The Center on Budget and Policy Priorities demonstrates that taxing the super rich would, in fact, put a big dent in the U.S. fiscal deficit.
IRS data show that the top 1 percent of taxpayers had a combined income of $1.7 trillion in 2008, the most recent year available. This is fully 20 percent of the nation’s total adjusted gross income — and much more than the bottom half of the population had (around 13 percent).
Moreover, the tax burden at the top of the income scale has fallen dramatically in recent decades. IRS data show that the top 1 percent of taxpayers paid an average of about 23 percent of their income in federal income taxes in 2008. That’s far below what they paid prior to the Bush tax cuts, and about a third less than they paid back in 1980 (see graph).
Returning the average tax rate on the top 1 percent of taxpayers to its 1996 level of 29 percent could raise about $100 billion a year, or $1 trillion over the next decade.
That ain’t chump change. Couple that with higher effective corporate tax rates and the deficits begin to disappear.