Effective Tax Rate for Top 0.01% in U.S. Only One-Sixth Its Level of the 1950s
Feb. 19 , 2021 (EIRNS)—The Institute for Policy Studies released a report in January reporting on “the unique and dominant role of tax policy” on wealth concentration. Compared to 1953, the tax rate as a percentage of wealth for the top .01% had plummeted 83% by 2018. The dramatic shift in tax starting in 1980 allowed the percentage of national wealth in the hands of the top .01% to soar from around 3% (the level for 40 years) up to 10% today.
On the timeline: The year 1953 was chosen as it was very nearly the high point for tax rate, and the nadir for percentage of wealth controlled by the top .01%. And 1980 was the year when the growth (or stagnation) in workers’ wages began to diverge sharply from the continued increase in what is called “productivity.”
A recalibration of the entire economic system is required to reorient the increasing financialization of the economy and concentration of wealth, through implementing Glass-Steagall legislation to allow speculation to fully bear its own losses and to reorient investment into productive ventures; expanding physical economic growth through improving the productive powers of labor and the percentage of the working population involved in productive labor; through investing in long-term science-driver projects to create the technological leaps of the future; and by drawing up a tax system coherent with these goals. The IPS concludes that such a tax system would include, in addition to income tax (and treating different forms of income equally), a wealth tax on extremely wealthy individuals. If a typical worker must pay property tax for the privilege of owning his or her car, why cannot a decabillionaire pay a tax on the holdings of financial “property”?