Are rich paying more taxes?

Taxes.

Just writing it lays a weight. Uttering it in conversation is like opening Pandora's box; you never know what you'll get as a result. Write an editorial about it, and let's hope you've donned armor first.

Like it or not, taxes glue society together. We give taxes and we get services and infrastructure, at least ideally. The devil's in the details, especially when considering statistics. So when an editorial with one income tax statistic generates reader comment, neither should be considered alone.

The Press editorial stated 47 percent of non-millionaires pay no income tax on wages. Whether that translates to the wealthiest shouldering most of the burden requires more information, and can't be answered simply. Federal income tax figures from the Internal Revenue Service, the Tax Foundation, and October issues of the Christian Science Monitor and Wall Street Journal:

* The top 400 earners paid a net average 18 percent in 2008. However, after similar deductions and credits, that 47 percent of Americans pay close to none.

* The top 5 percent of earners ($211,000 or more annually) pay 57.5 percent of all taxes. In 30 years the same group has seen their share of incomes rise 56 percent, while every other group has seen a relative decline.

* While the top tax rate has dropped since the 1960s (70 percent to current 35 percent), the share of total taxes the richest (top 1 percent) pay has increased from 20 percent to almost 40 percent of all taxes paid.

For more perspective, compare us to other countries. The top tax rate is 50 percent in U.K. and Japan, 40 percent in France and 42 percent in Germany. Of course their taxes also cover medical insurance and college tuition. However, if you separate income categories from relative share, the top 10 percent of American households account for 45.1 percent of all taxes. That ratio is higher than in any other industrialized nation.

As election season approaches and Congress continues partisan battles over tax philosophies in a recessionary economy, there is evidence that lowering tax rates stimulates income.

For the Tax Reform Act in October of 1986, Republican President Reagan and Democrat Speaker Tip O'Neill managed to agree on compromise reform, reducing the top income tax rate (from 50 to 28 percent) while closing a variety of "loopholes."

Whether or not a similar hybrid could work now, the last quarter century provided a nearly one-for-one increase in income with tax rate reduction for top tier earners (45 percent reduction in highest tax rate and 44 percent increased taxable income for the same group). The second tier of earners netted a similar result - a 25 percent reduction in tax share and average 20 percent increased income.

Does that lead to hoped-for trickle down effects of more investment, entrepreneurship, and taxpayer spending? Hard to say; too many other factors affect them. Long term, the answer seems to be usually. Short term the price can be hard to pay, with lawmakers and policies blamed for a lack of instant results and resulting knee-jerk fix attempts mucking the reform landscape.

Perspective is key, especially at election time. Representatives who are well-informed, research carefully, open-minded, civil and collaborative without finger-pointing mentalities will be much more valuable to the average taxpayer than candidates who repeat catch phrases and rallying cries.

One can hope.

Sholeh Patrick is an attorney and a columnist for the Hagadone News Network. Email [email protected].