Further to Toby’s comments, Miles Corak has posted an excellent commentary on the new numbers on high incomes, together with a spread sheet showing average effective tax rates by income group from the 1980s. The big story is that the average effective tax rate for the very affluent has been stable since the early 1980s as their income share has grown, and that the average effective tax rate for high income groups has fallen significantly since the early 1990s.
I posted an Economy Lab piece on this as well. While opinions will differ on what is fair, I think the big finding here is that the income tax system has not limited rising income inequality.
- Is r>g in Canada? (July 30th, 2014)
- Alex Usher is Wrong on Tuition Fees (May 12th, 2014)
- Review of Capital in the Twenty-First Century by Thomas Piketty (April 29th, 2014)
- Pikkety on Capital in the 21st Century (Tom Palley) (April 24th, 2014)
- Flaherty’s Legacy: Ideological, reckless and just plain lucky (March 20th, 2014)