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.
- Wages: Up, Down, or Sideways? (June 19th, 2015)
- Inequality, the Financial Crisis and Stagnation: Competing Stories and Why They Matter (June 10th, 2015)
- Should we be taxing the rich 1% more? (May 12th, 2015)
- The Return of the Gilded Age: Consequences, Causes and Solutions (April 27th, 2015)
- Doubling Contributions To The Tax Free Savings Account: Even Nastier Than Income Splitting (March 2nd, 2015)