Inspiration for post was reading this:
“According to Emmanuel Saez and Gabriel Zucman, economists at the University of California, Berkeley, the average tax rate on the top 0.01 per cent has fallen by more than half, to about thirty per cent, while rates for the bottom ninety percent have climbed slightly, to an average of twenty-five per cent.” - The Getty Family’s Trust Issues by Evan Osnos/The New Yorker January 16, 2023
And I got to thinking…tax rates are a poor indicator of what US households actually pay in taxes. Economists know this, and those who use tax rates to make a point about rising inequality are being intentionally misleading, the better to stir moral outrage, the better to further a political agenda. Consider the 1950s, when the top federal income tax rate was 91% for most of the decade, although the top 1% of taxpayers paid less than half that over the same period. Also, “rates for the bottom ninety percent” is a rather broad range of taxpayers, from the penniless to the well-off. I’m more concerned about financially stressed households, especially those middle-class and below. Sure, many in the top 60-90% are financially stressed as well, but that’s less the government’s problem than a matter of shoddy household budgeting.
So are the bottom 60% paying more in taxes over the last few decades? No, they’re paying less - a lot less if you count government transfers. Check it out:
None of this has bearing on whether the very rich should pay higher taxes. They probably should. Then again, so should most Americans.