Raising Taxes on “the Rich,” And Everybody Else Too

Icon TaxHikesBernard Hinault, five-time cycling champion of the Tour de France, once grumbled that the French government taxed the rich so heavily, the state had claim to three pumps of his bicycle pedal for every one that pushed him forward. 

President Obama has long claimed that the wealthy can afford to pay more in taxes, and wants to raise the top marginal income tax rate to 40 percent. His allies, from Occupy Wall Street protestors to Warren Buffett, further claim the rich don’t pay their “fair share.”

But the United States has one of the most progressive tax systems in the world, meaning top earners shoulder the majority of the country’s tax burden. The National Center for Policy Analysis reports that in 2009, the top 20 percent—those who earn more than $74,000—paid 70 percent of all federal taxes (including payroll, income and other federal taxes), while the middle 20 percent paid just nine percent. Furthermore, the top one percent of earners paid more than 22 percent of all federal taxes.

Unfortunately, it isn’t just the rich who face higher taxes—2013 will usher in a “Taxmageddon” on the middle class from increases in the income, death and alternative minimum taxes plus higher costs associated with President Obama’s health care act. Pennsylvania will see a $20.5 billion hike in taxes, or $3,065 more per tax return, under current law. (You read that right—that’s $20.5 billion extra in 2013 alone). With these numbers, it isn’t just French cycling champions who need to worry about onerous taxes—we all do.