Claims that the US had great economic growth despite high income tax rates in the mid 20th century conveniently ignore the fact that the amount of tax actually *collected* was about the same as today.pic.twitter.com/b3jBE9w3oO
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So the historical argument has to be amended to: "History shows that high growth is not incompatible with high tax rates, so long as the tax code is porous enough to make the actual tax rate irrelevant."
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Given that the rates at the top have fallen off a cliff in recent years, you seem to be proving the point that the middle class are shouldering more of the burden.
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Michael, you seem to think that the higher rates in the past means that people paid a higher percentage of their income. No, the higher rate was applied to a smaller part of income so tax came out about the same. "The rate was 90%" is just misleading about what was actually paid.
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A considerable number of high net worth people in the US would be willing to pay more if we were confident in efficient capital allocation. That’s difficult to achieve even by well-intentioned leaders for an org as big as the US Government.
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If you mean income tax, curious how people got to that point given top 20% income earner pay more than 85% tax with little over more than 50% income
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It can’t be looked at it in the aggregate. The malaise of the middle class is that they don’t have the tax breaks that capital has. It’s like looking at startup metrics. Segments and cohorts need to be broken out to get to deeper insights.
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That is the story of both Capital by Picketty and his critics. Segmentation across capital, cohorts, land ownership, education, etc, matters.
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That chart alone does not demonstrate massive evasion. It’s also possible that extraordinary marginal rates on a small portion of ultra high income doesn’t move the needle much. In any case, this share of GDP example DOES show the latest round of tax cuts was silly.
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You’re smart enough to not conflate fraction of GDP with fraction of income across multiple decades over which there were dramatic changes in workforce participation and income distribution, surely.
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I don’t think the explanation is as clear as “high taxes are murder” or “high taxes are a panacea”. Tweeting one chart pretends it is.
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