Thoughtful piece, and I want to engage it seriously because there's real common ground here — I agree the tax code is a mess, that zoning reform and occupational licensing are quietly progressive issues, and that envy makes a lousy foundation for policy. But I think the chart at the center of your argument is doing more work than it can honestly bear.
Federal income tax is a tax on wages and realized gains. It is not a tax on wealth, and for the people at the very top, wages are a rounding error. A billionaire whose shares appreciated $4 billion last year shows essentially zero "income" on a tax return until they choose to sell. They can borrow against that gain, live on it, plan estates around it — but the IRS sees nothing. When ProPublica got the actual returns of the wealthiest Americans, the "true tax rate" on wealth growth came in below 4% for several of the most famous names. A schoolteacher pays a higher share of her economic gain than that, automatically, every year.
So yes — the top 10% pays 71% of income tax. That mostly tells us the middle class has hollowed out and a lot of professionals (surgeons, senior engineers) are now classified as "rich." It tells us very little about whether the people who actually own the country's productive assets contribute proportionally to the system protecting those assets.
And the concentration matters because the gains have stopped circulating. Productivity has roughly doubled since 1980; median real wages for non-supervisory workers have barely moved. The top 1% now holds more wealth than the entire middle 60% combined. Median home prices went from ~3x household income to ~6x. Medical bills remain the leading cause of personal bankruptcy — a sentence that wouldn't parse in any other developed country. 40% of adults can't cover a $400 emergency. Diabetics ration insulin. Life expectancy has fallen in exactly the working-class communities your essay says are being failed. They are. But not by progressive tax policy.
On government being "too large" — I'd gently push back. U.S. federal spending as a share of GDP is lower than nearly every peer democracy. Germany, France, the UK, Canada, the Nordics, Japan all spend more and deliver universal healthcare, paid leave, subsidized childcare, real public transit, affordable higher ed. We deliver none of that reliably and still run deficits. Why? Because our revenue as a share of GDP is dramatically lower than theirs. The CBO has been pretty clear that most projected debt growth is driven less by new spending than by revenue that was structurally cut — Bush cuts, Trump cuts, the preferential capital gains rate, carried interest, step-up in basis at death, the Social Security payroll cap at $168k — and never restored. The deficit isn't primarily a spending story. It's a revenue story we've been told not to look at.
And on the "you'll kill the incentive" objection: a person worth $1B and a person worth $100B live identical lives. Same meals, same houses (more of them, but they sleep in one at a time), same doctors, same schools, same access. The lifestyle curve flattens completely somewhere in the low nine figures. What changes above that isn't motivation — it's power. Steve Jobs didn't work harder because of estate-tax policy. The doctor pulling 80-hour residencies isn't grinding for the delta between a 35% and 39.6% bracket. The high-tax, high-investment postwar era produced more upward mobility and more new business formation per capita than the low-tax era we've lived in since 1980. The motivation thesis is empirically thin.
You wrote that the dream is "work hard, take responsibility, build something, own something." I want that dream too. But it depends on owning something being achievable, and right now for most Americans under 40 it isn't — not because they don't work hard, but because the share of national wealth available to people who don't already have wealth has collapsed.
That's not envy. That's arithmetic. And fixing it doesn't require villainizing anyone — just being honest that an economy where the top 0.1% captured most of four decades of growth isn't the natural outcome of merit. It's the outcome of policy choices, and policy choices can be revisited.
Jon - This is one of the better critiques, and I agree with a meaningful chunk of it.
The chart does not prove that America’s entire tax system is fair. It proves something narrower: the federal individual income tax is already highly concentrated among high earners. That distinction matters. Payroll taxes, sales taxes, state taxes, property taxes, and the treatment of unrealized capital gains all change the picture.
So yes, if someone reads the chart as “the rich carry every part of the tax burden,” that is too broad.
But I still think the chart matters because it punctures a very common political slogan: “the rich don’t pay their fair share.” In 2023, the top 10% of earners paid roughly 72% of federal individual income taxes, and the top 1% paid about 40%. The bottom 50% paid about 3%. That does not describe a federal income tax system where high earners are absent from the bill. It describes one that already depends on them heavily.
The stronger version of your argument is about wealth, not income.
And there, I think you have a real point.
The very wealthy often do not experience wealth the way salaried professionals experience income. A surgeon, engineer, or executive earns taxable income. A founder or investor may hold appreciated assets, borrow against them, defer realization, and plan around estate rules. ProPublica’s “true tax rate” analysis tried to capture that difference by comparing taxes paid with estimated wealth growth rather than reported income. That is a useful lens, even if people can debate the methodology.
So I would separate three groups that often get blended together:
The high-earning professional who pays a large ordinary income tax bill.
The productive owner-builder who creates durable enterprise value.
The ultra-wealthy asset holder who can convert appreciation into lifestyle, borrowing capacity, and political influence without recognizing much taxable income.
Those are not the same person. Our politics talks about them as if they are.
Where I part ways is on the conclusion that the answer is a much larger state.
The U.S. does raise less tax revenue as a share of GDP than most rich peer countries. That is true. In 2021, total U.S. tax revenue across all levels of government was about 27% of GDP versus an OECD average around 34%.
But European-style welfare states are not funded only by taxing billionaires. They are funded by broad, heavy taxation across the middle class too, especially through value-added taxes, payroll taxes, and consumption taxes. That is the part American progressives often do not say out loud. You cannot get Denmark’s benefits with a tax system aimed mostly at Jeff Bezos.
And on deficits, I do not think the clean “revenue story” framing works either. CBO’s 2025 outlook says future deficits are driven by a gap between spending and revenue, with rising Social Security, Medicare, and net interest costs pushing federal outlays higher over time. It also projects outlays rising to 24.4% of GDP by 2035 and revenues to 18.3% of GDP. That is a spending problem and a revenue problem, with interest now becoming its own trap.
The better debate is not “tax the rich” versus “leave everything alone.”
The better debate is: what kind of wealth do we want to reward, what kind of wealth do we want to stop subsidizing, and what kind of government actually increases upward mobility?
I am all for closing dumb loopholes.
Carried interest deserves scrutiny.
Step-up in basis deserves scrutiny.
The ability to borrow indefinitely against appreciated assets deserves scrutiny.
Regulatory capture, bailouts, and monopoly protection deserve more scrutiny than they get from either party.
But none of that requires pretending government is automatically the builder of the ladder. In many parts of American life, government is one of the reasons the ladder is harder to climb.
Housing is the clearest example. Local rules make it illegal or uneconomic to build enough homes where people want to live. That is not a failure of low tax rates. It is a failure of policy.
Occupational licensing is another. We have built permission slips around work that should not require permission.
Healthcare is another. The system is expensive partly because it is a dense knot of public programs, private intermediaries, tax preferences, opaque pricing, and regulatory protection.
Education too. We subsidized demand, restricted supply, inflated credentials, and then acted surprised when young people ended up with debt instead of ownership.
So yes, the ladder is broken.
But when I look at the broken parts, I do not mostly see a shortage of government power. I see too much bad government power in the wrong places, and too little competitive pressure where it matters.
The American Dream requires ownership. On that, we agree. More people should own homes, equity, businesses, skills, and portable savings. A society where asset ownership is locked inside the top few percent will eventually become angry and unstable.
But the path back to ownership is not just redistribution. It is abundance.
Build more housing.
Make it easier to start firms.
Make it easier to hire.
Make it easier to switch jobs.
Make healthcare portable.
Make education cheaper and more outcomes-based.
Make the tax code simpler.
Stop protecting incumbents.
Stop subsidizing scarcity.
Stop treating every successful person as the same social villain.
My objection is not to every tax reform. My objection is to a politics that turns wealth into guilt and government into virtue.
Some wealth is earned. Some is extracted.
Some government spending builds capacity. Some buys dependency, votes, or delay.
Your chart in the post isn't lying, but it is selective. It’s like looking at a photo of a clean kitchen while the rest of the house is on fire.
If we’re going to talk about who’s carrying the weight of the country, we have to look at the whole ledger, not just the "Federal Income Tax" column.
1. Federal Income Tax isn't the only bill in the mail.
The post makes it look like the bottom 50% are getting a free ride. But federal income tax is just one flavor of tax. Most Americans get hit hardest by payroll taxes (Social Security and Medicare), which are flat and actually stop being collected once you hit a certain income ceiling ($168,600 in 2024).
The Reality: When you add in sales tax, property tax, and state taxes, the "tax gap" starts to close. Lower-income families often pay a much higher percentage of their total earnings into these systems than a billionaire does.
2. Wealth vs. Income: The "Capital Gains" Loophole
The wealthy pay a lot of income tax, but they don't get their wealth from a "paycheck" like the rest of us. They get it from assets.
If you work 60 hours a week as a surgeon, your income is taxed at a high rate.
If you sit on a pile of stocks that grow by $10 million, you don't pay a cent until you sell-and even then, it’s often at a Capital Gains rate (approx. 20%), which is significantly lower than the top income tax bracket.
A 2021 study showed the 400 wealthiest families paid an effective rate of just 8.2% when you count their total wealth growth. That’s less than what many teachers pay.
3. The "Government as the Enemy" Fallacy
The post frames the government as a parasite on the "founder." But let’s be real: no one builds a billion-dollar company in a vacuum.
The Foundation: Founders use public roads to ship goods, a public-educated workforce to run the machines, and a taxpayer-funded legal system to protect their patents.
The R&D: The "tech" in your iPhone? Much of it (GPS, the Internet, Touchscreens) started as government-funded research. Taxing the winners of that system isn't "punishment" -it’s a reinvestment in the infrastructure that allowed them to win in the first place.
4. Inflation isn't just "The Government’s Fault"
The author calls inflation "the cruelest tax." They’re right. But blaming it solely on government spending is a massive oversimplification.
Profit Margins: In the last few years, corporate profits hit record highs. While the "cost of eggs" went up for us, the companies selling them were reporting their best years ever.
If we’re going to talk about "fairness," we have to ask why the "ladder" is being pulled up by the same people who benefited from it when it was still intact.
The Bottom Line:
We don't need a bigger state just for the sake of it, but we do need a system where the "share" is actually proportional to the total benefit received.
You can't claim the system is "unfair" to the rich while the top 1% holds 30% of the nation's wealth. The ladder isn't broken because the rich pay too much; it’s broken because the rungs are getting further apart.
Federal income tax is not the whole tax system. Payroll taxes matter. Sales taxes matter. Property taxes matter. State and local taxes matter. And yes, once you widen the lens, the burden looks less dramatically concentrated than it does in a federal-income-tax-only chart.
That distinction should be stated clearly.
The point I was making is narrower: when people say “the rich don’t pay their fair share,” they often talk as if high earners are barely contributing to the federal system. That is hard to square with the data. In 2023, the top 1% paid 38.4% of all federal individual income taxes, while the top 10% paid roughly 71%. The bottom 50% paid about 3%. That does not describe a system where high earners are absent from the bill. It describes a system where federal income tax receipts already depend heavily on them.
You are also right that payroll taxes hit workers differently. Social Security taxes are capped, and in 2024 that cap was $168,600. Medicare taxes are not capped, but the Social Security portion is. That makes payroll taxes much less progressive than the federal income tax.
So the honest version is this:
The federal income tax is highly progressive.
The broader tax system is less progressive.
Both things can be true.
Where I disagree is on the conclusion.
The fact that other taxes exist does not automatically mean the answer is a larger government with more spending, more borrowing, and more redistribution. It means we should be more precise about which taxes we are discussing and more serious about what problem we are trying to solve.
If the problem is that housing is unaffordable, then zoning and permitting reform matter more than another tax slogan.
If the problem is that healthcare is opaque and expensive, then price transparency, competition, and portability matter.
If the problem is that workers feel stuck, then we should lower barriers to starting businesses, entering trades, moving for opportunity, and building assets.
If the problem is that inflation crushed purchasing power, then fiscal discipline matters. Monetary policy matters. Supply constraints matter. Corporate behavior may matter too. But pretending government spending has no role in inflation is just as selective as pretending federal income tax is the only tax.
On capital gains, I agree there is a real philosophical debate. Unrealized gains are not taxed the same way wages are taxed. That is by design. Taxing paper gains before sale creates valuation, liquidity, and volatility problems. It also risks punishing ownership before income has been realized. Reasonable people can debate reforms here, especially around step-up in basis, carried interest, borrowing against appreciated assets, and loopholes used by the ultra-wealthy.
But we should separate tax reform from resentment.
A founder who builds a company did not do it in a vacuum. Of course public infrastructure matters. Roads, courts, schools, basic research, contract enforcement, national defense, and the rule of law all matter. That is an argument for funding essential government well. It is not an argument for treating every successful person as if they owe unlimited tribute to the state.
The question is not whether government should exist.
The question is whether government is helping people climb, or quietly making the climb harder.
Right now, too much of government does the second thing. It restricts housing supply, protects incumbents, complicates the tax code, subsidizes politically favored industries, inflates credentials, and spends money it does not have. Then when people feel trapped, the same system points at the rich and says, “There’s your problem.”
I do not buy that.
The ladder is broken in many places. But the fix is not to make success more suspicious. The fix is to make upward mobility more possible.
That means more building. More ownership. More competition. More school choice. More housing. More entrepreneurship. More fiscal discipline. More room for people to create a life without needing permission from five layers of bureaucracy.
So yes, let’s look at the whole ledger.
But the whole ledger includes both sides: what people pay, and what government does with it.
And on that second question, I still think America’s problem is less that the rich are under-taxed, and more that ordinary people are over-governed, over-regulated, over-inflated, and priced out of the basic building blocks of the American Dream.
Martez, I took your critique seriously and rebuilt the analysis across several tax categories, not just federal income tax. The broader picture is more nuanced, and frankly more interesting.
The original chart was right, but narrow. Federal individual income tax is extremely top-heavy: the top 1% pays about 40% of it, and the top 10% pays the clear majority. That supports the point that high earners already carry most of the federal income-tax burden.
But once we add other taxes, the picture changes.
Payroll taxes are much more broadly distributed. The bottom 80% pays a large share because Social Security and Medicare are tied to wages, and Social Security taxes are capped. So while income tax is highly progressive, payroll tax lands much more heavily on working households.
Excise taxes also look much less progressive. Lower and middle-income groups pay a meaningful share because these taxes attach to consumption rather than accumulated wealth.
State and local taxes are flatter still. Sales taxes, property taxes, and state/local taxes spread the burden across the middle much more than the federal income tax does. On an effective-rate basis, these taxes can hit lower-income households harder because they spend a larger share of their income on taxable consumption.
Capital gains are the opposite extreme. Realized capital gains are overwhelmingly concentrated at the top. In the CBO-based chart, the top 1% receives roughly three-quarters of realized capital gains income, and the 96–99% group receives much of the rest. That validates your point that wealth and asset appreciation are not captured well by a wage-focused income-tax chart.
So the honest summary is:
Federal income tax is highly progressive.
Payroll, sales, excise, and state/local taxes are much less progressive.
Realized capital gains are massively concentrated among the top 1%.
That means both claims can be true. The rich pay a very large share of federal income taxes, but the total tax system is not as cleanly progressive as the original chart alone suggests.
Where I still land is that this should push us toward better policy design, not reflexive class warfare. If the problem is payroll-tax pressure, housing scarcity, healthcare opacity, capital-gains treatment, or loopholes around asset borrowing and step-up in basis, then we should debate those directly.
The federal income-tax chart is useful. It just should not be asked to explain the whole tax system by itself.
Well stated. Another (possible) source of the class envy...in line with prior cycles in history where class envy ('Gatsby-esque flaunting of wealth, extreme bifercation of 'haves/have nots', etc.) is how much of the current culture emphazies 'Limbic Capitalism', crowding out 'Legacy Capitalism'. For more, see https://docsend.com/view/zftqevax23jacta9
A lot of the anger aimed at “the rich” is probably not aimed at wealth itself. It is aimed at a certain version of wealth: loud, extractive, status-obsessed, dopamine-driven, and often disconnected from contribution.
That is where the distinction between “Legacy Capitalism” and “Limbic Capitalism” feels important.
Legacy Capitalism says capital is a tool. It should build things, fund risk, extend trust, create opportunity, and leave behind institutions or companies that outlive the person who created them. The DocSend piece makes that point well with the old merchant banking story: trust, reputation, and speed were possible because people had something to lose beyond the transaction itself. Their name mattered. Their conduct mattered. Their legacy mattered.
Limbic Capitalism is different. It turns human weakness into a business model. Addiction, outrage, vanity, fear, status anxiety, endless scrolling, gambling mechanics, fast dopamine. It does not create admiration for capitalism. It creates resentment, because people can feel when they are being harvested rather than served.
That may be one of the reasons class envy feels more culturally combustible today.
People are not just looking at the rich and asking, “Why do they have more?”
They are asking, “What did they build? Who did they help? What did they leave better than they found it?”
That is a much more serious question.
My argument is not that every rich person deserves admiration. They do not. Some capitalism is productive. Some is extractive. Some founders build ladders. Others sell slot machines with better branding.
But that distinction matters because the policy conversation usually flattens everything into one blob called “the rich.” Once that happens, the builder, the rent-seeker, the industrialist, the speculator, the long-term investor, and the attention-economy addict dealer all get treated as the same social character.
They are not the same.
The country needs more Legacy Capitalists: people who see money as stored economic energy, not as a scoreboard. People who use capital to build housing, companies, schools, tools, laboratories, communities, and long-duration institutions. People whose ambition does not end at accumulation.
That version of capitalism is worth defending.
The limbic version deserves much less sympathy.
So maybe the sharper framing is this: America does not need a war on wealth. It needs a cultural and policy preference for wealth that builds, compounds, and serves over wealth that extracts, flaunts, and addicts.
That is a better fight than “workers versus billionaires.”
Thoughtful piece, and I want to engage it seriously because there's real common ground here — I agree the tax code is a mess, that zoning reform and occupational licensing are quietly progressive issues, and that envy makes a lousy foundation for policy. But I think the chart at the center of your argument is doing more work than it can honestly bear.
Federal income tax is a tax on wages and realized gains. It is not a tax on wealth, and for the people at the very top, wages are a rounding error. A billionaire whose shares appreciated $4 billion last year shows essentially zero "income" on a tax return until they choose to sell. They can borrow against that gain, live on it, plan estates around it — but the IRS sees nothing. When ProPublica got the actual returns of the wealthiest Americans, the "true tax rate" on wealth growth came in below 4% for several of the most famous names. A schoolteacher pays a higher share of her economic gain than that, automatically, every year.
So yes — the top 10% pays 71% of income tax. That mostly tells us the middle class has hollowed out and a lot of professionals (surgeons, senior engineers) are now classified as "rich." It tells us very little about whether the people who actually own the country's productive assets contribute proportionally to the system protecting those assets.
And the concentration matters because the gains have stopped circulating. Productivity has roughly doubled since 1980; median real wages for non-supervisory workers have barely moved. The top 1% now holds more wealth than the entire middle 60% combined. Median home prices went from ~3x household income to ~6x. Medical bills remain the leading cause of personal bankruptcy — a sentence that wouldn't parse in any other developed country. 40% of adults can't cover a $400 emergency. Diabetics ration insulin. Life expectancy has fallen in exactly the working-class communities your essay says are being failed. They are. But not by progressive tax policy.
On government being "too large" — I'd gently push back. U.S. federal spending as a share of GDP is lower than nearly every peer democracy. Germany, France, the UK, Canada, the Nordics, Japan all spend more and deliver universal healthcare, paid leave, subsidized childcare, real public transit, affordable higher ed. We deliver none of that reliably and still run deficits. Why? Because our revenue as a share of GDP is dramatically lower than theirs. The CBO has been pretty clear that most projected debt growth is driven less by new spending than by revenue that was structurally cut — Bush cuts, Trump cuts, the preferential capital gains rate, carried interest, step-up in basis at death, the Social Security payroll cap at $168k — and never restored. The deficit isn't primarily a spending story. It's a revenue story we've been told not to look at.
And on the "you'll kill the incentive" objection: a person worth $1B and a person worth $100B live identical lives. Same meals, same houses (more of them, but they sleep in one at a time), same doctors, same schools, same access. The lifestyle curve flattens completely somewhere in the low nine figures. What changes above that isn't motivation — it's power. Steve Jobs didn't work harder because of estate-tax policy. The doctor pulling 80-hour residencies isn't grinding for the delta between a 35% and 39.6% bracket. The high-tax, high-investment postwar era produced more upward mobility and more new business formation per capita than the low-tax era we've lived in since 1980. The motivation thesis is empirically thin.
You wrote that the dream is "work hard, take responsibility, build something, own something." I want that dream too. But it depends on owning something being achievable, and right now for most Americans under 40 it isn't — not because they don't work hard, but because the share of national wealth available to people who don't already have wealth has collapsed.
That's not envy. That's arithmetic. And fixing it doesn't require villainizing anyone — just being honest that an economy where the top 0.1% captured most of four decades of growth isn't the natural outcome of merit. It's the outcome of policy choices, and policy choices can be revisited.
Jon - This is one of the better critiques, and I agree with a meaningful chunk of it.
The chart does not prove that America’s entire tax system is fair. It proves something narrower: the federal individual income tax is already highly concentrated among high earners. That distinction matters. Payroll taxes, sales taxes, state taxes, property taxes, and the treatment of unrealized capital gains all change the picture.
So yes, if someone reads the chart as “the rich carry every part of the tax burden,” that is too broad.
But I still think the chart matters because it punctures a very common political slogan: “the rich don’t pay their fair share.” In 2023, the top 10% of earners paid roughly 72% of federal individual income taxes, and the top 1% paid about 40%. The bottom 50% paid about 3%. That does not describe a federal income tax system where high earners are absent from the bill. It describes one that already depends on them heavily.
The stronger version of your argument is about wealth, not income.
And there, I think you have a real point.
The very wealthy often do not experience wealth the way salaried professionals experience income. A surgeon, engineer, or executive earns taxable income. A founder or investor may hold appreciated assets, borrow against them, defer realization, and plan around estate rules. ProPublica’s “true tax rate” analysis tried to capture that difference by comparing taxes paid with estimated wealth growth rather than reported income. That is a useful lens, even if people can debate the methodology.
So I would separate three groups that often get blended together:
The high-earning professional who pays a large ordinary income tax bill.
The productive owner-builder who creates durable enterprise value.
The ultra-wealthy asset holder who can convert appreciation into lifestyle, borrowing capacity, and political influence without recognizing much taxable income.
Those are not the same person. Our politics talks about them as if they are.
Where I part ways is on the conclusion that the answer is a much larger state.
The U.S. does raise less tax revenue as a share of GDP than most rich peer countries. That is true. In 2021, total U.S. tax revenue across all levels of government was about 27% of GDP versus an OECD average around 34%.
But European-style welfare states are not funded only by taxing billionaires. They are funded by broad, heavy taxation across the middle class too, especially through value-added taxes, payroll taxes, and consumption taxes. That is the part American progressives often do not say out loud. You cannot get Denmark’s benefits with a tax system aimed mostly at Jeff Bezos.
And on deficits, I do not think the clean “revenue story” framing works either. CBO’s 2025 outlook says future deficits are driven by a gap between spending and revenue, with rising Social Security, Medicare, and net interest costs pushing federal outlays higher over time. It also projects outlays rising to 24.4% of GDP by 2035 and revenues to 18.3% of GDP. That is a spending problem and a revenue problem, with interest now becoming its own trap.
The better debate is not “tax the rich” versus “leave everything alone.”
The better debate is: what kind of wealth do we want to reward, what kind of wealth do we want to stop subsidizing, and what kind of government actually increases upward mobility?
I am all for closing dumb loopholes.
Carried interest deserves scrutiny.
Step-up in basis deserves scrutiny.
The ability to borrow indefinitely against appreciated assets deserves scrutiny.
Regulatory capture, bailouts, and monopoly protection deserve more scrutiny than they get from either party.
But none of that requires pretending government is automatically the builder of the ladder. In many parts of American life, government is one of the reasons the ladder is harder to climb.
Housing is the clearest example. Local rules make it illegal or uneconomic to build enough homes where people want to live. That is not a failure of low tax rates. It is a failure of policy.
Occupational licensing is another. We have built permission slips around work that should not require permission.
Healthcare is another. The system is expensive partly because it is a dense knot of public programs, private intermediaries, tax preferences, opaque pricing, and regulatory protection.
Education too. We subsidized demand, restricted supply, inflated credentials, and then acted surprised when young people ended up with debt instead of ownership.
So yes, the ladder is broken.
But when I look at the broken parts, I do not mostly see a shortage of government power. I see too much bad government power in the wrong places, and too little competitive pressure where it matters.
The American Dream requires ownership. On that, we agree. More people should own homes, equity, businesses, skills, and portable savings. A society where asset ownership is locked inside the top few percent will eventually become angry and unstable.
But the path back to ownership is not just redistribution. It is abundance.
Build more housing.
Make it easier to start firms.
Make it easier to hire.
Make it easier to switch jobs.
Make healthcare portable.
Make education cheaper and more outcomes-based.
Make the tax code simpler.
Stop protecting incumbents.
Stop subsidizing scarcity.
Stop treating every successful person as the same social villain.
My objection is not to every tax reform. My objection is to a politics that turns wealth into guilt and government into virtue.
Some wealth is earned. Some is extracted.
Some government spending builds capacity. Some buys dependency, votes, or delay.
A serious country should know the difference.
Your chart in the post isn't lying, but it is selective. It’s like looking at a photo of a clean kitchen while the rest of the house is on fire.
If we’re going to talk about who’s carrying the weight of the country, we have to look at the whole ledger, not just the "Federal Income Tax" column.
1. Federal Income Tax isn't the only bill in the mail.
The post makes it look like the bottom 50% are getting a free ride. But federal income tax is just one flavor of tax. Most Americans get hit hardest by payroll taxes (Social Security and Medicare), which are flat and actually stop being collected once you hit a certain income ceiling ($168,600 in 2024).
The Reality: When you add in sales tax, property tax, and state taxes, the "tax gap" starts to close. Lower-income families often pay a much higher percentage of their total earnings into these systems than a billionaire does.
2. Wealth vs. Income: The "Capital Gains" Loophole
The wealthy pay a lot of income tax, but they don't get their wealth from a "paycheck" like the rest of us. They get it from assets.
If you work 60 hours a week as a surgeon, your income is taxed at a high rate.
If you sit on a pile of stocks that grow by $10 million, you don't pay a cent until you sell-and even then, it’s often at a Capital Gains rate (approx. 20%), which is significantly lower than the top income tax bracket.
A 2021 study showed the 400 wealthiest families paid an effective rate of just 8.2% when you count their total wealth growth. That’s less than what many teachers pay.
3. The "Government as the Enemy" Fallacy
The post frames the government as a parasite on the "founder." But let’s be real: no one builds a billion-dollar company in a vacuum.
The Foundation: Founders use public roads to ship goods, a public-educated workforce to run the machines, and a taxpayer-funded legal system to protect their patents.
The R&D: The "tech" in your iPhone? Much of it (GPS, the Internet, Touchscreens) started as government-funded research. Taxing the winners of that system isn't "punishment" -it’s a reinvestment in the infrastructure that allowed them to win in the first place.
4. Inflation isn't just "The Government’s Fault"
The author calls inflation "the cruelest tax." They’re right. But blaming it solely on government spending is a massive oversimplification.
Profit Margins: In the last few years, corporate profits hit record highs. While the "cost of eggs" went up for us, the companies selling them were reporting their best years ever.
If we’re going to talk about "fairness," we have to ask why the "ladder" is being pulled up by the same people who benefited from it when it was still intact.
The Bottom Line:
We don't need a bigger state just for the sake of it, but we do need a system where the "share" is actually proportional to the total benefit received.
You can't claim the system is "unfair" to the rich while the top 1% holds 30% of the nation's wealth. The ladder isn't broken because the rich pay too much; it’s broken because the rungs are getting further apart.
Martez, this is a fair critique of the chart.
Federal income tax is not the whole tax system. Payroll taxes matter. Sales taxes matter. Property taxes matter. State and local taxes matter. And yes, once you widen the lens, the burden looks less dramatically concentrated than it does in a federal-income-tax-only chart.
That distinction should be stated clearly.
The point I was making is narrower: when people say “the rich don’t pay their fair share,” they often talk as if high earners are barely contributing to the federal system. That is hard to square with the data. In 2023, the top 1% paid 38.4% of all federal individual income taxes, while the top 10% paid roughly 71%. The bottom 50% paid about 3%. That does not describe a system where high earners are absent from the bill. It describes a system where federal income tax receipts already depend heavily on them.
You are also right that payroll taxes hit workers differently. Social Security taxes are capped, and in 2024 that cap was $168,600. Medicare taxes are not capped, but the Social Security portion is. That makes payroll taxes much less progressive than the federal income tax.
So the honest version is this:
The federal income tax is highly progressive.
The broader tax system is less progressive.
Both things can be true.
Where I disagree is on the conclusion.
The fact that other taxes exist does not automatically mean the answer is a larger government with more spending, more borrowing, and more redistribution. It means we should be more precise about which taxes we are discussing and more serious about what problem we are trying to solve.
If the problem is that housing is unaffordable, then zoning and permitting reform matter more than another tax slogan.
If the problem is that healthcare is opaque and expensive, then price transparency, competition, and portability matter.
If the problem is that workers feel stuck, then we should lower barriers to starting businesses, entering trades, moving for opportunity, and building assets.
If the problem is that inflation crushed purchasing power, then fiscal discipline matters. Monetary policy matters. Supply constraints matter. Corporate behavior may matter too. But pretending government spending has no role in inflation is just as selective as pretending federal income tax is the only tax.
On capital gains, I agree there is a real philosophical debate. Unrealized gains are not taxed the same way wages are taxed. That is by design. Taxing paper gains before sale creates valuation, liquidity, and volatility problems. It also risks punishing ownership before income has been realized. Reasonable people can debate reforms here, especially around step-up in basis, carried interest, borrowing against appreciated assets, and loopholes used by the ultra-wealthy.
But we should separate tax reform from resentment.
A founder who builds a company did not do it in a vacuum. Of course public infrastructure matters. Roads, courts, schools, basic research, contract enforcement, national defense, and the rule of law all matter. That is an argument for funding essential government well. It is not an argument for treating every successful person as if they owe unlimited tribute to the state.
The question is not whether government should exist.
The question is whether government is helping people climb, or quietly making the climb harder.
Right now, too much of government does the second thing. It restricts housing supply, protects incumbents, complicates the tax code, subsidizes politically favored industries, inflates credentials, and spends money it does not have. Then when people feel trapped, the same system points at the rich and says, “There’s your problem.”
I do not buy that.
The ladder is broken in many places. But the fix is not to make success more suspicious. The fix is to make upward mobility more possible.
That means more building. More ownership. More competition. More school choice. More housing. More entrepreneurship. More fiscal discipline. More room for people to create a life without needing permission from five layers of bureaucracy.
So yes, let’s look at the whole ledger.
But the whole ledger includes both sides: what people pay, and what government does with it.
And on that second question, I still think America’s problem is less that the rich are under-taxed, and more that ordinary people are over-governed, over-regulated, over-inflated, and priced out of the basic building blocks of the American Dream.
Martez, I took your critique seriously and rebuilt the analysis across several tax categories, not just federal income tax. The broader picture is more nuanced, and frankly more interesting.
The original chart was right, but narrow. Federal individual income tax is extremely top-heavy: the top 1% pays about 40% of it, and the top 10% pays the clear majority. That supports the point that high earners already carry most of the federal income-tax burden.
But once we add other taxes, the picture changes.
Payroll taxes are much more broadly distributed. The bottom 80% pays a large share because Social Security and Medicare are tied to wages, and Social Security taxes are capped. So while income tax is highly progressive, payroll tax lands much more heavily on working households.
Excise taxes also look much less progressive. Lower and middle-income groups pay a meaningful share because these taxes attach to consumption rather than accumulated wealth.
State and local taxes are flatter still. Sales taxes, property taxes, and state/local taxes spread the burden across the middle much more than the federal income tax does. On an effective-rate basis, these taxes can hit lower-income households harder because they spend a larger share of their income on taxable consumption.
Capital gains are the opposite extreme. Realized capital gains are overwhelmingly concentrated at the top. In the CBO-based chart, the top 1% receives roughly three-quarters of realized capital gains income, and the 96–99% group receives much of the rest. That validates your point that wealth and asset appreciation are not captured well by a wage-focused income-tax chart.
So the honest summary is:
Federal income tax is highly progressive.
Payroll, sales, excise, and state/local taxes are much less progressive.
Realized capital gains are massively concentrated among the top 1%.
That means both claims can be true. The rich pay a very large share of federal income taxes, but the total tax system is not as cleanly progressive as the original chart alone suggests.
Where I still land is that this should push us toward better policy design, not reflexive class warfare. If the problem is payroll-tax pressure, housing scarcity, healthcare opacity, capital-gains treatment, or loopholes around asset borrowing and step-up in basis, then we should debate those directly.
The federal income-tax chart is useful. It just should not be asked to explain the whole tax system by itself.
Well stated. Another (possible) source of the class envy...in line with prior cycles in history where class envy ('Gatsby-esque flaunting of wealth, extreme bifercation of 'haves/have nots', etc.) is how much of the current culture emphazies 'Limbic Capitalism', crowding out 'Legacy Capitalism'. For more, see https://docsend.com/view/zftqevax23jacta9
Joe, I think this is a very useful distinction.
A lot of the anger aimed at “the rich” is probably not aimed at wealth itself. It is aimed at a certain version of wealth: loud, extractive, status-obsessed, dopamine-driven, and often disconnected from contribution.
That is where the distinction between “Legacy Capitalism” and “Limbic Capitalism” feels important.
Legacy Capitalism says capital is a tool. It should build things, fund risk, extend trust, create opportunity, and leave behind institutions or companies that outlive the person who created them. The DocSend piece makes that point well with the old merchant banking story: trust, reputation, and speed were possible because people had something to lose beyond the transaction itself. Their name mattered. Their conduct mattered. Their legacy mattered.
Limbic Capitalism is different. It turns human weakness into a business model. Addiction, outrage, vanity, fear, status anxiety, endless scrolling, gambling mechanics, fast dopamine. It does not create admiration for capitalism. It creates resentment, because people can feel when they are being harvested rather than served.
That may be one of the reasons class envy feels more culturally combustible today.
People are not just looking at the rich and asking, “Why do they have more?”
They are asking, “What did they build? Who did they help? What did they leave better than they found it?”
That is a much more serious question.
My argument is not that every rich person deserves admiration. They do not. Some capitalism is productive. Some is extractive. Some founders build ladders. Others sell slot machines with better branding.
But that distinction matters because the policy conversation usually flattens everything into one blob called “the rich.” Once that happens, the builder, the rent-seeker, the industrialist, the speculator, the long-term investor, and the attention-economy addict dealer all get treated as the same social character.
They are not the same.
The country needs more Legacy Capitalists: people who see money as stored economic energy, not as a scoreboard. People who use capital to build housing, companies, schools, tools, laboratories, communities, and long-duration institutions. People whose ambition does not end at accumulation.
That version of capitalism is worth defending.
The limbic version deserves much less sympathy.
So maybe the sharper framing is this: America does not need a war on wealth. It needs a cultural and policy preference for wealth that builds, compounds, and serves over wealth that extracts, flaunts, and addicts.
That is a better fight than “workers versus billionaires.”
It is builders versus harvesters.