Fair Shares and Tax Shares

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Will Wilkinson wasn’t impressed with President Obama’s defense of progressive taxation yesterday:

It’s rather less intuitive that fairness demands that the wealthy not only pay more in taxes, but pay a larger percentage of income. But let’s accept that fairness does require it. Anyway, high-earners in America do pay higher rates. In 2008, the top 1% paid 38% of all federal income taxes, and the top 5% paid 58%. Indeed, America is the industrialised world’s champion of income-tax progressivity! If any country’s upper-crust pays its fair share, America’s does.

Notice the bait and switch there? (If you don’t, my blogging for the past eight years has been for nought.) First, there’s the insistence on judging tax fairness solely by federal income taxes. But if you take a look at total tax burdens (federal/state/local), America’s tax system is only very modestly progressive. Second, there’s the switch from tax rates to tax shares. It’s true that the top 1% pay a big share of all federal income taxes, and there’s a good reason for that: it’s because the top 1% earn a big share of all income.

For a better idea of what Obama was talking about, here’s a handy chart that EPI sent around today. It shows average overall tax rates over time and the picture isn’t very pretty. For the average schmoe (the bars on the right), tax rates have decreased only slightly. For the rich (the bars on the left), they’ve plummeted. And for the super-duper rich (the bars on the middle) they’ve gone down so much that on average they pay a lower tax rate than your average bank clerk.

So Will ought to be pretty happy. America’s tax code is progressive, but it’s not very progressive, and it’s getting less progressive all the time. Given the explosion in wealth at the top over the past 30 years, asking them to go back to Clinton-era rates — which is all that Obama is proposing — hardly seems like a vast unfairness.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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