows that the share of the overall tax burden paid by the top one percent has risen some 12 percentage points since 1986:
But here’s the rub: The overall income of the top 1 percent has risen significanly faster than that over the same time period. The second chart shows that the percentage change of the overall average income of the top one percent has risen by 119 percent. That’s more than twice the amount of the change in their income tax, which grew by 54 percent in that time:
And finally, the third chart shows clearly what this means: The share of adjusted gross income paid by the top one percent dropped by 10 percentage points over that time period. The bottom line is that the amount of after tax income has risen at a much faster pace than the amount they pay out of it:
So, look, here’s the disagreement in a nutshell. Conservatives say we should not raise taxes on the rich because wealthy people are already paying a disproportionate share of the tax burden. Liberals respond that the wealthy’s after tax income has exploded at a far greater rate than their rate of taxation has risen. Liberals are proposing only a tiny adjustment in that trend, as part of a broader solution to reduce the deficit that would also involve those of much more modest means making sacrifices.
There's a finer point to put on this, though. Liberals aren't just arguing over the fairness of the tax burden. The tax issue is basically highlighted now because the Bush tax cuts have been the primary driver of the deficit that the powers that be in Washington want us to think is the country's biggest problem.
It's not. The country's biggest problem is in chart 2, above. The big problem isn't that the rich are getting richer and not paying their share. It's the fact that income has remained stagnant for 90 percent of Americans for three decades. Most of the 90 percent don't begrudge the wealthy their wealth, though in poll after poll it's clear that the 90 percent think the 10 percent should pay more in taxes. It's not about them getting richer, it's about us getting poorer.