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Net GDP normalized graph looks the same right? However, my point was that the origin of the income has shifted significantly. Parent says 45% progressive tax i

Net GDP normalized graph looks the same right? However, my point was that the origin of the income has shifted significantly. Parent says 45% progressive tax is high, it's not - it's half as progressive as it was in the 50s before including other societal changes that effectively serve as a regressive tax.

s1artibartfast 2y ago
>Net GDP normalized graph looks the same right? My first point is to question if %GDP is the right framework to even think about this, rather than dollars. >However, my point was that the origin of the income has shifted significantly. I dont think it has. Income taxes seem to be within a percent or so of 1950 values, but payroll taxes have increased massively. This means income tax revenue is pretty similar as a % of GDP, and massively increased in real dollars. >Parent says 45% progressive tax is high, it's not - it's half as progressive as it was in the 50s before including other societal changes that effectively serve as a regressive tax. Thats not evident from the data. You would have to look at actual breakdown of federal revenues from income group, not just the tax brackets. It could be that taxes were far more flat/regressive in the 1950s (e.g. to 1,10% paid a much smaller share. Table 5 of this link goes back to the 80s, and shows the fraction paid by the top 10% earners increase from 32% to 52% in the last 40 years. That is a huge progressive taxation swing. https://taxfoundation.org/data/all/federal/latest-federal-income-tax-data-2024/#:~:text=The%20share%20of%20income%20taxes,policy%20during%20the%20coronavirus%20pandemic https://taxfoundation.org/data/all/federal/latest-federal-in...
- thatcat 2y ago
  Maybe gdp is not the best normalizing variable to choose, any suggestions on something better? In the context of the previous 25 years its not. "following World War II tax increases, top marginal individual tax rates stayed near or above 90%, and the effective tax rate at 70% for the highest incomes (few paid the top rate), until 1964 when the top marginal tax rate was lowered to 70%..."- wikipedia it would be interesting to have the full historical data set to play with
  - s1artibartfast 2y ago
    Yes it would. The wiki quote is misleading in that it only talks about rates, not what is actually paid, shelters, exemptions, ect.

s1artibartfast 2y ago

>Net GDP normalized graph looks the same right? My first point is to question if %GDP is the right framework to even think about this, rather than dollars. >However, my point was that the origin of the income has shifted significantly. I dont think it has. Income taxes seem to be within a percent or so of 1950 values, but payroll taxes have increased massively. This means income tax revenue is pretty similar as a % of GDP, and massively increased in real dollars. >Parent says 45% progressive tax is high, it's not - it's half as progressive as it was in the 50s before including other societal changes that effectively serve as a regressive tax. Thats not evident from the data. You would have to look at actual breakdown of federal revenues from income group, not just the tax brackets. It could be that taxes were far more flat/regressive in the 1950s (e.g. to 1,10% paid a much smaller share. Table 5 of this link goes back to the 80s, and shows the fraction paid by the top 10% earners increase from 32% to 52% in the last 40 years. That is a huge progressive taxation swing. https://taxfoundation.org/data/all/federal/latest-federal-income-tax-data-2024/#:~:text=The%20share%20of%20income%20taxes,policy%20during%20the%20coronavirus%20pandemic https://taxfoundation.org/data/all/federal/latest-federal-in...

thatcat 2y ago
Maybe gdp is not the best normalizing variable to choose, any suggestions on something better? In the context of the previous 25 years its not. "following World War II tax increases, top marginal individual tax rates stayed near or above 90%, and the effective tax rate at 70% for the highest incomes (few paid the top rate), until 1964 when the top marginal tax rate was lowered to 70%..."- wikipedia it would be interesting to have the full historical data set to play with
- s1artibartfast 2y ago
  Yes it would. The wiki quote is misleading in that it only talks about rates, not what is actually paid, shelters, exemptions, ect.