In a different article, I exposed the myth of income inequality, rhetoric that is constantly being repeated by the Obama administration and the media. Using data from the CBO and the IRS, Ron Schmidt of the University of Rochester School of Business was able to dissect and expose the inaccuracies being perpetuated. The Left frequently cited a CBO report that claimed to show income was at an all-time high, but it was revealed that reported only represented data until 2007 — right before the Great Recession began. The article is worth a two minute read.
Between 2007 and 2009, after-tax earnings by Americans in the top one percent for income fell 37 percent. On a pre-tax basis they fell 36 percent in the same period.
and at the same time,
when you take into account federal transfers, assistance and taxes paid, the incomes of the bottom 20 percent grew by 3 percent, while it fell a modest 2 percent for the middle 20 percent. In other words, the incomes of the top one percent fell 18 times more than the incomes for the middle class at the start of the recession.
The article goes on to show that the amount of taxes paid by upper-income earners is also higher now than before the Great Recession. Although the author was incorrect that the current highest level tax margin is the lowest rate ever (it was lowered in the 1986 IRC reforms to 28% ), he correctly concludes that the highest earners
paid an average effective tax rate of 28.9 percent on their income — far more than any other group, and more than twice the average effective rate of the middle class, who paid 11 percent on average.
Overall, a good analysis to help refute the continuous income inequality argument used as a justification to raise taxes on the wealthy in order to pay for the government’s overspending problem.