As Greg Sargent explains in the Washington Post:
. . . Among the bottom 50 percent of earners, average real annual income even after taxes and transfers has edged up a meager $8,000 since 1970, rising from just over $19,000 to just over $27,000 in 2018.
By contrast, among the top 1 percent of earners, average tripled since 1970, rising by more than $800,000, from just over $300,000 to over $1 million in 2018.
Among the top 0.1 percent, average after-tax-and-transfer income has increased fivefold, from just over $1 million in 1970 to over $5 million in 2018. And among the top .01 percent, it has increased nearly sevenfold, from just over $3.5 million to over $24 million.I’m emphasizing the phrase “after taxes and transfers” because this is at the core of Zucman’s new analysis. The idea is to show the combined impact of both the explosion of pretax income at the top and the decline in the effective tax rate paid by those same earners — in one result.
The declining progressivity of the tax code is the subject of “The Triumph of Injustice,” a great new book by Zucman and fellow Berkeley economist Emmanuel Saez. It charts the slow strangulation of that progressivity at the top. . . .
The swing toward gross inequality began with Reagan.
Republicans have just kept widening the gap.
Inequality can lead to crashes and depressions. To electing fascist demagogues. To revolution.
And in a properly-functioning democracy, it can lead to peaceful adjustments . . . like a more progressive tax code or this excellent bill that would ding businesses above a certain size if their highest-paid employee earned more than 50 times as much as their median worker.
Businesses would be free to pay whatever they wanted.
To avoid extra tax, they could raise worker pay and/or lower CEO pay.
The basics of the bill could not be simpler — or, to my eye, more directly on target.
