Wednesday, March 23, 2011

Tax the Rich? We do.

Using well-respected OECD data, economists at the Tax Foundation found that the United States depends on its highest 10% of earners for a larger share of taxes than any other rich country. Looking only at income and payroll tax, the top 10% of U.S. earners pay 45% of taxes while earning 33% of all income.

Since European countries have higher tax rates than the U.S., for the most part, what this means is that we "undertax" our middle class relative to other rich countries. The difference is even starker when you consider that the U.S. has low sales taxes (which hit the poor and middle class hard) and will have the highest corporate income tax as of next month.

Next time somebody claims that the U.S. has a less progressive tax structure than Europe, Canada, Japan or anywhere else, ask them for data.

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