Top 1% Pay > 40% of Federal Income Taxes

New data says the top 1 percent of taxpayers paid 40.42 percent of total federal income taxes in 2007 according to a story printed in the NYT on Thursday. This group now pays more federal income tax than the bottom 95 percent of earners. It also reports that fewer and fewer taxpayers are paying an increasing share of taxes than ever before.

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Things are going to get ugly when the entitlement class outnumbers taxpayers! It is already happening. People are sensing they can just vote themselves more benefits and “rights” at the expense of the rich — we see populist politicians becoming demagogs and filing right into line, appeasing the masses.

The big problem with this approach… it is going to be difficult to get the rich to pay a bigger percentage of the taxes when the top 10% of earners already pay over 70%. I think the administration is realizing this now — as evidenced by comments earlier today by both Treasury Secretary Geithner and National Economic Council President Larry Summers — both declining to rule out the necessity for middle-class tax increases on Sunday morning interviews.