Editorial: Forget 'fair share,' the income tax already soaks the wealthy

The Editorial Board, Las Vegas Review-Journal on Dec 9, 2024

Published in Op Eds

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Progressives who argue that “the rich” should pay their “fair share” of income taxes are inadvertently arguing they should get a tax cut.

The IRS recently released new data on tax collections in 2022. It shows — once again — that top income earners pay a disproportionate share of income taxes. In other words, the income tax is already highly progressive.

Around 15.4 million filers were in the top 10 percent of income earners. Their average tax rate was 21.1%. Collectively, they earned around half of the country’s income but paid 72% of income taxes.

More than half of that 72% is paid by the top 1% of income earners. This group had 22.4% of the country’s adjusted gross income, but they paid 40.4% of all income taxes. Among this group, the average tax bill was more than $560,000. The average tax rate was 26.1%.

In contrast, the bottom half of income tax filers had an average tax bill of $822. Those in this group earned 11.5% of the country’s income but paid only 3% of the country’s income taxes. Their average tax rate was under 4%.

In practice, it’s less than that.

“Because the Office of Management and Budget classifies the refundable part of tax credits as spending, the IRS does not include it in tax share figures,” Erica York, a senior economist with the Tax Foundation, wrote. “The result overstates the tax burden of the bottom half of taxpayers.”

These facts are readily available, but that hasn’t quieted Democratic demagoguery on this issue.

“I’m not mad at anybody for being rich, but they should pay their fair share,” Vice President Kamala Harris said during the campaign. She continued, “It is not right that the teachers and the firefighters that I meet every day across our country are paying a higher tax than the richest people in our country.”

Good news. They’re not, as it applies to wage earners. Harris and her Democratic allies often resort to these distortions and outright falsehoods because President-elect Donald Trump’s record on this is so strong. In 2017, he signed the Tax Cuts and Jobs Act. This 2022 data shows average tax rates for all income categories were lower than in 2017.

One of Trump’s priorities should be extending his tax cuts, which will expire at the end of 2025 without congressional action.

As that debate unfolds, expect Democrats to repeat their amorphous “fair share” claims even though they’re nonsense.

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