With Tax Day fast approaching and deficit reduction all the rage, one fact deserves significant attention: the wealthy are enjoying the some of the lowest taxes in generations. The Figure shows the average tax rate in 1979, 1992, and 2007, as well as the tax rate for the top 1% of households, and the top 400 households (who have an average annual income of nearly $350 million). Since 1979, the country’s overall average tax rate—the share of income paid in taxes—has fallen slightly, but for those at the top of the earnings ladder this share has fallen dramatically.
It may not be the case that we can solve all our problems by increasing taxes on the wealthy. But it's also not the case that the wealthy are stumbling under the weight of an overbearing tax burden in the United States, either.