When heading into Tax Day, if you listen to progressive policymakers for a few minutes, you’ll likely hear that few problems on Earth can’t be solved by “taxing the rich.� Want to nationalize healthcare? Tax the rich. Want to close the deficit? Tax the rich. Need a ball gown for the Met Gala? Tax the rich. Unfortunately, legislators not invited to fashion shows should look elsewhere for real solutions to America’s fiscal challenges.
Let’s start with the basics: The federal tax code is already one of the most progressive in the world. According to the Joint Committee on Taxation, the U.S. tax code is highly progressive, with the bottom 50% of U.S. taxpayers facing an average federal tax rate of 6.8%. In comparison, the top 1% pays about 5 times that amount, at 34%. Note that these measures include all federal taxes, including payroll taxes, which are generally regressive, and the corporate tax, which JCT assumes primarily falls on higher-income earners.
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