Mickey Kaus | Krugman’s Twinkie Defense

Hmm.  Something seems off here. Did this super-rich  hundredth-of-the-1% in the ’50s reallya) pay anything near those super-high 91% marginal  rates, or did they b) employ accountants and loopholes to avoid  them (as the conventional tax-reformer wisdom would have it)? If you read  Krugman’s paragraph you’d probably conclude (a)–high income tax rates  really sock it to the rich! But the truth is closer to (b).

According to this CRS study, that 91% marginal rate  produced an effective income tax rate on the top o.o1 percent of only  about 45%. Krugman himself appears to be relying on Piketty and Saez–but they come in with an even lower figure,  31%. They only get to 70% by including corporate taxes, which  Krugman mentions, and estate taxes–which he doesn’t mention at all. **

Why is this semi-deceptive omission significant?

More.



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