Many in Washington have made this one of their focal points over the past several years, citing the “Bush Tax Cuts” as favoring the wealthiest 1% of Americans (i.e. taxpayers making approximately $380,000 or more a year). In a recent speech, President Obama stated that the budget deficit could be minimized if the wealthiest Americans were asked “to pay a little more.”
Is this true though? In 2008, the top 1% paid 38% of all taxes. This is actually up from 37% paid by the richest 1% in 2000. The bottom 50% of Americans only paid 2.7% of the total tax burden in 2008 - down from 3.91% in 2000. So the trend already is that the rich are paying more and more of the total tax burden, even during the “Bush Tax Cut” years that have been labeled as being friendly to the wealthiest Americans.
Advocates of increasing tax rates for the wealthy often cite the 1950’s as a major success, and attribute the top rate of 91% in the early 1950’s as being the catalyst for this. What people often forget is that the middle class was also paying a much higher effective rate. In fact, during the 1950’s, the middle class was paying a much bigger percentage of the overall tax burden than they do today.