This is the Cato Daily Podcast for Thursday, July 12, 2012.

I'm Caleb Brown.

How Politicians use terms regarding taxation and income says a lot about how they view your income.

And according to Chris Edwards, director of tax policy studies at the Cato Institute,

a deeper view of CBO data shows that high earners almost always pay the most taxes.

The Congressional Budget Office just came out with a new study looking at who pays the taxes

and who earns the income between 2007 and 2009.

And of course, 2009 was a deep recession, so average taxes paid went down across the board and income of course plummeted between

2007 and 2009 because of the recession and that undergirds, all these we're hearing about the new CBO report.

According to the Washington Post, a sharp decline in income, especially among the wealthiest

Americans who pay the highest tax rates played a role.

According the report by the CBO, household income fell 12% on average

from 2007 to 2009. Income among the top 1% of earners decreased by more than a third.

That's right. The interesting thing about CBO is the way they view income and taxation

as if all the income is distributed from Washington. So the CBO says, for example, that market income is very

unevenly distributed, quote unquote in the United States. Well as good Hayekian

economists we know that market income isn't really distributed.

It is earned in a decentralized fashion in the United States.

But that type of sort of top-down thinking unfortunately permeates the federal statistical agencies

when they talk about income.

As if when they say distribution, they mean that it comes from the central source. Exactly. They think that income... distribution they think

think that it comes from the central source exactly they they think that income is

...