The tax code is progressive. Economists and analysts and politicians agree on very little when it comes to economic policy, but on that they broadly concur. Rich people fork over a higher percentage of their earnings to the government than poor people do, and the whole of government acts as a kind of Robin Hood Rube Goldberg machine, taking from the well-off and redistributing to the less fortunate.
Or perhaps not. In a new paper, the influential tax economists Emmanuel Saez and Gabriel Zucman, both of UC Berkeley, advance their argument that the tax code is not progressive at all. Right now, Republican and Democratic politicians alike are not soaking the rich; they’re watering their gardens. And some of the leading left-of-center candidates for president would not do much to change that.
The paper is an update of an earlier analysis of candidates’ tax plans, and comes after a holistic reassessment of the tax code found in their book, The Triumph of Injustice, released last year. Unlike many other tax analysts, Saez and Zucman include state and local taxes in their accounting. They count corporate earnings somewhat differently than other analysts. They also omit certain payments made to lower-income households through the earned-income tax credit and child tax credit, arguing that they function more as benefits, like food stamps. In the end, they find that the tax code asks families from top to bottom to pay something like 25 or 30 percent of their income to the government—except at the very top. The richest of the rich pay just a little more than 20 percent.