The Washington Post admits what anyone willing to look at facts knows: the United States has a progressive tax system that leads to progressive taxation:
In 2006, the top 20 percent of earners paid 70 percent of all federal taxes. On average, they paid 26 percent of their income to the government. The very richest — the top 1 percent of taxpayers, with household incomes of over $332,000 — paid 28 percent of all taxes, with an effective tax rate of 31 percent. The middle three quintiles paid rates of 10, 14 and 18 percent. The lowest 20 percent of households paid only 0.8 percent of all federal taxes — and the bottom 90 percent of households paid only 45 percent.
You know this still isn’t going to end well, right? Just look at the sleight-of-hand commonly used among advocates of further progressivity. A household with an income over $332,001 may not, in reality, be “the very richest”. In DC, $332,001 before taxes would make that household very comfortable after taxes, but only in the short-term. It would still take many years of that income to be considered “rich”, and more still to be “the very richest”. Contrary to what the Post implies, $332,001 is not $100-bills-as-toilet-paper rich.
But that’s the buildup. Here’s the Post’s sales pitch:
Based on these numbers, it would be hard to argue that the country doesn’t already have a significantly progressive tax system. Taxes aren’t just for suckers, with cashiers paying more of their income than corporate chief executives. Nor is the system egregiously stacked against the wealthy — who, after all, receive the bulk of the income. The top quintile earned over 55 percent of the income, and the top 1 percent earned a full 19 percent of all income.
The “wealthy” do not receive income, just as the “poor” do not receive income. People of all incomes earn. The Post uses the proper word in the last sentence, but only in the populist context of whining towards an argument of fairness. Can something earned be unfair?
I will give the Post proper credit for acknowledging that spending cuts are the best route to balancing the budget, which politicians will never embrace. (Politicians engage in a more extensive version of the populism the Post engages in here.) Still, the editors drag out “income inequality” in the fifth paragraph of a six-paragraph editorial. It can’t possibly get a sufficient analysis. Are the higher incomes earned? They should at least address that question. Instead, this:
When taxes go up, they should be increased in a way that makes the tax code more progressive. Income inequality has widened for the past three decades, and it only makes sense for those who have benefited to pay more. …
It only makes sense for the Post to prove that those who earn more do so because of the government provided by the the taxes they remit. I’m not sure a direct case can be made. Opportunity exists for those who wish to pursue it. There are no entry requirements based on economic class.
It’s obvious that government plays favorites. Or, if you must believe that government is above reproach, it gets played through rent-seeking. Where this occurs, it must stop. Unlike what the Post argues in its editorial, I believe words like fair and equal mean fair and equal. No free benefits for the “poor”, but no free benefits for the “rich”. But even if we go with the Post’s populism, rent-seeking isn’t going anywhere as long as there are favors available. That is why limited government is so essential to true fairness and equality (of opportunity).