The top 1% of U.S. taxpayers had 19.4% of the total income in 2007 and paid 28.1% of all federal taxes. In 1987, the top 1% had had 11.2% of the total income and paid 16.2% of all federal taxes. The share of total income going to the wealthy (income over $353,000 in 1987) and the share of federal income taxes they paid increased. That the poverty rate hit 15% in 2011 while the real wages of the middle and lower classes were back to mid-1990s levels suggests that the rich were getting richer as the poor were getting poorer; income and wealth inequalities were increasing. Differential impacts of a taxation regime can have an impact on a growing inequality, and thus on whether a society should adjust its tax structure.
The full essay is at "Taxation and Economic Inequality."
