Wall Street Journal Editorial, How America Soaks the Affluent:

The Internal Revenue Service recently released its income and tax statistics for 2020, and they show the top 1% of earners paid 42.3% of the country’s income taxes. That’s a two-decade high in the share of taxes the 1% pay.

That same 1% reported earnings of 22.2% of adjusted gross income (AGI) on their tax returns, which means the share of taxes paid by the top 1% as a group is roughly double their share of income. Whatever else you say about the current tax code, there’s no denying that it is steeply progressive.

The nearby bar chart is based on a Tax Foundation analysis of the IRS data for 2020. Note that the top 5% of earners reported 38.1% of total AGI but paid 62.7% of all income taxes. The bottom 50% of earners reported 10.2% of AGI but paid 2.3% of all income taxes.

Martin A. Sullivan (Tax Analysts), Are the Superrich More Burdened And Paying the Highest Rates?, 178 Tax Notes Fed. 1631 (Mar. 13, 2023):

The 27,000 Americans with more than $10 million of income have lower average federal income tax rates than the 580,000 Americans with income between $1 million and $10 million. And though the share of federal income tax revenue from taxpayers with income in the top percentile rose from 33.2 percent in 2001 to 42.3 percent in 2020, that doesn’t mean the affluent are more oppressed or less well off. That’s because over the two decades spanning 2001 through 2020, their share of total before-tax income has risen, and their average effective income tax rate has declined.

Those observations, and others discussed below, add important context to — and counter the thrust of — assertions by the editorial board of The Wall Street Journal. First, about the income tax code, the board noted: “There is no denying that it is steeply progressive.” And second, it said, “The trend over the past two decades is that the income tax burden has been shifting even more to the highest earners” (How America Soaks the Affluent, The Wall Street Journal, Mar. 3, 2023).

The first shortcoming in The Wall Street Journal editorial board’s analysis of federal individual income taxation is that it uses IRS data that combines all tax returns of the top 1 percent — that is, all returns with adjusted gross income exceeding $550,000 in 2020. This categorization jumbles together both the mildly and the wildly affluent. So it’s easy to miss how the superrich are taxed at lower rates than the merely rich. …

Now for the second shortcoming of the Wall Street Journal discussion. As the editorial board highlights, the share of federal income taxes paid by taxpayers who collectively account for 1 percent of AGI was 42.3 percent in 2020, up from 33.2 percent in 2001. Those data are shown on the left-hand side of Figure 3. Left alone, that fact could leave the impression that the top 1 percent over time are subject to an increasingly greater burden. But what The Wall Street Journal neglects to report are the other two sets of data in the middle and right-hand side of Figure 3.