American billionaires have never had it so good – they are actually paying a lower tax rate than the working class, according to two economists who expose the real beneficiaries of a system that has redistributed wealth to the top.
The richest 400 US families paid a lower effective tax rate than working-class families for the first time last year, said economists Emmanuel Saez and Gabriel Zucman of the University of California, Berkeley, in their next book. " The Triumph of Injustice ".
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Billionaires, they say, were taxed at 23 percent, while working-class families were taxed at 24.2 percent. Their calculations take into account state, local and federal taxes, corporate taxes, and what the pair calls "indirect taxes," including licenses and other fees paid to the government.
While US income inequality was already peaking, Saez and Zucman cite the 2017 tax cuts that mainly benefited the rich and large corporations as the "tipping point" that made the degree of inequality impossible to ignore – or allow Continue .
Decades of "sparse" economic policies, led by economists who believed that reducing the tax burden on rich "job creators" would improve the fate of the poorest citizens, reduced the tax rate of richer Americans from 70 percent in 1950 to just over a third of that.
The rich have seen not only their income tax rates go down, but capital gains and property taxes cut by politicians seeking to please their rich donors. Those who oppose the wealth tax on the principle that wealth redistribution smells of socialism or excessive government interference must ignore the enormous redistribution of wealth that has occurred over the past 70 years as income for the middle and working class has plummeted and the rich have become significantly richer.
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Saez and Zucman called for a progressive tax, dramatically increasing the rate a richer percent pays and imposing a "minimum global corporate tax" to reduce the old corporate practice of hiding wealth abroad.
Similar ideas are on the lips of Democratic presidential candidates, including Bernie Sanders and Elizabeth Warren, who proposed some form of "wealth tax." And Americans under 30 are much older sympathetic of the idea of wealth redistribution than previous generations having been raised in the aftermath of Reaganomics.
After more than half a century of rising inequality, the richest 85 people on the planet have the poorest 3.5 billion, and the supply-side economic model is widely considered a failure. Americans under 30, having had such a negative experience with neoliberal capitalism, see socialism far more favorably than their parents and previous generations.
During the Great Depression, in the face of widespread poverty and a robust communist / socialist movement, then President Franklin Delano Roosevelt approved the New Deal to "save" capitalism, arguing that if the government did not bring some benefits to the Americans, they would embrace the socialism. One wonders if a 21st century president would expect to do the same.
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