Comparing British and US Tax and Income Concentration

There's a very good short opinion piece in the NY Times written by DeAnn Julius about why she opposes the tax hike on the rich in Britain but believes the US is different.  Now, I'd like to add that with all of our loopholes marginal rate hikes are likely to be far less effective in the US than in Britain, loophole closing is what we really need to do (and why I'm currently annoyed with the Democrats for making Obama's good but imperfect plan rather worse).  Here's what happens if all tax expenditures are eliminated.

She points out that the top 1% of earners receive 11% of income and paid 21% of personal income taxes.

I'd like to add numbers for the US from the Tax Policy Center.  The top 1% receives 16.8% of income in the US and paid 25.6% of all taxes.

Of course, these figures aren't directly comparable because of differences in other taxes, such as US Social Security and Medicare taxes vs. UK National Insurance Contribution.  US payroll taxes account for 42% of US Federal revenue compared to 17% for UK's NIC (I don't really know which sources to use for UK data, it doesn't come up often).

For just US income taxes, we actually look worse for income taxes than the UK, the top 1% pays 34.3% of the individual income tax, compared to the UK's 21%.  However, they pay only 4.1% of the payroll tax which is 42% of Federal revenue compared to 44% for the income tax (I don't have figures for the UKs overall taxes or for the share the top 1% pay for NIC).

A few things to point out here.  First of all, I wish I had total tax shares for the UK.  Given the poor comparability of the data making a comparison is somewhat difficult, but given the large size of payroll taxes relative to government revenue in the US it seems the US wealthy are paying a somewhat smaller share of tax compared to their share of income in the US.

Perhaps the more important takeaway though is that while there is some concentration of income in the top 1% globally, the US is really an outlier, receiving a share of income that is 5% larger than in the UK, which is known as one of the most unequal in Europe.  As much as I dislike Occupy Wall Street for a variety of reasons their central grievance is very real, wealth concentration is occurring at unprecedented rates in the US and this is a US specific phenomenon and partially, or perhaps largely, due to policy.  Taxes are one tool to help combat this.