Suppose you had gone to a restaurant with five friends and you were under the impression that it was going to be more or less "dutch". You were hungry and consumed 22% of the food that was brought to the table. When the bill came you were asked to pay 40% of the tab. Seems unfair, correct? Now suppose that your same group intends to return to the restaurant and they will expect you to now pay even more, say 43%, of the tab even though you will consume the same proportion as last time. If you balk at this apportionment, you will be called selfish. "An outrage", you proclaim.
According to the IRS, in 2006, the top 1% of wage-earners paid 40% of income taxes while earning 22% of all income. The top 10% paid 71% of all income taxes and the top 50% paid 97%. The bottom 50% paid 3%.
Being in the top 1% in 2006 meant that your adjusted gross income was $388 thousand or greater. To qualify for the top 50%, you needed $32 thousand in income.
Pre-Bush, in 2000, the top 1% paid 37%. The top 10% paid 66% and the top 50% paid 96%. The bottom 50% paid 4%.
Hence, despite the "tax cut for the rich" there was increased disproportionality in the tax burden distribution. That Bush guy, he really favored the rich. But how could this happen? Easy, the number of millionaire income taxpayers nearly doubled between 2003 and 2006 and these new "rich" entrants paid more in taxes because, while cut, the tax rate schedule remained progressive.
The next time you go to that restaurant with your friends, you should consume 20% but go ahead and pay 50%. The next three friends can pay another 60%. The remaining two pals will then receive a refund for the 10% that was overpaid even though there bellies will be plenty full. Then no one will call you selfish, at least not until your next restaurant rendezvous.
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