Progressive federal income taxes account for just 27% of total government revenue collected in America. The remaining three-quarters of the tax pie is quite regressive

MY COLLEAGUE suggests that America’s wealthy already pay at least their fair share of the cost for the public goods they depend on to prosper. He notes that in recent years, the top 5% of earners have received 32% of the country’s adjusted gross income, but paid 59% of federal individual income taxes. “If that’s not giving something back, what is?”, he asks.

This is a case of cherry-picking the data. Yes, the federal income-tax system is progressive through most of the income distribution—although it becomes extremely regressive at the high end, because of the low rates applied to qualified dividends and long-term capital gains (as Mitt Romney can attest).

However, federal income taxes account for just 27% of total government revenue collected in America. And the remaining three-quarters of the tax pie is quite regressive. The middle class may not pay much federal income tax. But they sure pay the payroll tax for Social Security and Medicare , which the rich can mostly skip out on since it only applies to the first $110,000 of wage income. (The Medicare levy, unlike its bigger Social Security counterpart, is not capped). The masses also pay a much greater share of their income in sales and excise taxes than the rich do, because they cannot afford to save.

The fact of the matter is that the American tax code as a whole is almost perfectly flat. The bottom 20% of earners make 3% of the income and pay 2% of the taxes; the middle 20% make 11% and pay 10%; and the top 1% make 21% and pay 22%. Steve Forbes couldn’t have drawn it up any better.

A charitable interpretation of the position that the rich already pay enough taxes is that its advocates have simply made a good-faith oversight about all those other pesky levies that the vast majority of Americans get stuck with. If they really think that a world where people earning the top 32% of income pay 59% of the taxes is fair, then they should support radical reform to make that a reality.

To start, we’d have to eliminate the flat payroll tax and its $110,000 income ceiling, and replace those revenues with the progressive income tax. We’d also need to tax dividends and capital gains as ordinary income. Then we’d have to modify sales taxes—by, say, taxing things rich people buy, like yachts, at a higher rate than things poor people buy, like generic-brand groceries.

However, I am yet to see the Cato Institute or Tax Foundation beating the drums for such policies. That suggests a somewhat less sympathetic account: that they are trying to focus public attention on a narrow slice of data that justifies letting the rich pay as little as possible, while obscuring the full picture, which leads to precisely the opposite conclusion.

Addendum: A commenter reminds me that most states do indeed exempt food from sales tax, in a rare nod to progressivity outside the income-tax system. However, it’s worth noting that Mississippi, the poorest state in the union, is one of the few that still levy the full rate.

This post has been revised to reflect the distinction between the Social Security and Medicare portions of the payroll tax.