, 6 tweets, 2 min read
The nature of government has changed a lot--in 1950 the US government was basically a large army. Now it is a large insurance company with an army.
The government taxed very differently in 1950 but it also spent money very differently.

(Regressive) social insurance taxes have increased from 3% in 1950 to 15.3% today. But we now have larger SS benefits, disability and Medicare.
Even ignoring benefits, social insurance taxes changes tell an incomplete story since the EITC and the refundable portion of the child tax credit have both been explicitly expanded in part to offset (and in many cases more than offset) payroll taxes for workers with children.
Anyone who supports, for example, the FAMILY Act for paid leave is calling for a more regressive tax system (it has a payroll tax) but (in my view) a more fair and progressive fiscal system. Europe has a lot more like this and thus does much more to reduce inequality.
As an aside, VATs are actually more progressive than payroll taxes as they also effectively tax existing wealth--everything you buy with your wealth goes up in cost. While either is hard to imagine now, understanding this incidence point could be important at some point.
And yes, taxes at the top have fallen by just about any measure. I view that as a problem and in the short run the more likely one to fix than getting the overall size of social insurance closer to what I would like to see. But worth understanding the bigger picture too.
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