now up at the New York Times website and titled The Rich Really Do Pay Lower Taxes Than You.
I strongly urge everyone to read it.
There is a mobile graphic that runs from 1950 to 2018
by mobile I mean the line showing the effective rate of taxation across various income levels changes as you go down through the column. Trust me, you will be glad you clicked on if for that alone.
But there’s more.
Allow me to offer just a few snips, and then some comments:
For the first time on record, the 400 wealthiest Americans last year paid a lower total tax rate — spanning federal, state and local taxes — than any other income group, according to newly released data.
That’s a sharp change from the 1950s and 1960s, when the wealthy paid vastly higher tax rates than the middle class or poor.
The overall tax rate on the richest 400 households last year was only 23 percent, meaning that their combined tax payments equaled less than one quarter of their total income. This overall rate was 70 percent in 1950 and 47 percent in 1980.
The data here come from the most important book on government policy that I’ve read in a long time — called “The Triumph of Injustice,” to be released next week. The authors are Emmanuel Saez and Gabriel Zucman, both professors at the University of California, Berkeley, who have done pathbreaking work on taxes. Saez has won the award that goes to the top academic economist under age 40, and Zucman was recently profiled on the cover of Bloomberg BusinessWeek magazine as “the wealth detective.”
The book compares the history of taxation across the nation, with the contrasts being stark:
The story starts in the 17th century, when Northern colonies created more progressive tax systems than Europe had. Massachusetts even enacted a wealth tax, which covered financial holdings, land, ships, jewelry, livestock and more.
The Southern colonies, by contrast, were hostile to taxation. Plantation owners worried that taxes could undermine slavery by eroding the wealth of shareholders, as the historian Robin Einhorn has explained, and made sure to keep tax rates low and tax collection ineffective. (The Confederacy’s hostility to taxes ultimately hampered its ability to raise money and fight the Civil War.)
I have already pushed fair use, and will not quote more.
I hope I have given you enough to entice you to read the entire opinion piece.
Now for some comments by me.
Leonhardt reminds us that the economy as a whole has always done better when both the corporate and top marginal tax rates were higher.
The transfer of wealth to the already wealthy has accelerated, and not just as a result of the increasing disparity in the pay ratio between CEOs and average workers.
The minimum wage has fallen far behind the increases in pay for both Congress and for CEOs.
As noted in the article, the notion of wealth tax is nothing new in this country, and I might note that those who know their economic history will realize that it did not hurt Massachusetts to have imposed one.
Unless and until we can both restrict the influence of money on our politics (the attempts made in the post-Watergate era having been increasingly rolled back) and reverse the massive shifts of wealth upwards to now obscene levels, we can kiss the idea of America being a liberal democracy goodbye.
Yes, I know that I have just made a blunt statement.
Yes, I know that I qualify neither as a political scientist or an economist.
I have taught both subjects at a college level — AP US GOvt and Politics, AP Comparative Govt and Politics, and AP Micro and AP Macro Econ.
I am a voracious reader in a number of fields.
And I am quite aware of both economic and political trends, not merely during my now 7+ decades on the earth, but earlier in US History and in the histories of many nations.
There are many arenas in which there is little time left. Global climate change is clearly an urgent matter. So is American health (much of which can be traced to the changes in diet driven by among other things fast food). So are the economics, politics, and governance of this country.
So long as we both shift wealth to fewer and fewer hands and allow that wealth to disproportionately control the mechanisms of government, I fear that my efforts to teach the high school seniors in my current classes may be a waste of time, because long before they reach my age democracy in America will be gone, and we will be a republic in name only.
Read the Leonhardt column.
Then think very hard about what you can do — in your personal and political endeavors — to try to prevent the looming disaster.
Peace?
UPDATE Leonhardt put the mobile graph into a tweet — here it is