Sweet, sweet regressivity
Josh Marshall flags an interesting tax storyno, reallyin the Christian Science Monitor. It turns out that America's "progressive" tax structure really isn't all that progressive. When you add up federal, state, and local taxes, it turns out that the tax code becomes pretty darn flat. The top 1 percent of the population, with average income $978,000, pays 32.8 percent of its income in taxes. Meanwhile, the middle 20 percent of taxpayers, with average income $34,500, pays 29.8 percent of its income in taxes. This is mostly due to the regressive nature of state and local taxes, along with the payroll tax, but there you go.
Notice what follows. If the country were to move, as many Republicans would like to do, to a flat federal tax on earned income, top 1 percent of earners would end up with a smaller effective tax rate than those in the middle class, after you add up all taxes. In other words, a flat tax wouldn't just move the system a bit more towards regressivity, it would just make it regressive, period. I'm not aware of any notion of "fairness" that would justify this sort of thing, but perhaps some very clever GOP pollster is out there crafting one right as we speak.