Last week, the U.S. House of Representatives Committee on Ways and Means issued its "2000 Tax Facts," which included a breakdown of who pays the personal income tax:
| Income Category | Share of Population | Share of Income Taxes |
| $200,000 and over | 2% | 40% |
| $100,000 to $200,000 | 6% | 22% |
| $75,000 to $100,000 | 7% | 13% |
| $50,000 to $75,000 | 14% | 15% |
| $40,000 to $50,000 | 9% | 6% |
| $30,000 to $40,000 | 11% | 4% |
| $20,000 to $30,000 | 15% | 2% |
| Less than $20,000 | 35% | -2%* |
* Due to cash payments to earned income tax credit recipients
It is worth noting that the U.S. income tax is structured so that the 15% of the people earning more than $75,000 a year are paying 75% of income taxes. Obviously, part of this phenomenon is explained by the fact that this 15% earns more. However, it is also explained in part by the progressivity of income tax rates.
Progressive income tax rates are not only unfair-after all, why should one person face a higher tax rate on the next dollar of income earned than another person?-but imposing higher tax rates on individuals because they earn more by working, investing, and starting up and building businesses is downright punitive and counterproductive to fostering economic growth.
The U.S. tax code remains a major impediment to entrepreneurship and growth, and it needs to be tossed out in favor of a low, flat tax on consumption.
