{"id":187301,"date":"2013-04-15T19:24:00","date_gmt":"2013-04-16T00:24:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2013\/04\/15\/on-tax-day-read-joseph-stiglitz\/"},"modified":"2013-04-15T19:24:00","modified_gmt":"2013-04-16T00:24:00","slug":"on-tax-day-read-joseph-stiglitz","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2013\/04\/15\/on-tax-day-read-joseph-stiglitz\/","title":{"rendered":"On Tax Day, Read Joseph Stiglitz"},"content":{"rendered":"

He makes the obvious point that the tax code since the Reagan tax cuts has skewed increasingly toward the richest people in our society<\/a>:<\/p>\n

\u2026\u2026\u2026<\/span>

<\/span>Today, the deadline for filing individual income-tax returns, is a day when Americans would do well to pause and reflect on our tax system and the society it creates. No one enjoys paying taxes, and yet all but the extreme libertarians agree, as Oliver Wendell Holmes said, that taxes are the price we pay for civilized society. But in recent decades, the burden for paying that price has been distributed in increasingly unfair ways.<\/span>

<\/span>About 6 in 10 of us believe that the tax system is unfair \u2014 and they\u2019re right: put simply, the very rich don\u2019t pay their fair share. The richest 400 individual taxpayers, with an average income of more than $200 million, pay less than 20 percent of their income in taxes \u2014 far lower than mere millionaires, who pay about 25 percent of their income in taxes, and about the same as those earning a mere $200,000 to $500,000. And in 2009, 116 of the top 400 earners \u2014 almost a third \u2014 paid less than 15 percent of their income in taxes.<\/span>

<\/span>Conservatives like to point out that the richest Americans\u2019 tax payments make up a large portion of total receipts. This is true, as well it should be in any tax system that is progressive \u2014 that is, a system that taxes the affluent at higher rates than those of modest means. It\u2019s also true that as the wealthiest Americans\u2019 incomes have skyrocketed in recent years, their total tax payments have grown. This would be so even if we had a single flat income-tax rate across the board.<\/span>

<\/span>What should shock and outrage us is that as the top 1 percent has grown extremely rich, the effective tax rates they pay have markedly decreased. Our tax system is much less progressive than it was for much of the 20th century. The top marginal income tax rate peaked at 94 percent during World War II and remained at 70 percent through the 1960s and 1970s; it is now 39.6 percent. Tax fairness has gotten much worse in the 30 years since the Reagan \u201crevolution\u201d of the 1980s.<\/span>

<\/span>Citizens for Tax Justice, an organization that advocates for a more progressive tax system, has estimated that, when federal, state and local taxes are taken into account, the top 1 percent paid only slightly more than 20 percent of all American taxes in 2010 \u2014 about the same as the share of income they took home, an outcome that is not progressive at all.<\/span>

<\/span>With such low effective tax rates \u2014 and, importantly, the low tax rate of 20 percent on income from capital gains \u2014 it\u2019s not a huge surprise that the share of income going to the top 1 percent has doubled since 1979, and that the share going to the top 0.1 percent has almost tripled, according to the economists Thomas Piketty and Emmanuel Saez. Recall that the wealthiest 1 percent of Americans own about 40 percent of the nation\u2019s wealth, and the picture becomes even more disturbing.<\/span>

<\/span>LEONA HELMSLEY, the hotel chain executive who was convicted of federal tax evasion in 1989, was notorious for, among other things, reportedly having said that \u201conly the little people pay taxes.\u201d<\/span>

<\/span>As a statement of principle, the quotation may well have earned Mrs. Helmsley, who died in 2007, the title Queen of Mean. But as a prediction about the fairness of American tax policy, Mrs. Helmsley\u2019s remark might actually have been prescient.<\/span>

<\/span>Today, the deadline for filing individual income-tax returns, is a day when Americans would do well to pause and reflect on our tax system and the society it creates. No one enjoys paying taxes, and yet all but the extreme libertarians agree, as Oliver Wendell Holmes said, that taxes are the price we pay for civilized society. But in recent decades, the burden for paying that price has been distributed in increasingly unfair ways.<\/span>

<\/span>About 6 in 10 of us believe that the tax system is unfair \u2014 and they\u2019re right: put simply, the very rich don\u2019t pay their fair share. The richest 400 individual taxpayers, with an average income of more than $200 million, pay less than 20 percent of their income in taxes \u2014 far lower than mere millionaires, who pay about 25 percent of their income in taxes, and about the same as those earning a mere $200,000 to $500,000. And in 2009, 116 of the top 400 earners \u2014 almost a third \u2014 paid less than 15 percent of their income in taxes.<\/span>

<\/span>Conservatives like to point out that the richest Americans\u2019 tax payments make up a large portion of total receipts. This is true, as well it should be in any tax system that is progressive \u2014 that is, a system that taxes the affluent at higher rates than those of modest means. It\u2019s also true that as the wealthiest Americans\u2019 incomes have skyrocketed in recent years, their total tax payments have grown. This would be so even if we had a single flat income-tax rate across the board.<\/span>

<\/span>What should shock and outrage us is that as the top 1 percent has grown extremely rich, the effective tax rates they pay have markedly decreased. Our tax system is much less progressive than it was for much of the 20th century. The top marginal income tax rate peaked at 94 percent during World War II and remained at 70 percent through the 1960s and 1970s; it is now 39.6 percent. Tax fairness has gotten much worse in the 30 years since the Reagan \u201crevolution\u201d of the 1980s.<\/span>

<\/span>Citizens for Tax Justice, an organization that advocates for a more progressive tax system, has estimated that, when federal, state and local taxes are taken into account, the top 1 percent paid only slightly more than 20 percent of all American taxes in 2010 \u2014 about the same as the share of income they took home, an outcome that is not progressive at all.<\/span>

<\/span>With such low effective tax rates \u2014 and, importantly, the low tax rate of 20 percent on income from capital gains \u2014 it\u2019s not a huge surprise that the share of income going to the top 1 percent has doubled since 1979, and that the share going to the top 0.1 percent has almost tripled, according to the economists Thomas Piketty and Emmanuel Saez. Recall that the wealthiest 1 percent of Americans own about 40 percent of the nation\u2019s wealth, and the picture becomes even more disturbing.<\/span><\/p><\/blockquote>\n

He also notes that the increasingly unfair tax will hamstring voluntary compliance, which is at the core of our tax system.<\/p>\n

If Republicans want to call this belief socialism, then we need a f%$#load more socialism.<\/p>\n","protected":false},"excerpt":{"rendered":"

He makes the obvious point that the tax code since the Reagan tax cuts has skewed increasingly toward the richest people in our society: \u2026\u2026\u2026Today, the deadline for filing individual income-tax returns, is a day when Americans would do well to pause and reflect on our tax system and the society it creates. No one …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1002,1143,983],"tags":[],"class_list":["post-187301","post","type-post","status-publish","format-standard","hentry","category-good-writing","category-inequality","category-taxes"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/187301"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=187301"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/187301\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=187301"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=187301"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=187301"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}