The Next Time Someone Tells You That Taxes Are Not Progressive …
Lowest quintile: 4.3 percent
Second quintile: 9.9 percent
Middle quintile: 14.2 percent
Fourth quintile: 17.4 percent
Percentiles 81-90: 20.3 percent
Percentiles 91-95: 22.4 percent
Percentiles 96-99: 25.7 percent
Percentiles 99.0-99.5: 29.7 percent
Percentiles 99.5-99.9: 31.2 percent
Percentiles 99.9-99.99: 32.1 percent
Top 0.01 Percentile: 31.5 percent
Here is Mankiw’s accompanying note:
The C.B.O. has released a new report on effective tax rates (total taxes divided by total income). Compared with previous reports, it includes more information about thin slices at the top of the income distribution. [These] are the total effective federal tax rates for 2005, the most recent year available … N.B.: These figures include all federal taxes, not just income taxes.
Remember that these are percentages and not amounts, which makes it pretty hard to keep making the argument that the rich are dumping their tax burden on the middle class and the poor. Yes, it is true that the top .01 percentile pays slightly less than the fraction of taxpayers just poorer than them, but if that is the extent of the rich-don’t-pay-enough-taxes argument, then … oy vey.
Also this morning comes word of an Obama plan for a $300 billion tax cut, fully half of which will “provide credits up to $500 for most workers.” One can assume that “most workers” includes people far below the 99th percentile.
If this still leaves you needing to scratch that hate-the-rich itch, consider one of the largest effects of the Great 2008 Financial Meltdown: income inequality — which many Americans fear more than fear itself — has been substantially leavened since the biggest losers of the meltdown have been high-income and high-net-worth individuals.