Saez and Zucman, a running thread... 
Point/counter-point
This is completely misleading. Median income in the U.S. is somewhere around $33,000. They are taking the average of the people below the median and then saying that half the population lives on this average.
There are just blatant contradictions in the book. They argue that when determining who pays the tax, we shouldn’t worry about tax incidence and then say that tariffs are a consumption tax. But by their own logic if you tax the importer/exporter, these are taxes on shareholders.
Their history of US tax policy is a Marxist theory of class struggle. The role of war in the types of taxes levied is dismissed. There’s no discussion of US fiscal capacity, the constraints thereof, and the changing nature of the constraints over time.
Also, here’s a bad faith argument about the economics profession re: The Tax Reform Act of 1986. The economics departments of American universities, bastions of Reagan conservatives.
That famous period of the 1980s, when the US suspended elections.
They further argue that exploiting loopholes in the tax system isn’t a problem for the tax system because these loopholes get closed, and they give countless examples. No assessment of the marginal cost of enforcement versus the marginal benefit of additional revenue.
The historical narratives are disjointed and political. First, we are told that the reduction in tax rates in the 1980s was based on a *false belief* that the high taxes were being avoided anyway. Then we are told that tax shelters were the “iconic product of the Reagan era.”
The rise in tax shelters from the late 1970s through the 1980s is entirely blamed on the fact that these shelters were “government-approved” by the Reagan administration rather than the diffusion of regulatory arbitrage.
Just pages after they proclaim that schemes to avoid taxes are easily eliminated by new rules and shouldn’t be an impediment to setting high tax rates, they argue that authorities “can’t possibly investigate all suspicious claims.”
To summarize:
1. There’s a false belief that tax compliance is an impediment to high tax rates
2. Tons of resources went to tax shelters during the 1980s to avoid high tax rates
3. It’s really costly to deal with tax avoidance/evasion
4. We should have higher tax rates
🤔🤔🤔
1. There’s a false belief that tax compliance is an impediment to high tax rates
2. Tons of resources went to tax shelters during the 1980s to avoid high tax rates
3. It’s really costly to deal with tax avoidance/evasion
4. We should have higher tax rates
🤔🤔🤔
They argue that tax evasion is higher as a percentage of taxes paid for the “ultra-rich”. Yet IRS audits suggest that underreported income declines as a percentage of income for higher levels of reported income. They’re dismissive of the audits. davidsplinter.com/Splinter-Taxes…
