E.J. Dionne argues that rich Americans are “undertaxed”
(“In American politics, stupidity is the name of the game,” July 29).

http://www.washingtonpost.com/wp-dyn...072804529.html

He quotes the Congressional Budget Office to explain why: “the gaps in
after-tax income between the richest 1 percent of Americans and the
middle and poorest fifths of the country more than tripled between
1979 and 2007.”

Mr. Dionne’s view of “undertaxed” is odd. The IRS reports that in
2007 (the latest year for which data are available) the top 1 percent
of taxpayers in the U.S. paid 40.4 percent of the total income taxes
collected by Uncle Sam. This percentage is well above the 24.8
percent of the income-tax burden borne by this group in 1987, the year
after the 1986 tax reform. Moreover, the top 1 percent of taxpayers
now pay more federal income taxes than do the bottom 95 percent
combined!*

If taxes are the price we pay for government services – rather than
booty to be extracted simply because someone is unusually wealthy –
then Mr. Dionne’s conclusion that rich Americans are undertaxed
overtaxes credulity.

Sincerely,
Donald J. Boudreaux

http://cafehayek.com/2010/07/undertaxed.html

* See the Tax Foundation’s Scott Hodge.
http://www.taxfoundation.org/blog/show/24944.html