And one more note on how Samuelson presented his data. "The richest 1 percent of Americans pay 28 percent of federal taxes, says the Congressional Budget Office," he wrote, as if that meant something. But the question with the top one percent is not simply how much they pay, but how much they make. If they make 50 percent of the national income, paying 28 percent of taxes is paying very little. If they make two percent of the national income, then their tax burden is heavy indeed. What they pay only makes sense if you know what they make. And this is true for historical comparisons too. You often hear conservatives argue that the rich pay a larger percentage of national taxes than they did in the 1970s, and that shows the system's progressivity. But the rich make much more money than they did in the 70s. The question is whether their share of the national income increased faster or slower than their share of the federal tax burden. In 1979, the top one percent brought home 9.3 percent of the national income -- which is to say, for every $100 paid in wages, $9.30 went to the top one percent -- and paid 15.4 percent of federal taxes. The ratio of tax share to income share was 1.65. Their tax burden was 1.65 times larger than their income share. In 2005, they brought home 18.1 percent of the national income -- it had doubled -- and paid 27.6 percent of federal taxes. The ration was 1.52. In other words, it has gone down. The rich pay less taxes as a share of their income than they did in the 1970s, and they control much more of the nation's wealth. This is worse than it even looks on first glance (and it looks quite bad). Progressive taxation rests on a simple theory: As you make more money, you can bear to pay a higher rate. That's how it differs from, say, a flat tax. A flat tax advocate would levy a 25 percent tax on Bob, who makes $50,000, and Russell Wordsforth Skotchpuckett III, who makes $500,000. They might even call that progressive. 25 percent of $500,000 is more than 25 percent of $50,000. The progressive taxer would scoff at this. Bob is left with $37,500 to live on. Russell Wordsforth Skotchpuckett III has $375,000. That's not an equal burden, much less a progressive one. In other words, as the top one percent's share of the national income grew, their ratio of income-to-taxes shouldn't have simply stayed steady. It should have grown. Instead, it shrunk. Not only were they paying a lower share of federal taxes relative to their share of income, but it had gone down even as their ability to pay more had radically increased.
