US rich paying more tax under Bush

Since 2001 the proprtion of tax paid by those earning over US$200,000 a year has risen from 41% to 47%. Yes, those greedy rich now pay almost 50% of all income tax despite being just 3% of the population.

But it is not because the rich are getting richer – the share of all income earned by the wealthiest 10% of Americans has actually fallen since 2001.

So Bush is pilloried as favouring the rich, but in fact the rich are earning less of the total income, yet paying more of the taxes.

And the taxes he did cut – capital gains and dividend taxes – are now bringing in massively more money – because cutting tax rates can lead to an increase in total tax paid as it reduces avoidance and encourages more wealth generation.

Hat Tip: Tim Blair