“The Rich Really Do Pay Lower Taxes Than You.” In a new op-ed published this week in The New York Times, author David Leonhardt demonstrates that for the first year on record, the 400 wealthiest Americans last year paid a lower total tax rate than any other income group.
According to the newly released data, after the 1960s, taxes such as the estate tax and corporate tax, those that usually hit the wealthiest the hardest, have plummeted. This, along with increasingly common tax avoidance, has caused the wealthy’s tax rate to plummet.
The 2017 Republican tax cuts, which overwhelmingly favored the rich, finally pushed things over the edge, making the tax rate on the 400 wealthiest households below the rates for almost everyone else.
In 2018 the overall tax rate on the richest 400 households was 23 percent. In 1950 this tax rate was 70 percent. In 1980 it was 47 percent.
Meanwhile middle-class and poor families haven’t received the benefit of the decline in corporate tax or estate tax, but definitely are feeling the changes from the increase in payroll taxes and get very little benefit in the modest decline of federal income tax.
Leonhardt’s data is pulled from a new book on government policy, titled “The Triumph of Injustice.” The data was compiled by two professors at California Berkeley who did groundbreaking work with tax data, constructing a “historical database that tracks the tax payments of households at different points along the income spectrum going back to 1913, when the federal income tax began.”
Tax reform is a huge progressive policy topic for the upcoming 2020 election. All of the front runners of the Democratic presidential race agree that tax reform is absolutely necessary to curb the massive inequality still growing in the United States. As Senator Bernie Sanders stated, in response to this release of information, “The question of our time is this: will we tolerate it? Or will we take back our democracy from the oligarchs who run this country?”