Emmanuel Saez and Gabriel Zucman: The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay
- PDF / 161,284 Bytes
- 4 Pages / 439.37 x 666.142 pts Page_size
- 68 Downloads / 323 Views
Emmanuel Saez and Gabriel Zucman: The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay Matthias Weber1 Published online: 13 August 2020 © Swiss Society for Financial Market Research 2020
The book The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay (Saez and Zucman 2019) by Berkley professors Emmanuel Saez and Gabriel Zucman is mainly a book about taxation in the USA. It contains some comparisons to other countries and is certainly relevant beyond the USA. The book gives a short overview of the history of taxation in the USA and describes how a tax system that used to be highly progressive (meaning that richer people paid a higher share of their income in taxes than poorer people) became less and less progressive, up to the point where the richest of the rich pay a lower fraction of their income in taxes than the middle class, which is the case at the moment. The book is a book about taxation, but it is also a book about inequality. The authors elucidate the two-way interaction between taxes and inequality. Taxation naturally influences the development of inequality in a society. However, inequality similarly influences taxation via the influence that wealthy people have on politics and therewith on which taxes are levied, how high tax rates are, and what the rules and norms for the enforcement of the tax collection are. The USA used to have highly progressive taxes for most of its history, especially in the decades after the Second World War when US economy and society were thriving. Measuring who pays how much tax effectively is not an easy task—at the end, all taxes are paid by people, but many taxes (as one example the corporate income tax) are levied in a way that do not make it obvious who pays. To measure the effective tax
B 1
Matthias Weber [email protected] School of Finance, University of St. Gallen, St. Gallen, Switzerland
123
350
M. Weber
payments, the authors largely rely on a relatively new methodology that they developed themselves, jointly with Thomas Piketty (Piketty et al. 2018).1 The authors describe how the tax system has slowly become ever more favorable to the rich in the past decades. In the fifties and sixties, the richest 0.1% of individuals paid on average about half of their income in taxes, whereas the population excluding the richest 10% paid on average only a quarter to a fifth. This changed slowly over the decades. Currently, all income deciles pay with about 25–30% a similar fraction of income in taxes. Taxes are mildly progressive for most part of the income distribution, but they become even regressive at the very top of the income distribution: In 2018, for the first time in history, the richest 400 Americans paid on average a lower fraction of their income in taxes than the poorer half of society. This decrease in tax progressivity went hand in hand with an increase in inequality so severe that the richest 1% of society now earn more than 20% of national income (as compared to about 10% forty years ago), while the bottom h
Data Loading...
