Income Gap Shrinks in Slump at the Expense of the Wealthy

Over the past 30 years, chief executives, Wall Street bankers and traders, law-firm partners and such amassed ever-greater incomes, while the incomes of factory workers, teachers, office managers and others in the middle grew much more slowly. In 2007, the top 1% of U.S. families accounted for 23.5% of all personal income in the U.S., according to economists Emmanuel Saez of the University of California at Berkeley and Thomas Piketty of the Paris School of Economics. That was a level not seen since the Roaring Twenties.

It's hard to know how to react to this article because the authors manage to write in an almost compassionate tone.  As if they are arguing that wealth disparity is good for a democracy.  We admit our own bias may be playing a role in this interpretation, but the article is still worth a read.

For instance, the top 1% of earners will pay 36% of all federal individual income taxes this year, according to an estimate from the Tax Policy Center, a Washington think tank.

This crock of an argument is consistently used by conservatives to defend the "right" of ultra-high income earners to hide their earnings from the IRS.  By stating the argument in such obtuse terms, the presumption is to convince people that the rich pay more than their "fair" share of federal taxes.  The stupidity of this argument can be highlighted with a simple non-scientific comparison.

Let's start with this statement: High income earners pay 36% of ALL federal income taxes.

Ok, so what.  All this should tell anyone is that high income earners earn SO MUCH MORE than everyone else that their tax liability is greater the more they earn.  This is when any half wit would chime in with a boisterous "no shit!" 

Average income earners in the U.S. earn approximately $50,000 per year.  Conversely, the top 1% control 80% of the wealth in the U.S.  

If I earn $1 per year and a wealthy individual earns $100 per year, he earns 100 times my salary.  My federal taxes are equal to 35% of 1 dollar or 35 cents.  The wealthy individual will pay $35 dollars in income tax.  

$.35 or $35.  The wealthy pay more despite the fact that the percentage is the same.  Do you see the fallacy in this argument?  

Yes, I understand that the tax rate increases as incomes rise, that isn't the point.  The point is that no matter how the math is calculated, the bell curve will always appear to show that the wealthy pay more in taxes simply due to the fact that the ratio of their wealth as compared to the average income earner is so very very very much greater.

This same argument could just as easily be used if the United States enacted a flat tax of 25%.  No matter how the math was calculated, the wealthy would still be paying the larger percentage of income tax ... because they earn far more than average tax payers.

If the wealthy own 80% of the wealth, they should be held accountable for 80% of the tax revenue.  It's only fair.