An April 26 Wall Street Journal editorial argued that "the overall tax burden grew more progressive" in the last 25 years because upper income taxpayers pay a larger share of total taxes than they did in 1979. But the Journal failed to explain why upper income taxpayers pay a larger share today: The wealthiest Americans earn a much larger share of total income than they did in 1979.
...The relative share of total taxes paid by various income groups -- which the Journal cites -- is a flawed measure of actual progressivity in the tax code. Economists do not consider a tax system "more progressive" simply because high-income earners pay a larger share of total taxes. Rather, a tax system is "more progressive" if taxpayers pay a progressively larger share of their incomes in taxes as these incomes go up. In the online supplement (PowerPoint exhibit for chapter 12, slide 35) to the third edition of his introductory economics textbook, Principles of Economics (Thomson South-Western, 2004), N. Gregory Mankiw, who served as the chairman of President Bush's Council of Economic Advisers until late February 2005, defined the term "progressive tax" as "one for which high-income taxpayers pay a larger fraction of their income than do low-income taxpayers." The Journal presented no evidence that the U.S. tax system has become "more progressive" in this sense.
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