About my recent tweets on the proportion of federal income tax revenue paid by the top 1% being 40%. I know about payroll tax. I have pointed out many times that separating the two is deceptive and unhelpful. Yes, I understand, that if you want to measure the total tax burden...
You would want to include all taxes. I also understand that while the top 1% has 20% of the income, they have more of the wealth. Got it. I also understand that the rich have a disproportionate share of the political power in the US. I was simply pointing out that if the top 1%
really ran the system, if the system were "rigged" as people like to claim, you'd think the top 1% would find a way to avoid paying the $600B they currently pay annually to Uncle Sam. But maybe that's just a ruse to distract people from the fact that they run things.
Part of the reason I tweeted about this is that I am tired of people relentlessly claiming (using data that cannot support the claim) that the top 1% have received all the gains from economic growth in the last 30-40 years. First, those claims usually imply
That the top 1% is a club whose membership never changes, that they get together and rig all the rules in their favor. Second, the club changes every year. Third, yes, the rich have used the political system to rig things in their favor--I have written extensively criticizing
crony capitalism. It's horrible. My essay on the crisis coming out as a book early next year blames the government and Wall Street for rigging the rules of the game in favor of the rich. Fourth, when you follow people over time instead of comparing snapshots at different points
in time the poorest Americans get the biggest gains when the economy is growing and the richest Americans gain zero or lose money. The point is that annual measures of income are very poor measures of economic well-being over time. And how much the poor (and middle class gain)
over time is probably understated because we overstate inflation. (And btw, if you really think as many seem to do, that the average American has gotten nothing from the economic growth of the last 30-40 years, the solution isn't a $15 minimum wage or the genteel socialism of
Bernie Sanders but a real revolution. Lastly, if you think the rich run government (I don't) or you think they have too much power (I do), why do you want to continue to make government more powerful with a larger command over who gets what?
