The income made by, and the taxes paid by, the rich, in one graph
Much of my story about the economic thinking behind the GOP’s resistance to any and all kinds of tax increases is, in practice, about the tax increases on the wealthy, as that’s all the Democrats have really put on the table. So it’s worth posting this graph that the kind folks at the Hamilton Project worked up for me to provide some context: Over the past 30 years, the very rich have seen their real taxes fall sharply even as they’ve seen their incomes rise rapidly.
I think the implication of the orthodox GOP take on taxes would be that the lower rates faced by the most productive members of society should have unlocked some dramatic economic benefits, but I think it’s very hard to detect those benefits in the economy’s performance over this period.
This graph is also worth keeping in mind when you hear that the rich are paying a greater proportion of federal income taxes than they have in previous years. That’s true, but it’s also true that the reason they’re paying more in taxes is that they’re making much more money. If you look at the taxes they pay on any given dollar of income, that’s been falling, and for most of us, that’s what’s actually relevant in terms of our tax burden.