If incomes for the rich continue to rise faster than for the middle class – as has been the recent historical pattern – then the rich could pay a constant share of federal income taxes even as the effective tax rate on their income steadily fell over time.
"In order to properly evaluate the 'fairness' of a tax system, you have to compare tax burdens to income levels, or ability to pay," says Diane Lim Rogers, chief economist at the Concord Coalition, a group that champions fiscal responsibility. By contrast, she says via email, a focus on the "share of taxes paid" can be tricky or misleading.
Ms. Rogers says that when President Bush cut taxes, the share of income taxes paid by the rich went up, but that doesn't mean the tax code had become more progressive. "The rich were paying a larger share of a much smaller pie," she says. Even so, the rich "enjoyed the largest relative (not just absolute) decline in tax burdens" she says, so progressivity actually fell, when tax burdens are measured by income level.
Romney's proposed tax reform is very different from what occurred under Bush. Romney calls for continuing the Bush tax policies, and then cutting tax rates by an additional 20 percent. Unlike Bush, he pledges to offset the revenue loss from lower rates by closing or capping deductions and other loopholes.
Still, some critics of Romney predict that he would not be able to cut enough deductions and tax breaks for high income individuals to fully pay for the tax rate cut. The result might be big tax cuts for the high-income individuals, and a failure to keep his pledge to hold federal revenue constant over the next decade, compared with current policies.