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Hiltzik column: On taxes, do the rich really pay their fair share?

October 12, 2009 |  3:00 am

The myth of the "overburdened rich" has assumed a place of honor in today's political narrative right next to that of the "undeserving poor," though it's often accompanied by an economic argument out of the brow of Ayn Rand: If you require the wealthy and accomplished to fund more than their fair share of the costs of government, they'll either stop working and achieving or flee to a more accommodating jurisdiction.

But do they pay more than their fair share? My column today examines the services state government provides to residents at all economic levels, and concludes that the wealthier one is, the more one benefits -- and the less one pays as a share of personal wealth.

Yet the notion that government unfairly redistributes wealth through the tax system never goes away. It's the animating factor in the recommendations by the state commission on tax reform released late last month, and it is sure to be a major talking point for tax-cutters at upcoming state elections, where more tax reform will be on the ballot.

The column starts below:

When it comes to the state budget and state taxes, everybody knows the following facts:

People earning $75,000 or less pay little or no taxes now.

The same people use 99.9% of state social programs.

Ergo, millions of residents of this state are getting something for nothing, and the rest pay for their freeloading.

Of course, I’m kidding. These are popular notions (I owe the formulation above to a reader’s e-mail), but they’re not facts. Yet, like a cracked windshield, they have the power to distort almost everything we see when we turn our attention to state spending and taxation.

Read the whole column.

-- Michael Hiltzik