The income gap in the United States is greater than many imagine — the top 29,000 Americans have as much income as the bottom 96 million. And in recent years tax burden for the richest Americans — especially corporations — has been falling sharply while everyone else’s has risen.
A study by the General Accounting Office found that almost two-thirds of America’s corporations paid no federal income taxes during the late 1990’s, when corporate profits were soaring. Nine out of 10 companies paid less than the equivalent of 5 percent of their total income.
A new book by Pulitizer Prize winning New York Times reporter David Cay Johnston argues that most Americans are “being duped into supplementing the incomes and extravagant lifestyles of the rich and powerful.”
The book is titled Perfectly Legal: The Covert Campaign To Rig Our Tax System to Benefit The Super Rich — And Cheat Everybody Else. Last month Johnston was awarded top honors at the 2003 Investigative Reporters and Editors Awards for the book.
DAVID CAY JOHNSTON: Most Americans, no matter how much they make, assume that people who make more pay a larger share in income taxes. That is a progressive tax system. We don’t have that. If you made $60,000 last year, you paid a larger share of your income in income taxes and social security taxes to the government than people who made more than 10 million a year. That top group’s average income by the way, was $25.6 million. If you made $400,000, that’s a lot of money, but if you made $400,000, you paid a larger share of your income just in income taxes than people who made more than $10 million. That is people who made in a week what you worked for all year. We are shifting the burden of taxes steadily off the richest people in America and onto people who work. The very top taxpayers, the 400 highest income taxpayers in America, their taxes have gone from 30 cents on the dollar, which doesn’t strike me as an onerous burden, in 1993, down to 22 cents on the dollar at the end of the Clinton administration and now under the bush administration, they’re down to 17.5 cents on the dollar. Everybody else in America during those year, their taxes went up from 13 cents on the dollar overall to 15.
AMY GOODMAN: Who is doing this?
DAVID CAY JOHNSTON: Both parties are doing this …