Tax Rate for the Rich

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Income tax brackets for the USA in general: this tells us little, because the super-rich do not pay the 37%. [1]

Who pays? Not these guys:

The top wealth Americans pay betweeon 0.1% and 3% tax rate on income. Their growth in wealth is 10x of their income. [2]

Why do average americans support lower taxes for the rich? Because they think the rich deserve it [3]: 'we find strong support for fairness-based explanations'. Fairness-based explanations are this [4].

But 61% of the people think the rich don't pay a fair share. [5].

Deriving Solutions

  • First, is there a problem? Some say yes, some say no. The top 1% pay 25% of all income tax. [6]. Top 1% own 30% of wealth. So the taxation amount seems to be fair? However, the super-rich pay much lower rates. Now the top 0.1% owns $20T, or about 14% of all wealth (and of course the skew is higher the richer we go)
  • Flat rate across the board could be fair. Devil's in the details. So we can start with a ridiculous low rate such as 10%, or lowest bracket in the US system. This way, the US tax system is perfectly fair - but only up to $11k. People say a 'flat rate is regressive'. [7] Not if we start the bottom bracket at the minimum level - or even no taxes up to a certain level - and continue the 10% to higher brackets up to huge incomes - but without loopholes and writeoffs. You simply pay tax on your net.