More evidence that the rich can afford higher taxes

I have made the point before, and it’s worth repeating: the top earners in this country are more than able to pay higher taxes than they currently do.  The top 1% of earners are the primary beneficiaries of the previous 30 years of economic growth (and lower taxes).  In case there was any doubt – and there isn’t really – the Center on Budget Policies and Priorities titles their newest report the “Top 1 Percent of Americans Reaped Two-Thirds of Income Gains in Last Economic Expansion.” (H/t to Matt Yglesias for pointing it out.)

There’s more commentary and another pretty graph after the jump.

A lot of defenders of the current tax regime like to point out that the top 1% and 10% pay most of the share of the revenue that the government receive from income taxation.  (According to this Congressional Budget Office report from April 2009,  the top 1% pay 28.3% of all federal tax revenue and the top 10% pay 55.4%.)  Those arguments are correct in their form but not their intent: high-income individuals do pay a plurality/majority of federal taxes, but that fact does not mean they should pay less taxes.  The huge inequalities of the previous 30 years mean that the top 1% – even the top 2-10% did vastly worse than the top 1% – have the extra income to pay increased taxes.

Will Wilkinson suggests that current tax levels are fine because rich people tax themselves through conspicuous consumption (yachts, subzero refrigerators, &c), but their yachts and fancy cars don’t really do anything for people who do not have health insurance or commuters sitting in traffic.  (Larry Ellison can’t buy everyone helicopters, and doing so would just shift the problem higher.)  Arguing that current tax levels are unfair does not mean that we need the government to measure annually comparative income growth rates and modify taxes accordingly.  It just means that we need the federal government to do something more to promote overall welfare.