The "Tax Hike for the Rich" of 2003
The IRS just released data for tax year 2004 that includes the tax shares paid by different income groups. As the charts above show (click to enlarge), the top 1% of taxpayers paid almost 37% of all federal income taxes in 2004, an increase from 34.27% in 2003. The top 5% paid more than 57% of all taxes in 2004, up from 54.36% in 2003; and the top 10% paid 68.19% in 2004 compared to 65.84% in 2003.
1. What were largely denounced as "tax cuts for the rich" in 2003, actually turned out to be "tax hikes for the rich," since their share of total taxes paid increased significantly from 2003 to 2004 in the wake of the changes in tax rates.
2. U.S. income taxes are highly progressive, and actually become more progressive after the tax reform of 2003 - "the rich" now pay even more as a share of total taxes than at almost any time during U.S. history. The share of income for the top 1% was 19% in 2004, but they pay almost 37% of all taxes.
3. For the top 5%, their share of total taxes paid is at an all-time historical high of 57.13% in 2004.
4. The top 1% paid an average of 32.75% of all taxes during the Clinton years (1993-2000), and have since paid an average of 34.69% during the Bush years (2001-2004). Therefore, the "tax burden on the rich" has been higher under Bush than Clinton.