It is not surprising to learn that people in the upper 2 percent of income pay more than 90 percent of the taxes in this country. These people do control 87 percent of the country’s wealth, while the bottom 50 percent controls 2.5 percent of the wealth.
Reports from the United Nations and our own CIA indicated that in terms of income equality the United States rakes 64th among developed countries.
The rich really are getting richer. According to the non-partisan Congressional Budget Office, the income of the wealthiest 1 percent of Americans grew by 275 percent between 1979 and 2007. The income of the next highest 19 percent grew by 65 percent during that time period. For the middle 60 percent of our population, it was 18 percent.
In terms of taxation, immediately before the current financial crisis, the top 20 percent of the population received more after-tax income than the entire bottom 80 percent. One of the reasons for this is that much of wealthy people’s income comes from capital gains. Capital gains are taxed at 15 percent. Tax tables indicate that most people making around $50,000 in salary per year can expect to pay $12,500 in taxes while a person who earns $50,000 from capital gains can expect to pay $7,500. Personally, I sure would be happy to have that extra $5,000 a year.