[petersellers]

No? We aren't a communist country, so bringing up communist revolutions is irrelevant here.

We used to tax the rich much more than we do now, and government bureaucrats were not obscenely wealthy then as you seem to be implying.

Also, the US government spends more money than it accrues every year, so there isn't any consolidation of money happening in the government (nor will there be if taxes go up).

[AnthonyMouse]

> We used to tax the rich much more than we do now, and government bureaucrats were not obscenely wealthy then as you seem to be implying.

This is inaccurate. We used to have higher tax rates on paper but nobody actually paid them because the tax code of the time had many enormous loopholes that have since been closed, which happened at the same time as the rates were lowered. Real government revenue per capita has been increasing over time.

[petersellers]

It's not inaccurate. While it is true that they didn't pay the rates on paper, their effective rate was still significantly higher than it is today (even with all the loopholes).

[AnthonyMouse]

It wasn't. Federal receipts as a percent of GDP have been basically flat since the end of WWII:

https://fred.stlouisfed.org/series/FYFRGDA188S

Before that the rate was significantly lower.

[petersellers]

Federal Receipts as a percent of GDP doesn't address my point whatsoever.

GDP is not income. Federal receipts aggregated across all tax brackets provides zero information about what the highest tax bracket paid.

[AnthonyMouse]

GDP is the aggregate of everyone's income, but the highest income earners have a disproportionate share by definition. The lowest tax brackets have never represented a large proportion of government revenue; they both pay lower effective rates and have less income. It's a decent proxy unless you expect that the tax rates paid by the upper middle class (e.g. the top 50% as opposed to the top 1%) have gotten dramatically out of proportion from what they used to be, but that isn't what happened.

You can find the raw data here though (Tables II: distributional series, you're looking for tab TG2b): http://gabriel-zucman.eu/usdina/

And then you can see that the highest effective income tax rate ever paid by the top 1% was 23.4% in 2001. The most current number from that table was 2019 when it was 20.3%. Whereas the highest rate from the mid-20th century period when they were alleged to have been paying such high income tax rates was 21% in 1945. In 1953, when the US had its highest marginal tax rates (92%), the effective income tax rate on the top 1% was 14%. Which is more typical for the period; 1945 was an outlier, it being the height of WWII.

The thing that has actually come down is not effective income tax rates on the top 1%, it's corporate income tax, which is a consequence of globalization. "Corporate income tax" is not a good fit for an international supply chain because tax avoidance and jurisdiction shopping is too easy if you're trying to tax something that only exists in a spreadsheet ("corporate profit") instead of something that has a definable physical location (goods, workers, real estate, etc.) So corporate tax avoidance is higher (because of transfer pricing etc.) and corporate rates are lower because it's easier for corporations to set up shop somewhere else if the somewhere else is taxing them less, which puts tax jurisdictions in competition with each other. But that's not an easy one to fix without abandoning globalization, so other taxes got raised to compensate (which brings us back to, government receipts as a percent of GDP haven't really changed).

[petersellers]

Thank you for clarifying and providing that source, it's very informative.

The numbers I was looking at before were referring to the overall tax rate, which included both income tax and corporate taxes. With that said, the overall tax rate for the top 1% has gone down significantly since 1950 (from 45ish percent down to 32ish percent). As you mentioned, that is mainly due to the lower corporate income tax rate.

Given that drop in the overall tax rate (along with rising income inequality and increasing debt spending), it seems clear to me that the income tax rate was not raised enough to compensate for that loss but that's a separate discussion.

All this to say that - my original point that the rich were effectively taxed higher back then still stands, and government bureaucrats were not getting rich off of the higher tax rates either (that was a response to the person I originally replied to, not you)

[00_hum]

false. effective tax rate was lower not higher

[petersellers]

That is false, at least for the top tax bracket (which is what I'm referring to).

Even the Tax Foundation, which is a biased source that is anti-tax in general states that the effective rate for the top bracket was 6% higher then than it is today (https://taxfoundation.org/data/all/federal/taxes-on-the-rich...)