Posted on 10/17/2019 9:47:54 AM PDT by SeekAndFind
Most Americans have to work to earn a living. But the rich are different: They get most of their income not from labor but from what they own — companies, stocks, real estate and the like.
These income-generating assets are what economists call capital. And because capital is heavily concentrated among the rich, the U.S. government taxed earnings derived from capital at a higher rate than earnings made through labor for the entirety of the 20th century.
But that’s no longer the case, according to economists Emmanuel Saez and Gabriel Zucman of the University of California at Berkeley. In their new book, “The Triumph of Injustice,” they present data showing that in 2018, labor income was taxed at a higher rate than capital income for the first time in modern U.S. history.
The proximate cause of the shift was the 2017 Tax Cuts and Jobs Act (TCJA), which dramatically slashed taxes on corporate profits and on estates — both forms of capital income — according to their analysis. But Saez and Zucman also note that the trend has been decades in the making, driven in large part by the same forces that have pushed billionaires’ tax rates below those of the working class.
“From the 1940s to the 1980s, the average tax rate on capital exceeded 40%, while labor paid less than 25%," they write. “Since its peak of the 1950s, however, the average capital tax rate has been cut by twenty percentage points. At the same time, labor taxation has risen more than ten points, driven by the upsurge in payroll taxes.”
Saez and Zucman’s findings are controversial in some quarters of the economics field because they upend a number of long-held orthodoxies about the distribution of income and spending in the United States.
(Excerpt) Read more at washingtonpost.com ...
Guess it’s time for another income tax cut then.
False. Their Leftist Trust fund gods have been doing this for years. It all about how they structure their fund.
Also false.
https://www.wsj.com/articles/trumps-middle-class-economic-progress-11569786435
President Trump’s critics can’t deny that the economy is doing well, so instead they insist all the benefits have gone to the rich and large corporations. “America’s middle class is under attack,” Sen. Elizabeth Warren asserted in her presidential campaign announcement last December.
The latest data from the Census Bureau monthly surveys tell a different story. Real median household income—the amount earned by those in the very middle—hit $65,084 (in 2019 dollars) for the 12 months ending in July. 5 times the rate of growth under Obama and 12 times greater then under Bush.
Horrific! I recommend that we immediately reduce the size and scope of government, cut spending and cut taxes.
This is so disingenuous on the WP’s part. They imply only day traders and big investors are getting the benefit here. They don’t mention that millions of American families and workers benefit through their IRA’s, 401k’s, pension funds, and other retirement accounts, which are hugely invested in stock/bond portfolios managed by the people the left wants to vilify.
BS.
They’re counting workers making OVER 50k and including state taxes.
Let us not forget that investment income tax is made with money ALREADY taxed!
I thought we couldn’t say “owner” because rassist...
Yes, and what this is saying is people who are retired and living on that already taxed investment get to keep more of their earnings and live better retirements. The article authors would have all of us work till we are dead in their quest to punish the rich.
“...For the first time, workers are paying a higher tax rate than investors and owners...”
So, if a democrat gets elected, they are going to CUT taxes for the middle class, huh?????
Yeah....Riiiiiight...
Yup.
Whenever the economy is doing well under a Republican the only Democrat countermove is “but....not enough of it is trickling down to YOU!”
It’s a party built around envy, and given human nature, it works for them much of the time.
This bit of class-warfare propaganda is brought to you by the WashingtonCompost on behalf of Betty Warren and her “Plan” to tax retirement funds, i.e., “Capital”.
YOU RACIST! Look, a squirrel!
A conservative looks at this data and concludes that labor is taxed too much. A liberal looks at the same data and concludes that “capital” (whatever that means) is taxed too little.
Where is it written in our constitution that the role of government is to equalize or manipulate the tax burden on different classes of taxpayers?
Obviously, in the run up to the election, we are going to get more and more propaganda regarding income/wealth inequality and the sad stories of those who have been “left behind” by the Trump economy.
Buckle your seat belts.
This study has already been debunked by Forbes:
So lower the taxes on the workers already.
Yes workers are over taxed, conservatives already know this.
Could it be that people are working and because they are working they are paying taxes?
Yea DUH, capital is invested by the wealthy. No poor man ever gave me a job.
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