Politics Magazine

Our Tax System Is Now Regressive And Very Unfair

Posted on the 12 October 2019 by Jobsanger
Our Tax System Is Now Regressive And Very Unfair
These charts are from an excellent article in The New York Times by Emmanuel Saez and Gabriel Zucman. If you care about the U.S. economy and fair taxation, I urge to to read the article.
The point made is that we no longer have a progressive tax system. Thanks to policies passed in the last few decades, we now have a regressive tax system. When you consider all taxes paid (local, state, federal), the system is not fair. In fact the richest 400 people in this country actually pay a smaller total tax rate than all other people in this country. The richest pay only a total tax rate of 23%, while the poorest 10% pay a total tax rate of 25.6%!
That's inexcusable. They should be paying a higher total tax rate than everyone else.
The chart below shows how this has happened. It shows the change in the total tax rate from 1962 (when it was much fairer) to 2018 (the current mess). The top 10% has seen their total tax rate go down 4.2 points, the top 1% by 13 points, the top 0.1% by 19.7 points, the top 0.01% by 24.2 points, and the richest 400 by 31.4 points. Meanwhile, the total tax rate for the bottom 90% has gone up!
It doesn't have to be this way. There are solutions which would re-institute a progressive tax system. Some suggestions are:
Raise the top federal income tax rate for the rich, and put a new higher tax on any income beyond $10 million.
Raise the corporate tax rate, and tax the difference between the U.S. tax rate and the rate they have by keeping money in a low-tax country.
Eliminate the tax subsidies for companies making millions or billions in profit.
Consider a wealth tax on the richest people.
Eliminate the capital gains tax, and tax all income as earned income.
Tax stock market trades.
Give the bottom 50% a rebate for at least part of the local and state taxes they pay.
Those are just some ideas. There may be others that make sense. But nothing will be done as long as Republicans control the White House and at least one of the houses of Congress. There's a chance that could be accomplished in 2020, but more needs to be done. Pressure must be put on the Democrats then to act appropriately (because sadly, there are some Democrats who have bought into the Republican lie that what is good for the rich is good for everyone).
Our Tax System Is Now Regressive And Very Unfair

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