The Triumph of Injustice

Cross posted from GD: https://www.democraticunderground.com/100213018994


Around six or eight weeks ago, I read Emmanuel Saez and Gabriel Zucman's book, "The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay." I highly recommend it.

The book is part historical survey, and the product of the most comprehensive research into the actual effects of the US tax code for the last several decades. Saez and Zucman collected information about what taxes were paid at all levels (Federal, State, local, etc.) and by whom. They also give some information about the reasoning and justification politicians offered at any given time for various tax policies.

The book has a definite point of view, and is partly prescriptive. They believe the tax code should be much more progressive than it currently is, and that there would be political, social, economic benefits to a more progressive tax policy. The book takes time to explain things about tax evasion and avoidance, in particular in the era of "globalization," and how to deal with it. The authors also have their own tax proposal, which is outlined in the text.

Saez and Zucman are obviously concerned with the negative ramifications of extreme inequality. They do not, however, spend much time discussing other policy changes that have contributed to a less egalitarian distribution of pre-tax income (for example, changes in the treatment of intellectual property, changes in the rules of the road for the financial sector, etc.). However, one statistic they do offer was startling to me and worth confronting: in 1950, a full time worker being paid the Federal minimum wage earned around one half of the average national income (i.e. total income divided by the adult population); currently a full time worker being paid the Federal minimum wage earns around 20% of the average national income - and pays a larger percentage of that in taxes than their 1950s counterpart.

There is a website connected to the book - http://www.taxjusticenow.org - with some interesting information, as well as a widget that allows you to design your own tax plan and see the results plotted on a graph. It's fun to play with!

The New York Times did a piece on Saez and Zucman's work last year, so some of you may have seen it. One of the things the NYT did was create an animated graph showing how dramatically the tax regime has shifted over time. Below, I'm pasting a link to a tweet that includes this animation. Before anyone screams "no one ever actually paid those rates," this is not a graph of the tax code as written, this is a graph of taxes actually collected, and includes all forms of taxation (not, for example, just the Federal income tax). It's really quite striking.

Link to tweet