On the last day to file federal taxes, Fox host Stuart Varney complained that the wealthiest Americans “already pay for almost everything,” ignoring the fact that tax rates for the richest Americans have steadily declined in recent decades mirroring rates paid by most Americans.
On the April 15 edition of America's Newsroom, host Bill Hemmer highlighted a Congressional Budget Office report finding that the top 20 percent of income earners in the U.S. pay over 90 percent of federal income tax money. His guest, Fox Business host Stuart Varney, wondered whether it was fair:
VARNEY: You hear it all the time, don't you? Tax the rich some more because they can afford it. Well you may be surprised to hear that wealthier people already pay for almost everything. Let me repeat the number you just gave. 20 percent - the top 20 percent of income earners pays over 90 percent of all the federal income tax money.
Do you think that's fair, Bill? If I may ask you a question. Do you think it's fair that that minority pays for everything for the vast majority?
Varney, however, left out a few key details about the tax system in his defense of the country's top income earners. As The Wall Street Journal's Market Watch blog pointed out on April 15, “when you include all taxes ... the top 1% don't pay much more of their income than the rest of us do,” adding that the truly rich pay even less because “most of their income is in the form of lightly taxed capital gains.”
And as the Brookings Institute explained, the U.S.'s progressive tax code -- one in which tax rates increase as incomes increase -- has actually become less progressive over time due to the steady decline of tax rates for the rich:
In addition to being less progressive relative to other countries, the U.S. tax system has also become less progressive over time. Over the last fifty years, tax rates for the wealthiest Americans have declined by 40 percent, while tax rates for average Americans have remained roughly constant. This is illustrated in the figure below.
In fact, wealth in the U.S. remains concentrated in the hands of the rich. Sociology Professor G. William Domhoff of the University of California, Santa Cruz, pointed out that 20 percent of people own 89 percent of the wealth in America:
In the United States, wealth is highly concentrated in a relatively few hands. As of 2010, the top 1% of households (the upper class) owned 35.4% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 53.5%, which means that just 20% of the people owned a remarkable 89%, leaving only 11% of the wealth for the bottom 80% (wage and salary workers).
In 2012, a Pew Poll found that almost 60 percent of Americans believed that the rich should pay more taxes.
Another widely held perception of the rich is that they do not pay their fair share in taxes:
A majority of adults (58%) say that upper-income people pay too little in federal taxes. One-in-four (26%) say upper-income people pay their fair share in taxes, and 8% say they pay too much in taxes. Even among those who consider themselves upper or upper-middle class, fully 52% say upper-income people pay too little. Only 10% of this group says upper-class adults say people pay too much in taxes.